Federal appeals court affirms $54.6M award in Walmart trucker wage lawsuit

Despite efforts to reverse a federal district court’s order, Walmart is still on the hook for tens of millions of dollars in lost trucker wages, an appeals court decided on Monday.

On Monday, Jan. 6, a panel for 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.

Walmart ‘exercised control over its drivers’

Like similar cases, Walmart’s wage lawsuit is based on whether the company controlled the drivers.

During oral arguments, Walmart argued that drivers should not have been awarded damages for layovers. That portion of the verdict accounted for $44.7 million of the $54.6 million in damages. A jury decided that drivers should be compensated for the 10-hour layover period when they cannot work and are free to engage in rest, sleep and leisure activities away from their truck.

Walmart argues the verdict makes it sound like the payment plan requires pay for every minute of the 10-hour layover. However, the plan does not say that drivers must take their layover in the truck. In fact, if truckers want to earn a $42 “inconvenience fee,” only then does Walmart require the layover period take place inside the truck.

Attorneys for the drivers claim that truckers need permission to sleep anywhere other than the cab. 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.

Essentially, drivers can lose their job for not sleeping in their cab, thus establishing control.

In its appeal, Walmart argued that layovers are not compensable. However, the federal court applied California law to the case.

The appeals court ruled that under California law, “time drivers spent on layovers was compensable if Walmart exercised control over the drivers during those breaks.” On that note, the panel also agreed “that Walmart’s written policies, if applied as written, resulted in Walmart exercising control over employees during mandated layovers as a matter of California law.”

“In California, an employer must pay minimum wages whenever it controls the employee,” the appeals court states. “And there is no reason to think that, as a matter of law, an employer cannot exercise control of a trucker even when the driver is taking a legally-mandated break.”

Second, Walmart argues that even if that is the case, it has no control over the drivers during layovers. The company’s pay manual only requires a driver to seek approval for the $42 for a layover taken at home. Walmart argues that the pay manual does not require employees to seek approval to go home during layovers. Rather, it requires drivers to seek preapproval to obtain the $42 inconvenience payment.

The manual states that a driver can take a break at home “only after receiving approval from a member of transportation management,” according to the appeals court. The manual also states that taking an “unauthorized break at home” is “unacceptable and may lead to immediate termination.”

“These provisions make no mention of the $42 inconvenience fee and instead require drivers to seek preapproval before choosing to take a break at home,” the appellate panel concluded. “Thus, when read comprehensively and in context, Walmart’s written policy clearly prohibits drivers from taking a layover at home unless they receive prior approval. Walmart’s argument to the contrary lacks textual support.”

The court also ruled the following:

Walmart’s policy restricted drivers’ freedom of movement and prevented drivers from making a unilateral decision to spend layovers at home without preapproval. Walmart employees may have been free to leave the truck and engage in personal activities during layovers, but they could not go home. This foreclosed drivers from numerous activities in which they might otherwise engage while on layovers. As a result, employee liberty and freedom of movement was controlled by Walmart.

Consequently, the appeals court affirmed the $54.6 million in damages. Those damages include (rounded up):

• $44.7 million for layovers.
• $4 million for rest breaks.
• $3 million for pre-trip inspections.
• $3 million for post-trip inspections.

The appellate decision also affirms restitution in the amount of $5.86 million and more than $300,000 for class representatives.

Walmart can still request an en banc rehearing or petition to the U.S. Supreme Court.