Tale Lites Issue 44

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🚨 California Issued First Known AB5-Related Penalties in Trucking

AB5 has been a pretty hot topic the past few years, but really hasn’t had much action until just recently.

In late October, the California Labor Commissioner announced citations against three companies for misclassifying truck drivers and committing multiple labor violations. The companies named:

• Mega Nice Trucking (the carrier)

• Ryder Last Mile (NYSE: R)

• Costco Wholesale Corp. (NASDAQ: COST)

Mega Nice was operating as a subcontracted delivery carrier for Ryder Last Mile and Costco.

Why CA Says They’re Liable

According to Labor Commissioner Lilia García-Brower, both Ryder and Costco exerted direct and indirect control over delivery drivers, including:

• Scheduling their deliveries

• Requiring uniforms

• Enforcing operating protocols

• Closely tracking performance

Because of that level of control, California determined all three companies were joint employers, and therefore jointly responsible for misclassification and wage theft.

The state’s Bureau of Field Enforcement led the investigation.

AB5 Was Used BUT Wasn’t Mentioned

The official announcement didn’t refer to AB5, but when pressed on it, the Labor Commissioner confirmed that the AB5 “ABC Test” was used to determine that drivers were employees, not independent contractors.

For a worker to be an “independent contractor” under AB5, the hiring entity must prove:

A) The worker is free from the company’s control
B) The work performed is outside the hiring entity’s usual business
C) The worker has an independent business doing that work

Mega Nice failed both the ABC and older Borello legal tests.

This matters because AB5 only fully applied to trucking after the U.S. Supreme Court declined to hear the trucking industry’s appeal in 2022, removing prior injunctions.

The Penalties

The investigation covers 58 drivers and includes violations involving:

• Minimum wage

• Overtime

• Meal and rest breaks

• Sick leave

Total amount assessed which includes penalties + interest:

💰 $868,127.76
Of that, roughly $663,000 is expected to go directly to drivers.

The case is not a settlement. All three companies are expected to appeal, and litigation is ongoing.

🚛 Why This Enforcement Matters

Even though AB5 took effect statewide in 2020, trucking had a temporary legal shield until halfway through 2022. Since then, the industry has been waiting to see if California would truly enforce it.

This appears to be the first visible enforcement action citing misclassification in trucking under AB5/AB2257.

For carriers using contractor models in California, this may signal:

🔹 Increased misclassification audits
🔹 More joint-employer liability risk for retailers and 3PLs
🔹 Higher cost of operating independent contractor fleets
🔹 More incentive to convert owner-operators into employee drivers

📉 Has AB5 disrupted California trucking?

Despite mainstream media fears of less capacity, the market data shows no major long term divergence in outbound tender rejections from Ontario, CA versus national levels.

Several Owner/Operators have left California, but others reportedly restructured to comply with the law using options like:

• Business to business exemption (difficult but sometimes viable)

• Small carrier authority and true independence

• Leasing on employment models

What’s Next?

• Appeals will determine how aggressively California expands enforcement.

• Retailers and 3PLs may rethink subcontracting structures.

• The case could become an important precedent for broader AB5 trucking actions.

The trucking fight against AB5 largely ended when courts rejected further appeals, leaving OOIDA as the last group still challenging the law. My general take is laws like AB5 were going to be inevitable. We just covered the ATRI top issues in trucking, and for drivers, the number one issue is driver pay, and another top issue is retention. When those kinds of problems go on year over year, eventually action will be taken.

Do you support AB5 measures? I want to hear from you! For Driver Submissions, questions, and comments contact me at: [email protected] or Text me directly at 423-275-2444

Tale Lites Throwback

Advice on how to stay compliant from 1966!

🏛️ New Bill Would Fine Carriers Knowingly Hiring Unqualified Drivers

A new bill introduced in Congress will not only make it harder for individuals to obtain a Commercial Driver’s License, but also penalize trucking companies and states that issue them to drivers without legal work authorization.

Introduced November 14, 2025 by US Representative Jefferson Van Drew, the new bill is called the No CDLs for Illegals Act. Van Drew says the bill responds to recent fatal crashes involving truck drivers who were in the U.S. illegally. Many of which we have covered in Tale Lites.

He argues that when states issue CDLs to drivers who cannot legally work in the U.S., it creates a safety risk that affects the entire country, not just the issuing state.

🚚 What the Bill Would Do

If passed, the bill instructs the U.S. Secretary of Transportation to establish new enforcement rules, including:

🔹 Fines for Trucking Companies

Carriers that knowingly hire drivers without valid CDLs could face monetary penalties.

🔹 Stricter CDL Verification

CDL applicants would need to show:

• Proof of U.S. citizenship or

• Lawful permanent residence or

• Valid work authorization
  Plus: proof of domicile in the state issuing the CDL.

🔹 Mandatory Immigration Status Checks

States would be required to verify immigration status using the federal SAVE database.

🔹 Consequences for Non-Compliant States

States that issue CDLs outside federal rules could lose access to federal transportation funding.

Larger Trend in Washington

The No CDLs for Illegals Act is part of a growing legislative push to:

• Tighten CDL requirements for non-citizen drivers

• Enforce English proficiency standards

• Hold states accountable for CDL program oversight

Multiple bills on Capitol Hill this year have targeted CDL eligibility, especially after the recent crashes involving drivers who were not legally authorized to work in the U.S.

What it Means for Carriers:

If enacted, fleets and owner-operators could see:

🚧 More documentation required during hiring
📉 Higher legal risk for carriers who cut corners
🕐 Longer onboarding timelines for non-citizen drivers
🌎 Greater scrutiny of state CDL programs

📩 Thoughts?
Reply to this email or text (423) 275-2444 

Health Tip of the Week - Your New Morning Habit

A glass of water first thing in the morning is one of the simplest wins you can stack but it pays off all day long.

Sharper focus & quicker reaction time: Even mild dehydration can slow you down behind the wheel. Rehydrating within that first hour of waking up clears the brain fog and primes the body.

Fewer cravings & smoother appetite: Research shows that people who drank ~16 oz of water before meals ate 13% fewer calories. 

More energy without crash: Coffee/energy drinks spike you up and drop you fast. 

Starting with water fuels steady energy and keeps you from chasing refills all day.

Road-Ready Tactics

This isn’t about perfection - it’s about building a routine that works anywhere you wake up:

•    In the cab: Keep a bottle in your cupholder before bed so it’s waiting when you wake.

•    At the truck stop: Grab a bottle when you get your morning coffee.

•    At home: Put a glass by the sink or on your nightstand.

Cheapest version? Refill a reusable bottle at a stop before bed. Easiest version? Buy one when you fuel up.

The first thing you drink sets the tone for your whole day. Start with water: sharper mind, stronger body, steadier energy. Miss it? No big deal. Reset tomorrow and stack another win

Partner Post of the Week

Check out our Partner Trucking with Shawn where he found an entire fuel island taken up by trucks parked! In a bind like this? Use the promo code shawn20 for $20 off your next booking!

Truck Parking Club Partner Program

Do you create content for truckers, want to help solve the truck parking crisis, and an opportunity to give drivers FREE parking? Let’s work together! Click below to apply for Truck Parking Club’s Partner Program today!