Appeals Court Hears Arguments in California Nondriving Pay Lawsuit

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A U.S. appeals court on June 10 heard oral arguments in a class-action case in which California truck drivers argued they should have been paid for nondriving work time, even while under a piece-rate basis agreement with a motor carrier to transport a load

The three-judge panel of the 9th U.S. Circuit Court of Appeals is being asked by the certified class of drivers to overturn a lower court’s determination that California law does not require motor carriers to pay drivers separately for “nonproductive” work such as inspections, refueling, and loading and unloading at docks, when drivers are paid on a “piece-rate” basis.

During the 40-minute oral arguments hearing, attorneys for the plaintiff drivers and defendant motor carrier U.S. Xpress Enterprises Inc., underwent a variety of vigorous questioning from the judges. At issue was whether U.S. Xpress had violated a California minimum wage law by paying drivers based on a piece-rate formula based on the distance traveled to carry a load.

READ MORE: California Drivers Ask Appellate Court to Require Pay for Nondriving Work

“Drivers did not receive separate pay for nondriving work, such as long hours spent waiting at the facilities of U.S. Xpress’ customers to pick up or drop off cargo,” Raymond Wendell, an attorney for the drivers, told the court. “As USX informed them in a training video, when their wheels aren’t turning they weren’t earning. Courts in California have long held that drivers who are paid on a per-mile basis must receive separate compensation at no less than the minimum wage for nondrivers.”

“Why shouldn’t we focus on the contractual agreement of the parties, which the record seems to show — if I look at the [U.S. Xpress] 2013 handbook and your clients’ deposition testimony — confirmed that the parties agreed that the piece-rate pay based on Rand McNally mileage covered the delivery of the load?” asked Circuit Judge Richard Tallman.

As Wendell, an attorney for the Oakland, Calif., law firm of Goldstein, Borgen, Dardarian & Ho, attempted to explain his position he was interrupted by Circuit Judge Andrew Hurwitz.

“But a [prior case] did say that the employer and the employee can agree to the scope of the work,” Hurwitz said. “So in this case it seems to be pretty clear that the employer and the employee agreed that the scope of the work was delivery of the load from point A to point B.”

U.S. Xpress attorney James Hanson, a partner at the Indianapolis-based law firm of Scopelitis, Garvin, Light, Hanson & Feary, P.C., said the district court correctly decided that the undisputed evidence showed that U.S. Xpress and its drivers agreed on compensation that included all of the activities to get the load delivered.

“The district court also correctly decided that time in the sleeper berth is not compensible time,” Hanson said.

Hanson said the manner in which the company pays drivers is included in the company’s employee handbook, and also is outlined in employee orientations, that the mileage rate basis pay is the way the company compensates employees.

“In other words, a load cannot be delivered unless the driver does all of those activities that they now complain are unpaid,” Hanson said.

But Judge Hurwitz asked, “My question is, if we affirm the district court, are we allowing manipulation of the California system? California as a matter of public policy says you ought to be compensated for nonproductive time on the job. In the end are we really allowing the employer to evade that concern of the Legislature?”

Hanson said no, all of those things are required to get the load delivered.

“The way we pay is common in the trucking industry,” Hanson replied. “What they will be paid for the load doesn’t address the activities the driver does.”

Hanson added, “When USX gives a load to a driver — when they dispatch for the load — they provide them with all of the information. Where they start, where they end, how many miles [are] going to be paid for with that load. Then they get an itemized statement that lays out the load to be delivered, and the amount they are paid for that load. Drivers are not paid for the actual miles driven.”

The lawsuit is Anthony Ayala v. U.S. Xpress Enterprises, Inc., et al.

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