By Richard Rahm and Angela Rafoth

In a significant victory for trucking companies operating in California, a superior court judge decertified a class of California truck drivers who challenged the legality of compensating drivers on a “combined” piece rate that covers both driving and non-driving duties, when compensation for the “piece” is based generally on the number of miles driven. The decertification order in Carson v. Knight Transportation is particularly significant not only because it is the first state-court order addressing the legality of a combined piece rate, but also because three federal courts in the Northern and Central Districts of California concluded that such a combined piece rate runs afoul of California’s law prohibiting the “averaging” of hours worked.

The plaintiffs made two arguments against decertification, which were both rejected by the Superior Court. First, the plaintiffs argued that based on Cardenas v. McLain FoodServices, Inc., 796 F. Supp. 2d 1246 (C.D. Cal. 2011), a combined piece rate that covers both driving and non-driving activities is illegal. In its May 8, 2012 ruling, the Superior Court rejected the Cardenas decision, finding its reasoning “to be circular” because the district court simply assumed that a piece-rate contract that calculates compensation based on mileage does not cover non-driving work. Because the Superior Court found that such a combined piece rate was not “illegal on its face,” the Court held that Plaintiffs’ claims were essentially contractual.

Second, the plaintiffs argued that even if the claims were contractual, the terms of the contract were ambiguous and therefore there was no contract providing that the piece rate covered non-driving work. Thus, the plaintiffs claimed, they were owed payment for non-driving work. In its ruling on August 30, 2012, the Superior Court found the argument illogical. If there was a lack of mutual agreement, then there would be “no contract at all,” and if there was no contract at all, the plaintiffs could not have a contractual claim. Thus, their only claim could be that they were paid less than minimum wage. But, the court stated, “[t]here is no way to determine whether any driver was not paid at least minimum wage without an individual inquiry into each trip and/or day.” Accordingly, The Superior Court found the case inappropriate for class action treatment and decertified the class.

To learn more about the decision, please see Littler's ASAP, California Court Validates Piece-Rate Pay for Drivers, by Richard Rahm and Angela Rafoth.