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AB 5 contractor law: California small fleets, owner-ops take stock

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Updated Jul 6, 2022

The day I arrived in Merced, California, last week, also happened to be the day the Supreme Court conferenced to make what ultimately was its final decision on the California Trucking Association's case against the AB 5 law's ABC independent contractor test and its application to trucking. The next day, on the Merced County Fairgrounds, site of the second annual A.J. Soza Memorial Truck Show, the California contractor law was most certainly a topic of discussion, and considerable uncertainty for many there. 

For some, it's more than that, too, feeling like it amounts to a potential existential threat for business-to-business relationships with longtime owner-operators in de facto exclusive relationships. That was the case for Andy Chavez Sr., owner of A&D Equipment, contracting directly with construction-related and other outfits for hauling needs in the region around his business' Santa Clara home base. Chavez choked up at the prospect of the AB 5 law getting in between him and his dedicated owner-operators, many in longtime relationships with the company that evolved with mutual benefit into a small trucking family, of a fashion. 

For Chavez and so many other small fleets, the businesses they've built and the relationships they've formed, well, they just mean more than anything you can put a price tag on. "All these guys are dreamers, every single one of them," he said, also pointing to the dozens of owner-ops and small fleet owners displaying out at the show. The small-business entrepreneurs "all have families, they get up every day, they get up early in the morning and do the work." 

The owner-operators who run more or less exclusively contracting with A&D Equipment, Chavez said, pay a percentage-of-the-load fee for use of the company's trailers, but do have freedom to go and do whatever they want, perhaps landing them within qualifications of the business-to-business exception to AB 5.

Yet reality is A&D Equipment "subhaulers" -- California trucking's common shorthand for owner-operators without federal DOT motor carrier authority contracting job by job, trip by trip with motor carriers and/or owners with federal DOT authority who run for multiple carriers/brokers -- don't often stray far from A&D's customer base. That's simply by virtue of the fact that "I keep them busy enough," Chavez said, with direct contracts with outfits that in some cases stretch back two decades to the business' founding in 1999. "It’s a handshake and a promise from me to keep them busy.

"We're all just hardworking truck drivers," Chavez said, himself included, pulling today with his son, Andy Chavez Jr., as he trains him up on combination work in a 2020 Peterbilt 389 and Landoll 930.

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