No Preemption; Unfair Competition Law [UCL] Action May Go Forward.

Defendants are a trucking company in Long Beach, California and the company’s owner. The People, on behalf of the State of California, filed this action under Business and Professions Code section 17200, Unfair Competition Law [UCL] against defendants for misclassifying drivers as independent contractors and for other alleged violations of California’s labor and unemployment insurance laws. The complaint alleges numerous violations of law, such as failing to pay unemployment insurance taxes or employment training fund taxes, failing to withhold state disability insurance taxes or state income taxes and failing to provide workers’ compensation or provide itemized written wage statements. The People specifically noted that as a result of failing to follow the above statutes, defendants obtained an unfair advantage over their competitors, deprived employees of benefits and protections to which they are entitled under California law, harmed their truck driver employees, harmed the general public, and deprived the state of payments for California state payroll taxes, all in violation of the Unfair Competition Law. The People seek injunctive relief, civil penalties, and restitution. The trial court determined the action is preempted by the Federal Aviation Administration Authorization Act of 1994 [FAAAA; 49 U.S.C. § 14501(c)(1)] because the action is “related to a price route or service.” The California Supreme Court determined there was no preemption as the principles concerned in preemption cases are not involved here and the laws implicated in this action are generally applicable, governing when a worker is an independent contractor and when a worker is an employee. (People. ex rel. Kamala D. Harris v. Pac Anchor Transportation, Inc. (Cal. Sup. Ct.; July 28, 2014) 59 Cal.4th 772, [329 P.3d 180, 174 Cal.Rptr.3d 626].)