California Meal and Rest Break Law
Feds Tell Ninth Circuit Federal Preemption Doesn’t Apply
By Joe Rajkovacz, CCTA Director of Governmental Affairs
Many California based motor carriers have been increasingly subjected to lawsuits brought on behalf of drivers claiming they were not allowed to take state mandated meal and rest breaks as prescribed by California law (California Labor Code, § 226.7).
In two of those lawsuits (Dilts v. Penske and Campbell v. Vitran Express) the federal trial court agreed with the motor carriers that a particular federal law (“Federal Aviation Administration Authorization Act of 1994” or “FAAAA”) preempted California’s law mandating a meal break after five hours on-duty and ten minute breaks for every four on-duty hours.
The FAAAA prohibits states from enacting or enforcing a law related to the “price, route, or service” offered by motor carriers. The FAAAA has been used by motor carriers to successfully defend themselves from state or local laws designed to regulate motor carriers.
Two recent Supreme Court decisions (American Trucking Associations v. City of Los Angeles and Rowe v. New Hampshire Motor Transport Association) were based on violation(s) of the FAAAA and were decided in favor of motor carriers that federal law preempted state/local law. The CCTA’s own litigation challenging diesel emissions regulations issued by the California Air Resources Board (CDTOA v. Mary D. Nichols) is based on CARB violating the FAAAA.
The named plaintiffs (Dilts and Cambell) appealed the adverse decision(s) issued by the federal district court to the Ninth Circuit Court of Appeals and both cases were consolidated by the Ninth to be argued together. The Ninth “invited” the U.S. Department of Transportation (DOT) to submit an amicus curiae (friend of the court) brief which the Obama Administration DOT seemed eager to comply with and their brief was filed, specifically supporting the drivers.
Ideology Over Congressional Intent
In what can only be described as political ideology trumping Congressional intent in passage of the FAAAA and previous decisions of a DOT controlled by Republican administrations, the DOT brief is clearly intended to water-down the importance of the FAAAA and allow/encourage certain state laws favored by organized labor (and their running mates, environmentalists and trial attorneys) to interfere with motor carrier operations. In the brief, DOT claimed:
“The FAAA Act does not preempt the state meal and rest break law under these standards. The California law is squarely within the states’ traditional power to regulate the employment relationship and to protect worker health and safety. Moreover, it is a law of longstanding, general applicability and does not reflect any state effort to regulate motor carriers directly.”
DOT did say that “A state law may nonetheless be preempted if it has an indirect but significant effect on prices, routes, or services,” and this is where DOT’s brief entered the realm of speculative fantasy in lieu of actual reality to support their contrived belief that federal preemption does not exist. DOT claimed the effect of taking breaks were positive from the perspective of driver health and wellness and drivers being required to take breaks had a “remote and tenuous” connection (effect) on motor carrier prices, routes, and services.
Mental Gymnastics
In a further example of the tortured logic used by DOT to substantiate their political posturing, they claim that “Federal HOS regulations do not apply to commercial drivers operating in intrastate commerce and federal break requirements, in particular, are not applicable to short-haul drivers…”
DOT’s statement is completely at odds with the fact that states are encouraged to harmonize their trucking rules and regulations with federal standards – in fact it is required by DOT for nearly all their regulations as a pre-condition for federal Motor Carrier Safety Assistance Program funding. Few states elect to maintain significantly different rules for intra-state operations versus interstate. It would be a bureaucratic nightmare to enforce.
For DOT to argue that “federal break requirements” do not apply to short-haul operations is factually correct because they screwed-up in their HOS rulemaking and the D.C. Court of Appeals vacated DOT’s attempt to have short-haul operations subjected to the new federally mandated break requirements.
However, DOT misleads the Appeals Court in their brief by insinuating drivers using the short-haul exemption to the HOS regulations are not engaged in interstate operations. Apparently the legal minds at DOT who claim in the brief that DOT is due “deference” by the court because of their “expertise” in trucking has no clue that many operations using the short-haul exemption are engaged in interstate commerce. Port drayage operations are a classic example of where the drivers often operate under the short-haul exemption, never leave the state and in fact are engaged in the “continuance of an interstate movement” thus subjected to federal requirements. Apparently, according to DOT this is no longer true?
Nonetheless, the applicability of the FAAAA is not simply limited to motor carriers or drivers solely engaged in “interstate” operations, and DOT is encouraging the most over-turned Appeals court in the nation to buy into a much more narrow interpretation of how the FAAAA impacts motor carriers. Doing so benefits one significant constituency of the current administration in control of DOT – unions.
It’s difficult to think that the Ninth Circuit won’t buy into DOT’s inconsistent logic and reverse the lower court findings to favor the drivers. This is certain to land at the Supreme Court for the final word.
http://aaacompliance.com/california-meal-rest-break-law/
Many California based motor carriers have been increasingly subjected to lawsuits brought on behalf of drivers claiming they were not allowed to take state mandated meal and rest breaks as prescribed by California law (California Labor Code, § 226.7).
