House Democrats approve “federal AB5” legislation

The U.S. House of Representatives passed a bill on Thursday that effectively nationalizes the provisions within California’s AB5 law which severely constricts the ability of companies to hire independent contractors.

The “Protecting the Right to Organize (PRO) Act,” introduced in Congress last year, expands the definition of “employee” and “employer” to discourage the classification of workers as independent contractors, with language that mirrors the three-pronged “ABC” test in AB5 to determine independent contractor status. An amendment attached to the bill clarifies that its ABC test “does not preempt any state laws governing the wages, work hours, workers’ compensation, or unemployment insurance of employees.”

The legislation was approved along party lines in the Democrat-controlled House. The bill has a much more difficult road in the Republican-majority U.S. Senate, however, where it is not expected to pass. “It’s a messaging bill that has no chance of passing” in the Senate, said Rodney Davis (R-Ill.) in opposing the bill on the House floor.

On Jan. 1, a federal judge handed down a temporary restraining order blocking implementation of California’s AB5 against motor carriers. That order was subsequently extended two weeks later at the request of the California Trucking Association (CTA).

The CTA had argued that the Federal Aviation Administration Authorization Act of 1994, known as the F4A act, had made California’s imposition of AB5 against the trucking sector an act that illegally substituted the state’s authority for federal authority.

Larry Willis, president of the Transportation Trades Department of the AFL-CIO, testified last year that the PRO Act would open the door to union representation, which the International Brotherhood of Teamsters has been attempting to do for years within the port truck drayage sector. “We know union workers across the board do better on wages, benefits and working conditions than their nonunion counterparts, and we think that’s an important path forward for [ride-sharing company] drivers,” Willis said.

In addition to revising the National Labor Relations Act to prevent employers from classifying employees as exempt from labor law protections, the PRO Act also:

  • Expands unfair labor practices to include prohibitions against replacement of or discrimination against workers who participate in strikes
  • Makes it an unfair labor practice to require or coerce employees to attend employer meetings designed to discourage union membership
  • Permits workers to participate in collective or class action litigation
  • Allows injunctions against employers engaging in unfair labor practices involving discharge or serious economic harm to an employee
  • Expands penalties for labor law violations, including interference with the National Labor Relations Board or causing serious economic harm to an employee
  • Allows any person to bring a civil action for harm caused by labor law violations or unfair labor practices.