[00:00:00] Speaker 03:
Or and now we have someone from indiana here and we have a fine indiana district court judge here.

[00:00:06] Speaker 03:
This is a special deal Indeed okay, please.

[00:00:13] Speaker 03:
Uh mr. Did you say donnas is that correct danis danis?

[00:00:16] Speaker 00:
Okay, please proceed may please the court glenn danis for appellants and plaintiffs here

[00:00:21] Speaker 00:
So there are, in this case, there are four bases for reversal and I'd like to present them in the following order unless the court would like me to address them in a different order.

[00:00:32] Speaker 00:
One is that there's a minimum wage violation that was based on a failure to pay nonproductive time that the court erred below on.

[00:00:40] Speaker 00:
Number two, there's a failure to pay off the clockwork, which is an independent claim.

[00:00:45] Speaker 00:
Number three, there is a wage statement claim that there were errors made as to, and four, there were business expense reimbursement claims where there were some errors made at trial.

[00:00:55] Speaker 03:
Council, I confess I've really wrestled with this case.

[00:00:59] Speaker 03:
It's a very close case.

[00:01:01] Speaker 03:
But let me just start by asking that you know about Oman versus Delta Airlines.

[00:01:06] Speaker 03:
It seems pretty clear that in that case that employers and employees can contract whatever compensation scheme they want to so long as

[00:01:14] Speaker 03:
employees are paid at least a minimum wage.

[00:01:17] Speaker 03:
If I'm understanding that case correctly, why does J.B.

[00:01:20] Speaker 03:
Hunt's scheme not comply with OMON?

[00:01:23] Speaker 00:
Sure.

[00:01:24] Speaker 00:
Well, I'll address that in a couple of ways.

[00:01:26] Speaker 00:
Number one, Oman, in the case itself, only dealt with hourly employees and did not purport to deal with piece rate whatsoever.

[00:01:35] Speaker 00:
And in fact, I believe there's a footnote, I forget offhand which one number it is, but it says that specifically.

[00:01:43] Speaker 00:
And I believe Justice Liu in his concurrence also makes an issue about that.

[00:01:49] Speaker 00:
You know, that said,

[00:01:51] Speaker 00:
The essence of the claim here really is that the district court did not look at this plan as applied.

[00:02:00] Speaker 00:
It looked at the plan only on its face.

[00:02:04] Speaker 00:
Once the plan is applied, it's clear that there is not amendment wage being paid for all hours worked.

[00:02:11] Speaker 00:
The reason why, and one very clear example that the district court never looked into was at 6 ER 1178 through 1184, there's a discussion which I think is very illuminating about the fact that no matter how many hours someone works, they get paid the exact same.

[00:02:31] Speaker 00:
And the example that was given to the 30B6 witness was if someone worked 31... So I saw that argument.

[00:02:38] Speaker 01:
i had trouble seeing why that proves that because let's say let's say i was going to pay uh... i could call a judge smith uh... a billion dollars for this thing uh... and it was you know it was going to take six hours and no matter how many hours he works uh... on on you know within he's not gonna he's only he's gonna get a billion dollars it's not gonna change whatever those hours will be the billion dollars will be

[00:03:07] Speaker 01:
divided by

[00:03:21] Speaker 00:
Yeah, it's a gotcha point because of Gonzalez and because of California law and the way that it's developed, which says that no matter where, even if on average you were getting a billion dollars and you were getting a million dollars per hour,

[00:03:37] Speaker 00:
You still have to be paid for every hour as an individual unit under California law.

[00:03:43] Speaker 00:
This is based on the wage orders.

[00:03:45] Speaker 00:
It is different than federal law.

[00:03:47] Speaker 00:
It may be counterintuitive, but this is the way that California law has decided.

[00:03:51] Speaker 00:
Each hour is its own unit.

[00:03:53] Speaker 00:
So if you're making a million dollars an hour for the time that you're spent doing the piece rate work,

[00:04:00] Speaker 00:
but you're not making that money on, let's say, in between piece rate assignments, you know, the waiting time, the other things, the traffic or whatever.

[00:04:11] Speaker 00:
Under California law, that time is compensable.

[00:04:14] Speaker 00:
Our point isn't that you can't have a piece rate system.

[00:04:16] Speaker 00:
You absolutely can have a piece rate system.

[00:04:19] Speaker 00:
Under 226.2,

[00:04:20] Speaker 00:
The requirement is that if you're going to have a peace rate system, you have to pay for nonproductive time.

[00:04:26] Speaker 00:
And there's absolutely no question here.

[00:04:28] Speaker 00:
You have to pay separately for nonproductive time?

[00:04:30] Speaker 00:
You have to pay separately if you have a peace rate system.

[00:04:33] Speaker 01:
So the peace rate would be one category and you divide that and you go, yeah, it's over minimum wage, so we're good.

[00:04:37] Speaker 01:
But then you could not put the non-productive time in with the piece rate time in figuring out.

[00:04:42] Speaker 00:
That's your... Bingo.

[00:04:44] Speaker 00:
Correct.

[00:04:44] Speaker 00:
That is absolutely the way the law works.

[00:04:47] Speaker 00:
That is the Wright versus Rosenberger case, which is a case that my colleagues on the other side didn't address at all in their brief, but we raised in our brief.

[00:04:57] Speaker 00:
This is Gonzalez, which is, you know, California from 2013 case.

[00:05:03] Speaker 02:
And really... So we would have to find, though, that there's nonproductive time for which there was no payment.

[00:05:07] Speaker 00:
Exactly.

[00:05:08] Speaker 00:
Okay.

[00:05:08] Speaker 00:
So, I mean, really, the way that the analysis works is once you agree that this is a piece rate system, and the other side, that's why the other side argues so vociferously that it is not a piece rate system.

[00:05:19] Speaker 00:
Once you find that it is a piece rate system, they have to pay for nonproductive time, excuse me, and there's no question that they don't.

[00:05:26] Speaker 00:
So then it gets to, is it a piece rate system?

