In Re Conway Freight Petition for Writ of Mandamus

7/28/2019 In Re Conway Freight Petition for Writ of Mandamus

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UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Docket No. _________

IN RE CON-WAY FREIGHT INC.Defendant-Petitioner,

vs.

UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF CALIFORNIA

Respondent,

JORGE R. QUEZADAReal Party in Interest.

From the United States District CourtFor the Northern District of California

Case No. C 09-03670 JW

PETITION FOR WRIT OF MANDAMUS COMPELLING

DETERMINATION THAT CON-WAY’S PIECE-RATE COMPENSATION

POLICY IS LAWFUL

Barrett Green, Bar No. 145393Littler Mendelson, P.C.2049 Century Park East, 5th Floor Los Angeles, California 90067T: 310.553.0308 / F: 310.553.5583

Richard H. Rahm, Bar No. 130728Angela J. Rafoth, Bar No. 241966Littler Mendelson, P.C.650 California Street, 20th Floor San Francisco, CA 94108.2693T: 415.433.1940 / F: 415.399.8490

Attorneys for Defendant-Petitioner CON-WAY FREIGHT INC.

Case: 13-71160 04/02/2013 ID: 8574584 DktEntry: 1-1 Page: 1 of 40



CORPORATE DISCLOSURE STATEMENT

Defendant-Petitioner Con-way Freight Inc. (“Con-way”) is a wholly owned

subsidiary of Con-way Inc. No publicly held corporation owns 10% or more of the

stocks of this entity.

Dated: April 2, 2013 Respectfully submitted,

/s/ Richard H. Rahm

BARRETT GREENRICHARD H. RAHMANGELA J. RAFOTHLITTLER MENDELSON, P.C.

Attorneys for Defendant-Petitioner CON-WAY FREIGHT INC.




TABLE OF CONTENTS

PAGE

i.

CORPORATE DISCLOSURE STATEMENT ........................................................ 0

I. INTRODUCTION .......................................................................................... 1

II. STATEMENT OF RELIEF SOUGHT .......................................................... 7

III. STATEMENT OF ISSUES PRESENTED .................................................... 8

IV. STATEMENT OF RELEVANT FACTS ....................................................... 8

A. Con-way Compensates Drivers By The Trip, WhichContractually Covers Both Driving And Non-Driving Duties ............ 8

B. The District Court Held That Con-way’s Piece Rate Could NotLegally Compensate Its Drivers For Non-Driving Activities .............. 9

V. CON-WAY’S PETITION FOR A WRIT OF MANDATE SHOULDBE GRANTED ............................................................................................. 10

A. Con-way Satisfies The Ninth Circuit’s Guidelines For Granting

A Petition For A Writ Of Mandate .................................................... 10B. Alternative Relief Is Not Available As There Is No Appeal

From The District Court’s Summary Judgment Decision ................. 11

C. Con-way Will Suffer Severe Prejudice That Cannot BeRemedied On Direct Appeal At The End Of The Case ..................... 11

D. FAAAA Preemption Of California Minimum Wage Law As ToPiece Rate Pay Is A Significant Issue Of First Impression ................ 13

1. The FAAAA Preempts State Laws Having A SignificantImpact On Prices, Routes And Services Of Motor Carriers ..................................................................................... 13

2. Rowe Dictates That California’s Minimum Wage LawsAs To Piece Rates Are Preempted By The FAAAA ............... 15




TABLE OF CONTENTS

(CONTINUED)

PAGE

ii.

a. California Courts Have Held That Each Hour Worked Must Be Separately Compensated ................... 15

b. The FAAAA Preempts California’s MinimumWage Laws Because They Directly Affect AMotor Carrier’s Services, Routes Or Prices .................. 17

E. Alternatively, The District Court Committed Clear ReversibleError By Holding A Piece Rate Could Not Cover Certain

Duties .................................................................................................. 211. As A Matter Of Contract, A Piece Rate May Legally

Include Non-Driving Duties .................................................... 21

2. The Cardenas and Quezada Decisions Are Contrary ToWell-Established Supreme Court Precedent ............................ 25

VI. CONCLUSION ............................................................................................. 29




TABLE OF AUTHORITIES

PAGE

i.

CASES

Aguiar v. California Sierra Express, Inc.,2012 U.S. Dist. LEXIS 63348 (E.D. Cal. May 4, 2012) .................................... 20

Aguirre v. Genesis Logistics,2012 U.S. Dist. LEXIS 186132 (C.D. Cal. November 5, 2012) ........................ 21

American Trucking Associations, Inc. v. City of Los Angeles,660 F. 3d 384 (9th Cir. 2011) (“ ATA”) ............................................... 3, 17, 19, 20

Angeles v. US Airways, Inc.,2013 U.S. Dist. LEXIS 22423 (N.D. Cal. Feb. 18, 2013) (ADA) ...................... 21

Armenta v. Osmose, Inc.,135 Cal. App. 4th 314 (2005) ......................................................................passim

Balasanyan v. Nordstrom, Inc.,2012 U.S. Dist. LEXIS 181350 (S.D. Cal. Dec. 20, 2012) .................... 6, 7, 8, 13

Bauman v. U.S. Dist. Ct.,

557 F. 2d 650 (9th Cir. 1977) ............................................................................. 10

Bickley v. Schneider National Carriers, Inc.,2013 U.S. Dist. LEXIS 8636 (N.D. Cal. Jan. 22, 2013) ................................. 12, 7

Blackwell v. Skywest Airlines, Inc.,2008 U.S. Dist. LEXIS 97955 (S.D. Cal. Dec. 3, 2008) ................................... 20

Campbell v. Vitran,2012 U.S. Dist. LEXIS 85509 (C.D. Cal. June 8, 2012) (Ninth Circuit

Case No. 12-56250) ........................................................................................ 1, 20

Cardenas v. McLane Foodservices, Inc.,796 F. Supp. 2d 1246 (C.D. Cal. 2011) .......................................................passim

Christensen v. U.S. Dist. Ct.,844 F.2d 694 (9th Cir. 1988) .............................................................................. 11





(CONTINUED)

PAGE

ii.

Cole v. CRST, Inc.,2012 U.S. Dist. LEXIS 144944 (C.D. Cal. Sept. 27, 2012) ..................... 5, 21, 25

Cole v. CRST, Inc.,2013 U.S. Dist. LEXIS 32793 (C.D. Cal. Mar. 5, 2013) ...................... 2, 3, 17, 18

Credit Suisse v. U.S. Dist. Ct.,130 F.3d 1342 (9th Cir. 1997) ...................................................................... 10, 11

Dannenberg v. Software Toolworks, Inc.,

16 F.3d 1073 (9th Cir. 1994) .............................................................................. 11 Deleon v. Verizon Wireless, LLC ,

207 Cal.App.4th 800 (2012) ............................................................................... 24

Dilts v. Penske,819 F.Supp.2d 1109 (S.D. Cal. 2011) (Ninth Circuit Case No. 12-55705) ..........................................................................................................................1, 4, 20, 21

Equivel v. Vistar Corp.,2012 U.S. Dist. LEXIS 26686 (C.D. Cal. Feb. 8, 2012) .................................... 20

Gentry v. Superior Court, 42 Cal.4th 443 (2007) ......................................................................................... 29

Gonzalez v. Downtown LA Motors, LP ,2013 Cal. App. Unpub. LEXIS 1728, *20-22 (Cal. Ct. App. Mar. 6,2013) ........................................................................................................ 2, 16, 28

Hopkins v. City of Sierra Vista,931 F.2d 524 (9th Cir. 1991) .............................................................................. 11

Jasper v. C.R. England, Inc.,2012 U.S. Dist. LEXIS 186607 (C.D. Cal. Aug. 30, 2012) ............................... 20

Koehl v. Verio, Inc., 142 Cal.App.4th 1313 (2006) ....................................................................... 24, 29





(CONTINUED)

PAGE

iii.