In two of those lawsuits (Dilts v. Penske and Campbell v. Vitran Express) the federal trial court agreed with the motor carriers that a particular federal law (“Federal Aviation Administration Authorization Act of 1994” or “FAAAA”) preempted California’s law mandating a meal break after five hours on-duty and ten minute breaks for every four on-duty hours.
The FAAAA prohibits states from enacting or enforcing a law related to the “price, route, or service” offered by motor carriers. The FAAAA has been used by motor carriers to successfully defend themselves from state or local laws designed to regulate motor carriers.
Two recent Supreme Court decisions (American Trucking Associations v. City of Los Angeles and Rowe v. New Hampshire Motor Transport Association) were based on violation(s) of the FAAAA and were decided in favor of motor carriers that federal law preempted state/local law. The CCTA’s own litigation challenging diesel emissions regulations issued by the California Air Resources Board (CDTOA v. Mary D. Nichols) is based on CARB violating the FAAAA.
The named plaintiffs (Dilts and Cambell) appealed the adverse decision(s) issued by the federal district court to the Ninth Circuit Court of Appeals and both cases were consolidated by the Ninth to be argued together. The Ninth “invited” the U.S. Department of Transportation (DOT) to submit an amicus curiae (friend of the court) brief which the Obama Administration DOT seemed eager to comply with and their brief was filed, specifically supporting the drivers.
Ideology Over Congressional Intent
In what can only be described as political ideology trumping Congressional intent in passage of the FAAAA and previous decisions of a DOT controlled by Republican administrations, the DOT brief is clearly intended to water-down the importance of the FAAAA and allow/encourage certain state laws favored by organized labor (and their running mates, environmentalists and trial attorneys) to interfere with motor carrier operations. In the brief, DOT claimed:
“The FAAA Act does not preempt the state meal and rest break law under these standards. The California law is squarely within the states’ traditional power to regulate the employment relationship and to protect worker health and safety. Moreover, it is a law of longstanding, general applicability and does not reflect any state effort to regulate motor carriers directly.”
DOT did say that “A state law may nonetheless be preempted if it has an indirect but significant effect on prices, routes, or services,” and this is where DOT’s brief entered the realm of speculative fantasy in lieu of actual reality to support their contrived belief that federal preemption does not exist. DOT claimed the effect of taking breaks were positive from the perspective of driver health and wellness and drivers being required to take breaks had a “remote and tenuous” connection (effect) on motor carrier prices, routes, and services.
Mental Gymnastics
In a further example of the tortured logic used by DOT to substantiate their political posturing, they claim that “Federal HOS regulations do not apply to commercial drivers operating in intrastate commerce and federal break requirements, in particular, are not applicable to short-haul drivers…”
DOT’s statement is completely at odds with the fact that states are encouraged to harmonize their trucking rules and regulations with federal standards – in fact it is required by DOT for nearly all their regulations as a pre-condition for federal Motor Carrier Safety Assistance Program funding. Few states elect to maintain significantly different rules for intra-state operations versus interstate. It would be a bureaucratic nightmare to enforce.
For DOT to argue that “federal break requirements” do not apply to short-haul operations is factually correct because they screwed-up in their HOS rulemaking and the D.C. Court of Appeals vacated DOT’s attempt to have short-haul operations subjected to the new federally mandated break requirements.
However, DOT misleads the Appeals Court in their brief by insinuating drivers using the short-haul exemption to the HOS regulations are not engaged in interstate operations. Apparently the legal minds at DOT who claim in the brief that DOT is due “deference” by the court because of their “expertise” in trucking has no clue that many operations using the short-haul exemption are engaged in interstate commerce. Port drayage operations are a classic example of where the drivers often operate under the short-haul exemption, never leave the state and in fact are engaged in the “continuance of an interstate movement” thus subjected to federal requirements. Apparently, according to DOT this is no longer true?
Nonetheless, the applicability of the FAAAA is not simply limited to motor carriers or drivers solely engaged in “interstate” operations, and DOT is encouraging the most over-turned Appeals court in the nation to buy into a much more narrow interpretation of how the FAAAA impacts motor carriers. Doing so benefits one significant constituency of the current administration in control of DOT – unions.
It’s difficult to think that the Ninth Circuit won’t buy into DOT’s inconsistent logic and reverse the lower court findings to favor the drivers. This is certain to land at the Supreme Court for the final word.
http://aaacompliance.com/california-meal-rest-break-law/
California Meal and Rest Break Laws Are Not Preempted by the FAAAA: Ninth Circuit
- Resource type: Legal Update: archive Status: Published on 14-Jul-2014 Jurisdictions: California, USA
On July 9, 2014, in Dilts v. Penske Logistics, LLC, the US Court of Appeals for the Ninth Circuit reversed and remanded the district court's holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempts California's meal and rest break laws as applied to motor carriers. The Ninth Circuit held that the California meal and rest break laws at issue are not related to prices, routes or services, and are therefore not preempted by the FAAAA. (12-55705, 2014 WL 3291749 (9th Cir. July 9, 2014).)
In light of the holding in Dilts, the same day the Ninth Circuit issued a memorandum decision in Campbell v. Vitran Express, Inc. the court once again reversed and remanded the district court's holding on the same issue as in Dilts, and similarly held that California's meal and rest break laws, as applied to motor carriers, are not preempted under the FAAAA (12-56250, 2014 WL 3339179 (9th Cir. July 9, 2014)).
