Walmart petitions court ruling requiring retailer to pay $54.6M to drivers

UPDATE: Jan. 27, 2020: Lawyers for Walmart last week filed a petition asking the panel of judges in the federal appeals court to rehear the case in which the retailer was ordered to pay up to $54.6 million in damages. The petition challenges the judge's conclusion that Walmart must pay damages and the class certification, calling the latter "erroneous and irreconcilable." The plaintiffs in the case accuse Walmart of not paying truck drivers properly for break and layover time.

While petitions for rehearing are not uncommon "few are granted," according to the U.S. Court of Appeals. The decision to accept the petition lies with the panel of judges who ruled in the appeal.

Dive Brief:

A federal appeals court Monday upheld a 2016 decision saying Walmart must pay back "tens of millions of dollars in damages" in a class-action suit brought by the company's truck drivers, according to court documents. Total damages add up to $54.6 million.
The drivers filed the suit originally seeking back pay for time spent in layover (a mandatory break as required by the Department of Transportation), on break or in inspections. The three-judge panel concluded, "time drivers spent on layovers was compensable if Wal-Mart exercised control over the drivers during those breaks" and the district court did not err in its original decision.
Walmart's driver pay manual was at the heart of the decision as it said drivers remained under Walmart's control during the 10-hour layover time at the end of a shift. The court said the drivers had to receive pay for any time they were under Walmart's control.

Dive Insight:

The drivers who formed the class worked out of "several" distribution centers in California that made deliveries across the western U.S. The class includes about 700 drivers, according to The Fresno Bee.

The district court reached its decision in 2016 after a 16-day trial and the jury awarded the following to the plaintiffs:

$44,699,766 for layovers.
$3,961,975 for rest breaks.
$2,971,220 for pre-trip inspections.
$2,971,220 for post-trip inspections.

"We continue to believe that our truck drivers are paid in compliance with California law and often in excess of what California law requires," Randy Hargrove, the senior director of national media relations for Walmart, told Supply Chain Dive in an emailed statement. "We are proud that our drivers are among the best paid in the industry, earning, on average, between $80,000 to over $100,000 per year. We are reviewing the 9th Circuit's opinion and will explore our options."

The court did agree in its decision that the Walmart drivers "were paid well," but California state law says employees have to be paid at least minimum wage for all time they're under the control of the employer.

Walmart appealed the jury's decision claiming a lack of jurisdiction, saying it was a mistake to certify the class and that the damages should not have been awarded. The appeals court dismissed all of these concerns and fully affirmed the district court decision.

This litigation has been working its way through court for over a decade, but the debate around mandatory breaks has gotten more attention in recent years with the implementation of the electronic logging device (ELD) mandate. Drivers say they need more flexibility, and the DOT says it's planning to give it to them, but a new rule from the agency has been in the rulemaking process since August 2019.