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Friday, September 28, 2012

Bell v. HF Cox: Court of Appeal Holds That Truck Drivers Are Subject To Motor Carrier Exemption

In Bell v. H.F. Cox, Inc. (9/5/12) --- Cal.App.4th ---, truck drivers filed a class action against their employer, Cox, alleging wage and hour violations. The trial court summarily adjudicated three counts in favor of Cox, a jury found in favor of Cox on another count, and the trial court found that plaintiffs were exempt from federal overtime compensation requirements and awarded attorney fees to Cox. Plaintiffs appealed, and the Court of Appeal affirmed in part and reversed in part.

The Court affirmed the trial court's grant of summary judgment on the count for failure to pay promised vacation benefits to current employees, but reversed on the count for failure to pay vacation benefits on termination of employment. Slip op. at 9-17. First, a triable issue of fact (whether the employer pays vacation benefits from its general funds or from a separately maintained account) precluded summary judgment on ERISA grounds. Slip op. at 10-13. Because this was the trial court's sole basis for summary judgment on the claim for payment of vacation funds on separation, the Court reversed as to this count. Ibid. Second, because Labor Code section 227.3 prohibits the forfeiture of vested vacation benefits upon the termination of employment, Cox's policy of paying its drivers $500 (and later $650) per week of unused vacation time did not violate section 227.3, as applied to current employees. Slip op. at 13-17.

The Court affirmed the trial court's order denying the plaintiffs' motion to exclude certain witnesses from trial. Slip op. at 17-18. In short, the plaintiffs had asked Cox to identify witnesses, and Cox had identified "the shippers," but the plaintiffs failed to dig further, and the court properly denied the plaintiffs' motion to exclude individual representatives of "the shippers" from testifying at trial. Ibid.

The Court held that the plaintiffs were exempt from the Fair Labor Standards Act (FLSA) overtime requirements because they fell within the motor carrier exemption as employees "with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49." 29 U.S.C. section 213(b)(1). Slip op. at 19-24. The Court held that substantial evidence supported the trial court's finding that the drivers "reasonably could be expected to be called on to drive an interstate route," and did not discuss the more interesting issue of whether the drivers' intrastate deliveries were "part of the continuous movement of goods in interstate commerce." Slip op. at 22.

The Court rejected the plaintiffs' argument that the trial court committed instructional error. Slip op. at 24-27. "Because plaintiffs have not shown that any particular proposed instruction was proper, we conclude that they have shown no error in the denial of any of their proposed instructions." Slip op. at 26.

Finally, the Court reversed the award of attorney fees to Cox because its reversal in part "compels the conclusion that there is no prevailing party at this time and therefore no basis for an attorney fee award under section 218.5." Slip op. at 28.

The opinion is available here

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