BackgroundPlaintiffs are a certified class of drivers employed by defendants Penske Logistics, LLC and Penske Truck Leasing Co., L.P. (defendants). Defendants are motor carriers. Plaintiffs (who represent a class of 349 delivery drivers and installers) brought a class action against defendants, alleging that defendants routinely violate the following California meal and rest break laws:
- Cal. Lab.Code § 226.7.
- Cal. Lab.Code § 512.
- Cal. Code Regs. tit. 8, § 11090.
Defendants moved for summary judgment, arguing that the California meal and rest break laws as applied to motor carriers are preempted under the FAAAA. The FAAAA's preemption clause provides that:"States may not enact or enforce a law ... related to a price, route, or service of any motor carrier ... with respect to the transportation of property."(49 U.S.C. § 14501(c)(1).)
The district court:
- Concluded that California's meal and rest break laws impose "fairly rigid" timing requirements:
- dictating "exactly when" and "for exactly how long" drivers must take breaks; and
- restricting the routes that a motor carrier may select.
- dictating "exactly when" and "for exactly how long" drivers must take breaks; and
- Held that California's meal and rest break laws meet the FAAAA preemption standard because they are related to price, route or service.
- Granted summary judgment for the defendants.
Plaintiffs appealed to the Ninth Circuit.
OutcomeThe Ninth Circuit (Circuit Judge Graber) held that the FAAAA does not preempt California meal and rest break laws as applied to motor carriers because California meal and rest break laws are not sufficiently related to prices, routes or services to meet the preemption standard. The parties did not dispute that the transportation of property was involved, so the court's analysis focused on the "related to price, route or service" prong of the FAAAA preemption test.
The Ninth Circuit found that:
- There is a presumption against the preemption of state law.
- Even if state laws increase a motor carrier's operating costs (by increasing its cost of doing business, or impacting its routes or drivers' schedules in some way), this does not alone make these laws related to prices, routes or services.
- If the state laws do not have any other forbidden connection with prices, routes or services (that is, they do not directly or indirectly mandate, prohibit or otherwise regulate prices, routes or services), they are not preempted by the FAAAA.
- In light of the FAAAA preemption principles, California's meal and rest break laws plainly are not the sort of laws "related to" prices, routes or services that Congress intended to preempt because they:
- did not set prices, mandate or prohibit certain routes or tell motor carriers what services they may or may not provide, either directly or indirectly;
- are broad laws applying to hundreds of different industries with no other forbidden connection with prices, routes and services;
- are normal background rules for almost all employers doing business in California;
- do not bind the motor carriers to specific prices, routes or services (even though motor carriers must take them into account when allocating resources and scheduling routes); and
- do not freeze prices, routes or services, or determine the prices, routes or services the motor carriers will provide.
- did not set prices, mandate or prohibit certain routes or tell motor carriers what services they may or may not provide, either directly or indirectly;
- Applying California meal and rest break laws to motor carriers would not contribute to an impermissible patchwork of state-specific laws. The fact that such laws are different in each state does not alone cause FAAAA preemption. Meal and rest break laws are more analogous to state wage laws that vary by state but are permitted and not preempted.
- The Secretary of Transportation, in an amicus brief, argued that the California laws at issue are not preempted because:
- they do not directly regulate prices, routes or services, and do not have a "significant effect" on prices, routes or services;
- if there are no explicit instructions from Congress, there is a presumption against preemption in areas of traditional state police power, including employment; and
- there is no showing of an actual or likely significant effect on prices, routes or services.
- they do not directly regulate prices, routes or services, and do not have a "significant effect" on prices, routes or services;
- Although the Secretary of Transportation's position is not controlling, it does deserve weight because of the agency's expertise in transportation and regulation, its reasoned consideration of the question and its consistency when dealing with preemption questions concerning California meal and rest break laws. It is especially persuasive that the Department of Transportation sees no evidence that California's meal and rest break laws will significantly affect the prices, routes or services of motor carriers.
Update: On September 8, 2014, in Dilts v. Penske Logistics, LLC, the Ninth Circuit filed an order and amended opinion, denying Penske’s petition for an en banc rehearing of the court’s previous ruling from July 9, 2014, which stated that the FAAAA does not preempt California's meal and rest break laws as applied to motor carriers because meal and rest breaks are not sufficiently related to prices, routes or services to bring them under the FAAAA’s pre-emption clause. As a result of this order, the Ninth Circuit maintained its reversal of the district court’s decision which had initially granted summary judgment to Penske on the basis that the California laws were preempted by the FAAAA. (No. 12-55705, 2014 WL 4401243 (9th Cir. Sept. 8, 2014).)