[00:05:30] Speaker 01:
There's no question that they don't pay because they don't say there is.

[00:05:33] Speaker 01:
They also are saying there's no nonproductive time, right?

[00:05:37] Speaker 00:
Is that correct?

[00:05:37] Speaker 00:
They're agreeing that there is nonproductive time.

[00:05:40] Speaker 00:
Their 30B6 witness admitted that things like fueling, washing, pre and post shift paperwork and safety meetings are not covered under the activity pay bonus.

[00:05:51] Speaker 00:
So it would only be paid if it were separately paid as hourly.

[00:05:56] Speaker 00:
Now, they say, well, it is separately paid as hourly.

[00:05:59] Speaker 00:
We pay, excuse me, we pay for all hours work.

[00:06:01] Speaker 00:
That's not true.

[00:06:02] Speaker 00:
And that's why the district court, it was incumbent on the district court to take a look at the way that this works as applied.

[00:06:10] Speaker 00:
In our brief, we go through how this policy applies to Mr. Williams' pay.

[00:06:19] Speaker 00:
And the way it applies to Mr. Williams' pay is that his total compensation is equal only to his piece rate earnings.

[00:06:30] Speaker 03:
I get your point about Gonzalez.

[00:06:33] Speaker 03:
I get your point about Justice Lew's concurrence.

[00:06:37] Speaker 03:
But as you know, the district court took comfort in the what I'll call safe harbor rule of 226.2A7.

[00:06:46] Speaker 03:
Yes.

[00:06:47] Speaker 03:
What's your best argument, that notwithstanding Gonzalez and Justice Lew, that the district court was wrong, that this safe harbor rule, which seems to say, as long as you get the minimum wage, you're okay, doesn't fit?

[00:07:01] Speaker 00:
The safe harbor provision is for folks that have non-peace rate compensation schemes.

[00:07:09] Speaker 03:
And on what do you rely for that understanding?

[00:07:12] Speaker 00:
Just the plain language of the statute.

[00:07:14] Speaker 00:
The plain language of the statute

[00:07:16] Speaker 00:
in 226.2A says that if you have a peace rate system, X applies and you have to pay for nonproductive time, you have to do certain things on the wage statements, X, Y and Z. If you don't have one and in fact you have a system that's part peace rate and part paying for everything else, then you can nestle under the safe harbor at 226.2A7.

[00:07:43] Speaker 00:
Our whole point is that the district court

[00:07:45] Speaker 02:
simply fail to look beyond the superficial aspects of their plan to see that they don't get... You say superficial, but you're actually meaning like the terms of the plan, correct, that provide for a set hourly rate.

[00:07:59] Speaker 02:
And I know there's math that's involved at the back end, but doesn't the plan also provide if the math at the back end ends up in a negative?

[00:08:07] Speaker 02:
Yes.

[00:08:11] Speaker 02:
You're absolutely correct.

[00:08:14] Speaker 00:
That's absolutely right.

[00:08:16] Speaker 00:
So the answer is that this applies, this entire argument applies only to employees who are getting

[00:08:24] Speaker 00:
Where the numerator of their activity bonus pay, where they're getting a quote-unquote bonus.

[00:08:31] Speaker 00:
For people where the denominator is larger, where their hours worked is larger than their quote-unquote bonus, they're not included in this claim.

[00:08:40] Speaker 00:
They only have minimum wage claims to the extent that there's a separate off-the-clock work.

[00:08:45] Speaker 00:
which there is, and there is a separate off-the-clock word claim, which is entirely distinct from this peace rate issue.

[00:08:52] Speaker 03:
I appreciate your analysis of that.

[00:08:54] Speaker 03:
As I look at the statute and look at the case law, I originally started out one way, then I went another way, then went another way, then went another way.

[00:09:03] Speaker 03:
Is this the kind of a case where we ought to certify this question to the California Supreme Court?

[00:09:08] Speaker 03:
It's an important question.

[00:09:10] Speaker 00:
Your Honor, I absolutely think that that would be the right way to go because there is no California appellate decision as of yet interpreting this new 2016 statute.

[00:09:22] Speaker 00:
So if the court has any question that it's not clear, the California Supreme Court should be weighing in in the first instance.

[00:09:29] Speaker 00:
And as you know, it has taken a number of cases from this court through that very procedure.

[00:09:36] Speaker 03:
They do take their time.

[00:09:37] Speaker 03:
They're busy, too.

[00:09:39] Speaker 03:
But it is an important question.

[00:09:41] Speaker 03:
Like I said, I just back and forth and back and forth and I can see arguments both ways.

[00:09:47] Speaker 03:
So you, it wouldn't hurt your feelings if that's what we did, right?

[00:09:50] Speaker 00:
Not at all.

[00:09:51] Speaker 00:
I absolutely understand because frankly this is very important particularly for the trucking industry which really this statute seems in many ways designed for.

[00:10:00] Speaker 00:
But no, I think that it took me living with these issues quite a bit really to understand what was going on here and why the plan

[00:10:09] Speaker 00:
is nothing but a peace raid plan that doesn't fall under that safe harbor.

[00:10:14] Speaker 00:
I'd like to just address a couple of the other points.

[00:10:16] Speaker 00:
One of them would have to do with an entirely independent off-the-clock work claim.

[00:10:21] Speaker 00:
This claim is the district court found that there are two prongs for it.

[00:10:27] Speaker 00:
A, that there was off-the-clock work, and B, that the employer knew or should have known.

[00:10:31] Speaker 00:
It found that, yes, on one basis, there was, in fact, off-the-clock work, or at least a jury could find that there was off-the-clock work.

[00:10:39] Speaker 00:
On the knowledge point or the constructive knowledge point, the court made an error.

[00:10:46] Speaker 00:
We raised three different reasons why the court was on actual or constructive notice.

[00:10:54] Speaker 00:
All of this is record evidence.

[00:10:56] Speaker 00:
One that folks were told to show up 45 minutes before their shift.