Marlo v. United Parcel Service, Inc.,2009 U.S. Dist. LEXIS 41948 (C.D. Cal., May 5, 2009) ................................... 24

Medhekar v. U.S. Dist. Ct.,99 F.3d 325 ......................................................................................................... 11

Miller v. Southwest Airlines, Co.,2013 U.S. Dist. LEXIS 18835 (N.D. Cal. Feb. 12, 2013) (ADA) ...................... 21

Morales v. TransWorld Airlines,

504 U.S. 374, 378 (1992) .................................................................................... 13 Nein v. Hostpro, Inc.,

174 Cal.App.4th 833 (2009) ......................................................................... 23, 28

Ortega v. J.B. Hunt Transport, Inc.,Case No. 2:07-CV-08336-FMC-JCx .............................................................. 7, 12

Quezada v. Con-way Freight, Inc.,2012 U.S. Dist. LEXIS 98639 (N.D. Cal. July 11, 2012) (hereafter Appendix to Petition (“AP”) at AP004-017) .................................................. 3, 25

Rowe v. New Hampshire Motor Transport Assn.,552 U.S. 364 (2008) .....................................................................................passim

Schachter v. Citigroup, Inc.,47 Cal.4th 610 (2009) ................................................................................... 22, 24

Steinhebel v. Los Angeles Times Communications, LLC ,126 Cal.App.4th 696 (2005) ......................................................................... 24, 29

STATUTES

8 Cal. Code Regs. § 11090(4)(B)....................................................................... 22, 25

28 U.S.C. § 1292 ...................................................................................................... 10

49 U.S.C. § 14501(c) ................................................................................................. 1





(CONTINUED)

PAGE

iv.

Airline Deregulation Act ("ADA") .................................................................... 13, 20

Cal. Lab. Code § 200 ............................................................................................... 22

Cal. Lab. Code § 200(a) ........................................................................................... 23

Cal. Lab. Code § 221 ............................................................................................... 26

Cal. Lab. Code § 222 ............................................................................................... 26

Cal. Lab. Code § 223 ............................................................................................... 26

FLSA ........................................................................................................................ 15

Motor Carrier Act of 1980 ....................................................................................... 13

Pub. L. No. 103-305, Title VI, § 601(a)(1), 108 Stat. 1569, 1605 (1994) ............... 13

OTHER AUTHORITIES

49 C.F.R. § 395.3 ..................................................................................................... 19

49 C.F.R. § 395.8 ................................................................................................. 4, 19

DLSE Manual § 2.5.1 .............................................................................................. 23

DLSE Manual § 34.2 ......................................................................................... 27, 28

DLSE Manual § 49.2.1.2 ......................................................................................... 27

DLSE Manual §§ 2.4.4 ............................................................................................ 23

DLSE Op. Letter 2002.01.29 ................................................................................... 26

http://appellatecases.courtinfo.ca.gov ...................................................................... 16

Wage Order 9-2001 .................................................................................................. 22

Wage Order No. 9-2001(4)(B) ................................................................................. 22




1.

I. INTRODUCTION

Currently before this Court are two appeals concerning the scope of

preemption under the Federal Aviation Administration Authorization Act

(“FAAAA”), 49 U.S.C. § 14501(c). See Dilts v. Penske, 819 F.Supp.2d 1109,

1116-20 (S.D. Cal. 2011) (Ninth Circuit Case No. 12-55705), and Campbell v.

Vitran, 2012 U.S. Dist. LEXIS 85509, *8-10 (C.D. Cal. June 8, 2012) (Ninth

Circuit Case No. 12-56250). The district courts in both of these cases correctly

held that the FAAAA preempts California’s meal and rest break laws because

these laws dictate when and for how long a motor carrier must stop its services and

leave its route in order to comply with California law. Moreover, for “federal law

to permit these, and similar, state requirements could easily lead to a patchwork of

state service-determining laws, rules and regulations” that is inconsistent with

Congressional intent to leave such decisions “to the competitive marketplace.”

Rowe v. New Hampshire Motor Transport Assn., 552 U.S. 364, 373 (2008).

As with the Dilts and Campbell appeals, the instant Petition of

Defendant-Petitioner Con-way Freight, Inc. (“Con-way”) concerns the scope of

FAAAA preemption. Plaintiff and Real Party in Interest Jorge R. Quezada

(“Plaintiff”), a former driver for Con-way, sued Con-way on a class-wide basis

alleging that its piece rate compensation formula does not comply with California’s

minimum wage statutes because it does not separately compensate its drivers for




2.

non-driving duties, even if the total compensation from the driver’s piece rate

activities averages far more than minimum wage for all hours worked. Con-way

compensates its linehaul drivers by the trip, which, by contract, includes many

duties – not just driving – associated with the trip. Because California state and

federal courts have recently interpreted the state’s piece-rate compensation laws as

incompatible with “averaging,” a motor carrier must monitor each hour a driver

works for purposes of determining whether the driver was able to earn at least

minimum wage for any particular hour. See Cardenas v. McLane Foodservices,

Inc., 796 F.Supp.2d 1246, 1253 (C.D. Cal. 2011) (if piece rate does not separately

compensate a driver for each duty performed, the time to complete the duty is

unpaid time and violates minimum wage law, regardless of whether piece-rate

compensation averages above minimum wage for all hours worked); Gonzalez v.

Downtown LA Motors, LP , 2013 Cal. App. Unpub. LEXIS 1728, *20-22 (Cal. Ct.

App. Mar. 6, 2013) (even if piece rate compensation for mechanics averages above

minimum wage for all hours worked, it does not cover “down time,” which must

be separately compensated).

The rejection of “averaging” in determining compliance with

minimum wage requirements means that such compliance must be determined on

an hour-by-hour basis. See Cole v. CRST, Inc., 2013 U.S. Dist. LEXIS 32793,

*12-13 (C.D. Cal. Mar. 5, 2013). Specifically, because a driver’s minimum wage




3.

cannot be “averaged,” i.e., be determined by dividing the driver’s total

compensation from the piece rate by the total number of hours worked, each hour a

driver works must be analyzed as to whether that driver earned at least minimum

wage. For instance, if because of traffic congestion, it took a driver one hour to

drive a mile, the motor carrier would be required to adjust the driver’s

compensation for that hour up to minimum wage, because it must show that the

driver earned at least minimum wage in each particular hour. See id. In this case,

the Respondent District Court (“District Court”) followed Cardenas in rejecting

“averaging” and held that Con-way’s piece-rate cannot legally compensate drivers

for all hours worked in performing both driving and non-driving duties. See

Quezada v. Con-way Freight, Inc., 2012 U.S. Dist. LEXIS 98639, *9-19 (N.D. Cal.

