Is There Federal Preemption for California AB 1513 Claims Against California Trucking Companies for Rest and Recovery Breaks and Non-Productive Time?

By: Kyle D. Kring and Tyler Kring

AB 1513/Labor Code section 226.2 provides that companies who pay piece rate must pay for rest and recovery breaks and non-productive time separate and in addition to traditional piece rate wages. Trucking companies often opt to use piece rate pay because it incentivizes drivers to perform as efficiently as possible. In 1994, Congress aimed to prevent states from interfering with the trucking carriers' way of doing business and drafted a preemption provision in the Federal Aviation Administration Authorization Act of 1994 (FAAAA). The "safe harbor" affirmative defense which the recently passed AB 1513 create, has resulted in a number of trucking companies signing up with the Department of Industrial Relations (DIR) for the AB 1513 affirmative defense. The intersection between the FAAAA and AB 1513 has raised the question whether federal law, specifically the FAAAA, preempts California meal and rest break law including AB 1513/Labor Code section 226.2?

The answer to this question may be costly for California truck companies. The Ninth Circuit, in Dilts v. Penske Logistics, refused to adhere to Congress, holding that federal preemption did not apply to meal and rest breaks in California because the state laws were not sufficiently "related to" prices, routes, or services.

The Ninth Circuit's decision has been widely criticized and many believe Dilts is clearly distinguishable because price, specifically, is affected. With AB 1513 and the California legislature's implicit determination that four (4) percent of gross wages is a reasonable figure attributable to rest and recovery breaks and non-productive time, price is clearly at issue in these rest and recovery break and non-productive time cases. That being said, a strong argument can be made that preemption should apply.

The Dilts court did not address the impact that paying for unpaid rest breaks and non-productive time at a rate of 4 percent of gross earnings would have on the rate. If 4 percent, or something close, is used to calculate the unpaid rest breaks and non-productive time on a case-by-case basis, it would seem plausible that the state law (i.e. Labor Code 226.2) could be strongly related to the price and rate, thereby allowing federal preemption to apply.

The Supreme Court cannot correct all lower court decisions on the issue so legislative action is necessary for clarification. The Fiscal Year 2017 Transportation, Housing and Urban Development, and Related Agencies Appropriations bill contains language supporting preemption. The bill clarifies that the scope of federal preemption extends to state meal and rest break requirements. This bill passed the Senate and has been approved by full committee (voice vote). While the 2017 fiscal year began October 1, the House passed a continuing resolution, delaying the passage of appropriation bills until the budget is resolved.

Meanwhile, trucking companies and carriers are encouraged to contact an attorney at Kring & Chung, LLP to see how these laws may affect you or your company.

No Comments

Leave a comment
Comment Information
Premium Av Preeminent 5.0 out 5 Rating Peer Review Rated LexisNexis Martindale Hubbell Avvo Super Lawyers OC Metro Register
Contact

How Can We Help You?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Office Locations

Irvine Office
38 Corporate Park
Irvine, CA 92606

Phone: 949-345-1621
Fax: 949-261-8800
Irvine Law Office Map

Los Angeles Office
3435 Wilshire Blvd., Suite 2700
Los Angeles, CA 90010

Phone: 949-345-1621
Phone: 213-232-1633
Map & Directions

Temecula Office
41955 Fourth St., Suite 315
Temecula, CA 92590

Phone: 949-345-1621
Phone: 951-331-4520
Fax: 951-257-0450
Map & Directions

Sacramento Office
2620 J Street #1
Sacramento, CA 95816

Phone: 949-345-1621
Phone: 916-266-9000
Fax: 916-266-9001
Map & Directions

San Diego Office
11682 El Camino Real, Suite 100
San Diego, CA 92130

Phone: 949-345-1621
Phone: 858-436-0268
Fax: 858-436-0279
Map & Directions

Las Vegas Office
1050 Indigo Dr., Suite 200
Las Vegas, NV 89145

Phone: 949-345-1621
Phone: 702-260-9500
Fax: 702-260-9434
Map & Directions