[00:11:01] Speaker 00:
Number two, that they were told to clock in using the people net units on their trucks, which means that they can't clock in when they get to the site and they pick up their paperwork.

[00:11:13] Speaker 00:
It means that they're instructed to do so on their truck, so it's automatically missing all of that pre-shift work.

[00:11:20] Speaker 00:
That's at 5ER1052.

[00:11:22] Speaker 00:
And number three, that there was GPS data that showed that the trucks were moved after the drivers were clocked out.

[00:11:30] Speaker 00:
That's at 7ER 1698.

[00:11:32] Speaker 00:
And all three of these things showed that the employer, the J.B.

[00:11:37] Speaker 00:
Hunt, was on notice of there being at least some off-the-clock work.

[00:11:41] Speaker 00:
We cited cases for this.

[00:11:43] Speaker 00:
The Reloge, R-E-L-O-J case versus government employee empire insurance, the York versus Starbucks case.

[00:11:53] Speaker 00:
And these cases stand for the proposition that where there is, let's say, VPN tracking,

[00:11:58] Speaker 00:
It raises a tribal issue, in fact, as to the employer's knowledge, or where managers were frequently requesting off-the-clock work.

[00:12:06] Speaker 00:
It raises a tribal issue of employer knowledge.

[00:12:09] Speaker 00:
So here we have the district court going halfway.

[00:12:12] Speaker 00:
Yes, there was some off-the-clock work, but it erred on the issue of constructive or actual knowledge.

[00:12:20] Speaker 00:
And then finally, just completely separately, there is an issue, there is at least a couple of issues regarding the wage statement claim.

[00:12:28] Speaker 00:
The most glaring and a pure legal issue is that the district court didn't understand that under 226A, for a Paga violation for wage statements, there is no requirement to meet 226E, knowing and intentional.

[00:12:42] Speaker 00:
So if you have a Paga wage statement violation,

[00:12:46] Speaker 00:
All you need to show is 226A that there was a violation, that there was missing data on the face of the pay stub.

[00:12:54] Speaker 00:
There is no other part of the analysis that is local.

[00:12:57] Speaker 03:
But in the case itself, though, as I recall, at page 59 of your brief, you indicate there was just one page in a wage statement.

[00:13:04] Speaker 03:
And yet, later on, at 5 ER 1097, it showed there's lots of additional paperwork.

[00:13:11] Speaker 03:
that was provided.

[00:13:12] Speaker 03:
Yes.

[00:13:12] Speaker 03:
So I gather you're not claiming that you have already shown that there was a pocket violation.

[00:13:17] Speaker 00:
Thank you, Your Honor.

[00:13:18] Speaker 00:
That's a separate issue.

[00:13:19] Speaker 00:
So there are two bases, two standalone wage statement claims.

[00:13:23] Speaker 00:
One of them is that they're missing total hours and that that goes along with there being some off-the-clock work.

[00:13:29] Speaker 00:
That has nothing to do with what page it's on.

[00:13:31] Speaker 00:
That's just that there is just missing time.

[00:13:34] Speaker 00:
And the district court agreed on that.

[00:13:36] Speaker 00:
It found that for the same reason that there was

[00:13:39] Speaker 00:
a jury issue on off-the-clock work, there's a jury issue on off-the-clock total hours missing on the face of the pay stub.

[00:13:47] Speaker 00:
That is it for a Paga claim.

[00:13:49] Speaker 00:
That should have just been you get to the motion is denied.

[00:13:53] Speaker 00:
Now, for the non-Paga claim, we have the 226A3 claim based on the fact that certain information is missing that is required for a piece rate employee.

[00:14:05] Speaker 00:
They don't deny that it's only on a separate sheet.

[00:14:11] Speaker 00:
It's not on the pay stub.

[00:14:13] Speaker 00:
Whether or not this separate sheet qualifies for being on the statement itself is an issue that really is a fact issue.

[00:14:22] Speaker 00:
There's a case, Aguirre versus Genesis Logistics, a 2013 case that rejected the idea that if an employer has additional documentation that's made available to an employee that would show them what their piece rate, the rate and the number of units and all of that, that that would be sufficient.

[00:14:39] Speaker 00:
It has to be on the face of the pay stub because these are folks who are getting their pay stub and the whole point of California law in this, whether we agree with it or not, is that it's there for transparency so folks know if they're being paid properly.

[00:14:52] Speaker 00:
It must be on the pay stub.

[00:14:55] Speaker 00:
The other side doesn't disagree that it was on a separate sheet.

[00:14:59] Speaker 00:
The only question is how that sheet was given to the employee and whether or not that was in fact, and that's not in the briefing and it's not in the record.

[00:15:08] Speaker 00:
All they said in their brief was, we included it in our document in production, it's right there.

[00:15:13] Speaker 00:
at 7 ER 1655.

[00:15:16] Speaker 00:
Well, you know, it is in the document production, but that says nothing about how the employee got it and whether it's on the pay stub.

[00:15:22] Speaker 03:
You want to save the balance of your time for rebuttal?

[00:15:25] Speaker 03:
Yes, thank you very much, Your Honor.

[00:15:26] Speaker 03:
Thank you.

[00:15:27] Speaker 03:
All right, Mr. Hanson.

[00:15:35] Speaker 04:
Thank you, may it please the court.

[00:15:38] Speaker 04:
My view of the record is much different than what opposing counsel's is.

[00:15:42] Speaker 04:
Let me start first of all with the pay plan that was used.

[00:15:48] Speaker 04:
No matter what you call it, or what you continue to call it, that it's a piece rate plan, the plan itself specifically says you get an hourly rate for all hours worked.

[00:16:01] Speaker 04:
The employees required to clock in before they begin any work activities to clock out after they finish their last work activities.

[00:16:12] Speaker 04:
There should be no other time that they're working that isn't recorded.

[00:16:17] Speaker 04:
Now, one of the plaintiffs said, I was told to come in early.

[00:16:22] Speaker 03:
I just want to be sure you understand.