July 11, 2012) (hereafter Appendix to Petition (“AP”) at AP004-017).

It is thus difficult to imagine a better example of state requirements

leading “to a patchwork of state service-determining laws, rules and regulations”

than California’s piece-rate compensation laws. See Rowe, 552 U.S. at 373. This

Court has defined “service” as “such things as the frequency and scheduling of

transportation, and to the selection of markets to or from which transportation is

provided.” American Trucking Associations, Inc. v. City of Los Angeles, 660 F. 3d

384, 396 (9th Cir. 2011) (“ ATA”) (emphasis supplied). As a matter of logic, it is

undeniable that such requirements must directly impact “rates, routes and services”




4.

of a motor carrier.

For example, when a driver enters California, the motor carrier would

be required to separately track, verify, and provide additional, separate

compensation each time a driver failed to earn minimum wage for each hour driven

in that state. To accomplish this, each hour a driver would be required to cease

services and drive off route to stop and fill in an activity log for the previous hour

(to ensure any non-driving activities performed in that hour could be separately

compensated), and to record the mileage for the hour (to monitor whether the

driver earned minimum wage for that hour). The motor carrier’s payroll and

computer systems would need to be redesigned to capture the additional

information required by California law, necessitating the hiring of additional

personnel to monitor, review, and process the collected data, and drivers would

need to be retrained and monitored to ensure that they are complying with the

additional logging requirements. Department of Transportation (“DOT”) Hours of

Service (“HOS”) logging requirements, however, make no such demands. See 49

C.F.R. § 395.8 (requiring only change of duty statuses). Yet, “to allow California

to insist” on such requirements “would allow other States to do the same, but

differently.” Dilts, 819 F.Supp.2d at 1120. Accordingly, although presented with

an issue of first impression with respect to the exact question of the FAAAA’s

preemption of California’s piece-rate rules for calculating minimum wage, based




5.

on existing relevant precedent, the District Court committed clear and reversible

error in its July 11, 2012 order (“Order”) denying Con-way’s motion for summary

judgment and ruling that California’s piece-rate compensation laws are not

preempted by the FAAAA. See AP014.

Alternatively, Con-way petitions this Court on the ground that the

District Court committed reversible error by rejecting “averaging” and wrongly

interpreting California’s minimum wage laws, as applied to piece rate

compensation, to require the separate compensation of duties, regardless of the

actual contract. See AP013. Under California law, employers may compensate

employees on a piece-rate basis and, provided the employee earns at least

minimum wage for the hours worked, it is a matter of contract as to what duties are

covered by the compensation for the piece. Again, Con-way compensates its

linehaul drivers by the trip, which, by contract, includes all driving and many non-

driving duties associated with that trip, based on the approximate number of miles

between the supplier and the consignee. Such piece-rate compensation is both

legal and the industry standard. See, e.g., Cole v. CRST, Inc., 2012 U.S. Dist.

LEXIS 144944, *19-22 (C.D. Cal. Sept. 27, 2012) (non-driving duties

compensated by mileage-based piece rate); Carson v. Knight Transportation, Inc.,

Tulare County Superior Court Case No. VCU234186 (Aug. 30, 2012)

(decertification based on piece rate being a matter of contract), RJN, Exh. 1.




6.

Again, following Cardenas, the District Court granted Plaintiff’s motion, even

though there is no California statute or regulation or even Labor Commissioner

ruling requiring a piece rate to separately compensate each duty required in the

completion of the piece. Con-way accordingly petitions for a writ of mandamus

directing the District Court to reverse its summary judgment order (“Order”).

The District Court’s decision in this case is an issue of first

impression, insofar as FAAAA preemption of California’s minimum wage as

applied to piece rates has never been addressed by an appellate court.

Alternatively, the District Court’s decision constitutes clear and reversible error

with respect to holding that California minimum wage law prohibits a piece rate

from covering both driving and non-driving duties, as that decision lacks any

statutory or regulatory basis.1 See AP008 (“neither party has identified any

binding authority which directly addresses this question, and the Court is aware of

none”). Relief is imperative so that Con-way, and every other trucking company

compensating its California drivers by piece rate, will have appellate clarification

whether or not it is legal error to require motor carriers to comply with California’s

1

Incentive-based compensation is under attack in California both withrespect to piece-rate compensation and commission-based compensation. See

Balasanyan v. Nordstrom, Inc., 2012 U.S. Dist. LEXIS 181350, *20 (S.D. Cal.Dec. 20, 2012) (following Armenta and Cardenas, district court held thatcommissions could not compensate sales assistants for activities unrelated toselling). On April 2, 2013, the defendant in Balasanyan has also filed a petition tothis Court for a writ of mandate as to the district court’s ruling on commissions.




7.

piece rate law when their drivers are in California – either because such laws have

been held not to be preempted by the FAAAA or because motor carriers must now

separately compensate each “duty” performed by a driver in completing the

hauling of goods, regardless of the parties’ intentions. Absent mandamus relief,

the parties in this class action, as well as the parties in numerous other class actions

in this state – potentially affecting thousands of other drivers – will unnecessarily

incur the time and expense of preparing for and conducting class trials, only to

have those decisions later reversed.2

II. STATEMENT OF RELIEF SOUGHT

Con-way seeks an order directing the District Court to vacate its July

11, 2012 Order and (1) to enter summary judgment in favor of Con-way because

the FAAAA preempts California’s minimum wage law as applied to piece-rate

compensation; or, alternatively, (2) enter summary judgment in favor of Con-way

because a piece rate may legally cover both driving and non-driving duties and still

comply with California’s minimum wage requirements.

2 See, e.g., Ortega v. J.B. Hunt Transport, Inc., Case No. 2:07-CV-08336-FMC-JCx, ¶ 29 (C.D. Cal. Nov. 7, 2008) (Complaint filed Nov. 19, 2007);

Anderson v. Andrus Transp. Servs., Inc., San Bernardino Superior Court Case No.CIV DS 915878 (Complaint filed Nov. 4, 2009); Bickley v. Schneider National

Carriers, Inc., 2013 U.S. Dist. LEXIS 8636 (N.D. Cal. Jan. 22, 2013); RJN Exs. 2-4 (attaching true and correct copies of these complaints). See also Balasanyan v.

Nordstrom, Inc., 2012 U.S. Dist. LEXIS 181350 (S.D. Cal. Dec. 20, 2012)(petition for writ of mandate to this Court filed on April 2, 2013 as to whether commissions can cover non-sales activities).




8.

