Transportation Law Update: Piece Rate Pay for Nondriving Work

06.14.2021

Ayala v. U.S. Xpress Enterprises, Inc., No. EDCV 16-137-GW-KKx, 2020 WL 3071707 (C.D. Cal. June 9, 2020).

Anthony Ayala, and the certified class of truck drivers (“Ayala”), appealed a California district court decision to the United States Court of Appeals for the Ninth Circuit. See Docket No. 20-55981. The appeal is currently pending and, as of this writing, has not yet been set for oral argument. The appeal has been supported by numerous amicus curiae from industry groups and other interested parties. The lower court decision held that motor carriers do not have to pay their driver’s separately for nondriving work when paid on a piece-rate basis under California state law. Nondriving work includes refueling, inspections, and loading and unloading at docks. But minimum wage issues remain.

The case has a potential to impact the transportation industry as a whole. At the very least, companies doing business in California or hiring from California need to be aware of the decision. A discussion of the lower court decision follows.

The lawsuit began as a class action against U.S. Xpress Enterprises, Inc. and motor carrier U.S. Xpress, Inc. (“Defendants”) in regards to the piece-rate compensation system. Ayala alleged that this piece-rate system violates California’s wage and hour laws by not paying drivers for their time spent on work tasks. The piece-rate system implemented by U.S. Xpress calculates payment based on how many miles the driver has driven instead of how many hours the driver has worked. However, California law mandates that piece-rate system employees are to be paid for nonproductive time separately from the general piece-rate payment system.

The argument has been made that a piece-rate system encourages productivity and efficiency in the transportation industry. The theory goes that because motor carriers have limited ability to supervise and monitor their drivers, this system gives a higher earning potential, higher employee retention, and increased productivity.

The district court, while declining to decertify the class, had concerns about Ayala’s position and how it would prohibit fixed-fee compensation systems. The district court found that the piece-rate system did in fact cover the nondriving tasks under the U.S. Xpress’s driver handbook, partially granting the Defendant’s motion for summary judgment, as these nondriving tasks at issue are not covered under nonproductive time. The district court also granted, in part, Ayala’s motion for summary judgment in that “(1) solo drivers delivering high-value cargo loads are entitled to minimum-wage payment for all off-duty and sleeper-berth time logged while in California; and (2) for team drivers delivering high-value cargo loads, the driver designated to stick with the truck while it is stationary is entitled to minimum-wage payment for any off-duty and sleeper-berth time logged while the truck was stationary in California.”

Check back for the Ninth Circuit’s decision regarding Ayala’s appeal on drivers not being paid separately for nondriving work when working on a piece-rate basis.

Contact John F. Fatino for more information at 515-288-6041 or fatino@whitfieldlaw.com. Elaina J. Steenson, J.D. Candidate, Drake University, assisted in the preparation of these materials.

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