In a case alleging misclassification of an independent contractor in the transportation industry, the California Supreme Court has found that the California unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (“UCL”) was not preempted by the Federal Aviation Administration Authorization Act of 1994 (Pub. L. No. 103-305 (Aug. 23, 1994) 108 Stat. 1569) (“FAAAA”). In P. ex rel. Harris v. Pac Anchor Transportation, Inc. (SC S194388 7/28/14), the Court held that California UCL was not preempted where a trucking company’s alleged violations of state labor and insurance laws did not relate to the employer’s “price, route or service,” the concerns of the federal law.

The Court noted the FAAAA was passed originally so “States would not undo federal deregulation with regulation of their own.” Therefore, the FAAAA included a pre-emption provision. The Court, however, rejected the employer’s argument that the FAAAA facially preempted all California UCL claims and, specifically, the case at issue. The Court ruled:

the FAAAA embodies Congress’s concerns about regulation of motor carriers with respect to the transportation of property; a UCL action that is based on an alleged general violation of labor and employment laws does not implicate those concerns.

The misclassification of workers can lead to widespread liability in many areas under California and federal law. Employers should consult with counsel when making decisions with respect to independent contractor status.

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Photo of Jonathan A. Siegel Jonathan A. Siegel

Jonathan A. Siegel is one of the founding Principals of the Orange County, California, office of Jackson Lewis P.C. He practices before the Equal Employment Opportunity Commission, National Labor Relations Board, state and federal agencies and courts.

Mr. Siegel also provides advice and…

Jonathan A. Siegel is one of the founding Principals of the Orange County, California, office of Jackson Lewis P.C. He practices before the Equal Employment Opportunity Commission, National Labor Relations Board, state and federal agencies and courts.

Mr. Siegel also provides advice and counsel regarding labor and employment law with respect to various issues ranging from wage and hour law, reduction in force, WARN Act, discipline, leave management and harassment and discrimination issues. Mr. Siegel defends employers regarding different varieties of wrongful termination and discrimination claims.

Mr. Siegel has represented management in union organizing drives and regularly defends employers in unfair labor practice proceedings as well as in collective bargaining and arbitrations. He also has extensive experience conducting wage and hour preventive audits. He conducts single location and multi-location audits for employers. The scope of such audits can range from examining specific issues, i.e., exempt status under federal law and California, to comprehensive FLSA and California Labor Code audits. Mr. Siegel has conducted audits for a wide range of industries including, but not limited to manufacturing, retail, transportation, various service industries, defense contractors and healthcare.

Mr. Siegel regularly speaks on a variety of topics including wage and hour, harassment/discrimination, national and California employment trends, Workers’ Compensation, EEO, managing leaves of absence under FMLA and state leave laws and union avoidance. He has moderated numerous programs and is featured as a keynote speaker for several different organizations.