III. STATEMENT OF ISSUES PRESENTED

(1) Does the FAAAA preempt California’s minimum wage law if

that law requires a motor carrier to determine on an hour-by-hour basis whether

each driver working in California has earned minimum wage as to that driver’s

piece-rate compensation?

(2) Does California’s minimum wage law require motor carriers to

compensate each duty entailed in a piece rate separately, regardless of the

agreement between the driver and the motor carrier, such that a piece rate may not

cover both driving and non-driving duties?

IV. STATEMENT OF RELEVANT FACTS

A. Con-way Compensates Drivers By The Trip, Which Contractually

Covers Both Driving And Non-Driving Duties.

The District Court found that Con-way employs truck drivers, known

as linehaul drivers, to transport freight. See AP005. The linehaul drivers

compensation is calculated by multiplying a pre-set mileage rate by the number of

miles in a trip. See id. The District Court also found that, although Con-way also

pays its drivers a separate hourly rate for work performed at its facilities, such as

loading and unloading freight, it does not pay its drivers an hourly rate for pre-trip

and post-trip vehicle inspections, or for the first hour of waiting time over the

course of a shift. See id. at *3 (AP005). Instead, Con-way considers such

activities to be built into the per-mile rate. See id. Plaintiff was employed by Con-




9.

way as a linehaul driver and was paid according to this system. See id .3

B. The District Court Held That Con-way’s Piece Rate Could Not

Legally Compensate Its Drivers For Non-Driving Activities.

Plaintiff brought a putative class action against Con-way contending

that Con-way’s practice of paying its drivers by the trip, without providing

additional compensation for certain non-driving tasks, violates the minimum wage

provisions of the California Labor Code. See AP004.

On March 22, 2012, the District Court ordered Plaintiff and Con-way

to file cross-motions for partial summary judgment regarding “whether California

law allows an employer to ‘build-in’ time for non-driving activities into its trip-

pay, or whether such time must be compensated separately.” See AP006; AP001-

002 (Mar. 22, 2012 Order). On July 11, 2012, the District Court granted

Plaintiff’s, and denied Con-way’s, cross-motions for partial summary judgment,

noting that there was no binding authority on point. See AP007-008. In particular,

the District Court held that “California law does not allow an employer to ‘build

in’ time for non-driving tasks into a piece-rate compensation system.” AP013.

The District Court also held that because Con-way “already has established an

hourly rate that it pays employees for performing tasks other than driving,” not

allowing piece-rate compensation that includes both driving and non-driving tasks

3 Plaintiff Quezada earned over $70,000 per year and was discharged for falsification of his federal DOT logs.




10.

“is not preempted by the FAAAA.” AP011.

On July 27, 2012, Con-way moved to certify the District Court’s July

11, 2012 order for interlocutory appeal pursuant to 28 U.S.C. § 1292, which was

denied on January 7, 2013. See AP017-018 (July 27, 2012 Motion); AP026-027

(Jan. 7, 2013 Order).

V. CON-WAY’S PETITION FOR A WRIT OF MANDATE SHOULD BE

GRANTED.

A. Con-way Satisfies The Ninth Circuit’s Guidelines For Granting A

Petition For A Writ Of Mandate.

The Ninth Circuit employs five guidelines in determining the

appropriateness of granting a petition for writ of mandate such as this: (1) whether

the petitioner has no other adequate means, such as a direct appeal, to obtain the

desired relief; (2) whether the petitioner will be damaged or prejudiced in a way

not correctable on appeal; (3) whether the district court’s order is clearly erroneous

as a matter of law; (4) whether the district court’s order is an oft-repeated error, or

manifests a persistent disregard of the federal rules; and (5) whether the district

court’s order raises new and important problems, or issues of law of first

impression. See Bauman v. U.S. Dist. Ct., 557 F.2d 650, 654-55 (9th Cir. 1977).

“None of these guidelines is determinative and all five guidelines need not be

satisfied at once for a writ to issue.” Credit Suisse v. U.S. Dist. Ct., 130 F.3d 1342,

1345 (9th Cir. 1997) (granting writ of mandamus from the district court’s denial of




11.

the bank’s motion to dismiss where first three factors were present).

B. Alternative Relief Is Not Available As There Is No Appeal From

The District Court’s Summary Judgment Decision.

Although the court of appeals has jurisdiction over “final decisions,”

neither an order granting partial summary judgment nor an order denying summary

judgment is an appealable final order. See Dannenberg v. Software Toolworks,

Inc., 16 F.3d 1073, 1074 (9th Cir. 1994); Hopkins v. City of Sierra Vista, 931 F.2d

524, 529 (9th Cir. 1991). Thus, the July 11, 2012 Order is not directly appealable.

Furthermore, because the District Court denied Con-way’s motion for

certification for interlocutory appeal, Con-way has no other means of obtaining

immediate review of the District Court’s July 11, 2012 Order. See AP026-027;

Christensen v. U.S. Dist. Ct., 844 F.2d 694, 696 (9th Cir. 1988) (mandamus relief

where district court refused to certify question for immediate appeal).

C. Con-way Will Suffer Severe Prejudice That Cannot Be RemediedOn Direct Appeal At The End Of The Case.

Con-way will suffer “severe prejudice that [cannot] be remedied on

direct appeal.” Credit Suisse, 130 F.3d at 1346 (finding severe prejudice district

court’s order forced the bank to choose between contempt of court and violation of

Swiss laws); Medhekar v. U.S. Dist. Ct., 99 F.3d 325, 326-27 (finding irreparable

harm where order compelled defendants to undergo the burden and expense of

initial disclosures prior to the district court ruling on a motion to dismiss). Further,

and even more prejudicial, Con-way will be required to implement costly new




12.

recordkeeping procedures and revisions to its existing piece-rate compensation

structure – just in California – in order to avoid liability under the District Court’s

Order while the case continues to trial.

This Petition raises two issues, each of which is potentially case

dispositive. If the FAAAA preempts California’s minimum wage as it applies to

piece-rate compensation, Plaintiff no longer has a basis to go forward with a class.

Alternatively, if this Court determines that California law allows parties the

freedom to agree that a piece rate covers both driving and non-driving duties, then,

again, Plaintiff no longer has a basis to go forward with a class. Thus, if this action

proceeds without immediate relief, Con-way will suffer severe prejudice by being

required to expend substantial human and financial resources to litigate and try a

class action where the case-dispositive core legal issues could be reversed on

appeal.

Moreover, there are several other class actions pending involving

essentially the identical issue. See, e.g., Ortega v. J.B. Hunt Transport, Inc., Case

No. 2:07-CV-08336-FMC-JCx, ¶ 29 (C.D. Cal. Nov. 7, 2008) (Complaint filed

Nov. 19, 2007); Anderson v. Andrus Transp. Servs., Inc., San Bernardino Superior

Court Case No. CIV DS 915878 (Complaint filed Nov. 4, 2009); Bickley v.

