“I’m Leased On — Does AB5 Still Threaten Me?” What the Courts Have Already Decided

For roughly two years after the ABC test became enforceable, industry counsel routinely described trucking enforcement of it as close to nonexistent: the law applied, but almost nobody was getting cited under it. That changed in October 2025. California’s Labor Commissioner cited Costco Wholesale, Ryder Last Mile, and a Chula Vista subcontractor called Mega Nice Trucking a combined $868,128, roughly $663,000 of it owed directly to 58 delivery drivers, for misclassifying them as independent contractors on last-mile delivery routes. The state’s Bureau of Field Enforcement had opened the investigation over a year earlier, in July 2024, after two former Mega Nice drivers complained about unpaid wages, per the Department of Industrial Relations’ announcement. All three companies have appealed, so the final dollar figure could still move; the fact pattern the state built the case on doesn’t depend on how the appeal comes out. A trade write-up in March 2026 described 2025 and 2026 together as “a significant escalation in regulatory enforcement,” pointing to that same case as the template other investigations are now following, in CityWatch LA’s rundown.

What made that particular arrangement a target is worth sitting with, because it isn’t “trucking” as a category. Mega Nice supplied drivers who ran Ryder Last Mile’s routes delivering Costco’s big-box freight, and the state found Costco and Ryder exercised both direct and indirect control over drivers who were, on paper, independent contractors. That’s a dedicated, single-client, schedule-controlled setup — almost the textbook shape of what the ABC test’s first two prongs (freedom from the hiring entity’s control, work outside its usual business) exist to catch. It is not the shape of a driver running his own authority and picking loads off different brokers.

AB5 doesn’t ask what a contract calls somebody. It asks a hiring entity to prove all three prongs of the ABC test, or fall back on whether the relationship fits one of the law’s carved-out exemptions. Trucking’s most relevant one is the business-to-business exemption that the Ninth Circuit’s May 2025 ruling was actually about. That exemption tends to hold up for a driver who runs his own MC authority, negotiates his own rate on each load, and works multiple brokers or carriers rather than one. It tends not to hold up for a driver whose day-to-day work looks like an employee’s, whatever the paperwork says: one company, a set schedule, loads assigned rather than chosen. A plain-language rundown of how the test and the exemption interact is at DAT’s overview of AB5 for carriers.

Notice what isn’t in that table: hauling into or through California on a brokered load. AB5 targets the relationship between a hiring entity and the person doing the work, not a state line a truck happens to cross. An owner-operator running his own authority who picks up a load in Ohio, drops it in Sacramento, and takes his next load from a different broker entirely hasn’t entered into the kind of relationship AB5 is built to reclassify. The freight isn’t restricted. The employment relationship, if there is one, is what gets tested.