Ninth Circuit Clarifies California Labor Law Protections for Truck Drivers in Dilts v. Penske Logistics

California labor laws almost always offer stronger protections than their federal counterparts, which set the minimum baseline for all states. However, for some categories of employees, the California Labor Code protections can be preempted by federal laws- meaning the federal law supersedes the California law. Federal preemption of California laws almost always translates into fewer protections for employees.

Two federal regulatory schemes in particular contain preemption clauses: the Federal Aviation Administration Authorization Act of 1994 (FAAAA), dealing with motor carriers (the trucking industry), and the Airline Deregulation Act of 1978 (ADA), dealing with the air carriers. Both laws bar the application of California laws “relating to the rates, routes, or services” of any air or motor carrier.

The precise scope and definition of this “related to” test has become an uncertain and contentious issue. Companies have attempted to utilize a broad reading of the “related to” test to shield themselves against the application of California labor laws, and particularly against meal and rest break provisions. As Scalia observed in his concurring decision in another preemption case, “everything is related to everything else.”

The broad interpretation of the “related to” test by companies put at risk the California labor protections for virtually all employees working either directly or indirectly with the trucking and airline industries.

Thankfully, the Ninth Circuit has clarified this area in favor of stronger protections for workers in its decision regarding the FAAAA in Dilts v. Penske Logistics, LLC (filed July 9, 2014, cited as 2014 S.O.S. 12-55705). Dilts is a class action on behalf of trucking drivers against trucking companies. The lower court in Dilts considered whether applying California meal and rest break laws to truck drivers would have a significant effect on the company’s routes, services, and prices. The court found that such application would have a significant effect because the meal and rest break requirements would impact the types and lengths of transportation services that were available. Dilts v. Penske Logistics, LLC (2011) 819 F.Supp.2d 1109,1118.

The Ninth Circuit disagreed, holding that “generally applicable background regulations that are several steps removed from prices, routes, or services, such as prevailing wage laws or safety regulations, are not preempted, even if employers must factor those provisions into their decisions about the prices that they set, the routes that they use, or the services that they provide. Such laws are not preempted even if they raise the overall cost of doing business or require a carrier to re-direct or re-route some equipment.” Dilts, 2014 S.O.S. 12-55705 at 16.

Under this reasoning, the Court held that California meal and rest break laws are not preempted because they are “not the sorts of laws ‘related to’ prices, routes, or services.” Id. at 18. Instead, they are “normal background rules for almost all employers doing business in the state of California.” Id. (emphasis in original).

The Court’s decision will greatly limit employers’ use of the FAAAA and ADA preemption schemes to deprive California employees of their state rights. This is an important victory for employees working directly or indirectly within the airline or trucking industry. Attorneys at Hunter Pyle Law are experienced in representing employees in both these industries. If you work in one of these industries and have any concerns about your employer’s compliance with California laws, contact us at 510.444.4400.