Schneider National Carriers, Inc., 2013 U.S. Dist. LEXIS 8636 (N.D. Cal. Jan. 22,

2013) RJN Exs. 2-4 (attaching true and correct copies of these complaints);. See




13.

also Balasanyan v. Nordstrom, Inc., 2012 U.S. Dist. LEXIS 181350 (S.D. Cal.

Dec. 20, 2012) (petition for writ of mandate to this Court filed on April 2, 2013 as

to whether commissions can cover non-sales activities).

D. FAAAA Preemption Of California Minimum Wage Law As To

Piece Rate Pay Is A Significant Issue Of First Impression.

1. The FAAAA Preempts State Laws Having A Significant

Impact On Prices, Routes And Services Of Motor Carriers.

Congress enacted the Airline Deregulation Act (“ADA”) in 1978 to

ensure “that the States would not undo federal deregulation with regulation of their

own, the ADA included a pre-emption provision, prohibiting the States from

enforcing any law ‘relating to rates, routes, or services’ of any air carrier.”.

Morales v. TransWorld Airlines, 504 U.S. 374, 378-79 (1992). In 1980, Congress

deregulated trucking in the Motor Carrier Act of 1980, and enacted the FAAAA in

1994 after finding that the regulation of intrastate transportation of property by the

States “imposed an unreasonable burden on interstate commerce.” Pub. L. No.

103-305, Title VI, § 601(a)(1), 108 Stat. 1569, 1605 (1994).

In enacting the FAAAA, Congress adopted the same preemption

language as in the ADA. See Rowe, 552 U.S. at 370. In Rowe, the Supreme Court

confirmed that the Morales holdings also applied to FAAAA preemption: (1) that

“[s]tate enforcement actions having a connection with, or reference to,” carrier

prices, routes, or services are pre-empted; (2) that such preemption may occur




14.

even if a state law’s effect on prices, routes, or services “is only indirect”; (3) that

with respect to preemption, it does not matter whether a state law is consistent or

inconsistent with federal regulation; and (4) that preemption occurs “at least where

state laws have a ‘significant impact’ related to Congress’ deregulatory and pre-

emption related objectives.” Id. at 370-71 (emphasis in original).

At issue in Rowe was a law passed by the State of Maine providing

that only licensed retailers could accept deliveries of tobacco products; that the

retailer must “utilize a delivery service” verifying that the tobacco is being

delivered to the person who bought the tobacco; who is of legal age to purchase

tobacco; who signs for the package; and who must produce identification if under

the age of 27. See Rowe, 552 U.S. at 370. Maine argued before the Supreme

Court that its tobacco regulation would “impose no significant costs upon carriers,”

and therefore the effect of its regulation on prices, routes and services was not

“significant” for purposes of FAAAA preemption analysis. See Rowe, 552 U.S. at

373. The Supreme Court found Maine’s argument to be “off the mark” because

“significant impact” is not limited to those state laws that would impose a

significant cost. Id. Rather, a state’s law has a “significant impact” on prices,

routes or services if its “‘effect ’ is ‘forbidden’ under federal law.” Id. at 375

(emphasis supplied). As such, because Maine’s law forced carriers to provide a

service that they “do not (or in the future might not) wish to provide,” which is




15.

contrary to the purpose of the FAAAA, the effect of Maine’s law was “significant”

and, for that reason, preempted.4 Id. at 373. The Court also held that to allow

Maine to pass such laws would mean that other states could do the same.

And to interpret the federal law to permit these, and similar,state requirements could easily lead to a patchwork of state

service-determining laws, rules, and regulations. That stateregulatory patchwork is inconsistent with Congress’ major legislative effort to leave such decisions, where federalunregulated, to the competitive marketplace.

Id. at 373 (emphasis supplied). The Supreme Court thus held that, even if it did

not directly regulate carriers, and even if the costs it imposed on the transportation

industry were insignificant, the law was still preempted. Id. at 376.

2. Rowe Dictates That California’s Minimum Wage Laws As

To Piece Rates Are Preempted By The FAAAA.

a. California Courts Have Held That Each Hour

Worked Must Be Separately Compensated.

In Armenta v. Osmose, Inc., 135 Cal.App.4th 314, 324 (2005), the

California Court of Appeal held that “the FLSA model of averaging all hours

worked ‘in any work week’ to compute an employer’s minimum wage obligation

under California law is inappropriate,” and, therefore, the “minimum wage

4

The Supreme Court also acknowledged that “federal law might not pre-empt state laws that affect fares in only a ‘tenuous, remote, or peripheral ...manner,’ such as state laws forbidding gambling.” Rowe, 552 U.S. at 371(emphasis supplied). Likewise, a “state regulation that broadly prohibits certainforms of conduct and affects, say, truckdrivers, only in their capacity as membersof the public (e.g., a prohibition on smoking in certain public places),” might not

be preempted.




16.

standard applies to each hour worked ” for which they were not separately paid.

(Emphasis supplied.) In Gonzalez , 2013 Cal. App. Unpub. LEXIS 1728 at *17, a

California Court of Appeal recently found that the anti-averaging principle in

Armenta also applied to piece-rate compensation for auto mechanics and that “the

minimum wage [must be paid] for each hour worked.”5 (Emphasis in original.)

In Cardenas, a California district court held that Armenta’s anti-

averaging principle applied to piece-rate compensation in the motor carrier

industry. See Cardenas, 796 F.Supp.2d at 1249-53.6

In that case, the district court

held that because “averaging” is not allowed, a motor carrier’s piece rate had to

separately compensate a driver for each duty performed, as otherwise the work was

uncompensated. See id. at 1253. Moreover, the district court held that “it is

irrelevant whether the pay formula was intended to compensate pre- and post-trip

duties, or even if employees believed it covered those duties, if its formula did not

actually directly compensate those pre- and post-trip duties.” Id. (emphasis in

original). The District Court in the present action also followed Cardenas, holding

5 Although the Court of Appeal issued Gonzalez as an unpublished opinion,to date, there have been six requests filed with the Court of Appeal to publish theopinion, with two of the requests being made by attorneys representing “truck

drivers.” See Court of Appeal website: http://appellatecases.courtinfo.ca.gov. 6 Cardenas, which was also decided on a motion for summary judgment,

was settled between the parties prior to trial, and, therefore, the district court’sruling never received appellate review. This outcome, not unusual in high-valueclass actions, illustrates how this issue, while important and recurring, isappropriate for issuance of a writ such that it does not indefinitely become casedispositive while evade appellate review.


http://appellatecases.courtinfo.ca.gov/






17.

that any duties that are not separately compensated by the piece-rate formula

constituted unpaid work. See AP013.

b. The FAAAA Preempts California’s Minimum Wage

Laws Because They Directly Affect A Motor Carrier’s

Services, Routes Or Prices.

