Another Court Preempts California Wage and Hour Law and Limits the ABC Test

by gspencermynko

This article is going to seem strikingly similar to my previous article, however, trucking companies have scored some more significant victories in the federal courts of California. In one case, yet another court handed a win to a trucking company on meal and rest breaks and limited the application of the ABC test at the same time. There also is some news on the retroactive application of the ABC test, and the United States department of labor weighs in on when sleeper berth time is compensable, and hands down an opinion in favor of trucking companies.

Another California Court Rules California Meal and Rest Break Law is Preempted by Federal Law and Limits the Application of the ABC Test

See Henry v. Central Freight Lines, Inc., No. 2:16-cv-00280-JAM-EFB (June 13, 2019). In this particular case, A driver by the name of Rickey Henry entered into an Independent Contractor Operating Agreement with Central Freight Lines, Inc. As with most interstate carriers, Central Freight Lines is authorized by the USDOT and received their motor carrier authority from the federal government. As is so typical and today’s litigious environment, when Mr. Henry became disenchanted with his employer, CFL, he sued them claiming he was misclassified as an independent contractor and that CFL violated California meal and rest break laws.
In a ruling that is astonishingly similar to the case I wrote about 2 weeks ago (Ayala v. US Xpress), The court dismissed Henry’s claims alleging violations of California’s meal and rest breaks under California Labor Code section is 226.7 and 512. And again, the court noted that in 2018, the FMCSA published an order “concluding that California’s meal and rest break rules are preempted as applied to property-carrying commercial motor vehicle drivers covered by the FMCSA’s hours of service regulations.” The court essentially ruled that it would not enforce California’s meal and rest break laws, because they are preempted by federal law. This marks two recent and significant transportation cases where courts have ruled that California meal and rest break laws do not apply to Federally licensed motor carriers.

The court stated it was required to follow and enforce the FMCSA decision: specifically, California meal and rest break rules cannot be enforced against motor carriers and their drivers who are operating in the state. The courts are respecting the FMCSA’s position and following its declaration that motor carriers subject to USDOT rules do not have to follow California Meal and Rest Break rules.

Furthermore, in what can be described as a slap in the face to the state of California and plaintiffs’ lawyers, The court ruled that the ridiculous ABC test will only apply to claims brought under California Wage Orders (and not the entire California Labor Code). The court specifically held that the previous Borello “Right of Control” test, also known as the “common law” test for determining if a driver is an independent contractor, would be used to determine most of Henry’s claims. In what can only be described as a huge victory for the trucking company, the court held that the Borello test would also be used to determine any claims brought under California’s private attorney general act (PAGA).

Obviously, this is yet another important case where the courts are prohibiting the application of California meal and rest breaks against trucking companies, and limiting the application of the absurdly strict ABC test.

The Ninth Circuit US Court Of Appeals Withdraws Their Opinion That Dynamex ABC Test Should Be Applied Retroactively and Punts to the California Supreme Court.

The question of whether the Dynamex ruling can be applied retroactively is being kicked backed to the California Supreme Court, where the Dynamex decision was first handed down. The Ninth Circuit held that Dynamex applied retroactively to an 11-year class action lawsuit brought against a nationwide janitorial cleaning business by franchisees who claimed they were misclassified as independent contractors. The Dynamex decision adopted the strict “ABC test” for determining whether workers are independent contractors or employees for claims brought under the state’s wage orders. After ruling that Dynamex could be implemented retroactively, The U.S. Ninth Circuit Court of Appeals withdrew that opinion and returned the question of whether Dynamex could be applied retroactively to the state Supreme Court. See Vazquez v. Jan-Pro Franchising International, which also dealt with misclassification of employees as independent contractors.

The California Supreme Court has up to 90 days to decide whether to take the case. We shall see – Unfortunately, despite decades of the relying on the Borello standard to determine if a worker is an Independent Contractor, many courts have been unsympathetic to trucking companies who acted in compliance with this test on the advice of their lawyers and changed the rules of the game with absolutely no warning and applied those rules to all prior games played.

U.S. Department of Labor (DOL) issued a July 22, 2019 opinion letter stating sleeper berth time is non-compnesable.

The US  Department of Labor has issued an opinion letter on compensating truck drivers for time spent in sleeper berths while off-duty.  The DOL stated that drivers need not be compensated for any time in which “drivers are relieved of all duties and permitted to sleep in a sleeper berth…. [as this is] presumptively non-working time that is not compensable.”  The rule that nonworking time in which the driver is relieved of all duties is not compensable is true  whether or not the truck is moving or stationary. See the full opinion letter here: DOL Opinion Letter.