[00:16:23] Speaker 03:
So do I understand you to be saying that with respect to piecework, that all of that's supposed to have been reported and all of that goes to their hourly wages?

[00:16:36] Speaker 03:
There should be no issue as long as they meet the minimum

[00:16:40] Speaker 03:
hourly payment, is that right?

[00:16:41] Speaker 04:
That's 226.287, which says that if you're paying an hourly rate that's above the minimum wage, and J.B.

[00:16:50] Speaker 04:
Hunt's hourly rate was well above the minimum wage, it changed every time the minimum wage changed, and then you receive additional amounts based on your productivity, and we figure that based on, take all the activity compensation, we subtract out what we've already paid on an hourly basis,

[00:17:10] Speaker 04:
And we add that to their pay so that they have an incentive to work hard.

[00:17:15] Speaker 03:
Your opposing counsel, if I understand him correctly, is making at least a couple of points.

[00:17:20] Speaker 03:
First of all, that all of the, if you will, off book was not required.

[00:17:28] Speaker 03:
So for example, like moving trucks or being there 45 minutes early, something like that.

[00:17:33] Speaker 03:
I gather you disagree with that.

[00:17:35] Speaker 03:
Secondly, I understand him to be saying that

[00:17:40] Speaker 03:
If, even if you include that, meaning the at-piece work, that sometimes, and this is my implication, sometimes you would be less than the minimum wage, but you get there by adding that in.

[00:17:56] Speaker 03:
What's your response to that?

[00:17:57] Speaker 04:
We don't do that, Your Honor.

[00:17:59] Speaker 04:
We don't do that.

[00:18:00] Speaker 04:
And we gave some examples to the district court, which are in this record, that what we do is if a person doesn't earn activity-based pay to earn the bonus or the productivity bonus, they are still paid the hourly wage for each hour worked.

[00:18:15] Speaker 04:
And it shows up on the pay statements.

[00:18:18] Speaker 04:
And that was in the record.

[00:18:19] Speaker 04:
We showed examples of people who their eligible productivity bonus did not exceed

[00:18:26] Speaker 04:
their hourly pay for each hour of work.

[00:18:29] Speaker 04:
Now the starting point is that we pay an hourly rate for each hour worked.

[00:18:35] Speaker 04:
It's not, it's not, we're not doing like in, in Gonzales, they were doing

[00:18:42] Speaker 04:
you know, it's automotive mechanics and they're doing it based on the field book of how long it takes to do the work and you get paid for four hours even if it takes you three.

[00:18:53] Speaker 04:
They were borrowing from that activity-based pay to make up for hours that were work that were less than the minimum wage.

[00:19:03] Speaker 03:
So you're saying that whether it's piecework or just regular work,

[00:19:08] Speaker 03:
All of the hours piecework or otherwise are being paid at the minimum at at least the minimum wage is that right greater than the minimum wage.

[00:19:15] Speaker 04:
Yes, your honor.

[00:19:16] Speaker 04:
We have no non-productive time and what and what?

[00:19:21] Speaker 04:
226.2 says is that if you have

[00:19:26] Speaker 04:
Hourly pay for each our work you've complied with the statute under four of separately paying for non-productive time Because we don't have any non-productive.

[00:19:37] Speaker 01:
You know that's your position I'm trying to make sure I understand where the disagreement here is there their position is that as I understand it is I don't I didn't understand them to be disputed that you get That if you took all of your productive time and your non-productive time which you say you have none of but that their positions if you took both them together and

[00:19:56] Speaker 01:
and you divide it by what people were paid that they're exceeding minimum wage.

[00:19:59] Speaker 01:
I don't understand the beauty of disputing that.

[00:20:00] Speaker 01:
What they seem to be saying is that California law requires you to take the productive time and you pay whatever you pay for that, right?

[00:20:11] Speaker 01:
And then that gets put in one bucket and then over here you have to take the nonproductive time and make sure that they are also being paid for the nonproductive time.

[00:20:21] Speaker 01:
You don't get to put the two together.

[00:20:23] Speaker 01:
And it's difficult because it seems like that's their argument.

[00:20:27] Speaker 01:
But if you're saying there's no non-productive time, then it's difficult to figure out, you know, you're denying a factual predicate of their whole position.

[00:20:37] Speaker 01:
And so I'm trying to figure out how to resolve that, how to address that.

[00:20:41] Speaker 04:
The premise of their argument is wrong.

[00:20:44] Speaker 04:
If you look at the actual compensation policy, it's got an hourly rate and it tells them that they're paid the hourly rate for each hour worked.

[00:20:55] Speaker 04:
They are required

[00:20:56] Speaker 04:
under the provisions that say hours worked, they are required to record all of their time from the time they begin work to the time that they end work, and all of those hours are compensated at the hourly rate specified in the pay plan.

[00:21:15] Speaker 04:
What they're saying is that if we pay an activity bonus, then we violate the statute.

[00:21:23] Speaker 04:
And that doesn't make any sense to me.

[00:21:25] Speaker 04:
That turns everything on its head.

[00:21:27] Speaker 04:
It's not logical to say that if we pay an hourly rate, plus we pay an activity-based bonus, that when you add the activity-based bonus, that we then violate the statute because we don't pay for nonproductive time.

[00:21:43] Speaker 04:
It's like any hourly employee, there is no non-productive time because they're being paid on an hourly basis for each of those hours from the time they come to work to the time they leave.

[00:21:56] Speaker 04:
There is no time for them to perform.

[00:22:00] Speaker 04:
Williams said that he came in

[00:22:04] Speaker 04:
They said he came in early to do work off the clock.

[00:22:08] Speaker 04:
That's how they characterize it.

[00:22:09] Speaker 04:
He never testified to that.

[00:22:11] Speaker 04:
He was told that before he began going out on the road, there's certain things drivers need to do in order to lawfully take their truck out on the road as a DOT regulated driver.

[00:22:24] Speaker 04:
They've got to get their paperwork for the day.

[00:22:26] Speaker 04:
They do that in the office.

