The Ninth Circuit Court of Appeal recently ruled, in a precedential opinion, that the Federal Aviation Administration Authorization Act (“FAAAA”), which regulates motor carriers and the trucking industry, does not preempt California meal and rest break requirements. Dilts v. Penske Logistics, LLC, No. 12-55705 (9th Cir. July 9, 2014) (slip opinion available here). The FAAAA provides that a state “may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). Dilts is an employment class action on behalf of delivery drivers for Penske Logistics LLC. Previously, U.S. District Judge Bencivengo of the Southern District of California dismissed the certified class’ claims, holding that the application of state meal and rest break laws to these truck drivers would have a significant effect on the company’s prices, routes, and services, because the break requirements would impact the types and lengths of feasible routes. Dilts v. Penske Logistics, LLC, 819 F. Supp. 2d 1109 (2011).
The Ninth Circuit reversed, holding that “generally applicable background regulations that are several steps removed from prices, routes, or services, such as prevailing wage laws . . . , 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.” Slip op. at 16. The Court thus 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 that Congress intended to preempt.” Id. at 18. Instead, they are “normal background rules for almost all employers doing business in the state of California.” Id. The panel found persuasive the brief filed by attorneys from the Department of Transportation, the Federal Motor Carrier Safety Administration, and the Department of Justice, which stated that the FAAAA did not preempt state break requirements because it is “squarely within the states’ traditional power to regulate the employment relationship and to protect worker health and safety.” The Court stated that it would give some weight to the government’s interpretation and ultimately rejected all six of the defendant’s arguments as to how the laws related to routes and services, stating that motor carriers were free to hire enough drivers and stagger employees’ breaks in order to provide continuous services and that a driver briefly pulling over to stop to take breaks does not “meaningfully interfere” with a motor carrier’s ability to choose its starting points, end points, and routes. Id. at 22. The Court found that defendants submitted no evidence showing that the break laws would actually or meaningfully decrease the availability of routes.
The Ninth Circuit also issued an unpublished ruling in a related case, Campbell v. Vitran Express Inc., which involved the same meal and rest break claims as Dilts. No. 12-56250 (9th Cir. July 9, 2014) (slip opinion available here). The holdings in Dilts and Campbell are likely to curb employers’ attempts to use the FAAAA to preempt employees’ state law claims.