Third-party logistics giant Penske Logistics has agreed to pay $750,000 to settle a lawsuit filed by three drivers in California alleging the company violated state laws by failing to compensate them for meal and rest breaks. The drivers also charged Penske deducted pay for rest periods that were never taken.
The settlement, which was reached at the end of January, ends a nine-year battle between Reading, Pa.-based Penske and the drivers over the alleged violations. The case had been expected to go trial at the beginning of February. A final ruling on the settlement is expected by the end of the month.
In a statement issued at the time of the settlement, Penske said it believed it would have prevailed on the merits of the case, but settled to put an end to the protracted litigation. Penske also did not admit to any wrongdoing as a part of the settlement.
The trucking industry has been embroiled in a battle over California law governing driver meal and rest breaks since the 9th Circuit Court of Appeals, in a 2014 ruling, upheld the state's power to enforce its rules on trucking companies whose drivers operate in and out of California. The industry has argued that the ruling violates a 1994 federal law pre-empting economic regulation imposed by states on truckers operating in interstate commerce. The court ruled that California's regulations were not subject to pre-emption because they did not bind motor carriers to specific prices, routes, or services, thus not interfering with the competitive market forces in the industry.
The American Trucking Associations (ATA), which represents larger companies, tried unsuccessfully last year to attach pre-emption language governing driver meal and rest breaks to aviation reform legislation. Currently, 22 states set their own driver meal- and rest-break rules. ATA has made the pre-emption issue a top priority in the 115th Congress. The Teamsters union and the main independent trucker group support the states.