Practical ImplicationsThis decision is important because it is the first time that the Ninth Circuit has considered the question of FAAAA preemption of California wage and hour laws. The decision shows that motor carrier employers cannot rely on the defense that state wage and hour laws are preempted by the FAAAA and therefore must comply with all applicable wage and hour laws in the states where they operate. Claims of preemption by employers in other regulated industries, including the claims raised in numerous district court decisions decided before Dilts, likely will be impacted by the Ninth Circuit's rulings as well.
http://us.practicallaw.com/4-574-3305
Six Days on the Road and I'm Gonna Park My Truck to Comply with State Laws Tonight
Posted by Doug Hass on July 17, 2014
My apologies to Dave Dudley. The song “Six Days on the Road” just doesn’t stand up to the changes we would have to make after the Ninth Circuit’s decision that the state meal and rest break laws are not preempted by federal hours of service laws (though I’m pretty sure that, eyes open wide or not, the “taking little white pills” part wasn’t even legal in 1963). Last week, in a case we have been watching carefully since this spring, Dilts v. Penske Logistics, the Ninth Circuit issued a decision affecting two related cases from the trucking industry that questioned whether California’s detailed meal and rest break requirements conflicted with a federal statute barring states from regulating the prices, routes and services of motor carriers and airlines. The case might seem to be a boring, narrow constitutional law issue, but the Ninth Circuit’s ruling that federal law does not trump California’s meal and break laws could have a substantial impact on transportation industry employers, whether in California, in thewestern states covered by the Ninth Circuit where this ruling applies immediately, or elsewhere in the country.
The Meal and Break Law Preemption Battle’s History
In 2008, motor carriers petitioned the Federal Motor Carrier Safety Administration (FMCSA) seeking a finding that state meal and break laws (like the ones in California) are preempted by the federal hours of service laws pursuant to the Federal Aviation Administration Authorization Act of 1994 (FAAAA) when applied to motor carriers. The FMCSA denied that petition, reasoning that the break law was just one part of California’s employment regulations that applied generally to employers in a variety of other industries. The FMCSA reasoned that Congress only preempted state laws and regulations related to commercial motor vehicle safety, not all laws generally that in any way overlap with the FMCSA's hours of service regulations.
In 2012, two district courts considered claims under California law by classes of delivery drivers (one making residential appliance deliveries, the other involving “city/local” drivers transporting a variety of cargo). The plaintiffs claimed that their fixed routes and the timing of deliveries prevented them from taking the meal breaks prescribed by state law. Unlike the FMCSA, the district courts found that the claims were preempted under the FAAAA’s expansive language, and determined that requiring motor carriers to follow California requirements for meal and rest periods would interfere with competitive market forces within the industry because they are directly related to the frequency and scheduling of transportation.
The Ninth Circuit invited the Department of Transportation (DOT) to participate as an amicus in the case this spring. First, the DOT argued against preemption because laws like the one in California were not specifically targeted toward the motor carrier industry. Second, the DOT argued that its position on the preemptive reach of the FAAAA should be given deference by the courts based largely on its expertise in regulation and interpretation of motor carrier safety under the Federal Motor Carrier Safety Act (the “Act”), even though the Act and the FAAAA are entirely separate and the DOT doesn’t regulate the latter.
The Ninth Circuit’s Decision
The Ninth Circuit ultimately agreed with the DOT’s interpretation. While the court recognized that the FAAAA uses expansive language, it found only a tenuous link between California’s meal and break laws and motor carriers’ prices, routes, or services. It held that where a state law does not refer directly to rates, routes, or services, “the proper inquiry is whether the provision, directly or indirectly, binds the carrier to a particular price, route or service and thereby interferes with the competitive market forces within the industry.”
Under that analysis, the court held that California meal and break laws do not directly or indirectly set prices, mandate or prohibit certain routes, or force motor carriers to provide or not provide certain services. The court found that merely accounting for meal and rest break requirements when scheduling routes, even if that meant potentially reallocating resources, did not bind motor carriers to specific prices, routes, or services in any significant way.
However, while the court declined to preempt these state laws in every case, it did leave room for individual employers to demonstrate preemption on an “as applied” basis. In these two cases, the court was not convinced that the carriers had made sufficient showings of the difficulties in scheduling breaks, the impact on their staffing levels, and the resulting influence on rates and routes to justify exempting them from compliance with California’s meal and break laws. One of the judges on the panel concurred specifically to emphasize that the defendant, Penske Logistics, failed to carry its burden of proof on its preemption defense.
Insights for Motor Carriers and Employers
The Ninth Circuit’s decision seems to overlook the complex logistical and scheduling issues involved in staffing around meal and break laws, particularly where pricing and performance are based on delivery speeds and timing. Of course, carriers often cannot control traffic delays, delivery backups and other related issues. The underlying arguments in the district court cases are pretty compelling that the meal and rest break laws are “related to” a motor carrier’s prices, routes, or services and are therefore preempted by the FAAAA. Arguably, with a better-developed factual record about the impact on carriers, other courts could come to the opposite conclusion than the Ninth Circuit.
