A California district court this week dismissed claims alleged by roughly 500 current and former drivers for XPO Logistics [NYSE: XPO] that the company failed to pay wages for missed meal and rest breaks.
The decision, by the U.S. District Court for the Central District of California in Angel Omar Alvarez, et al v. XPO Logistics Cartage LLC, et al, is part of an ongoing case initiated in 2018 by drivers seeking damages for unpaid wages and benefits based on XPO’s alleged misclassification of its drivers as independent contractors.
The big factor in the court’s decision weighing in XPO’s favor was a December 2018 order by the Federal Motor Carrier Safety Administration (FMCSA) declaring that its hour-of-service regulations preempt California’s meal and rest break laws. Earlier this year the U.S. Court of Appeals for the 9th Circuit upheld the FMCSA order after it was challenged by the International Brotherhood of Teamsters and the state of California.
The drivers countered XPO’s preemption argument by asserting they should be able to recover for alleged meal and rest break violations that occurred prior to the 2018 order and because the 2019 appeals court ruling was not binding due to requests to have it reheard.
The district court disagreed, citing a 2020 case involving truckload carrier Heartland Express that “the FMCSA order applies retroactively by necessity because the FMCSA order forecloses present enforcement of the preempted laws.” Regarding the nonbinding argument, the court pointed out that the four requests for an en banc rehearing of the upper court’s decision had been subsequently denied in March.
In addition to unpaid wages for meal and rest breaks, the drivers are suing XPO for, among other things, failing to pay minimum wages, reimbursed business expenses, waiting time penalties and unfair competition.
An attorney for the drivers acknowledged that while the district court’s decision was “significant,” it was not the biggest in terms of claims against XPO. “We have quite a few causes of action, and unpaid business expenses has the most liability involved,” the attorney told FreightWaves. “The case is still going forward.”
The drivers’ prospects for a win against XPO, as well as for drivers in other pending and future cases alleging worker misclassification, may have been given a boost by the Biden administration, which last month initiated a rulemaking to withdraw a Trump administration rule on the definition of independent contractors under the Fair Labor Standards Act that had favored employers.
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