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Shook v. Indian River Transport Co.

United States District Court, E.D. California

February 15, 2017

TODD SHOOK and HERSCHEL BERRINGER, on behalf of himself and others similarly situated, and on behalf of all other “aggrieved” employees, Plaintiffs,
v.
INDIAN RIVER TRANSPORT CO., a Florida Corporation, Defendants.

          MEMORANDUM OF DECISION, FINDINGS OF FACT AND CONCLUSIONS OF LAW

          WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE

         Plaintiffs, truck drivers formerly employed by Indian River Transport Co. (“Indian River”), brought this action on behalf of themselves and similarly aggrieved employees against Indian River alleging various violations of California law, including 1) Labor Code § 226.7 (failure to provide mandated rest breaks); 2) Labor Code § 226(a) (failure to provide accurate itemized wage statements); 3) Labor Code §§ 2699, et seq. (California Private Attorneys General Act (“PAGA”)) (failure to separately compensate for rest breaks and unpaid wages); 4) Business & Professions Code § 17200 (California Unfair Competition Law); 5) Labor Code §§ 201 and 203 (failure to compensate employees for non-driving work before and after employees' shifts and failure to timely pay compensation and wages to former employees); and 6) Labor Code § 226.2 (failure to provide accurate itemized wage statements and separately compensate for rest and recovery periods and other nonproductive time). The gravamen of their claims is that Indian River violated the California Labor Code by not providing its drivers with rest breaks, not compensating them for rest breaks and other time they were working but not driving, and by providing them with wage statements that did not include all the information required by the Labor Code.

         After a two-day bench trial and extended closing arguments, the matter was submitted to the court for decision. Having considered the evidence and arguments of counsel, and having read and considered the briefs, the court finds in favor of defendant Indian River on all claims. This memorandum constitutes the court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).

         I. Findings of Fact

         1. Plaintiffs Shook and Berringer and other aggrieved employees are current and former California-resident drivers (“California drivers”) employed by Indian River.

         2. Plaintiff Shook worked for Indian River from May to October 2012 and plaintiff Berringer worked for Indian River from November 2012 to January 2014.

         3. Plaintiffs paid California state income taxes on all their earnings for Indian River. Plaintiffs also received all their Indian River wage statements in California.

         4. Indian River is a Florida corporation with its headquarters in Winter Haven, Florida. Indian River offers liquid food-grade tank carrier services nationwide, transporting products such as milk and orange juice.

         5. Indian River's administrative staff and management are located at Indian River's headquarters in Winter Haven. The headquarters is responsible for payroll and other back office functions, including the issuing of wage statements and the resulting electronic deposits of paychecks, and drivers are hired out of Winter Haven and trained there. The Winter Haven facility also has a tank wash and maintenance facilities. The Winter Haven facility provides 24-hour dispatch service, including for drivers in the western United States after hours.

         6. Indian River provides transportation services across the country. Drivers typically spend several days or weeks away from home, during which they pick up and drop off product between suppliers and recipients that are 1-5 days apart. The area where a driver has his or her residence will normally determine only the beginning and end of the overall trip. Thus, a driver who lives in California will usually begin and end his or her overall trip in California but may spend the majority of that time outside California. Indian River has about 25 customers in California.

         7. Although Indian River dispatches most of its trucks out of it headquarters in Winter Haven, it has facilities in Clovis, New Mexico and in Turlock, California, with dispatchers in both locations. There are no drivers based in the Turlock facility, and its California drivers live throughout California. The Turlock facility, which is much smaller than the Winter Haven facility, provides light maintenance for Indian River trucks and has two dispatchers and only a few other employees. The Turlock facility also has a small lounge that drivers may use and parking spots where drivers can leave their trucks after hours. Drivers may also send paperwork to Indian River's headquarters from the Turlock facility, though they were not required to do so and could submit some, if not all, paperwork at commercial truck rest stops across the country. The Turlock facility does not have shower facilities or an indoor restroom for drivers, who may use a single portable toilet outside the facility.