However, until another appellate court weighs in, motor carriers should assume that they will have to comply with state meal and break laws. Motor carriers and other businesses employing drivers inCalifornia, Illinois, or other states that have enacted general meal and break laws should start looking now at whether they comply with these laws, rather than assuming that they are preempted by federal hours of service regulations.
http://www.wagehourinsights.com/breaks-and-meal-periods/six-days-on-the-road-and-im-gonna-park-my-truck-to-comply-with-state-laws-tonight/
My apologies to Dave Dudley. The song “Six Days on the Road” just doesn’t stand up to the changes we would have to make after the Ninth Circuit’s decision that the state meal and rest break laws are not preempted by federal hours of service laws (though I’m pretty sure that, eyes open wide or not, the “taking little white pills” part wasn’t even legal in 1963). Last week, in a case we have been watching carefully since this spring, Dilts v. Penske Logistics, the Ninth Circuit issued a decision affecting two related cases from the trucking industry that questioned whether California’s detailed meal and rest break requirements conflicted with a federal statute barring states from regulating the prices, routes and services of motor carriers and airlines. The case might seem to be a boring, narrow constitutional law issue, but the Ninth Circuit’s ruling that federal law does not trump California’s meal and break laws could have a substantial impact on transportation industry employers, whether in California, in thewestern states covered by the Ninth Circuit where this ruling applies immediately, or elsewhere in the country.
The Meal and Break Law Preemption Battle’s History
In 2008, motor carriers petitioned the Federal Motor Carrier Safety Administration (FMCSA) seeking a finding that state meal and break laws (like the ones in California) are preempted by the federal hours of service laws pursuant to the Federal Aviation Administration Authorization Act of 1994 (FAAAA) when applied to motor carriers. The FMCSA denied that petition, reasoning that the break law was just one part of California’s employment regulations that applied generally to employers in a variety of other industries. The FMCSA reasoned that Congress only preempted state laws and regulations related to commercial motor vehicle safety, not all laws generally that in any way overlap with the FMCSA's hours of service regulations.
In 2012, two district courts considered claims under California law by classes of delivery drivers (one making residential appliance deliveries, the other involving “city/local” drivers transporting a variety of cargo). The plaintiffs claimed that their fixed routes and the timing of deliveries prevented them from taking the meal breaks prescribed by state law. Unlike the FMCSA, the district courts found that the claims were preempted under the FAAAA’s expansive language, and determined that requiring motor carriers to follow California requirements for meal and rest periods would interfere with competitive market forces within the industry because they are directly related to the frequency and scheduling of transportation.
The Ninth Circuit invited the Department of Transportation (DOT) to participate as an amicus in the case this spring. First, the DOT argued against preemption because laws like the one in California were not specifically targeted toward the motor carrier industry. Second, the DOT argued that its position on the preemptive reach of the FAAAA should be given deference by the courts based largely on its expertise in regulation and interpretation of motor carrier safety under the Federal Motor Carrier Safety Act (the “Act”), even though the Act and the FAAAA are entirely separate and the DOT doesn’t regulate the latter.
The Ninth Circuit’s Decision
The Ninth Circuit ultimately agreed with the DOT’s interpretation. While the court recognized that the FAAAA uses expansive language, it found only a tenuous link between California’s meal and break laws and motor carriers’ prices, routes, or services. It held that where a state law does not refer directly to rates, routes, or services, “the proper inquiry is whether the provision, directly or indirectly, binds the carrier to a particular price, route or service and thereby interferes with the competitive market forces within the industry.”
Under that analysis, the court held that California meal and break laws do not directly or indirectly set prices, mandate or prohibit certain routes, or force motor carriers to provide or not provide certain services. The court found that merely accounting for meal and rest break requirements when scheduling routes, even if that meant potentially reallocating resources, did not bind motor carriers to specific prices, routes, or services in any significant way.
However, while the court declined to preempt these state laws in every case, it did leave room for individual employers to demonstrate preemption on an “as applied” basis. In these two cases, the court was not convinced that the carriers had made sufficient showings of the difficulties in scheduling breaks, the impact on their staffing levels, and the resulting influence on rates and routes to justify exempting them from compliance with California’s meal and break laws. One of the judges on the panel concurred specifically to emphasize that the defendant, Penske Logistics, failed to carry its burden of proof on its preemption defense.
Insights for Motor Carriers and Employers
The Ninth Circuit’s decision seems to overlook the complex logistical and scheduling issues involved in staffing around meal and break laws, particularly where pricing and performance are based on delivery speeds and timing. Of course, carriers often cannot control traffic delays, delivery backups and other related issues. The underlying arguments in the district court cases are pretty compelling that the meal and rest break laws are “related to” a motor carrier’s prices, routes, or services and are therefore preempted by the FAAAA. Arguably, with a better-developed factual record about the impact on carriers, other courts could come to the opposite conclusion than the Ninth Circuit.
However, until another appellate court weighs in, motor carriers should assume that they will have to comply with state meal and break laws. Motor carriers and other businesses employing drivers inCalifornia, Illinois, or other states that have enacted general meal and break laws should start looking now at whether they comply with these laws, rather than assuming that they are preempted by federal hours of service regulations.
http://www.wagehourinsights.com/breaks-and-meal-periods/six-days-on-the-road-and-im-gonna-park-my-truck-to-comply-with-state-laws-tonight/
Court: California's Meal and Rest Break Laws Apply to Truck Drivers Too
7/10/2014 9:55:00 AM
David Paul Morris/Bloomberg News
A federal appeals court ruled on July 9 that federal law does not exempt motor carriers from a California law requiring that they provide truck drivers no less than a 30-minute paid meal break when their work period is more than five hours.The 9th U.S. Circuit Court of Appeals reversed and remanded back to a California federal district court a meal break class-action lawsuit filed against Penske Logistics that Penske won at the district court level.
