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California jury awards $54M to Wal-Mart drivers for unpaid minimum wages

By Pamela Wolf, J.D.

A class of 800-plus Wal-Mart truck drivers had much to be thankful for on Thanksgiving Eve when a jury returned a verdict awarding $54,604,181 in unpaid wages for the time they spent on pre- and post-trip inspections, 10-minute rest breaks, and mandatory 10-hour layovers. The jury found the retail giant intentionally failed to pay the drivers the full minimum wage required under California law for these activities. The bulk of the award—$44,699,766—was earmarked for Wal-Mart’s failure to pay full minimum wage for mandatory 10-hour layovers—an activity for which the court held in an earlier ruling the drivers should be paid minimum wage based on the retailer’s degree of control as manifested in its pay manual (see Control over drivers provided by Control over drivers provided by Driver Pay Manuals entitled them to minimum wage for time spent on layovers, June 1, 2015).

Notably, the jury did not find the drivers had been deprived of minimum wage for seven other types of activities, including for washing, fueling, weighing, and submitting the trucks to roadside inspections.

In response to the court’s earlier summary judgment ruling finding a minimum wage violation, Wal-Mart moved away from its prior “activity-based” pay system and adopted a system in which drivers received a flat hourly rate plus additional productivity pay based on their mileage, stops, and other activities incidental to delivering the load.

Wal-Mart then cited that pay transition as having decreased efficiency and limited driver productivity, which, due to its effect on pricing, routes, or services, meant that the wage claims were preempted by Federal Aviation Administration Authorization Act. Rejecting that argument, the court held that complying with state minimum wage laws may impose a cost on businesses that necessarily may be reflected in the prices they charge to customers, but this did not mean state minimum wage laws are sufficiently “related to a price, route, or service of any motor carrier” to trigger FAAAA preemption of truck drivers’ state minimum wage claims.

On November 23, the jury also found the same minimum wage violations as to nine class representatives and made additional awards to those individuals. Since the jury determined that all of Wal-Mart’s failures to comply with state minimum wage requirements were intentional, the court will determinate the extent to which the retailer will be required to pay civil penalties.

“We do not believe the facts support the decision and will be filing post-trial motions and are likely to appeal,” Wal-Mart said in a statement to Employment Law Daily. “Our drivers are among the highest paid in the industry, earning from approximately $80,000 to over $100,000 per year. We strongly believe that our truck drivers are paid in compliance with California law and often in excess of what California law requires. Walmart is a great place to work, as demonstrated by the fact that more than 90 percent of our drivers have been with the company for more than 10 years.”