Ridgeway v. Wal-Mart, Inc., 946 F.3d 1066 (9th Cir. 2020)

The employer must pay minimum wages to employees for time spent on mandated layovers where the employer’s policy imposes constraints on employees’ movements during breaks.

California’s minimum wage laws for transportation workers are not preempted by the Federal Aviation Administration Authorization Act.

Plaintiffs, long-haul truckers for defendant Wal-Mart, filed a class action lawsuit alleging violations of California labor law with respect to minimum wages. Specifically, the plaintiffs alleged, among other things, that Wal-Mart exercised control over the plaintiffs during state and federally required 10-hour layover periods, inspections, and rest breaks, and were therefore required to pay minimum wages for that time. The trial court granted summary judgment in favor of the plaintiffs, finding that Wal-Mart’s pay policies would violate California law if applied as written, but left the factual question of whether Wal-Mart had implemented those policies to the jury. At trial, the jury found in favor of Wal-Mart on multiple issues, but found in favor of the plaintiffs on the issue of pay for the layovers, inspections, and rest breaks.

The Court of Appeals for the Ninth Circuit affirmed. Noting that it is improper for the court of appeals to play “armchair district judge,” the court concluded that while Wal-Mart raised some compelling points, it raised no reversible error. First, the court held that substantial evidence supported the jury’s factual finding that Wal-Mart exercised control over its employees during the state and federally mandated layovers because Wal-Mart’s layover policy, as written, imposed constraints on employee movement such that employees could not travel freely and avail themselves of the full privileges of a break. In reaching this conclusion, the Ninth Circuit also determined that the Federal Aviation Administration Authorization Act did not preempt California laws governing layovers because these laws do not set prices, mandate or prohibit certain routes, or tell motor carriers which services that they may or may not provide, either directly or indirectly. Second, the Ninth Circuit agreed that the plaintiffs were entitled to separate compensation for rest breaks and inspections. California law prohibited Wal-Mart from subsuming time spent on rest breaks and inspections into the “activity pay” component of Wal-Mart’s pay structure because the pay manual was silent on that and doing so would not separately pay workers for all the time worked, such as compensable rest time.

Practical Implications: Whether an employee is entitled to pay in California turns on whether the employer exercised control over the employee, not whether the employee is actively working. Employers should review their policies and procedures to ensure that employees are actually relieved of the employer’s control or influence during breaks and other non-compensable time.

Brome v. California Highway Patrol, — Cal. App. 5th —, 2020 WL 429035 (2020)

Statute of limitations on discrimination claims may be equitably tolled during the pendency of a workers’ compensation claim if the workers’ compensation claim is based on the same facts as the discrimination claim and the workers’ compensation claim gives the employer adequate notice, the employer is not prejudiced, and the plaintiff acts reasonably.

Plaintiff, an openly gay police officer with the California Highway Patrol (“CHP”), filed multiple administrative complaints with the CHP and the Department of Fair Employment and Housing (“DFEH”) alleging that he was subjected to homophobic comments and that he was frequently refused back-up assistance from colleagues during enforcement stops. As a result, he feared for his life during enforcement stops; experienced physical pain, anxiety and stress; and became suicidal. In January 2015, the plaintiff took medical leave and filed a workers’ compensation claim, which was resolved in his favor in October 2015. The plaintiff filed an administrative complaint with the DFEH 11 months later in September 2016. The day after filing his DFEH complaint and obtaining a Right to Sue Notice, the plaintiff filed suit alleging violations of California’s Fair Employment and Housing Act (“FEHA”). The CHP moved for summary judgment on the grounds that the plaintiff’s suit was untimely because he did not file his administrative complaint within one year of the challenged actions, which occurred prior to his medical leave in January 2015. In opposition, the plaintiff argued, among other things, that his workers’ compensation claim equitably tolled the one-year filing deadline. The trial court granted summary judgment in favor of the CHP.

The California Court of Appeal reversed, holding that the record did not preclude, as a matter of law, a conclusion that the plaintiff’s claims were timely. The court of appeal reasoned that the undisputed facts, viewed in the light most favorable to the plaintiff, created a triable issue on whether tolling was appropriate. Under the California Supreme Court’s decision in McDonald v. Antelope Valley Community College District, 45 Cal. 4th 88 (2008), the deadline for filing an administrative claim under FEHA could be tolled while a plaintiff is voluntarily pursuing alternate remedies if the plaintiff can establish three elements: (1) timely notice, (2) lack of prejudice to the defendant, and (3) reasonable and good faith conduct on the part of the plaintiff. The court of appeal explained that a trier of fact could reasonably conclude that the plaintiff’s workers’ compensation claim gave the CHP adequate notice of the facts and circumstances supporting his discrimination claim, and, for this reason, equitable tolling would not prejudice the CHP. The court of appeal also found that although 11 months elapsed between the resolution of his workers’ compensation claim and the filing of his FEHA complaint, the court could not say that the plaintiff is unable to meet the good faith requirement as a matter of law.

Practical Implications: Employers should not rely on the statute of limitations for FEHA actions as a reliable defense when an employee has a pending workers’ compensation case. Additionally, employers should ensure that their workers’ compensation insurance carriers or their selected defense counsel conduct a thorough investigation as the facts and circumstances that caused the alleged workplace injury could also support or dispel a claim for discrimination, retaliation, or harassment, and the employer’s investigation could shed light on more than just the employee’s alleged injury.