9th Circuit Affirms Jury’s $54M Award in Suit Against Walmart

A federal appellate court on Monday upheld a district court judgment that requires Walmart to pay $54.6 million in damages plus interest for failing to adequately pay long-haul truck drivers for time spent during layovers, rest breaks and during inspections of their trucks.

In a 2-1 decision, a 9th Circuit Court of Appeals panel affirmed a San Francisco jury’s decision that WalMart’s employment practices violated California state labor laws. The panel rejected numerous arguments by Walmart’s lawyers, including that the trial court erred in its jury instructions, by certifying a class of plaintiffs and by allowing counsel to substitute two new representative plaintiffs during litigation that spanned 12 years.

“Following over a decade of litigation, a robust motions practice, and a 16-day trial, we conclude that the judgment should stand,” the appellate panel said in a majority opinion written by Circuit Judge Eugene E. Siler.

Circuit Judge Diarmuid F. O’Scannlain dissented to a portion of the ruling. He wrote a separate opinion that he would have overruled the ruling that Walmart did not adequately pay its drivers for layovers between shifts. That portion of the judgment made up $44,699,766 of the jury’s award.

Walmart can appeal to the U.S. Supreme Court or ask all seven judges of the 9th Circuit to rule in an en banc decision. Michael Rubin, who

represented the truck drivers, said he doesn’t believe the Supreme Court would review the decision an en banc ruling would arrive at the same conclusion.

“My assumption is that this is the end of the road,” Rubin, with the Altshuler Person law firm, said in an interview. “Finally, after 12 years, Walmart will pay is drivers the minimum wage.”

Rubin said he may appeal the decision because the court did not award liquidated damages, which would double the size of the award. The court decided that punitive liquidated damages were not warranted because Walmart acted in good faith and believed that the company was complying with state labor laws.

Walmart said in a statement that it continues to believe that its truck drivers are paid in compliance with California law.

“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,” the company said in a statement. “We are reviewing the 9th Circuit’s opinion and will explore our options.”

According to the majority opinion, Walmart paid most of its long-haul drivers a per-mile fee that added up to an annual salary of $80,000 to $100,000, a pay rate that is better than the industry average. Even so, four of its drivers filed suit in 2008 contending that Walmart violated California law by failing to pay drivers during 10-hour layovers between shifts while requiring them to sleep in their trucks.

Walmart paid a $42 convenience fee to drivers who had to sleep in their trucks during ten-hour layover periods between shifts. “Basically they made them work as unpaid security guards, watching over their trucks,” Rubin said.

The per-mile payments also did not account for time the drivers spent inspecting their trucks before departure or for rest breaks required by state law, the suit alleged. Under California law, employers must pay at least minimum wage during all periods that employees are under their control.

The district court certified a class of drivers who could sue collectively, but the litigation was stayed while the Supreme Court considered related issues in another lawsuit. During the interim, two of the four original plaintiffs died, a third lost interest in the case and plaintiff’s counsel became concerned that remaining plaintiff could not adequately represent the class.

The district court allowed the plaintiffs to choose new plaintiffs to represent the class, which includes all Walmart drivers in California after Oct. 10, 2004.

After a 16-day trial, a jury found in favor of Walmart on most of the issued raised in the class-action lawsuit, but found that the plaintiffs were denied wages owed to them for layovers, rest breaks and truck inspections.

Altogether, the jury awarded damages amounting to $54,604,181. But on top of that, Walmart will have to pay pre-judgment and post-judgment interest, Rubin said.

Walmart argued on appeal that District Court Judge Susan Illston had given the jury improper instructions. Rubin said he doesn’t expect that argument to go very far if there’s a further appeal because Walmart’s counsel at trial that the instructions were a “fair compromise.”

Attorneys for Walmart could not be reached for comment. Rubin said the company changed its employment practices regarding drivers during the course of the litigation.