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The Ninth Circuit affirmed a $54.6 million jury verdict for truck drivers who said Walmart violated California wage and hour laws including failure to pay minimum wage for layovers, rest breaks and inspections as a matter of law. The majority of the damages awarded in this case rested on whether Walmart exercised control over its employees’ off duty time, a significant question that has been litigated in several contexts in recent years. This case is another reminder that employers who exercise even minimum control over employees during off duty hours could face hefty awards from a jury for unpaid wages. In the present case, the Court held that Walmart exercised enough control over truck drivers during their off duty periods that it was tantamount to working hours. Ridgeway v. Walmart Inc., DBA Wal-Mart Transportation LLC. (2020).

Under California law, employees may be entitled to wages during their off duty time if they can prove they were “subject to the control” of the employer, which includes time that the employee was suffered or permitted to work, whether or not required to do so. In the present case, Walmart had truck drivers who were required under federal and state law to take a mandatory 10-hour rest from driving at certain intervals, also called a “layover”. Walmart had a policy that paid drivers a $42 inconvenience fee for the layover, which is considered off duty time and generally taken in the cab of the employee’s truck. However, the policy went on to state that any exception to a layover being taken in the cab of the truck, including taking the layover at home, required supervisor approval. Walmart argued that the “approval” process was not intended to get permission to go home, but rather to get permission to be paid the inconvenience fee, even though the driver was taking his or her layover at home.

A more comprehensive review of Walmart’s pay manual established that drivers were required to ask permission regarding how they spent their layovers, including language that said a layover could only be taken at home with prior supervisory approval. Another provision in the manual stated if an employee took an unauthorized layover at home, this was unacceptable conduct and could lead to termination.  Neither of these provisions mention the $42 inconvenience fee. Taken in whole, the court found that the policy clearly prohibited drivers from taking a layover at home unless they received prior approval. The court held that requiring an employee to request permission regarding how they spent their “off” time was enough “control” to require payment for those hours.  

COUNSEL TO MANAGEMENT:

Employers who exercise any control over their employees’ off duty hours should get counsel on whether they may be exercising too much control over their employees’ off duty time, creating liability for unpaid wages. Additionally, this case is a good example of why all of a company’s policies should align and be scrutinized for legality to prevent unintended language from being used as evidence against the company. If you currently have a business model that requires any exercise of control over an employee’s off duty time, or you want your policies reviewed to verify they do not inadvertently create control that the company does not want to create, contact the experts at The Saqui Law Group, a Division of Dowling Aaron Incorporated.

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