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Wal-Mart truck drivers granted class action status in California minimum wage lawsuit

Truck drivers employed by Wal-Mart have been granted class action status in a lawsuit over the employer’s alleged failure to pay minimum wage in violation of the California Labor Code.

The California district court determined that the drivers met the requirements of Rule 23 after concluding that they identified common questions of law and fact concerning the alleged minimum wage violations and waiting-time penalties. The court also found that common questions regarding Wal-Mart’s pay formula meant that common issues predominated over individualized issues as required by Rule 23(b)(3).

However, certification was denied as  a class action for the employee’s wage statement claims.

Former truck drivers employed by Wal-Mart brought a class action suit alleging that the mega retailer violated various provisions of the California Labor Code and Business and Professional Code by failing to pay minimum wage, provide meal and rest breaks, and provide accurate wage statements.

According to the employees, Wal-Mart uniformly applied policies, detailed in its driver pay manuals, that rendered the issues in this case appropriate for class action. Specifically, they alleged that Wal-Mart’s piece-rate pay policies did not provide minimum wages and did not pay drivers for certain mandatory activities, in violation of California law. Wal-Mart pays its drivers based on mileage, activity pay (for duties Wal-Mart deems compensable), and non-activity pay (for events at Wal-Mart dispatch and home offices or unplanned events). The drivers contended that Wal-Mart’s piece-rate pay policies did not pay drivers minimum wage for all of the work they perform for tasks such as pre- and post-trip inspections; rest breaks; fueling; washing the tractors; weighing the tractors; completing mandatory paperwork; wait time and layover periods. When drivers are given a driving assignment, they also receive a projected estimated time of arrival. Drivers are to look at the estimated time only as an estimate and adjust it with the knowledge that they need a 10-minute rest break and/or a meal break under California law. The drivers have full autonomy to make changes to the estimated times.

Tasks including fueling, washing, and weighing trucks are not separately paid. Additionally, drivers must remain in the tractor when fueling at a regional distribution center and may be required to fuel their own tractor when fueling at a grocery distribution center. Drivers are also responsible for the cleanliness of the tractor and trailer and must wash them once per week, or as often as needed.

As to the waiting time issue, drivers are not separately compensated for all time spent waiting. Under the 2001Driver Pay Manual, the first two hours of wait time after arrival at a store, an hour after arrival at a vendor and when waiting at a return center, is non-compensable. The manual further states that drivers are not paid for wait time when routine scheduled maintenance is performed on equipment, when undergoing a DOT inspection, or for any time spent at a highway weigh scale.

Drivers were paid $42 for 10-hour layover periods. A layover is earned when taking a mandatory DOT break and is not paid in conjunction with any other type of pay.

In additional to an overall class of California drivers, the employees also sought to certify a waiting-time penalty sub-class. Wal-Mart argued that the employees’ questions were not capable of class resolution because the question of whether drivers were paid for various tasks required individualized inquiries. It also argued that the policies in its manuals were merely “guidelines” and that the employees’ inquiries required driver-by-driver and task-by-task analysis.

The court determined that the employees met the commonality requirement for the proposed class of drivers and found that the employees identified common questions of law and fact concerning minimum wages, including: whether Wal-Mart’s piece-rate pay plan violated California’s minimum wage laws by failing to pay drivers minimum wage for all hours worked; whether Wal-Mart’s drivers are entitled to payment of at least minimum wages for all hours worked; and whether Wal-Mart requires drivers to perform services during DOT-mandated layovers, for which drivers are paid less than California’s minimum wage.

Similarly, the court concluded that the drivers had also identified a common question of law and fact concerning waiting-time penalties: whether Wal-Mart violated Labor Code Sec. 203 by willfully failing to pay all wages due and owing to each driver whose employment ended at any time during the class period.

Again, the court found that the employees’ question can be resolved on a class-wide basis, and so they satisfied the commonality requirement for the waiting-time penalty subclass.

Observing that the employees’ theory of recovery involved Wal-Mart’s common practice or policy denying all class members minimum wage for all hours worked and that the  plaintiffs were subject to the policies and suffered the same injury as a result of the policies, the court found that they met the typicality requirement. Additionally, because Wal-Mart did not challenge the adequacy of the representative plaintiffs to serve as class representative, the court found that they met the adequacy requirements of Rule 23(a)(4).

With respect to the driver class, Wal-Mart first argued that the plaintiffs had not offered a way to determine which drivers performed which tasks or the amount of time spent on those tasks in California, so they could not meet the predominance requirement. However, the court found its argument unpersuasive. It found that the plaintiffs were California residents and worked out of distribution centers located in California. Further, it found that the plaintiffs presumptively enjoyed the protections of IWC regulations, so Wal-Mart’s argument presented no bar to the predominance requirement. The court also rejected Wal-Mart’s argument that the employees’ minimum wage claims required an hour-by-hour, driver-by-driver, and task-by-task analysis of how each plaintiff spent his workday, and these individual questions would overwhelm any common questions.

Instead, the court concluded that Wal-Mart’s pay formula raised common questions, and these common questions predominated over individual questions of whether certain drivers received additional discretionary pay after requesting such payments, or whether some drivers completed tasks like paperwork during wait-time or attended to personal phone calls during layovers. Accordingly, the court found that the plaintiffs satisfied the predominance requirement for their minimum wage claims. However, the court denied the employees’ motion for class certification for claims of inaccurate wage statements because they did not show that class members shared a common injury as a result of the missing wage statement information that could be adjudicated on a class-wide basis or that there were common legal question that predominated over the individualized issues for plaintiffs’ wage statement claims.

Wal-Mart also challenged whether the plaintiffs had established predominance for their waiting-time claims under California Labor Code Sec. 203. According to the plaintiffs, Wal-Mart’s policy of failing to pay drivers at least the minimum wage for all hours worked constituted a violation of Sec. 203. They suggested that Wal-Mart instituted a payment system that ensured its drivers were not paid the minimum wage. Under this framing of the waiting-time issue, the court found that common questions predominated and individualized inquiries into each driver’s underpayment were not required.

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