Transportation Law Update: Ninth Circuit Rules on Piece-Rate Pay Case
Ayala v. U.S. Xpress Enterprises, Inc., No. 20-55981 (9th Cir. June 22, 2021).
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 firm previously reported in a Transportation Law Update on the District Court proceedings. The District Court in central California 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.
The lawsuit began as a class action against U.S. Xpress Enterprises, Inc. and motor carrier U.S. Xpress, Inc. (“Defendants”) in regard to its 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.
At issue on this appeal was only whether the piece-rate payment system violates California law by failing to pay drivers for nonproductive time. The Ninth Circuit affirmed the decision of the District Court and held that piece-pay payment schemes do not violate California law because employee compensation is primarily a matter of contract. Ayala and U.S. Xpress entered into these contracts with the understanding that the piece-rate payment was compensation for “completing a trip and delivering a load” on behalf of the Defendants. Notwithstanding other California labor laws, a piece-rate compensation scheme that explicitly states the pay is for both productive and nonproductive time will not violate California law.
The Ninth Circuit declined to decide the remaining issues because of the certified question. The parties needed to continue litigating the remaining claims before the District Court to develop the factual record. The issues that remain regard pay in sleeper berth status and U.S. Xpress’ pre-2013 company handbook (which may have been unclear in defining nondriving pay issues).