©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 399 ground that it infringed on their ability to work, in violation of First Amendment freedoms. The infringement stemmed from AB 5’s rule (since modified by AB 2257) that anyone writing more than 35 articles for publication in a given year is an employee instead of an independent contractor.52 A federal district court denied temporary emergency relief because the plaintiffs failed to demonstrate a likelihood of success on the merits or serious questions going to the merits on their Equal Protection and First Amendment claims.53 Trucking companies initially succeeded in judicial challenges to AB 5. Both state and federal courts enjoined California from enforcing AB 5 as to motor carriers. An association of motor carriers obtained a preliminary injunction against enforcement on the ground that AB 5 is preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA), which overrides state laws “related to a price, route, or service of any motor carrier … with respect to the transportation of property.” The motor carriers successfully argued that Prong B of the ABC test—whether the worker serves in the defendant’s usual course of business—would automatically make every truck driver an employee instead of an independent contractor of the hiring motor carrier. Accordingly, motor carriers could not contract with owneroperators to provide trucking services without treating drivers as employees. The ABC test would thus affect motor carriers’ prices, routes, or services, contrary to the FAAAA.54 The State and the labor union appealed and the Ninth Circuit reversed, holding that the state statute had only a tenuous, remote, or peripheral connection to rates, routes, or services and thus was not preempted by FAAAA as applied to motor carriers.55 In 2020, the Court of Appeal reversed a trial court order that had applied FAAAA preemption to the ABC test on the ground that prong B of the ABC test prohibited motor carriers from using independent contractors to provide transportation services, thereby impermissibly affecting motor carrier prices, routes, and services. The Court of Appeal, in something of an ipse dixit, stated that the ABC test does not prohibit motor carriers from using independent contractors, but rather simply requires that the motor carriers classify drivers appropriately and comply with generally applicable labor and employment laws. According to the Court of Appeal, the ABC test is a law of general application that does not mandate any hiring entity to use employees. The ABC test is merely a worker-classification test that states a general and rebuttable presumption that a worker is an employee unless the hiring entity demonstrates certain conditions. That independent owner-operator truck drivers may be incorrectly classified does not mean that the ABC test prohibits motor carriers from using independent contractors. The ABC test is thus, according to the Court of Appeal, not the type of law that Congress intended the FAAAA to preempt.56 19.8 Professional Cheerleaders Must Be Employees California-based professional major and minor league teams (in baseball, basketball, football, ice hockey, and soccer) must treat the cheerleaders who perform during the teams’ exhibitions, events, and games as employees—not independent contractors.57 19.9 Special Reporting Requirements Businesses that retain individual independent contractors who perform work in California and receive payments exceeding $600 (or contract for such a payment) must report them to the EDD (see § 16.2). 19.10 Administrative Enforcement The EDD administers California’s employment tax laws, and provides guidance in determining whether a worker is an employee or independent contractor.58 The California Code of Regulations lists the rules generally applicable to common law determinations of employment verus an independent contractor relationship.59
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