[00:22:29] Speaker 04:
What they do when they come into the yard at the target facility where this was located is they walk right by their truck.

[00:22:36] Speaker 04:
They can log in and then they go in the office and do all the other things that they're required like get their paperwork,

[00:22:46] Speaker 04:
anything that's going on that the managers may need to tell them.

[00:22:50] Speaker 04:
And then they go out to the truck and they do the pre-trip inspection, which is required under the Federal Motor Carrier Safety Regulations.

[00:22:58] Speaker 04:
They then get in their truck.

[00:23:00] Speaker 04:
They go find their trailer, hook onto their trailer.

[00:23:03] Speaker 04:
And you've got to have that time before they actually start driving.

[00:23:07] Speaker 01:
And your position is that they should have logged in

[00:23:11] Speaker 01:
And that that's part of productive time under your they should have logged in right when he walked on the site 45 minutes early And I think their position as he said he sound like he factually maybe didn't do that And then that takes us I guess to the question of whether or not hunt knew or should have known that that was going on is that That is correct We had no knowledge if he was doing that we had no knowledge of that and

[00:23:38] Speaker 01:
I'm trying to think of why somebody like him wouldn't do that.

[00:23:41] Speaker 01:
But I could imagine if he's pretty confident he's going to get, if he's pretty confident he's going to make more than the minimum wage per hour, it sort of does take away a little bit of your incentive to log in.

[00:23:51] Speaker 01:
It's just extra work for him to get up in the cab and log in.

[00:23:55] Speaker 01:
And he's probably thinking to himself, I'm not, he doesn't get paid anymore.

[00:24:00] Speaker 01:
anymore for doing that.

[00:24:03] Speaker 01:
You know, if he just logs in later when he gets in the truck, because the amount he makes divided by his hours is significantly higher than minimum wage, so he's rarely ever going to get, if ever, going to get the other.

[00:24:15] Speaker 01:
Is that what's going on?

[00:24:16] Speaker 01:
Am I understanding that correctly?

[00:24:17] Speaker 04:
I don't understand his motivation of why he wouldn't do that because he's told in company policy, log in before you begin any work.

[00:24:27] Speaker 04:
That's how we keep record of the hours worked.

[00:24:30] Speaker 04:
We give them a tablet.

[00:24:31] Speaker 01:
I understand.

[00:24:32] Speaker 01:
I used to work, I used to do this kind of stuff.

[00:24:35] Speaker 01:
I was trying to think humans didn't act consistent with their incentives, right?

[00:24:39] Speaker 01:
And so that's, I'm guessing the reason he wouldn't have, if he didn't, the reason he wouldn't have logged in is because it doesn't really actually affect his bottom line if he logs in 45 minutes earlier, typically.

[00:24:53] Speaker 04:
He never testified.

[00:24:54] Speaker 04:
There is no evidence in the record that he had a motivation not to log in.

[00:25:00] Speaker 04:
You got to go based on what's in the record.

[00:25:02] Speaker 04:
And he never said that he worked off the clock.

[00:25:04] Speaker 04:
What he said is he was told by his manager that he had to arrive 45 minutes before he actually began the delivery of his load for the day.

[00:25:13] Speaker 01:
And you're saying that's just irrelevant as to whether or not when he actually started working.

[00:25:18] Speaker 01:
Your view would be if he had to do that, he would have started working 45 minutes before he drove off the lot.

[00:25:24] Speaker 01:
I'm sorry, you asked that one more time.

[00:25:25] Speaker 01:
Your position would be, yeah, that's fine, but that's not, then he would have just, he would have started working 45 minutes before he drove off the lot.

[00:25:32] Speaker 01:
That's your, that's how you would interpret that testimony instead of nothing wrong with that.

[00:25:37] Speaker 01:
We could say he needs to show up two hours earlier and if he shows up two hours earlier, he starts work two hours earlier.

[00:25:42] Speaker 01:
Right.

[00:25:43] Speaker 03:
In other words, under company policy, if he showed up 45 minutes in advance or two hours, he just logs in and he gets paid whatever his hourly rate is.

[00:25:53] Speaker 03:
the claim by the person that my colleague's referring to is something you didn't know about.

[00:25:58] Speaker 03:
It's certainly not your policy.

[00:26:00] Speaker 03:
As far as you're concerned, whether it's, we call it piecework or anything else, they get paid for it, they log in for it, they get the full benefit of that.

[00:26:08] Speaker 03:
It's all about minimum wage and you're entitled to the safety valve.

[00:26:12] Speaker 03:
Right.

[00:26:12] Speaker 04:
I mean under California law, each hour has to be separately compensated at a rate above the minimum wage.

[00:26:19] Speaker 04:
And so Hunt put into a policy that said, we're going to pay an hourly rate that's greater than the minimum wage, and we're not going to take away the incentive that drivers have to earn extra money by being productive.

[00:26:33] Speaker 04:
They get the opportunity to earn that through the productivity bonus that's paid to the drivers.

[00:26:38] Speaker 04:
But you can't call it an activity-based pay plan only by simply

[00:26:44] Speaker 04:
Repeating that statement.

[00:26:46] Speaker 01:
That's what they did at the district court level That's what they've done on appeal is they mischaracterize what the pay plan is If you look at the wording and I get a response I'm trying to understand this but so as I understand one of the concrete examples that I think he mentioned today is is a clock off or clock out of this people net or whatever it's called and

[00:27:08] Speaker 01:
And then we know that the truck moved after that because GPS data from the truck, that the truck moved.

[00:27:14] Speaker 01:
So the thought being that he clocked off and then he got up and he moved, he went back, somebody went back and moved their truck.

[00:27:20] Speaker 01:
Maybe not Williams, but some, you know, that we just know.

[00:27:24] Speaker 01:
And therefore you knew or should have known that people are clocking off and then still working.

[00:27:32] Speaker 01:
And what is your response to J.B.

[00:27:34] Speaker 01:
Hunt, I mean A,

[00:27:37] Speaker 01:
Two aspects of that.

