ATA lends support to Walmart in $55M driver wage lawsuit

A multimillion-dollar lawsuit against Walmart that the retailer is still fighting recently received a new player in the game: the American Trucking Associations. Two mega carriers joined ATA in the amicus brief

On Jan. 31, ATA filed an amicus brief in support of Walmart. On Jan. 6, the Ninth Circuit Court of Appeals upheld a lower court’s decision to award Walmart truck drivers in California $54.6 million in lost wages in addition to nearly $6 million in restitution. Shortly after, Walmart filed a request for rehearing with the full appellate court.

Together with the California Trucking Association, CRST Expedited and U.S. Xpress, ATA explained to the court it has “a strong interest in the outcome of this case, which has major implications for the treatment of time that drivers spend off-duty in a truck’s sleeper berth under California wage law.”

“Given the magnitude of the panel’s error and the confusion it will engender, rehearing is urgently warranted,” ATA wrote.

The main issue being argued is whether or not Walmart has complete control of the driver when determining whether layover time is compensable under California law. Both a federal district and appellate court determined that based on the language in Walmart’s pay manual, drivers can lose their job for not sleeping in their cab, thus establishing control.

Company policy states that drivers must park at a safe and secure location, typically a distribution center. According to oral arguments, drivers cannot conduct personal errands. If drivers want to leave the cab, they must first receive permission. Truckers hauling an expensive load rarely receive that permission.

“Whether Walmart’s written policy was to require permission for an at-home layover (as plaintiffs contend and as the panel concluded) or merely gave the company discretion over whether to pay an inconvenience fee for an at-home layover (as Walmart contends), it indisputably did not prohibit at-home layovers altogether, and as such stops far short of the level of control that was dispositive in Bono and Morillion,” ATA argued.

Walmart has cited a case involving Taco Bell employee food discounts. Employees had to eat the food on the premises in order to receive the discount. In that case, the company did not have to pay for that time on premises. Employees voluntarily accepted a benefit. Walmart argues that its drivers can voluntarily accept a $42 inconvenience to remain “on premises” much like Taco Bell employees voluntarily accept a discount.

Attorneys for the plaintiffs counterargued that that the benefit of the $42 inconvenience fee is not automatic, like Taco Bells’ employee discounts. More specifically, Taco Bell employees can make the unilateral choice to receive the discount. Conversely, Walmart drivers need permission to leave the truck.

However, ATA contended that the Taco Bell scenario does apply to the Walmart lawsuit. ATA said the case “presents a fact pattern far closer to the one here, and compels the conclusion that Walmart’s layover policy does not constitute control as a matter of law.”

ATA also invoked the federal hours-of-service regulations.

According to 49 C.F.R. § 395.2, “all time loading or unloading a commercial motor vehicle, supervising, or assisting in the loading or unloading, attending a commercial motor vehicle being loaded or unloaded, remaining in readiness to operate the commercial motor vehicle, or in giving or receiving receipts for shipments loaded or unloaded” is considered on-duty time.

“Thus, as a practical matter, there is little if any daylight between time that is off-duty for federal hours-of-service purposes (where so much as attending the vehicle without performing work renders a driver on-duty) and time that is outside the employer’s control (and therefore noncompensable under California law): drivers could not have been required to remain in attendance of their vehicles, as the panel’s decision would have it, and at the same time be off-duty for hours-of-service purposes,” ATA argued.

ATA went on to use a slippery slope argument.

More specifically, such a ruling will cross over into other industries when it comes to breaks and employer control:

“Lawyers, for example, may require support staff to check in before heading out, in case there is some pressing matter that will require them after hours. Retail and restaurant workers may be required to check in with their managers before the end of their shift, in case coverage gaps mean they will have to stay late. Surely no one would contend that California law requires such employees to continue to be paid if, for example, they chose to remain in their employer’s break room reading a novel for some period of time after their shift (perhaps because they had a nearby social engagement later in the evening), simply by virtue of the fact that their employer might have required them to remain on the premises even if they had wished to leave.”

As of publication, no other amicus briefs have been filed in support of either Walmart or the drivers. The Ninth Circuit can approve a rehearing with the panel or all circuit judges or deny the request. If the request is denied, Walmart can either petition to the U.S. Supreme Court or let the $54.6 million ruling stand.