         8. Indian River hires and employs drivers nationwide, of which there are 600-650 at any time. In 2016, Indian River had approximately 50 drivers at any particular time who were residing in California. Indian River drivers are dispatched based upon freight demands and the location of drivers at the time of demand, not their place of residence. Defendant estimates that based on fuel and tax records, Indian River drivers, including those living in California, spend on average 15-30% of their time driving in California.

         9. While some California drivers spend almost no time in California, others spend nearly half their time in the state in any particular pay period. These figures vary from driver to driver and from one week to the next, depending on driver preferences and demand.

         10. Until September 5, 2016, all Indian River drivers throughout the United States were generally only paid “piece-rate” or per mile driven, at a rate of approximately $.41 per mile. Plaintiffs and other drivers were not separately paid for rest breaks or paid for rest breaks at all. Plaintiffs were also not paid for other “nonproductive” time related to their work as drivers, including time spent on pre- and post-trip safety inspections, fueling, loading and unloading, waiting time before loading and unloading, tank washes, and waiting time before the tank washes. Defendant's compensation system was the same for all of its drivers.

         11. Until September 5, 2016, Indian River wage statements identified the dates of each trip during the weekly pay period, and the rate and dollar amount paid for that trip. The wage statements did not list the actual hours worked, whether driving, on duty but not driving, or while on break, though drivers recorded such time on daily logs. The wage statements also did not list any hourly rates for drivers, with the exception of certain hourly work not at issue in this case. (See Pls.' Exs. 1-2.)

         12. Indian River drivers were informed of their obligations to comply with federal regulations regarding rest breaks and the penalties that would result from failure to comply. Specifically, drivers were informed of federal regulations requiring drivers to take a 30-minute, off-duty break within 8 hours of coming on duty, to not exceed more than 11 hours of driving in a 14-hour period, and to be off-duty for at least 10 hours after 14 hours of work. Drivers were also informed of federal regulations prohibiting working more than 70 hours in an 8-day period. Drivers were also required to maintain 30-day and daily logs (prior to the implementation of electronic logs) recording hours driving, hours on-duty but not driving, and hours off-duty. Indian River drivers were warned of the punishments that Indian River would impose for failure to comply with federal regulations. (See, e.g., Pls.' Ex. A-10 (Indian River employee handbook).)

         13. Defendant did not schedule rest breaks for its drivers, as drivers were permitted and encouraged to take rest breaks for safety and comfort reasons when they wanted. Defendant's rest break policy was the same for all its drivers, and Indian River drivers understood that they were free to take breaks as desired.

         14. Indian River did not discourage its drivers from taking rest breaks. In that regard, the court does not find the testimony of Jeffrey Pilon credible to the extent that he claimed he was punished four times in connection with taking rest breaks. Even assuming Mr. Pilon was punished in connection with his rest breaks as he claimed, those isolated episodes do not establish that Indian River discouraged any other drivers from taking rest breaks, including plaintiffs Shook and Berringer. The court finds the testimony of all other witnesses to be substantially credible.

         15. Indian River drivers were not specifically informed of California law regarding rest breaks prior to September 5, 2016. However, plaintiffs' Complaint does not assert any cause of action based on Indian River's failure to inform plaintiffs or its California drivers of California law regarding rest breaks. Nor does their Complaint raise any allegation to that effect.

         16. On September 5, 2014, plaintiffs filed the present action against Indian River.

         17. On June 27, 2016, Indian River provided written notice to the California Department of Industrial Relations of its intent to make payments to current and former California drivers under California Labor Code § 226.2's “Safe Harbor” provision. (See Def.'s Ex. F-1.)

         18. Indian River modified its compensation and payroll system for California drivers on September 5, 2016 in order to comply with California law. Indian River reduced the piece-rate paid per mile from $.41 to $.14 and now compensates its California drivers separately for rest periods and other nonproductive time at $11.00 per hour. The transition to the new compensation structure and payroll system, in order to separately track, account for, and pay for productive and nonproductive time, was a lengthy process. The court does not find that the delay in transitioning to this new compensation ...


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