August 6, 2018

JB Hunt Drivers Score Early Wins Ahead Of Calif. Wage Trial

As originally posted on Law360.com

A certified class of J.B. Hunt Transport Inc. drivers scored partial quick wins on claims the trucking company’s piece-rate compensation system shorted thousands of drivers on wages and rest breaks in violation of California law, according to a federal judge’s ruling Tuesday.

U.S. District Judge R. Gary Klausner granted partial summary judgment to plaintiffs Gerardo Ortega and Michael D. Patton on a couple issues in the wage-and-hour class action as it heads toward a late-September trial.

Judge Klausner ruled that J.B. Hunt’s activity-based piece-rate pay plan violated California law to the extent it failed to separately compensate drivers for meal and rest breaks and other so-called nonproductive time that included maintaining or fueling trucks or completing required paperwork.

“Under the applicable wage order for the transportation industry in California, employers must pay employees at least the minimum wage for ‘all hours worked in the payroll period, whether the renumeration is measured by time, piece, commission or otherwise,’” the judge explained. “‘Hours worked’ is defined as the ‘time during which an employee is subject to the control of an employer and includes all the time the employee is suffered or permitted to work, whether or not required to do so.’”

Under J.B. Hunt’s piece-rate formula, drivers receive mileage pay, pay for certain activities like deliveries, and hourly pay for nonproductive time in certain exceptional circumstances — for instance, some drivers receive hourly pay starting one and a half hours after their arrival time when waiting for a customer, the judge said.

“But despite this separate hourly pay in certain exceptional circumstances, the ABP formula still fails to separately compensate drivers for other hours they spend performing required tasks,” Judge Klausner said.

Those uncompensated tasks included pre- and post-trip inspections, paperwork, waiting time at a customer’s location before hourly pay begins, time spent dealing with mechanical breakdowns before hourly pay kicks in, fueling the trucks, washing the trucks and waiting for assignments.

However, Judge Klausner refused to grant summary judgment on the drivers’ claims that J.B. Hunt was liable for failing to pay drivers minimum or agreed-upon wages and that J.B Hunt didn’t provide employees with accurate itemized wage statements as required by California law.

“Given the varying pay schemes and plans for different members of the class, the court cannot issue classwide summary judgment as to liability here,” the judge said. “Because not all drivers are compensated solely via defendant’s ABP system, defendant may not be liable to every member of the class.”

Judge Klausner added, “It remains plaintiffs’ burden to prove at trial that defendant’s ABP system was applied to members of the class in practice, and that class members compensated under the ABP system in fact failed to receive separate compensation for rest breaks and other nonproductive time.”

On the wage statement issue, Judge Klausner determined that there is still a genuine dispute of material fact as to whether J.B. Hunt’s wage statements failed to include the information required under state law.

Judge Klausner also denied the plaintiffs’ bid for summary judgment on their claims for liquidated and statutory damages, saying J.B. Hunt did not act in bad faith by compensating employees under its ABP system.

The drivers’ attorney Stan Saltzman of Marlin & Saltzman told Law360 that they were pleased with the ruling.

“Plaintiffs are of course thrilled that the court has found in their favor on these critical issues, consistent with our long-expressed view of California law, and look forward to the trial scheduled to begin on Sept. 25, 2018, to address the remaining issues, as well as damages owed to the class on this case filed back in 2007,” Saltzman said.

An attorney for J.B. Hunt declined to comment.

J.B. Hunt, one of the largest transportation logistics companies in North America, recently moved for summary judgment and to decertify the 11,000-strong class of drivers in the 11-year-old dispute over J.B. Hunt’s piece-rate compensation system.

J.B. Hunt argued earlier this month that the evidence doesn’t hold up because there are too many variations in drivers’ pay plans, details of a driver’s day and whatever their reasons might be for taking, or not taking, meal and rest breaks that they were free to take, according to court filings.

“Now, with discovery nearly complete and trial imminent, it is clear that plaintiffs’ promises of a trial with ‘common proof’ were fatally unsupported,” J.B. Hunt said in its decertification motion. “Discovery has shown that individualized questions, a lack of common proof, and manageability issues make continued class treatment unworkable. Far from being paid through a ‘uniform’ compensation system, the more than 11,000 intermodal and dedicated contract services drivers who comprise the class were paid through approximately 190 different pay plans.”

The drivers have countered that the evidence in this case is clear on the question of J.B. Hunt’s liability, and that they’re able to pinpoint what tasks class members were paid for and what they were not paid for. As such, there is no cause for decertifying their class action, the drivers have argued.

The class won certification back in 2009, largely relying on the plaintiffs’ promises that their claims stemmed from a single compensation policy and “standardized” wage statements covering all drivers.

It was first tossed by the district court in 2014, which had found that the law their claims were based on was preempted by the Federal Aviation Administration Authorization Act of 1994. But the Ninth Circuit revived the suit in 2017 based on its Dilts v. Penske precedent — which found that California’s meal and rest break laws were not preempted by the FAAAA, the federal statute that preempts any state law “relating to a price, route or service of any motor carrier.”

The U.S. Supreme Court denied J.B. Hunt’s petition for review this June, so the case is back in district court to get ready for trial.

The drivers are represented by Stanley D. Saltzman and Adam Tamburelli of Marlin & Saltzman and Paul T. Cullen and Barbara DuVan-Clarke of The Cullen Law Firm APC.

J.B. Hunt is represented by Scott Edelman, Jesse Cripps, Katherine V.A. Smith and Rachel S. Brass of Gibson Dunn & Crutcher LLP and Brad Schwan and Fatemeh S. Mashouf of Littler Mendelson PC.

The district court case is Geraldo Ortega et al. v. J. B. Hunt Transport Inc., case number 2:07-cv-08336, in the U.S. District Court for the Central District of California.

–Written by Linda Chiem.

–Editing by Alyssa Miller.