The three-judge panel held that California’s meal and rest break laws were not related to Penske’s “prices, routes or services” and were therefore not preempted by the Federal Aviation Administration Authorization Act of 1994.
“Congress did not intend to preempt generally applicable state transportation safety, welfare or business rules that do not otherwise regulate prices, routes or services,” the appeals court said.
Although the court conceded that the meal and rest break law would add costs for motor carriers, it said the law does not “set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly.”
In a statement, Michael Duff, Senior Vice President & General Counsel of Penske, said the company is disappointed by the decision: "We believe federal district court Judge Sammartino correctly determined that California’s meal and rest break rules as applied to motor carriers were preempted by the FAAAA. We are still evaluating the decision and considering our options for review going forward."
The case will now be sent back to the district court for a possible trial, unless Penske seeks a rehearing with the full 9th Circuit or seeks a review by the U.S. Supreme Court.
By Eric Miller
Staff Reporter
http://www.ttnews.com/articles/basetemplate.aspx?storyid=35443
David Paul Morris/Bloomberg News
A federal appeals court ruled on July 9 that federal law does not exempt motor carriers from a California law requiring that they provide truck drivers no less than a 30-minute paid meal break when their work period is more than five hours.The 9th U.S. Circuit Court of Appeals reversed and remanded back to a California federal district court a meal break class-action lawsuit filed against Penske Logistics that Penske won at the district court level.
The three-judge panel held that California’s meal and rest break laws were not related to Penske’s “prices, routes or services” and were therefore not preempted by the Federal Aviation Administration Authorization Act of 1994.
“Congress did not intend to preempt generally applicable state transportation safety, welfare or business rules that do not otherwise regulate prices, routes or services,” the appeals court said.
Although the court conceded that the meal and rest break law would add costs for motor carriers, it said the law does not “set prices, mandate or prohibit certain routes, or tell motor carriers what services they may or may not provide, either directly or indirectly.”
In a statement, Michael Duff, Senior Vice President & General Counsel of Penske, said the company is disappointed by the decision: "We believe federal district court Judge Sammartino correctly determined that California’s meal and rest break rules as applied to motor carriers were preempted by the FAAAA. We are still evaluating the decision and considering our options for review going forward."
The case will now be sent back to the district court for a possible trial, unless Penske seeks a rehearing with the full 9th Circuit or seeks a review by the U.S. Supreme Court.
By Eric Miller
Staff Reporter
http://www.ttnews.com/articles/basetemplate.aspx?storyid=35443
The Ninth Circuit Puts Up Road Block to Motor Carrier Arguing that California Break Laws are Preempted by the FAAA Act, But Leaves Some Wiggle Room
By Sabrina Shadi and Vartan Madoyan on July 11, 2014
Posted in Meal and Rest Periods
On Wednesday, the United States Ninth Circuit Court of Appeals rendered a decision that, on its face, involved a technical preemption issue, but one that will have serious repercussions for those in the transportation industry operating in California. In plain terms, the question was whether California’s detailed meal and rest break requirements conflict with a federal statute barring states from regulating the prices, routes and services of motor carriers and airlines.
Over the past few years, California district courts have varied as to whether motor carriers must follow California meal and rest break laws, or whether the Federal Aviation Administration Authorization Act of 1994 (“FAAA Act” or the “Act”) preempts California law in this regard. On July 9, 2014, in Dilts v. Penske Logistics, LLC, the Ninth Circuit decided, for the first time, that such preemption generally does not apply. Nevertheless, the possibility remains open that, in a future case, a motor carrier (particularly a long haul carrier) or airline may offer stronger evidence of and arguments for preemption.
Under the FAAA Act, in most instances a state “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). The Act was passed “‘to prevent States from undermining federal deregulation of interstate trucking’ through a ‘patchwork’ of state regulations.”
In Dilts, the plaintiffs sought to represent a class of hourly appliance delivery drivers and installers, working exclusively within California and on short-haul routes. They argued that they were unable to take the California-mandated meal and rest periods, and sought to assert the usual array of California wage and hour claims as a result. The lower court found that because California’s rest and meal period requirements so severely affected trucking prices, routes, and services, they were preempted by the FAAA Act, and it granted summary judgment in the employer’s favor.
After finding a strong presumption against preemption, the Ninth Circuit stated that while the FAAA Act’s “related to” language is deliberately expansive and broad, it does not preempt state laws that affect prices, routes, or services in only a tenuous way. It concluded that where a law does not refer directly to rates, routes, or services, “the proper inquiry is whether the provision, directly or indirectly,binds the carrier to a particular price, route or service and thereby interferes with the competitive market forces within the industry.”
The Ninth Circuit held that California break laws do not, in either a direct or indirect way, set prices, mandate or prohibit certain routes, or force motor carriers to provide or not provide certain services. While motor carriers may have to account for meal and rest break requirements when scheduling routes, including potentially reallocating resources, the court held that the break laws do not bind motor carrier to specific prices, routes, or services to a significant degree.
