Walmart Truck Drivers' $55 Million Unpaid Wages Award Survives at Ninth Circuit
The more than decade-long case seeks to answer an increasingly prevalent question in California courts: When do employers have to pay for workers' time?
January 06, 2020 at 06:04 PM
5 minute read
A class of Walmart truck drivers is poised to collect tens of millions of dollars in unpaid wages following a federal court ruling, as the courts continue to grapple with when California employers have to pay for workers' time.
The ruling from the U.S. Court of Appeals for the Ninth Circuit comes after more than a decade of litigation over allegations the retail giant violated professional drivers' state meal and rest break laws.
The Monday opinion affirmed a ruling from the U.S. District Court for the Northern District of California rejecting Walmart's attempt to dismiss the case for lack of jurisdiction. The Ninth Circuit panel also affirmed the lower court's decision granting partial summary judgment to plaintiffs over claims the company should have paid truck drivers minimum wage during layovers, since they were under Walmart's "control" during these 10-hour rest periods between shifts.
In 2016, a jury awarded the class $44,699,766 for unpaid wages related to layovers, $3,961,975 for rest breaks, $2,971,220 for pre-trip inspections, and $2,971,220 for post-trip inspections. In the appeal, Walmart had argued the district court erred in granting partial summary judgment and plaintiffs did not provide evidence that the company applied the policies in a way that actually controlled employee's movements.
"What constitutes control in California is not so clear, but caselaw provides underlying principles," wrote Sixth Circuit Judge Eugene Siler, sitting by designation at the Ninth Circuit. "Although an employer may place some constraints on an employee's movement during breaks, control exists if the employer goes too far."
In this case, the court ruled that "too far" was requiring workers to get manager approval to spend layovers at home instead of on the road, an act that disqualified them from receiving a $42 inconvenience payment. "Wal-Mart's policy restricted drivers' freedom of movement and prevented drivers from making a unilateral decision to spend layovers at home without preapproval," Siler wrote in the decision. "Wal-Mart employees may have been free to leave the truck and engage in personal activities during layovers, but they could not go home. This foreclosed drivers from numerous activities in which they might otherwise engage while on layovers."
Ninth Circuit Judge Jacqueline Nguyen concurred with the opinion and Judge Diarmuid O'Scannlain dissented, in part. In his partial dissent, O'Scannlain disagreed with the majority's affirmation of partial summary judgment based on the finding that the company's policies established the company controlled drivers during layovers. O'Scannlain wrote that the meaning of the policies should have been decided by the jury.
Walmart said the company continues to believe their truck drivers are paid in compliance with California law and often in excess of what California law requires. "We are proud that our drivers are among the best paid in the industry, earning, on average, between $80,000 to over $100,000 per year," a company spokesperson said. "We are reviewing the Ninth Circuit's opinion and will explore our options."
Two usual suspects in high-stakes employment disputes handled the appeal. Gibson, Dunn & Crutcher's Theodore Boutrous Jr. led Walmart's legal team and Altshuler Berzon's Michael Rubin represented the drivers.
Boutrous did not respond to a request for comment.
Rubin said plaintiffs' counsel were pleased, but not surprised the court affirmed the jury verdict for unpaid wages during layovers.
"The question for when an employer controls a worker's time is an important one under California law, but it's a factual one for a jury to decide," he said. "The jury had ample instruction on the facts to reach the verdict it did."
The question is becoming a recurring one in the state's district and federal courts. Rubin also represented labor unions in the California Supreme Court's Dynamex case, which adopted a new test for worker classification. He said that landmark decision and California's Assembly Bill 5 raised similar issues. "The courts are really struggling to determine what constitutes compensable work and, where work is compensable, who is responsible for paying it?" he said.
Last month, the California Supreme Court heard arguments in Frlekin v. Apple. In that case, Boutrous defends claims that Apple should pay retail employees for the time it takes for their bags to be inspected at the end of shifts. And later this week, Rubin will once again argue in front of the Ninth Circuit in a lawsuit over whether funeral homes are on the hook for wages to contractors who are on call 24 hours and dispatched to pick up the deceased.
Rubin said he's glad the Walmart case has come to a conclusion after 12 years and that drivers are going to be paid the minimum wage plus interest they have long been owed.
"And to that I say, it's about time," he said.
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