“[S]tate enforcement actions having a connection with, or reference

to [motor] carrier rates, routes or services are pre-empted.” Rowe, 552 U.S. at 370-

71. In ATA, the Ninth Circuit confirmed that the terms “rates, routes, and services”

were “used by Congress in the public utility sense; that is, service refers to such

things as the frequency and scheduling of transportation, and to the selection of

markets to or from which transportation is provided. ... Rates indicates price;

routes refers to courses of travel.” ATA, 660 F.3d at 396 (emphasis supplied). The

Ninth Circuit further confirmed that “[i]n determining whether a provision has a

connection to rates, routes, or services, we must examine the actual or likely effect

of a State’s action.” Id. (emphasis supplied). For instance, in Rowe, it was of no

consequence that the Maine law was directed towards shippers instead of the

carriers because the “effect of the regulation is that carriers will have to offer

tobacco delivery services that differ significantly from those that, in the absence of

the regulation, the market might dictate.” Rowe, 552 U.S. at 372.

In Cole, a district court drew the logical consequences for the motor

carrier industry if no “averaging” is allowed. See Cole, 2013 U.S. Dist. LEXIS




18.

32793 at *8-13. The drivers in that case argued that because their wage statements

did not show the total hours they worked, they were “injured” insofar as they were

unable to determine whether they were earning at least minimum wage. See id. at

*9. But if there is no “averaging,” the total hours worked does not allow a driver

to know whether he or she was paid minimum wage for each hour worked. For

instance, the driver may have arguably engaged in activities not covered by the

piece rate for which the driver should be separately compensated on an hourly

basis of at least minimum wage. Likewise, if the driver is paid $.50 a mile and,

because of traffic, only drives one mile in that hour, then the motor carrier could

arguably be required to compensate the driver separately for that hour to bring up

his hourly compensation to the minimum wage. Finally, the “total hours” do not

tell the driver which hours were driven in California, thereby subjecting the driver

to California’s minimum wage laws. See id. at *10.

Based on Cole, the logical effect of California’s minimum wage laws

on rates, routes and services is undeniable. In order to comply with California’s

minimum wage laws, once a driver has driven into California, the motor carrier

would be required to separately track and verify the driver’s activities each hour to

determine whether the driver must be provided with separate payment for

particular hours of work in the state. To accomplish this, the driver would be

required to cease services and drive off route each hour to stop and fill in an




19.

activity log for the previous hour so that non-driving activities could be separately

compensated. The driver would also be required to record the mileage for the hour

to ensure that the he or she was being paid minimum wage for that hour. These

additional logging activities are not required by the HOS regulations. See 49

C.F.R. § 395.8 (requiring only change in duty statuses). Yet, they would take time

away from the driver’s DOT-regulated maximum working time, thus reducing the

driver’s productivity, which would result in less capacity to complete scheduled

deliveries. See 49 C.F.R. § 395.3 (maximum driving time). Furthermore, the

motor carrier would need to develop a new payroll system, and with it, new payroll

hardware and software systems. Consequently, the motor carrier would need to

recruit and hire more payroll personnel to administer the new system.

“[P]re-emption occurs at least where state laws have a ‘significant

impact’ related to Congress’ deregulatory and pre-emption-related objectives[.]”

Rowe, 552 U.S. at 371. In Rowe, Maine’s preempted law “required motor carrier

operators to perform certain services,” which they provided, not as a result of

competition, but “simply because the State seeks to enlist the motor-carrier

operators as allies in its enforcement efforts.” Id. at 376. In ATA, this Court held

that the Port of Los Angeles’ concession agreement that required drivers to be

“employees” instead of “independent owner-operators” was FAAAA-preempted

because of the prohibited effect on “services,” where the Port sought to impose




20.

conditions on the “contractual relationships between motor carriers and third

parties.” ATA, 660 F.3d at 407-08. In this respect, it is difficult to imagine a

greater significant impact than every time a driver drives into a new state, the

motor carrier is obligated to change its method of paying the driver, is obligated to

change the contract between the motor carrier and the driver, and is forced to

monitor the driver on an hour-by-hour basis. Again, the motor carrier must do this,

not because of competition but “simply because the State seeks to enlist the motor-

carrier operators as allies in its enforcement efforts” of California’s minimum wage

laws. See Rowe, 552 U.S. at 376. Moreover, if California can enact such laws,

“other States could do the same,” leading to a “patchwork of state service-

determining laws, rules and regulations.” Id. at 373. California’s minimum wage

laws as to piece-rate compensation are thus preempted by the FAAAA.

Ten district courts in California have held that either the FAAAA or

the ADA preempts California’s meal and rest break laws because of the impact that

such laws have on services and routes, and the Dilts and Campbell cases are

presently before this Court to address the scope of FAAAA preemption.7 In Dilts,

7 In addition to the Dilts and Campbell cases, the other district court casesfinding either FAAAA or ADA preemption of California meal and rest break lawsare: Blackwell v. Skywest Airlines, Inc., 2008 U.S. Dist. LEXIS 97955, *42-54(S.D. Cal. Dec. 3, 2008) (ADA); Equivel v. Vistar Corp., 2012 U.S. Dist. LEXIS26686, *18 (C.D. Cal. Feb. 8, 2012) (FAAAA); Aguiar v. California Sierra Express, Inc., 2012 U.S. Dist. LEXIS 63348, *3 (E.D. Cal. May 4, 2012)(FAAAA); Jasper v. C.R. England, Inc., 2012 U.S. Dist. LEXIS 186607, *9-26




21.

the district court held that, as a matter of “simple mathematics,” complying with

California’s meal and rest break laws “bind motor carriers to a smaller set of

possible routes,” and reduce the number of hours services can be provided. Dilts,

819 F.Supp.2d at 1118-19. Applying the Dilts analysis, California’s minimum

wage laws, as applied to drivers’ piece-rate compensation, are likewise preempted

because of the effect they have on a motor carrier’s services and routes, if not their

prices. Con-way accordingly requests that this Court grant its petition so that these

FAAAA preemption issues may be decided together, and so that Con-way will not

be forced to try a class action before these issues are decided.8

E. Alternatively, The District Court Committed Clear Reversible

Error By Holding A Piece Rate Could Not Cover Certain Duties.

1. As A Matter Of Contract, A Piece Rate May Legally

Include Non-Driving Duties.

The District Court, relying on Armenta and Cardenas, committed

clear and reversible error when it held that “California law does not allow an

(C.D. Cal. Aug. 30, 2012) (FAAAA); Cole v. CRST, Inc., 2012 U.S. Dist. LEXIS144944, *11-17 (C.D. Cal. Sept. 27, 2012) (FAAAA); Aguirre v. Genesis Logistics, 2012 U.S. Dist. LEXIS 186132, *12-21 (C.D. Cal. November 5, 2012)(FAAAA); Miller v. Southwest Airlines, Co., 2013 U.S. Dist. LEXIS 18835, *12-17 (N.D. Cal. Feb. 12, 2013) (ADA); Angeles v. US Airways, Inc., 2013 U.S. Dist.LEXIS 22423, *25-30 (N.D. Cal. Feb. 18, 2013) (ADA).

8 The District Court’s analysis also conflicts with the analysis in Rowe whenit uses a “compliance” standard for FAAAA preemption, i.e., because Con-wayalready compensates certain non-driving tasks on an hourly basis, there can be no

preemption. See AP014. That standard is contrary to Rowe, which rejected as “off the mark” the State of Maine’s argument that the regulation at issue would not impose “significant additional costs upon carriers.” Rowe, 552 U.S. at 373.




