Penske Logistics to Settle California Truckers’ Lawsuit for $750,000

January 30, 2017 by Clarissa Hawes

Penske Logistics will pay $750,000 to settle a long-standing dispute over wages for meal and rest breaks for its drivers in California, ending nine years of litigation.

The truckers and Penske reached a proposed settlement, “which they believe to be fair, reasonable and adequate,” according to court documents filed Jan. 23.

Both parties asked U.S. District Judge Cathy Ann Bencivengo for preliminary approval of the proposed settlement last week. A final decision on the settlement is set for Feb. 27.

The class-action case was scheduled to go to trial Feb. 6.

“Penske is pleased to have reached an agreement with the plaintiffs’ counsel to settle this dispute,” the trucking company said in a statement. “We did not admit any wrongdoing and believe that Penske would have prevailed on the merits of the claims, but we look forward to the court approving the settlement and putting an end to this protracted litigation.”

The lawsuit, filed by three Penske drivers in 2008, claimed the company failed to pay California drivers for all of the hours they worked, a violation of California’s labor code, and failed to compensate them for meal and rest breaks. Drivers also alleged in the lawsuit that the company failed to keep accurate pay records of wages that drivers earned and hours they worked.

In a 2014 ruling, the 9th U.S. Circuit Court of Appeals affirmed that California could enforce its own meal and rest break requirements for the trucking industry. The trucking industry has fought to reverse that decision.

The American Trucking Associations, along with other trucking trade groups, said it would continue to push back against jurisdictions that are imposing extra meal and rest break requirements on interstate drivers already limited by federal hours-of-service regulations.

This is an issue the trucking industry hopes the Trump administration and a Republican-controlled Congress will change.

“We believe the 9th Circuit decision was politicized and it is past time for Congress to fully reassert federal supremacy over state attempts to regulate the trucking industry,” said Joe Rajkovacz, director of governmental affairs for Western States Trucking Association. “That is exactly what passage of the Federal Aviation Administration Authorization Act of 1994 was all about.”

While the legislation prevents states from enforcing any law “related to” a motor carrier’s “price, route, or service … with respect to the transportation of property,” the 9th Circuit Court rejected the argument that it extends to work rules and labor issues.

The trucking industry is asking Congress to step in and pass new legislation that would block states from enforcing their own rules on interstate truck drivers who are employees.

In California, the legislation would still allow the state to enforce meal and rest break requirements on a driver who, for example, travels only between Bakersfield and Oakland hauling goods manufactured within the state. That is a purely intrastate movement. But drivers headed out of state or who are shuttling goods from ports most likely would not fall under the California rules.

“We are keen to see the federal government assert itself and preempt the patchwork of state-level regulations on the trucking industry … that create an impediment to the safe and efficient flow of commerce,” the ATA said.

The Teamsters have lobbied hard against such a change that would block states from imposing their own rules over trucking, including meal and rest break requirements.

“The Teamsters believe that Congress will continue to reject this misguided legislation as they have time and time again,” Sam Loesche, the union’s transportation policy advisor, told Trucks.com. “This issue cuts across party lines. It has been opposed by both Democrats and Republicans as well as others in the trucking industry, state agencies, safety groups and more.”

He said previous attempts to preempt state trucking rules failed when they were inserted into larger pieces of legislation. Lawmakers threatened to vote against the legislation unless the preemption language was removed.

“With everything that our country needs to address, whether it’s major infrastructure investments or new programs to increase highway safety,” Loesche said, “we feel confident that lawmakers won’t want to include poison pill riders such as this that would seriously threaten their ability to achieve those goals.”

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