[00:27:38] Speaker 01:
One is does that show that some of this, what he's characterized as non-productive time or whatever you want to call it, but that he's doing something that we would agree is work?

[00:27:47] Speaker 01:
And B, should J.B.

[00:27:49] Speaker 01:
Hunt have known that that was going on?

[00:27:51] Speaker 01:
And I don't know, send a memo out saying stop clocking off until after you've moved your truck.

[00:27:57] Speaker 04:
I remember no evidence in the record that he ever

[00:28:02] Speaker 04:
that mister williams ever moved his truck or mister contrarious moves his truck uh... after clocking out i've i've never seen that in the value of the season always referring to them when he's talking about that part that about trucks being moved gps data showing trucks being moved after people clocked out but he said he he was told to arrive forty five minutes he gave three reasons told to arrive forty five minutes early

[00:28:30] Speaker 04:
But that's because there are things that you've got to do in order to hook up your truck in order to take the load to where you're going to deliver it.

[00:28:39] Speaker 04:
They clock into the OBC that he said they did that afterwards, but that's, there was no evidence that J.B.

[00:28:49] Speaker 04:
Hunt knew that they were clocking in after they started work or that they were clocking out and then continuing to work.

[00:28:57] Speaker 03:
And it would be contrary to J.B.

[00:28:59] Speaker 03:
Hunt's policy, right?

[00:29:00] Speaker 04:
That's correct, Your Honor.

[00:29:02] Speaker 04:
And then the thing about the GPS and the truck moving, the only way we would know that it was one of the plaintiffs, Contreras Williams or Klein, is that they logged into the OBC and put their driver code in.

[00:29:18] Speaker 04:
You know, the OVC can be, the truck can be used by any driver and you record it.

[00:29:25] Speaker 01:
You're saying maybe somebody else got in the truck, you know, they clock out, leave or do whatever and then maybe somebody else moves the truck, is that?

[00:29:34] Speaker 04:
Well, it's possible that there is a mechanic that moved it.

[00:29:37] Speaker 04:
It's possible that somebody else moved it, you know, while they were already clocked in because the driver, sometimes the truck might be in the way.

[00:29:46] Speaker 01:
Or I suppose it's possible, I mean it's not impossible for them to have clocked out and then gotten back in and moved their own truck, but your answer to that I assume would be they're not supposed to do that.

[00:29:56] Speaker 01:
They shouldn't have clocked out until after they moved the truck.

[00:29:59] Speaker 01:
Correct.

[00:30:00] Speaker 01:
If they were doing it as a work activity, they should have clocked back into their truck.

[00:30:03] Speaker 03:
Are you claiming that these are contrived situations that really didn't occur?

[00:30:08] Speaker 03:
What's your position?

[00:30:11] Speaker 04:
There's no evidence that J.B.

[00:30:12] Speaker 04:
Hunt had knowledge that any of that was going on.

[00:30:15] Speaker 04:
So I'll put that first.

[00:30:17] Speaker 04:
If I was going to try the case, that's exactly what I would say, is that I'm making up something to get around what J.B.

[00:30:25] Speaker 04:
Hunt has as a policy and as actual facts of what the drivers did, and that is clock in.

[00:30:32] Speaker 04:
There is no evidence that J.B.

[00:30:33] Speaker 04:
Hunt knew that anybody performed any work off the clock.

[00:30:38] Speaker 04:
That's the bottom line.

[00:30:39] Speaker 03:
And there's nothing in the trial record to that effect either, right?

[00:30:42] Speaker 04:
That's correct.

[00:30:42] Speaker 04:
And that's what the district court in entering summary judgment said, you got to show that you actually worked off the clock.

[00:30:50] Speaker 04:
And then number two, you got to show that the employer knew or should have known that you were working off the clock.

[00:30:55] Speaker 04:
Now in the cases that they rely on, there were cases in which the supervisors or managers in those cases were telling people to work off the clock.

[00:31:06] Speaker 04:
There is no evidence that we told him to work off the clock.

[00:31:09] Speaker 04:
The only evidence is Williams, who said he was told to come in before he began taking out his load for delivery.

[00:31:19] Speaker 04:
He was told to come in 45 minutes early so that he could do the things that are necessary in order to be able to get in the truck and leave to get to the stores that he was delivering to on time.

[00:31:31] Speaker 03:
Was there any evidence that in that 45-minute period that he knew he should have clocked in during that time period?

[00:31:41] Speaker 04:
Any evidence that he knew he should have?

[00:31:42] Speaker 03:
In other words, your company policy is he should have clocked in right away.

[00:31:46] Speaker 03:
He should have been compensated for the 45 minutes.

[00:31:49] Speaker 03:
Are you saying that the record doesn't show that he knew that or that he should have known that?

[00:31:54] Speaker 04:
He knew that because the pay plan that we have requires that it be signed by each of the employees.

[00:32:03] Speaker 04:
Williams, Contreras, and Klein all signed these pay plans that require them to record all hours worked.

[00:32:17] Speaker 02:
So just so I'm clear, was it his testimony that he arrived 45 minutes early but did not clock in?

[00:32:22] Speaker 04:
No, his only statement was he arrived 45 minutes before he actually took his load out for delivery.

[00:32:29] Speaker 04:
It was not that he was working off the clock.

[00:32:33] Speaker 04:
I was told to arrive 45 minutes before I took my load out for delivery.

[00:32:41] Speaker 03:
But he didn't just say that someone in J.B.

[00:32:43] Speaker 03:
Hunt said, you're supposed to be here 45 minutes early, but don't clock in?

[00:32:47] Speaker 04:
There's no evidence of that, Your Honor.

[00:32:49] Speaker 04:
That is not.

[00:32:50] Speaker 04:
That never occurred.

[00:32:52] Speaker 01:
And it sounds like what you're telling us is if the cases they're pointing to are all cases where some supervisor was sort of telling people to do something off the clock, then there just really isn't California case law that would help inform if somebody is working off the clock.

