The U.S. District Court for the Eastern District of California recently ruled in an employment class action regarding misclassification of trucking industry owner-operators as independent contractors. The ruling is a win for numerous industries. Henry v. Central Freight Lines, Inc., No. 2:16-cv-00280-JAM-EFB (June 13, 2019).
Background
In May 2014, Rickey Henry and Central Freight Lines, Inc. (CFL), which is a federally registered and permitted motor carrier, entered into an independent contractor agreement for Henry’s services as a truck driver. When the relationship ended, Henry sued alleging CFL misclassified him as an independent contractor and violated California’s meal and rest break laws.
Meal and Rest Break Rule Preemption
The court granted summary judgment to CFL on Henry’s claims alleging violations of California’s meal and rest break rules under California Labor Code sections 226.7 and 512. The court noted that, in 2018, the Federal Motor Carrier Safety Administration (FMCSA) published an order “concluding that California’s meal and rest break rules are preempted . . . as applied to property-carrying commercial motor vehicle (CMV) drivers covered by the FMCSA’s hours of service regulations.” The court held it would not enforce the preempted provisions.
Independent Contractor Tests
CFL argued Henry’s employment classification should be determined under the Borello test as opposed to the California Supreme Court’s 2018 ABC test. The court held that the previous Borello “right of control” test for determining if someone is an employee applies to nearly all of Henry’s claims, including his claims brought under California’s Private Attorneys General Act (PAGA). The court will only apply the more stringent ABC test to claims brought under California’s Wage Orders.
Key Takeaways
The law is rapidly evolving in this area, but the Henry opinion comes from one of the first courts to provide guidance on meal and rest preemption and the application of the ABC test to claims that are not brought under California’s Wage Orders. Spencer C. Skeen, Tim L. Johnson, and Jesse C. Ferrantella, attorneys in the San Diego office of Ogletree Deakins, convinced the court that federal law preempts the meal and rest period claims. They also obtained a clear ruling that the ABC test for independent contractors only applies to claims brought under California’s Wage Orders. It does not apply to claims brought under California’s Labor Code, including PAGA claims.