22.

employer to ‘build in’ time for non-driving tasks into a piece-rate compensation

system.” AP013. In so holding, the District Court ignored California law, which

allows an employer and an employee to contractually define what duties a piece

rate covers. Indeed, as the California Supreme Court has held, “[i]t cannot be

questioned that employers and employees are free to prospectively and bilaterally

alter the terms of employment,” and “[s]traight-time wages (above the minimum

wage) are a matter of private contract between the employer and employee.” See

Schachter v. Citigroup, Inc., 47 Cal.4th 610, 620 (2009). Consequently, there can

be no dispute that a piece rate that covers both driving and non-driving duties is not

only industry standard but patently legal.

California Labor Code section 200 allows an employer to pay an

employee a wage that can be “fixed or ascertained by the standard of time, task,

piece, commission basis, or other method of calculation.” Lab. Code § 200

(emphasis supplied). Likewise, Industrial Welfare Commission (“IWC”) Wage

Order No. 9-2001(4)(B) provides that a transportation employer must pay “not less

than the applicable minimum wage for all hours worked in the payroll period ,

whether the remuneration is measured by time, piece, commission, or otherwise.”

See 8 Cal. Code Regs. § 11090(4)(B). Neither these provisions of the Labor Code

and Wage Order 9-2001, nor any other provisions, restrict an employer from

paying non-exempt employees on a piece-rate basis, provided they earn at least




23.

minimum wage for all hours worked in the pay period.

It is also clear from section 200’s definition of “wages” that an

employee paid an hourly rate is treated as equal to an employee paid by “piece

rate.” The Labor Commissioner requires only that a piece rate “must be based

upon an ascertainable figure for completing a particular task ,” or “a fixed sum

which is paid for a specified piece of work (e.g., ‘piecework’).” DLSE Manual

§§ 2.4.4, 2.5.1, RJN, Exh. 5 (emphasis supplied). In addition to listing examples of

piece rates such as a nurse paid on the basis of the number of procedures

performed, or a carpet layer paid by the yard of carpet laid, or a carpenter paid by

the linear foot on a framing job – all of which involve numerous duties – the Labor

Commissioner specifically recognizes that a valid piece rate includes a “[t]ruck

driver paid by the number of loads hauled.” DLSE Glossary (“piece rate”), RJN,

Exh. 6 (emphasis supplied).

The case law concerning commissions is instructive as it confirms that

an employee’s entitlement to “wages” is contractual. As noted above,

“commissions,” like “piece work,” are considered “wages” pursuant to Labor Code

section 200(a), and “for purposes of enforcing provisions of the Labor Code, ‘[t]he

right of a salesperson or any other person to a commission depends on the terms of

the contract for compensation.’” Nein v. Hostpro, Inc., 174 Cal.App.4th 833, 853

(2009) (emphasis supplied) (employee’s entitlement to commissions is defined by




24.

the employment agreement). Thus, for example, where a commission plan defines

the conditions under which an employee will receive a commission, those

conditions will be enforced, and a commission will not be paid until those

conditions are met. See, e.g., Steinhebel v. Los Angeles Times Communications,

LLC , 126 Cal.App.4th 696, 705 (2005) (pursuant to commission plan, employee

did not “earn” commission until subscriber remained a customer for 28 days);

Koehl v. Verio, Inc., 142 Cal.App.4th 1313, 1335 (2006) (no entitlement to a

commission if the employee fails to meet specific conditions of the compensation

agreement). “In sum, cases have long recognized, and enforced, commission plans

agreed to between employer and employee, applying fundamental contract

principles to determine whether a salesperson has, or has not, earned a

commission.” Id. at 1331. See also Deleon v. Verizon Wireless, LLC , 207

Cal.App.4th 800, 808 (2012) (because commissions are a type of wages, “the right

to commissions depends upon the terms of the contract for compensation”

[emphasis supplied]); Schachter , 47 Cal.4th at 620 (pursuant to compensation

agreement, employee contractually forfeited portion of his salary used to purchase

company stock because he left the company before it vested); Marlo v. United

Parcel Service, Inc., 2009 U.S. Dist. LEXIS 41948, *10 (C.D. Cal., May 5, 2009)

(matter of contract as to what duties were compensated by a salaried position).

An employer and an employee can thus enter into a contract to be paid




25.

by the “piece” whereby the parties can specify what duties will be required to

complete the “piece,” and how much compensation will be paid for each “piece,”

provided that the employee’s compensation for the piece or pieces will be at least

equal to an hourly minimum wage for the pay period. See 8 Cal. Code Regs.

§ 11090(4)(B) (minimum wage applies to piece rate). Therefore, as a matter of

contract, there is no legal obstacle to Con-way having a piece rate that covers both

driving and non-driving duties, where the compensation is determined by the

approximate number of miles driven. See, e.g., Cole v. CRST, Inc., 2012 U.S. Dist.

LEXIS 144944, *17-22 (C.D. Cal. Sept. 27, 2012) (“[plaintiff] fails to demonstrate

that non-driving duties are not adequately compensated vis-à-vis [trucking

employer’s] mileage-based compensation system”).

2. The Cardenas and Quezada Decisions Are Contrary To

Well-Established Supreme Court Precedent.

In Cardenas, the employer had a piece-rate system that paid its

delivery drivers based on values assigned to three components: (1) the number of

cases of product delivered on a route; (2) the number of miles driven on a route;

and (3) the number of delivery stops made on the route. See 796 F.Supp.2d at

1249. The drivers sued, alleging, inter alia, that the piece rate did not compensate

them for their pre-trip and post-trip duties. In response, the employer submitted

declarations from employees that they had always known and understood that the

piece rate compensated them for their pre- and post-shift activities. Id. at 1252.




26.

The Cardenas district court relied primarily on Armenta and a DLSE

Opinion Letter, both of which held that hourly employees must be paid their

contractual hourly rate for each hour they work. For instance, in Armenta, the

Court of Appeal found that Labor Code sections 221, 222, and 223 “articulate the

principal that all hours must be paid at the statutory or agreed rate, which is

contravened by “averaging” paid and unpaid hours because it “effectively reduces

respondents’ contractual hourly rate.” Armenta, 135 Cal.App.4th at 323.

Likewise, the DLSE opined that “averaging” of hours for hourly employees was

not allowed because employees “must be compensated precisely in accordance

with the provisions of the CBA or contract [.]” DLSE Op. Letter 2002.01.29 at 11

(emphasis supplied). Thus, averaging of paid and unpaid hours of hourly

employees is not permitted because “to do so would result in the employer paying

the employees less than the contract rate for those activities.” Id. (emphasis

supplied); Cardenas, 796 F.Supp.2d at 1252 (quoting same).

After acknowledging that “averaging” is prohibited for hourly

employees based on contract, the Cardenas court extended Armenta’s holding to

piece-rate compensation, placing it outside of the realm of contract law and

concluding: “Even if [the employer] communicated to its employees that this

piece-rate formula was intended to compensate for pre- and post-shift duties, the

fact that it did not separately compensate for those duties violates California law.”




