October 28, 2011

Federal District Court Finds FAAAA Preempts California Meal and Rest Break Rules

On October 19, 2011, the U.S. District Court for the Southern District of California issued an order granting Penske Logistics, LLC (“Penske”) summary judgment on claims that Penske had violated California’s meal and rest break laws, which mandate that employers provide a 30-minute meal period to employees for every 5 hours worked and a 10-minute rest period for every 4 hours worked. Plaintiffs, former Penske drivers and installers, brought a class action against Penske seeking, among other relief, to recover wages for missed meal and rest breaks they claim Penske prevented them from taking.

Jim Hanson of the firm argued on behalf of Penske that the Federal Aviation Administration Authorization Act preempted the application of California’s meal and rest break laws to Penske’s operations. When Congress enacted the FAAA Act in 1994, Congress found that State regulation of intrastate trucking imposes an unreasonable burden on interstate commerce and thus prohibited the States from enacting or enforcing laws “related to a price, route or service of” any property-carrying motor carriers. Penske demonstrated that complying with the strictures of California’s meal and rest break rules would have impermissibly forced its drivers to “take shorter or fewer routes” in order to ensure that the drivers had “adequate locations” to stop and take the mandated breaks. Penske also demonstrated that the impact of ensuring that every employee took the proscribed breaks at the time required by the statutes, “would require one or two less deliveries per day per driver.”

The Court agreed with Penske’s analysis and found that the FAAA Act preempted California’s meal and rest break laws. Specifically, the Court found that the “length and timing of meal and rest breaks . . directly and significantly relate[] to . . . the frequency and scheduling of transportation” and that complying with California’s laws would limit the number of deliveries Penske drivers could make and the routes they could take to make those deliveries. The Court rejected Plaintiffs’ argument that, because they were only seeking wages as a result of missed breaks, the meal and rest break laws were tantamount to wage laws that should not be preempted. In doing so, the Court noted that it is not the impact of the monetary award on Penske’s operations that preempts the statutes, but “[r]ather, the impact is derived from the imposition of substantive restrictions upon the breaks taken by [Penske’s] drivers and drivers’ helpers, which binds [Penske] to a set of routes, services, schedules, origins, and destinations that it would otherwise not be bound to.” This, the Court found, was the “kind of interference Congress sought to avoid with the preemption clause that specifically prohibits state regulation related to prices, routes, and service.”

Penske’s victory, which is the first of its kind declaring the California meal and rest break rules preempted as applied to motor carriers, should afford truckers operating in California critically important relief. While this unprecedented decision will almost certainly be appealed, we expect the Penske decision to be cited in courts throughout California as persuasive authority in support of the trucking industry’s position on this important issue. The case is Dilts, et al. v. Penske Logistics, LLC, et al., Case No. 08-CV-318 JLS.