Federal Judge Finds J.B. Hunt Compensation System Too Varied To Sustain Class Certification
J.B. Hunt Transport Inc., one of the largest transportation logistics companies in North America, recently prevailed on a motion to decertify a class of around 11,000 current and former truck drivers, just six weeks before trial. The drivers alleged claims under California law for failure to pay the minimum hourly wage, unpaid wages at the agreed rate, meal and rest break violations, wage statement violations and waiting time penalties. The drivers claimed the company’s Activity-Based Pay (“ABP”) compensation system did not compensate them for various “nonproductive tasks” like pre- and post-trip inspections, paperwork, waiting times at the customer location, breakdowns, fueling and washing trucks, and waiting for assignments. Under the ABP, drivers were paid a piece-rate formula under which they received mileage pay, pay for activities such as deliveries, and occasional pay for nonproductive time, such as hourly pay if they waited at a customer location for more than one-and-a-half hours.
J.B. Hunt provides two types of driving services for customers: (1) “intermodal” – delivering freight to and from railways; and (2) Dedicated Contract Services (“DCS”) – freight deliveries for a particular customer on a regular basis. A class was initially certified in 2009 based on the premise that the ABP applied to both intermodal and DCS drivers.
However, just this past week, a federal court in the Central District of California found the company’s piece-rate compensation system was too varied to sustain class certification because it was not uniformly applied to all class members. Specifically, discovery reflected that not all drivers were paid under the ABP, but rather some drivers were paid straight hourly, daily, or weekly pay when driving for certain accounts. The Court emphasized that the only way to glean which pay plan applied to the each class member was to examine each individual driver’s payroll records and activity logs, and such individual issues predominated and were not appropriate for class adjudication.
The Company also obtained partial summary judgment on plaintiffs’ claims for liquidated and statutory damages and meal break claims under California law. As for the liquidated and statutory damages, the Court found J.B. Hunt did not act in bad faith because it reasonably believed the Federal Aviation Administration Authorization Act of 1994 preempted the meal break claims. Further, regarding those meal breaks, the named plaintiffs admitted they could take a meal break whenever they wanted, and the Court found the company was not required to “police” such breaks. The rest break claims, however, survived since the ABP formula did not separately list out the amount paid, if any, for rest breaks. This summary judgment ruling tempered a prior unfavorable summary judgment order where the District Court held the ABP pay plan violated California law to the extent it failed to separately pay for meal and rest breaks, and other nonproductive time (e.g., inspections, paperwork, fueling and washing trucks).
J.B. Hunt demonstrates that class certification can be defeated, particularly where employers can show that wage systems are not uniformly applied to all class members.