A judge's order rejecting a motion to dismiss a court case filed against PAM Transport (NASDAQ: PTSI) is a significant step in a process that could lead to a new regime regarding the minimum wage and truck driver pay.
At issue in the case is whether a truck driver should get paid for total time at work--not just the federal categories of "on-duty driving" and "on-duty, not driving"--rather than just for miles driven or other time on duty. In particular, if a driver spends three hours in a sleeper berth waiting for a truck to be offloaded or loaded, and it isn't considered "on-duty, not driving," should those hours count in determining whether a driver's total compensation is in violation of the federal minimum wage?
In other words, what constitutes "hours worked" under federal code?
Judge Timothy Brooks of the U.S. District Court for the Western District of Arkansas, said in a ruling last week that the existing federal laws on driver regulations are "unambiguous that a truck driver is not 'working' when he is sleeping, but it is completely silent on whether a truck driver's time spent sleeping should nevertheless count as hours worked." And when it comes to regulations, "such silence typically constitutes ambiguity."
But those regulations are in one part of the federal code, 785.41. But Brooks looked to another section, 785.22, to make his ruling. That section essentially says that any sleeping time above 8 hours will constitute hours worked.
Justin Swidler is a partner of Swartz Swidler of Cherry Hill, N.J. and is the lead attorney in the plaintiffs in a lawsuit filed in 2016 against PAM and which has been certified as a class action. Swartz Swidler has been counsel to drivers involved in other minimum wage-related actions against trucking companies.
Swidler said the court's ruling is not establishing any legal precedent that time in a sleeper berth must be separately compensated. (Or as noted elsewhere, the time could be sitting in the driver's seat while in detention). Rather, Swidler said, if means that those hours must be counted as hours worked when determining whether an employees’ compensation in a given week violated the federal $7.25 per hour minimum wage.
Swidler told FreightWaves that some state laws, like California, can be confusing because there are rules regarding the legal status of such things as stopping to fuel a truck. "Federal law is a much easier pill to swallow, because we look at all the money you are paid, whether it's a safety bonus, detention, and then we are going to divide that by the hours worked," Swidler said. "Admittedly, we (PAM and the defendants) have a disagreement over the definition of hours worked, and the court agreed with us. We say that goes into the calculation. At the end of the day the law is only violated if you take the total dollars and the hours worked and get less than 7.25."
Given current driver rates, Swidler agreed that a 40-hour week at existing levels would probably put a driver safely above the level at which the minimum wage laws would be violated. But not too many long-haul drivers are working 40-hour weeks. A 70-hour workweek at $7.25 is a bit more than $500. "Maybe today they're making more than $500 and they are probably on the side of getting paid more than the federal mandate," Swidler said. "But I don't believe truck drivers across the board are making that much."
Swidler said because driver wages have climbed and theoretically should put most drivers above the minimum wage level, the impact of the case is "less significant now" than when first filed several years ago. "But I don't think I can agree that the companies are now necessarily complying with the minimum wage law when you consider all the time the drivers give in many of their work weeks," he said.
The Hours of Service rule capping what is viewed as on-duty time at 14 hours does not appear to be relevant here. The issue is total hours worked, and what constitutes work does not necessarily fit into the 14 hour cap but still would not violate HOS rules.
The time spent in the sleeper berth waiting for the truck to be loaded and unloaded can push the work day to 16 hours. According to federal rules, the initial lawsuit said, "the maximum amount of time an employer may dock an employee who is on duty for more than 24 hours for time spent in a sleeper berth is 8 hours per day. The remaining time (16 hours per day) is work time and must be paid, less bona fide meal periods."
The case is not over; the decision by Judge Brooks was on a request for dismissal. Swidler conceded that the case is not over, and there could be a further decision by the judge that would render the findings regarding the definition of hours worked to be "not applicable." "But in practical terms, that would be very difficult to do," he said.
"The ruling makes clear that drivers are going to be entitled to compensation for some time spent in the sleeper berth," Swidler said.
An email to PAM’s outside counsel, with emails obtained from earlier court documents, did not receive a response.