This holding was likely wrong as carriers must deal with a myriad of logistics and timing issues, including pricing based on delivery time and speed, and having to schedule and staff to account for rest and meal periods. This is further complicated by both legal and practical issues that carriers often cannot control, such as traffic delays and other limitations that vary based on the type of truck being used. All of these tasks must be performed in a highly rate-competitive marketplace, and thus, California break laws do, indeed, have the “force and effect” of relating to the prices, routes, and services a carrier provides.
However, the court left open the issue of whether a federal law can ever preempt a state law on an “as applied” basis, or in other words, whether federal law can sometimes preempt a state law, but not at other times. In that regard, the court was somewhat dismissive of the employer’s arguments regarding the difficulties of scheduling breaks, the impact on staffing, and the inevitable influence on rates. Both the majority and concurring decisions were unconvinced by Penske’s evidence, or lack thereof, that finding routes which would allow drivers to comply with California’s break laws would limit motor carriers to a smaller set of possible routes.
The Bottom Line: The Ninth Circuit has rejected, at least on one set of facts, the application of FAAA Act preemption to California’s meal and rest period requirements in the transportation industry, but a better developed factual record might lead to a different conclusion.
http://www.employmentclassactionreport.com/meal-and-rest-periods/the-ninth-circuit-puts-up-road-block-to-motor-carrier-arguing-that-california-break-laws-are-preempted-by-the-faaa-act-but-leaves-some-wiggle-room/
Posted in Meal and Rest Periods
On Wednesday, the United States Ninth Circuit Court of Appeals rendered a decision that, on its face, involved a technical preemption issue, but one that will have serious repercussions for those in the transportation industry operating in California. In plain terms, the question was whether California’s detailed meal and rest break requirements conflict with a federal statute barring states from regulating the prices, routes and services of motor carriers and airlines.
Over the past few years, California district courts have varied as to whether motor carriers must follow California meal and rest break laws, or whether the Federal Aviation Administration Authorization Act of 1994 (“FAAA Act” or the “Act”) preempts California law in this regard. On July 9, 2014, in Dilts v. Penske Logistics, LLC, the Ninth Circuit decided, for the first time, that such preemption generally does not apply. Nevertheless, the possibility remains open that, in a future case, a motor carrier (particularly a long haul carrier) or airline may offer stronger evidence of and arguments for preemption.
Under the FAAA Act, in most instances a state “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). The Act was passed “‘to prevent States from undermining federal deregulation of interstate trucking’ through a ‘patchwork’ of state regulations.”
In Dilts, the plaintiffs sought to represent a class of hourly appliance delivery drivers and installers, working exclusively within California and on short-haul routes. They argued that they were unable to take the California-mandated meal and rest periods, and sought to assert the usual array of California wage and hour claims as a result. The lower court found that because California’s rest and meal period requirements so severely affected trucking prices, routes, and services, they were preempted by the FAAA Act, and it granted summary judgment in the employer’s favor.
After finding a strong presumption against preemption, the Ninth Circuit stated that while the FAAA Act’s “related to” language is deliberately expansive and broad, it does not preempt state laws that affect prices, routes, or services in only a tenuous way. It concluded that where a law does not refer directly to rates, routes, or services, “the proper inquiry is whether the provision, directly or indirectly,binds the carrier to a particular price, route or service and thereby interferes with the competitive market forces within the industry.”
The Ninth Circuit held that California break laws do not, in either a direct or indirect way, set prices, mandate or prohibit certain routes, or force motor carriers to provide or not provide certain services. While motor carriers may have to account for meal and rest break requirements when scheduling routes, including potentially reallocating resources, the court held that the break laws do not bind motor carrier to specific prices, routes, or services to a significant degree.
This holding was likely wrong as carriers must deal with a myriad of logistics and timing issues, including pricing based on delivery time and speed, and having to schedule and staff to account for rest and meal periods. This is further complicated by both legal and practical issues that carriers often cannot control, such as traffic delays and other limitations that vary based on the type of truck being used. All of these tasks must be performed in a highly rate-competitive marketplace, and thus, California break laws do, indeed, have the “force and effect” of relating to the prices, routes, and services a carrier provides.
However, the court left open the issue of whether a federal law can ever preempt a state law on an “as applied” basis, or in other words, whether federal law can sometimes preempt a state law, but not at other times. In that regard, the court was somewhat dismissive of the employer’s arguments regarding the difficulties of scheduling breaks, the impact on staffing, and the inevitable influence on rates. Both the majority and concurring decisions were unconvinced by Penske’s evidence, or lack thereof, that finding routes which would allow drivers to comply with California’s break laws would limit motor carriers to a smaller set of possible routes.