[00:33:11] Speaker 01:
They haven't been told to work off the clock, but they are just doing it.

[00:33:14] Speaker 01:
Where that line is where the employer

[00:33:18] Speaker 01:
Should know I mean assume if they know that would be if I but where the employer should know to where they would be liable I mean it's in some instance if like you just knew that everybody's working off the clock all the time and People are coming up to hey.

[00:33:30] Speaker 01:
I just worked off the clock.

[00:33:31] Speaker 01:
You know that That you think that at some at some point they would meet that second Factor, but we don't really have a lot of information on that because we don't have cases that that present those that those kind of facts and

[00:33:46] Speaker 04:
Those facts aren't in this case.

[00:33:48] Speaker 01:
I know you're saying not in the case, but it sounds like in addition to that, we don't really even have case law that tells us where that line is that an employer should have known.

[00:33:59] Speaker 01:
Not the known part, but that the employer, that people were working off the clock.

[00:34:02] Speaker 01:
Because here, the district court judge assumed or found at least there could be a jury question as to that they had worked off the clock, but said it's not a jury question as to

[00:34:14] Speaker 04:
whether or not they could have known but i'm trying to figure out what is there much guidance on what counts as could have known i mean we deal with the newer should have known in all kinds of circumstances i don't think that that's necessarily illegally unique standard that we have that week that we deal with on a daily basis almost you know but but i don't you know in this case the district court said

[00:34:41] Speaker 04:
They never put in any evidence of why J.B.

[00:34:45] Speaker 04:
Hunt should have known that they were working off the clock.

[00:34:49] Speaker 01:
The court said... So it's not so much that there's some evidence, but it would never meet the test.

[00:34:53] Speaker 01:
It's just there's no evidence.

[00:34:54] Speaker 03:
There's no evidence.

[00:34:55] Speaker 03:
Right.

[00:34:55] Speaker 03:
That's fair.

[00:34:56] Speaker 03:
I want to ask you one final question, as you may know.

[00:35:01] Speaker 03:
Our court pines about California law.

[00:35:07] Speaker 03:
usually only when courts of appeal or the California Supreme Court in this case have made it clear enough that we have a good idea what they would be doing.

[00:35:21] Speaker 03:
Given Gonzalez, given Justice Lew's comment and his concurrence and so on, do you believe that we have enough California case law and direction that our court can, if you will, opine what

[00:35:36] Speaker 03:
the safety valve means here or should we send this question certified to the California Supreme Court.

[00:35:42] Speaker 04:
I think it is unnecessary to send it to the California Supreme Court because the statute itself 226.2 a seven as you as you mentioned earlier your honor.

[00:35:55] Speaker 04:
The employer who, in addition to paying any piece rate compensation, pays an hourly rate of at least the applicable minimum wage for all hours worked shall be deemed in compliance with paragraph four.

[00:36:09] Speaker 04:
Paragraph four is the one that says you should be compensated for other nonproductive time at an hourly rate that is not less than the applicable minimum wage.

[00:36:20] Speaker 04:
So if we're paying an hourly rate for all hours work, you know, employers are put into this quandary when using a piece rate.

[00:36:27] Speaker 04:
As you probably know, there are a lot of trucking cases that have gone down.

[00:36:32] Speaker 04:
In fact, J.B.

[00:36:33] Speaker 04:
Hunt was one that got caught in that, that ended up settling in 2018.

[00:36:38] Speaker 04:
That's why they put the pay plan in effect, to say we're not going to get caught in that where we have piece rate pay and not paying for the pre-trip, post-trip inspections and whatnot.

[00:36:49] Speaker 03:
So from your perspective, you fully comply with the safety valve.

[00:36:53] Speaker 03:
There's nothing to certify the California Supreme Court, and we can decide that.

[00:36:57] Speaker 03:
Is that correct?

[00:36:57] Speaker 04:
That's correct.

[00:36:58] Speaker 04:
I think you can do away with this case quickly.

[00:37:00] Speaker 04:
Okay.

[00:37:00] Speaker 03:
Questions by my colleagues?

[00:37:03] Speaker 03:
All right.

[00:37:03] Speaker 03:
Thank you very much.

[00:37:04] Speaker 03:
Thank you, Your Honor.

[00:37:06] Speaker 03:
Mr. You said Dana's?

[00:37:09] Speaker 03:
Dan's.

[00:37:09] Speaker 03:
Dan, I apologize.

[00:37:10] Speaker 03:
Anyway, Mr. Dan's have a little bit of rebuttal time.

[00:37:17] Speaker 00:
Okay, thank you very much.

[00:37:18] Speaker 00:
I'm just going to try and be efficient here and hit a couple points quickly.

[00:37:21] Speaker 00:
Number one, to Judge Van Dyke's point, is there any case law that says that it can be something less than a manager telling you you must work off the clock or you must show up early?

[00:37:33] Speaker 00:
Rebo versus Farmers Insurance Group, 2013 U.S.

[00:37:37] Speaker 00:
District Lexus 100810.

[00:37:39] Speaker 00:
It's a July 17, 2013, CD-CAL case.

[00:37:44] Speaker 00:
Said that where the supervisors instructed employees to arrive early to perform functions necessary to being ready for work at their designated shift time That was sufficient to create a factual issue for trial So that that is one such case, but it but taking that point though if your opposing counsel says that under the pay plan Anybody who did arrive early and the supervisor told in rivalry should clock in and

[00:38:12] Speaker 03:
What's your response to that?

[00:38:13] Speaker 00:
Our response to that is twofold.

[00:38:15] Speaker 00:
Number one, that they are told to clock in on their people net units that are on their trucks.

[00:38:20] Speaker 00:
And in fact, the other side was saying that this is one of the great reasons they provide all the stuff you need.

[00:38:25] Speaker 00:
You shouldn't even need your own phone to clock in.

[00:38:27] Speaker 00:
You can do it on the truck.

[00:38:29] Speaker 00:
The truck is physically located apart from the office where they get their paperwork.

