January 9, 2020

9th Circ. Greenlights Walmart Truckers’ $55M Wage Victory

As originally posted on Law360.com

On Monday, January 6, 2020, the Ninth Circuit affirmed a $54.6 million jury win for truckers who said Walmart violated California law by not paying minimum wage for breaks and other work interruptions, noting reservations with the lower court’s analysis but declining to play “armchair district judge.”

A three-judge panel rejected the retail giant’s claims that the Northern District of California lacked jurisdiction to hear the case and that the workers weren’t owed minimum wage for layovers, rest breaks and inspections as a matter of law.

The panel said the lead plaintiffs were adequate class representatives and that California law let the drivers seek pay for these interruptions under certain circumstances, which the jury found were present in this case.

“It is improper for this court to play armchair district judge,” said Judge Eugene Siler, a member of the Sixth Circuit who sat on the Ninth Circuit panel by designation. “In the end, while Wal-Mart makes some compelling points, Wal-Mart raises no reversible error.”

The panel was unanimous on most facets of the complex case, though Judge Diarmuid O’Scannlain said the trial court should have let the jury resolve one dispute the court decided in the drivers’ favor.

Walmart challenged a November 2016 jury verdict handing a class of more than 800 truckers nearly $55 million in damages on claims the retailer violated California law requiring minimum wages for all work. While it found Walmart — which paid workers based on their activities — did not short workers for certain aspects of their work, the jury found the company owed wages for mandatory 10-hour layovers between driving periods, pre- and post-trip inspections, and rest breaks.

Under California law, employers owe workers minimum wage for work interruptions in which they nonetheless have “control” over employees. The verdict built on pretrial rulings by the district court that Walmart’s written policy denied workers minimum wage for these interruptions, with the jury finding that Walmart shorted workers in practice, too.

The panel devoted much of its analysis to the layover dispute, which accounts for about $44 million of the verdict. During the period covered by the suit, Walmart had a policy of giving workers a $42 “inconvenience” payment for layovers spent in their trucks, while letting workers request spending their layover time at home, though the parties dispute the policy’s exact mechanics.

Walmart argued that it did not control workers in writing or in fact, saying the court and the jury misread its policy. But the majority disagreed, saying the policy as written exerted “control” over workers because they had to get “permission to enjoy one of the most fundamental privileges that all employees enjoy — the autonomy to go home when they are not working.” And the workers offered ample evidence for the jury to conclude that Walmart so restricted them in practice, the panel said.

Judge O’Scannlain disagreed with his colleagues that Walmart had a stated policy of controlling workers during layovers, saying that was the jury’s decision to make. By answering that question itself, the court prejudiced the jury, he said.

“The district court should have left for the jury the critical task of determining the extent of control exerted by Walmart’s layover policies and practices,” Judge O’Scannlain said.

But Judge O’Scannlain otherwise agreed with his fellow panel members. As to the rest break and inspection pay, the full panel said it was not enough that the workers, who earned salaries of upwards of $80,000 per year, were on average paid minimum wage for breaks and inspections. It affirmed the trial court’s finding that Walmart’s written policy did not specifically pay workers for these interruptions, and said the jury’s finding that it denied pay in practice was reasonable.

Walmart also argued that the trial court should have dismissed the case for lack of jurisdiction following a stay while the California Supreme Court resolved a related issue. The company argued the court should have tossed the suit because two named plaintiffs had died during the stay, one had lost interest in the case, and attorneys for the workers were not sure whether the fourth was an adequate class representative. But even if the remaining plaintiffs were arguably disinterested in the case, they still had an active legal quarrel with Walmart, the panel said.

Altshuler Berzon LLP attorney Michael Rubin, who argued for the workers at the Ninth Circuit, praised the decision. “This litigation has gone on for 12 years, and we’re gratified that we’re finally at the end of the road,” he said.

A Walmart representative said the company is exploring its options. “We continue to believe that our truck drivers are paid in compliance with California law and often in excess of what California law requires,” the representative said.

Ninth Circuit Judges Diarmuid O’Scannlain and Jacqueline Nguyen and Sixth Circuit Judge Eugene Siler sat on the panel for the Ninth Circuit.

Walmart is represented by Theodore Boutrous Jr., Lauren Blas, Rachel Brass and Joseph Gorman of Gibson Dunn & Crutcher LLP, and James Hanson of Scopelitis Garvin Light Hanson & Feary PC.

The workers are represented by Michael Rubin and Matthew Murray of Altshuler Berzon LLP, Lawrence Artenian and Laura Brown of Wagner Jones Kopfman & Artenian LLP, Jacob Weisberg of the Law Office of Jacob M. Weisberg, and Stanley Saltzman of Marlin & Saltzman LLP.

The cases are Ridgeway et al. v. Walmart Inc., cases number 17-15983 and 17-16142, in the U.S. Court of Appeals for the Ninth Circuit.

–Written by Braden Campbell.

–Additional reporting by Cara Bayles.

–Editing by Adam LoBelia.