946 F.3d 1066
9th Cir.2020Background
- Long-haul Wal‑Mart truck drivers in California sued in a class action alleging unpaid minimum wages for 10‑hour layovers, rest breaks, and pre/post‑trip inspections under California law; Wal‑Mart used an activity‑based pay system (mileage, activity codes, limited hourly pay).
- Case removed to federal court and stayed pending California Supreme Court’s Brinker decision; after the stay plaintiffs substituted new named plaintiffs and amended the complaint.
- The district court granted partial summary judgment that Wal‑Mart’s written pay policies, if applied as written, would subject drivers to employer “control” during layovers and could fail to pay for certain activities, leaving factual implementation to the jury.
- At a 16‑day trial the jury found for Wal‑Mart on 7 tasks and for plaintiffs on 4 (layovers, rest breaks, pre/post‑trip inspections), awarding roughly $54.6 million; district court denied liquidated damages and Wal‑Mart’s post‑trial JMOL/new‑trial motions.
- On appeal Wal‑Mart challenged jurisdiction after the stay, class certification and classwide damages methodology, jury instructions, FAAAA preemption, and sufficiency of evidence on control; plaintiffs cross‑appealed the denial of liquidated damages.
- The Ninth Circuit affirmed: (1) federal jurisdiction remained, (2) class certification and representative damages evidence were permissible, (3) California law can require pay for time when employer exercises control (including certain layovers), (4) FAAAA did not preempt, and (5) liquidated damages were properly denied because Wal‑Mart showed good faith and a reasonable belief in the legality of its pay practices.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction after stay | Two named plaintiffs remained; case not moot | Moot because original named plaintiffs died/lacked interest | Case or controversy existed; jurisdiction proper |
| Compensability of layovers | Time is compensable if employer controls drivers during layovers | Breaks mandated by law cannot be compensable per se | Compensability depends on employer control, not status of break |
| Meaning of pay manual / control (summary judgment) | Manual’s preapproval rule and penalties show control as matter of law | Manual ambiguous; question for jury | Court may rule as matter of law that written policy would constitute control if applied; implementation left to jury |
| Sufficiency of evidence on control | Drivers’ testimony and manual support finding of control | Many drivers used layovers freely; no control in fact | Jury verdict upheld: substantial evidence supported control finding |
| FAAAA preemption | CA wage rules affect carrier prices/routes/services | FAAAA preempts state laws related to price/route/service | FAAAA did not preempt California wage law here (Dilts controlling) |
| Classwide damages / representative evidence | Representative sampling and expert (Phillips) reliably estimated unpaid time | Variations among drivers preclude classwide extrapolation | Representative evidence admissible under Tyson Foods; damages proof adequate |
| Liquidated damages | Liquidated damages required under Cal. Lab. Code | Wal‑Mart acted in good faith and reasonably believed its pay scheme lawful | Denial of liquidated damages affirmed: Wal‑Mart showed good faith/reasonable belief |
Key Cases Cited
- Brinker Restaurant Corp. v. Superior Court, 273 P.3d 513 (Cal. 2012) (employer must make meal/rest breaks available but need not ensure employees take them)
- Morillion v. Royal Packing Co., 995 P.2d 139 (Cal. 2000) (time spent under employer control during employer‑directed transport is compensable)
- Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (representative/statistical evidence may prove classwide wage claims when reliable)
- Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) (FAAAA does not preempt California meal/rest break laws)
- Mendiola v. CPS Sec. Sols., Inc., 340 P.3d 355 (Cal. 2015) (level of employer control—restrictions on use of time—determines compensability)
- Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 1150 (9th Cir. 2016) (need for individualized damages calculations does not defeat class treatment)
- Bluford v. Safeway Stores, Inc., 216 Cal. App. 4th 864 (Cal. Ct. App. 2013) (California disallows federal‑style averaging to satisfy minimum wage for discrete rest periods)
- Armenta v. Osmose, Inc., 135 Cal. App. 4th 314 (Cal. Ct. App. 2005) (federal averaging method for minimum wage claims not applied in California)