[00:38:34] Speaker 00:
A second point to the point about, well, there's nothing regarding Mr. Williams himself and any evidence that he worked off the clock.

[00:38:41] Speaker 00:
On page 7, ER 1698, they said, the question was, so you're saying that you do this while you're logged off duty?

[00:38:50] Speaker 00:
Yes.

[00:38:51] Speaker 00:
And how would the company be able to tell whether that ever occurred?

[00:38:54] Speaker 00:
Answer from Williams.

[00:38:56] Speaker 00:
I think so because they scan.

[00:38:58] Speaker 00:
They have a GPS system on the trailer.

[00:39:00] Speaker 00:
Target does or JB Hunt?

[00:39:02] Speaker 00:
No, JB Hunt.

[00:39:03] Speaker 00:
They have GPS systems on the trailer?

[00:39:05] Speaker 01:
Yes.

[00:39:06] Speaker 01:
But that kind of goes to my question, because even the case you pointed out is a situation where I assume people are being, you talked about shift.

[00:39:12] Speaker 01:
You used the word shift in there.

[00:39:14] Speaker 01:
People are being paid from a certain time or expected to be there a certain time.

[00:39:17] Speaker 01:
Obviously, people are expected to be there earlier here.

[00:39:19] Speaker 01:
I mean, the argument would just be that their shift starts 45 minutes before their truck leaves.

[00:39:24] Speaker 01:
Implicit in yours is the concept that the shift starts the moment your truck drives off the lot.

[00:39:29] Speaker 01:
That I don't think we're not truckers, but that's not even intuitive taught to me like I think sometime before that and so I'm trying to figure out like it seems quite a difference to say Well, they could have went in and and they could have taken the GPS data And they could have linked that up with their and and figured out that people were working off the clock like there's some sort of like there's some sort of detectives or something trying to versus a situation where

[00:39:56] Speaker 01:
in the case you're talking about where people actually are told, get here before you clock in essentially, before your shift.

[00:40:05] Speaker 01:
There's quite a difference between them.

[00:40:08] Speaker 00:
Well, when they tell them to clock in early and they, I'm sorry, when they tell them to arrive early and then they provide a way for them to clock in that they know isn't being used from facts on the ground, that should be enough for a jury question.

[00:40:20] Speaker 02:
And so where's the record evidence of that, that they know it's not being used?

[00:40:24] Speaker 00:
Well, the record evidence is at least from William saying that they have a GPS on his truck.

[00:40:29] Speaker 02:
He said the trailer, I thought you read.

[00:40:32] Speaker 02:
Isn't that what he said?

[00:40:32] Speaker 02:
It's on the trailer?

[00:40:34] Speaker 00:
I'm sorry.

[00:40:35] Speaker 00:
He said the GPS, but it's not contested that the people in that unit is in the truck.

[00:40:42] Speaker 01:
The GPS unit that you'd be supposedly

[00:40:45] Speaker 01:
Cross referencing is not actually on the truck if it's on the trailer like the trailers.

[00:40:51] Speaker 00:
I believe it's in the truck your honor I I think he may have misspoken here But it's there's plenty of evidence in the case that the people net unit is is a tablet That's in not in the trailers that are switched out, but rather in the cab in order to be successful on your claim Do you have to prove that JB hunt?

[00:41:12] Speaker 03:
knew or should have known that your three plaintiffs are

[00:41:15] Speaker 03:
were working off the clock that they knew it and they didn't say they should sign it.

[00:41:20] Speaker 00:
Yes, for the off-the-clock separate claim, for the separate off-the-clock claim, not for the unpaid nonproductive time claim.

[00:41:30] Speaker 03:
Why is that?

[00:41:30] Speaker 00:
Because unpaid nonproductive time is not an off-the-clock claim.

[00:41:34] Speaker 00:
It's not about employer knowledge.

[00:41:36] Speaker 00:
It's simply about the way that they set up their plan.

[00:41:39] Speaker 03:
But, again, my understanding is, and your opposing counsel has said this,

[00:41:45] Speaker 03:
all employees are supposed to clock in whenever they're doing any work for JB Hunt, period.

[00:41:52] Speaker 03:
If that's right, how can your argument succeed?

[00:41:56] Speaker 00:
The issue about being clocked in or out has nothing to do with the first claim about the way that their pay plan is set up.

[00:42:03] Speaker 02:
We're saying that it's a piece rate claim versus an hourly claim.

[00:42:06] Speaker 02:
Right.

[00:42:07] Speaker 00:
And if I could just say, Your Honor, you know, I think that the California Supreme Court should weigh in on it because really what the issue is here

[00:42:15] Speaker 00:
is that they add and then subtract all the hourly work.

[00:42:20] Speaker 00:
They're saying the whole thing that makes this plan kosher is that we add, people get paid for their time.

[00:42:27] Speaker 00:
They add it and then they take it right away in the denominator.

[00:42:30] Speaker 00:
If this were a situation where they added your hourly time and then just on top of it was gravy of a productive bonus, we would have no claim on that.

[00:42:39] Speaker 00:
We don't deny that.

[00:42:40] Speaker 00:
It's all about the fact that they then subtract it all out and all you're left with is piece rate.

[00:42:46] Speaker 00:
If you're then left just with piece rate, they must pay for non-productive time, which they don't.

[00:42:51] Speaker 02:
I think we've been talking about this for a long time.

[00:42:56] Speaker 03:
Very interesting labor case.

[00:42:58] Speaker 03:
Thank you both for your fine arguments.

[00:43:00] Speaker 03:
We appreciate it very much.

[00:43:02] Speaker 03:
The case of Williams versus J.B.

[00:43:04] Speaker 03:
Hunt Transport.

[00:43:05] Speaker 03:
is submitted and the court stands adjourned for the day.

[00:43:09] Speaker 03:
Thank you.

[00:43:10] Speaker 00:
Thank you very much, Your Honors.

[00:43:12] Speaker 02:
I'll rise.

[00:43:20] Speaker 02:
This court for this session stands adjourned.