Walmart challenges $61M jury verdict in driver wage suit
August 21, 2019
Attorneys for Walmart are trying to convince a federal appeals court to reverse a district court’s ruling that puts the retail giant on the hook for nearly $61 million in lost wages to truck drivers.
On Aug. 6, attorneys for Bentonville, Ark.-based Walmart Inc. and a class of approximately 800 Walmart truckers presented oral arguments before the Ninth Circuit U.S. Court of Appeals.
The case is another wage lawsuit that boils down to whether or not the employer controlled the drivers. A district court jury found it did and awarded the judgment accordingly.
In January 2017, the jury awarded the class of approximately 800 current and former Walmart truck drivers $61 million in lost wages after it found the company violated the California Labor Code.
Theodore Boutrous, an attorney for Walmart, opened up oral arguments by telling the court to consider the context of the wage lawsuit when considering a decision.
“This minimum wage case must be considered against the backdrop of both the purpose of the minimum wage law, which is to provide a livable wage for individuals, and of Walmart paying in the highest wages in the trucking industry, often in excess of $100,000 a year, and having one of the lowest attrition rates in the industry,” Boutrous said.
According to Walmart, the primary component of the multimillion dollar verdict is the 10-hour layover period when drivers 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.
A jury found Walmart’s inconvenience fee as taking control.
However, Walmart argued that previous rulings have determined such policies as a “degree of control” that doesn’t require compensation. Also, neither state nor federal law requires this inconvenience fee. Walmart adds this extra pay on its own volition. Yet, the jury decision finds that all drivers should receive pay for all 10 hours. This includes even if they go to a casino or out skiing, Boutrous said.
Boutrous 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. In Walmart’s case, Boutrous explained, drivers can voluntarily accept a $42 inconvenience to remain “on premises” much like Taco Bell employees voluntarily accept a discount.
Walmart is challenging “prejudiced” jury instructions regarding driver control and minimum wage in regard to rest breaks and inspections. During oral arguments, the company said those instructions suggest breaks and inspections do not qualify for compensation. If Walmart followed policy, those went uncompensated, which attorneys claimed is not true. Walmart intends to pay drivers for those times and drivers should have to prove any omission of that pay. Boutrous claimed that no individual plaintiff has proven that compensation is less than minimum wage for any single hour. Furthermore, he argued no driver proved that they were deprived of their freedom and their ability to do what they want on their layover.
“At a bare minimum that requires reversal and a new trial,” Boutrous said.
Conversely, Michael Rubin, an attorney for the class of drivers, claim they needed 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. Rubin also claims that 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.
If a driver leaves his or her truck without permission, Walmart can fire them, according to Rubin’s oral arguments. He mentions how managers inspect layovers to see where a truck is and if the driver is inside the truck.
Drivers can lose their job for not sleeping in their cab, thus establishing control, Rubin argues.
During oral arguments, Judge Diarmuid O’Scannlain brought up Walmart’s argument that the jury’s instructions were prejudiced. One instruction stated, “The court has previously found that the policy stated in the pay manual subjected drivers to Walmart’s control during layover.” O’Scannlain asked if that is an inaccurate instruction. Rubin said it is not since that is what the district court judge finds and explains how she finds it.
More specifically, what is in the manual and what actually occurs in practice differ. Walmart never objected to instruction during trial. In fact, it actually stated that the supplemental instruction “is a fair compromise, we can live with that,” Rubin said.
Rubin said the jury’s task was to find whether or not Walmart had control over drivers or if they could use their time effectively for his or her own purposes. One example the district judge gave to the jury was a case that found restrictions from leaving the workplace (such as a truck) can be control. Another case cited by the district involved agriculture workers taking a bus to work. Even if they can perform personal activities, if they cannot move wherever they like, that is also control.
Rubin argued 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.