November 19, 2019

November 18, 2019

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Washington Supreme Court Approves Trucking Industry Piece-Rate Compensation Practices

Last year, the Washington Supreme Court considered the following certified question: “Does the Washington Minimum Wage Act require non-agricultural employers to pay their piece-rate employees per hour for time spent performing activities outside of piece-rate work?” On September 5, 2019, the court answered with a resounding no.

The case, Sampson v. Knight Transportation, Inc., was one of several in which the U.S. District Court for the Western District of Washington considered whether flat-fee and other accessorial payments were sufficient to fully compensate truck drivers for inspection, tarping, layover, and other nondriving duties performed by most every interstate truck driver. The district court sought clarification on the issue from the highest court in the State of Washington.

The Washington Supreme Court held that under Washington Administrative Code Section 296-126-021, nonagricultural employers comply with the Minimum Wage Act’s guaranty that employees receive a minimum wage for each hour worked if they ensure that total wages for each week do not fall below the statutory minimum wage rate for each hour worked. So long as nonagricultural employers meet this pay minimum, they are not required to pay piece-rate employees on a separate hourly basis for time spent performing activities outside the piecework.

A brief history of this issue demonstrates the magnitude of the decision. In 2015, the Washington Supreme Court ruled for the first time that agricultural employers were required to compensate piece-rate workers in Washington State separately and on an hourly basis for rest breaks. Three years later, the court ruled that the same piece-rate agricultural workers were required to be paid separately and on an hourly basis for all nonproduction work.

In each of those decisions, the court rejected the agricultural employers’ assertion that piece-rate compensation (i.e., payment by the basket or bushel) was intended also to pay for rest breaks and nonproductive activities such as cleaning and hauling harvesting tools and ladders. The decisions demanded immediate changes to established compensation practices for agricultural workers that had long been approved by Washington State’s Department of Labor and Industries. These compensation practices were based, in large part, on a state industrial welfare regulation that was expressly directed at agricultural workers.

In the wake of the decisions, a class-action litigation assault on the trucking industry in Washington ensued; several plaintiff-side class-action firms sued virtually every trucking company with piece-rate compensated drivers in the state. In each of the cases, plaintiff-side class-action attorneys argued that the court should apply the same compensation principles to piece-rate compensated truck drivers that applied to piece-rate compensated agricultural workers. The drivers, they argued, should therefore be paid on a separate hourly basis for rest breaks and all nonproductive time—specifically, all on-duty time when the wheels were not turning on the drivers’ assigned trucks.

In the last several years, a handful of plaintiff-side class-action firms leveraged the Washington Supreme Court’s decisions on agricultural workers to extract hundreds of thousands of dollars in class settlements from dozens of trucking companies while state and federal trial courts wrestled with whether interstate drivers were to be paid separately and on an hourly basis for all work performed when the trucks’ wheels were not turning. With the court’s recent decision in Sampson v. Knight Transportation, Inc., this issue is now a matter of settled law and such claims have no merit.

© 2019, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

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Of Counsel

Jaime has spent most of her career advising major corporations, whether in-house or at Ogletree.  Prior to starting with Ogletree Seattle, Jaime worked for Target Corporation in Human Resources for both the stores and distribution after college.  While working for Target Corp., she implemented HR policies and procedures for the stores, helped create a centralized recruiting program for the distribution centers, and worked extensively on employee relations issues.  Upon graduation from law school in 2004, Jaime began her legal career with the Atlanta office of Ogletree...

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Robert Roginson, labor and employment lawyer, Ogletree
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Robert Roginson is a shareholder in the firm's Los Angeles office. His practice includes all aspects of employment and labor law litigation and counseling for employers.

Mr. Roginson has represented private and public employers in state and federal courts and administrative agencies. Mr. Roginson has defended dozens of employers in class actions involving a variety of allegations, including employee misclassification, meal and rest period violations, off-the-clock claims, and record keeping violations. He also counsels employers and companies on California and federal wage/hour and pay practice laws, prevailing wage laws, project labor agreements (PLAs), reduction in force issues and WARN notification requirements, labor relations and union matters, tribal immunity and sovereignty issues, and retaliation and discrimination claims.

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Laurence A. Shapero, Shareholder, Seattle,Employment Law, Unfair Competition and Trade Secrets
Shareholder

Mr. Shapero joined Ogletree Deakins in 2018 as a Shareholder in the firm’s Seattle office after almost 20 years of experience providing labor law, employment law and employee benefits advice and counsel to employers in Washington, Oregon and Illinois.

Mr. Shapero is an experienced civil litigator and trial attorney with a strong record of summary judgment and trial victories in state and federal courts in Washington state. Mr. Shapero’s litigation experience includes matters involving alleged violations of the Americans with Disabilities Act, the Washington Law Against...

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