The Bottom Line: The Ninth Circuit has rejected, at least on one set of facts, the application of FAAA Act preemption to California’s meal and rest period requirements in the transportation industry, but a better developed factual record might lead to a different conclusion.
http://www.employmentclassactionreport.com/meal-and-rest-periods/the-ninth-circuit-puts-up-road-block-to-motor-carrier-arguing-that-california-break-laws-are-preempted-by-the-faaa-act-but-leaves-some-wiggle-room/
FAAAA Does Not Preempt California Meal and Rest Period Requirements
Robert R. RoginsonIn
In Godfrey v, Oakland Port Services Corp., which was decided on October 28, 2014, the California Court of Appeal issued a published decision holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt California’s meal and rest period requirements. The case is significant because it is the latest California decision holding that the FAAAA does not preempt California’s wage and hour laws.
The decision relies primarily upon the Ninth Circuit Court of Appeal’s recent decision in Dilts v. Penske Logistics, LLC and the California Supreme Court’s decision in Harris v. Pac Anchor Transportation, Inc., both of which rejected challenges to California laws based upon FAAAA preemption. The decisions in Dilts and Pac Anchor each present a questionable analysis of FAAAA preemption not shared by other federal courts. Nonetheless, unless and until the Supreme Court of the United States grants review in either Dilts or Pac Anchor, these cases cast doubt as to whether transportation and logistics companies operating in California may use the FAAAA for protection from the application of California’s restrictive minimum wage, meal and rest period, and recordkeeping requirements.
Lavon Godfrey and Gary Gilbert were employed as truck drivers for Oakland Port Services Corp., which was doing business as AB Trucking. Godfrey and Gilbert initiated a class action lawsuit against the company, alleging that “AB did not pay its drivers for all hours worked, misclassified some drivers as non-employee trainees and did not pay them at all, and failed to provide required meal and rest breaks.”
The plaintiffs sought certification of the class of drivers who performed work for AB out of its Oakland, California facility. The trial court granted the plaintiffs’ class certification motion, and the case proceeded to a bench trial. The court awarded the class a total of $964,557.08, in addition to attorneys’ fees, litigation expenses, and class representative enhancements.
AB appealed arguing that federal law—the FAAAA—preempts application of California’s law on meal and rest break requirements to motor carriers. The FAAAA’s preemption clause restricts states from enacting or enforcing laws “related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” AB claimed that California’s meal and rest break laws have a significant impact on prices, routes, and services.
In addition, AB argued that the court order granting class certification was unsupported by substantial evidence, that the court should have reserved individual determinations of damages for the claims administration process, and that AB’s drivers are expressly excluded from coverage under Industrial Welfare Commission (IWC) Order No. 9-2001. The California Court of Appeal rejected AB’s preemption argument and its other arguments and affirmed the judgment of the trial court.
Robert R. Roginson is a shareholder in the Los Angeles office of Ogletree Deakins.
- See more at: http://blog.ogletreedeakins.com/faaaa-does-not-preempt-california-meal-and-rest-period-requirements/#sthash.5sfzhP7w.dpuf
In Godfrey v, Oakland Port Services Corp., which was decided on October 28, 2014, the California Court of Appeal issued a published decision holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt California’s meal and rest period requirements. The case is significant because it is the latest California decision holding that the FAAAA does not preempt California’s wage and hour laws.
The decision relies primarily upon the Ninth Circuit Court of Appeal’s recent decision in Dilts v. Penske Logistics, LLC and the California Supreme Court’s decision in Harris v. Pac Anchor Transportation, Inc., both of which rejected challenges to California laws based upon FAAAA preemption. The decisions in Dilts and Pac Anchor each present a questionable analysis of FAAAA preemption not shared by other federal courts. Nonetheless, unless and until the Supreme Court of the United States grants review in either Dilts or Pac Anchor, these cases cast doubt as to whether transportation and logistics companies operating in California may use the FAAAA for protection from the application of California’s restrictive minimum wage, meal and rest period, and recordkeeping requirements.
Lavon Godfrey and Gary Gilbert were employed as truck drivers for Oakland Port Services Corp., which was doing business as AB Trucking. Godfrey and Gilbert initiated a class action lawsuit against the company, alleging that “AB did not pay its drivers for all hours worked, misclassified some drivers as non-employee trainees and did not pay them at all, and failed to provide required meal and rest breaks.”
The plaintiffs sought certification of the class of drivers who performed work for AB out of its Oakland, California facility. The trial court granted the plaintiffs’ class certification motion, and the case proceeded to a bench trial. The court awarded the class a total of $964,557.08, in addition to attorneys’ fees, litigation expenses, and class representative enhancements.
AB appealed arguing that federal law—the FAAAA—preempts application of California’s law on meal and rest break requirements to motor carriers. The FAAAA’s preemption clause restricts states from enacting or enforcing laws “related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” AB claimed that California’s meal and rest break laws have a significant impact on prices, routes, and services.
In addition, AB argued that the court order granting class certification was unsupported by substantial evidence, that the court should have reserved individual determinations of damages for the claims administration process, and that AB’s drivers are expressly excluded from coverage under Industrial Welfare Commission (IWC) Order No. 9-2001. The California Court of Appeal rejected AB’s preemption argument and its other arguments and affirmed the judgment of the trial court.
Robert R. Roginson is a shareholder in the Los Angeles office of Ogletree Deakins.
- See more at: http://blog.ogletreedeakins.com/faaaa-does-not-preempt-california-meal-and-rest-period-requirements/#sthash.5sfzhP7w.dpuf