27.

Cardenas, 796 F.Supp.2d at 1253. The Cardenas court, however, cited to no

section of the Labor Code, the California Code of Regulations, or any DLSE

Opinion Letter or publication limiting a piece rate to a single “duty.”

There is simply no basis in law or logic for the Cardenas court’s

conclusion. An hourly employee contracts to work at an hourly rate, and must be

paid the contractual rate for each hour worked. But a piece-rate employee

contracts to be paid a rate by the “ piece,” as agreed and defined by the parties,

which can require the performance of any number of separate duties to accomplish,

and the employee is paid the contractual rate for each piece completed. Indeed,

while the DLSE prohibits “averaging” with respect to hourly-paid employees, it

embraces it as to all other forms of non-hourly payment as there would otherwise

be no method of calculating whether the compensation meets minimum wage

standards. See, e.g., DLSE Manual § 49.2.1.2 (“regular rate” for piece worker

determined by dividing total amount paid by number of hours worked in a week);

§ 34.2 (“If an employee receives a draw against commissions to be earned at a

future date, the “draw” must be equal at least to the minimum wage and overtime

due the employee for each pay period ...”).

The District Court, in following Cardenas, makes the same mistake in

assuming that the definition of a “duty” can exist outside of the parties’

employment contract. For instance, the District Court notes that the DLSE Manual




28.

provides that piece-rate employees must be separately paid for time they are

required to work but unable to earn compensation at the piece rate, e.g., attending

meetings that prevent the employee from earning his or her piece rate. See AP010.

The District Court then concludes that the DLSE Manual “does not appear to allow

for the possibility of simply building extra compensation into the piece-rate

amount for mandatory work time in which the piece-rate cannot be earned.” Id .

As such, “when employees are required to perform a task that precludes them from

earning piece-rate compensation, they must be directly compensated for that time,”

and that “‘building in’ compensation for non-driving tasks on a per-mile rate is not

permissible under the California Labor Code.” AP013, 015.

As in Cardenas, because the District Court fails to make reference to

the compensation agreement, it assumes that the only duty that is being

compensated is that of “driving.”9 However, if drivers are paid to haul a load from

the supplier to the consignee, which involves the completion of many duties, it

then becomes illogical to state that the “non-driving tasks” prevent the driver from

“earning piece-rate compensation.” As discussed above in connection with

commission contracts, the right to compensation “depends on the terms of the

contract for compensation.” Nein, 174 Cal.App. 4th at 853. Thus, performing a

9 The Gonzalez decision commits the same error as Cardenas when itassumes, without discussion, that a piece rate for auto mechanics could not compensate them for down time between repairs, even if the parties had agreed tosuch a condition. See Gonzalez , 2013 Cal. App. Unpub. LEXIS 1728 at *3-5.




29.

pre-trip inspection, fueling, waiting at the consignee to have the goods off-loaded,

and completing the required paperwork are not duties that prevent an employee

from earning his or her piece-rate compensation; instead, they are duties that the

compensation agreement requires a driver to complete in order to earn the piece-

rate compensation. See, e.g., Koehl , 142 Cal.App.4th at 1335 (no entitlement to

commission if the employee fails to meet specific conditions of the compensation

agreement). Similarly, when a commissioned sales employee makes a “sale,” if

the contract provides that the employee will not be paid unless the customer keeps

the product for over thirty days, the employee has not “earned” a commission until

this condition is satisfied. See Steinhebel , 126 Cal.App.4th at 705.

As in Cardenas, the District Court holds that Con-way’s piece rate

does not compensate for each hour worked because it assumes that a piece rate

cannot cover certain duties. Duties, however, do not exist in nature and must be

defined by the parties’ agreement. If the parties contract to define a piece rate to

include both driving and non-driving duties, provided the driver receives minimum

wage for all hours worked, the piece rate is legal. See Gentry v. Superior Court, 42

Cal.4th 443, 456 (2007) (“Straight-time wages (above minimum wage) are a matter

of private contract between the employer and the employee”).

VI. CONCLUSION

Application of California’s minimum wage law to piece rates is




30.

preempted by the FAAAA or, alternatively, the District Court in holding that a

piece rate may not cover non-driving activities is following a line of decisions that

are contrary to California Supreme Court precedent in holding that a piece rate

may not cover non-driving activities. The exact FAAAA preemption issue

presented here is one of first impression, and the District Court’s decision

misinterpreting the nature ofas piece rates is clear and a now recurring error.

The scope of FAAAA preemption is now before this Court and,

applying the Dilts analysis, California’s minimum wage laws are preempted.

Likewise, the defendant in the Balasanyan v. Nordstrom action is also petitioning

this Court for a writ of mandate to put the minimum wage issue squarely before

this Court. A ruling on either alternative could dispose of the present action.

Unless its Petition is granted, Con-way will be required to expend substantial time

and resources in response to the Dsitrict Court’s erroneous ruling below and

defending itself against a class action that ultimately concerns an issue of law.

Con-way accordingly petitions this Court for a writ of mandamus.

Dated: April 2, 2013

/s/ Richard H. RahmRICHARD H. RAHMLITTLER MENDELSON, P.C.Attorneys for Defendant-Petitioner CON-WAY FREIGHT INC.




31.

STATEMENT OF RELATED CASES

Pursuant to Local Circuit Rule 28-2.6, Con-way states that it is not

aware of any related cases in this Court.


/s/ Richard H. Rahm

RICHARD H. RAHMLITTLER MENDELSON, P.C.Attorneys for Defendant-Petitioner CON-WAY FREIGHT INC.




CERTIFICATE OF SERVICE

I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by usingthe appellate CM/ECF system on April 2, 2013.

Participants in the case who are registered CM/ECF users will beserved by the appellate CM/ECF system.

I further certify that some of the participants in the case are notregistered CM/ECF users. I have mailed the foregoing document):

• PETITION FOR WRIT OF MANDAMUS COMPELLING

DETERMINATION THAT CON-WAY’S PIECE-RATE

COMPENSATION POLICY IS LAWFUL

by First-Class Mail, postage prepaid, or have dispatched it to a third partycommercial carrier for delivery within 3 calendar days to the following non-CM/ECF participants:

Lawrence R. Cagney, Esq.Westrup Klick 444 West Ocean Blvd., Suite 1614Long Beach, CA 90802-4524

Fax: 562.435.4856

Michael L. Carver Law Offices of Michael L. Carver 1395 Ridgewood Drive, Ste. 300Chico, CA 95973

Fax: 530.891.8512

Jonathan Che GettlemanLaw Office of Jonathan Che Gettleman223 River Street, Ste. DSanta Cruz, CA 95060

Honorable Jeffrey S. WhiteUnited States District Court

Northern District of California450 Golden Gate AvenueSan Francisco, CA 94102


/s/ Stephanie FerrellStephanie Ferrell

Firmwide:119288621.3 012187.1046


In Re Conway Freight Petition for Writ of Mandamus

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