[Congressional Record (Bound Edition), Volume 162 (2016), Part 3]
[Extensions of Remarks]
[Pages 3515-3517]
[From the U.S. Government Publishing Office, www.gpo.gov]




   OPPOSE THE AIRR ACT PROTECT MEAL AND REST BREAKS AND FAIR PAY FOR 
                                TRUCKERS

                                 ______
                                 

                         HON. PETER A. DeFAZIO

                               of oregon

                    in the house of representatives

                         Monday, March 21, 2016

  Mr. DeFAZIO. Mr. Speaker, today the House considers a clean extension 
of aviation programs through July 15, 2016. While I have no objection 
to H.R. 4721, I do have serious concerns with H.R. 4441, the ``Aviation 
Innovation, Reform, and Reauthorization Act of 2016'' (AIRR Act), the 
controversial Federal

[[Page 3516]]

Aviation Administration reauthorization bill. My remarks focus on one 
provision in H.R. 4441, Section 611.
  Section 611 of H.R. 4441 pre-empts intrastate laws related to meal 
breaks, rest breaks, and hourly tracking of wages for truck drivers. 
Specifically, Section 611(a)(3) states:

       (A) A State, political subdivision of a State, or political 
     authority of 2 or more States may not enact or enforce a law, 
     regulation, or other provision having the force and effect of 
     law prohibiting employees whose hours of service are subject 
     to regulation by the Secretary under section 31502 from 
     working to the full extent permitted or at such times as 
     permitted under such section, or imposing any additional 
     obligations on motor carriers if such employees work to the 
     full extent or at such times as permitted under such section, 
     including any related activities regulated under part 395 of 
     title 49, Code of Federal Regulations.
       (B) A State, political subdivision of a State, or political 
     authority of 2 or more States may not enact or enforce a law, 
     regulation, or other provision having the force and effect of 
     law that requires a motor carrier that compensates employees 
     on a piece-rate basis to pay those employees separate or 
     additional compensation, provided that the motor carrier pays 
     the employee a total sum that when divided by the total 
     number of hours worked during the corresponding work period 
     is equal to or greater than the applicable hourly minimum 
     wage of the State, political subdivision of the State, or 
     political authority of 2 or more States.

  Section 611 pre-empts State laws in two parts. Part (A) is specific 
to meal and rest breaks, which are in effect in 21 States. Part (B) 
allows companies to continue to pay by the load or on a piece-rate 
basis, and to disregard State laws that require hourly tracking of 
wages.
  Additional language in Section 611 makes these legislative changes 
retroactive to 1994. This retroactivity language will wipe out at least 
50 pending lawsuits regarding wage and hour laws.


           part a: preempting state meal and rest break laws

  Section 611 is being pursued by a coalition of large trucking 
companies following a recent Ninth Circuit U.S. Court of Appeals 
decision that upheld the State of California's meal and rest break laws 
for all workers, including truck drivers. See Dilts v. Penske 
Logistics, LLC, 769 F.3d 637 (9th Cir. 2014), cert. denied, 135 S. Ct. 
2049 (2015). The trucking companies supporting Section 611 claim that 
the language in part (A) is needed to prevent a patchwork of State 
hours of service laws. In reality, Section 611 goes far beyond this 
stated purpose.


                   dilts v. penske logistics decision

  Section 611 pre-empts existing State meal or rest break laws, many of 
which have been on the books for decades, in 21 States. If enacted, 
Section 611 will prevent truck drivers who work exclusively within a 
single State from being protected by that State's wage and hour laws. I 
agree that if a truck driver is operating long haul, through several 
States, having to comply with new rest or meal break requirements every 
time the driver crosses a State line is confusing and impedes 
interstate commerce. The Dilts case was not a case that affected 
drivers moving goods from coast to coast--it was a case involving local 
appliance delivery drivers who never left California.
  The trucking companies supporting Section 611 argue that a driver 
would have to pull off the road at inconvenient times or in potentially 
unsafe situations to take a break. That is simply not true. In fact, 
case law has specifically established that employers do not have to 
require employees to take a break--they simply must permit it by 
relieving employees of duties or pay employees for the time.
  Moreover, it is disingenuous for some in the trucking industry to 
imply that the need for this legislative fix was caused by one 
``rogue'' Ninth Circuit court decision. California changed its meal and 
rest break law in 2000--16 years ago--to provide a monetary remedy of 
an additional hour of pay to an employee if an employer does not allow 
for a meal or a rest break.
  The 2014 Dilts decision regarding meal and rest breaks cites multiple 
cases setting the precedent for the decision. In addition, the U.S. 
Department of Transportation (DOT) filed an amicus brief in this case 
in support of the drivers, marking the first time the Federal 
Government has taken a position on intrastate pre-emption. DOT argues 
that there is a presumption against preemption in areas of traditional 
State ``police power'' or control, and that labor laws are a clear area 
of traditional State control. DOT also notes that Federal rules 
requiring a 30-minute rest break do not apply to short-haul drivers. 
Therefore, if Section 611 were enacted, short-haul intrastate drivers 
would not receive any rest break protection under Federal or State law.
  DOT's brief also cites a finding from a decision by the Seventh 
Circuit Court of Appeals, well known for its pro-business decisions, in 
a trucking case that found that any changes to economic inputs may 
raise the cost of doing business, but that does not rise to the level 
of challenging pre-emption. In S.C. Johnson & Son, Inc. v. Transport 
Corp. of America, Inc., 697 F.3d 544 (7th Cir. 2012), the Seventh 
Circuit found:

       [L]abor inputs are affected by a network of labor laws, 
     including minimum wage laws, worker safety laws, anti-
     discrimination laws and pension regulations. Capital is 
     regulated by banking laws, securities rules, and tax laws, 
     among others. Technology is heavily influenced by 
     intellectual property laws. Changes to these background laws 
     will ultimately affect the cost of these inputs, and thus, in 
     turn, the price . . . or service of the outputs. Yet no one 
     thinks that the ADA or the FAAAA preempts these and the many 
     comparable State laws. S.C. Johnson & Son, Inc., 697 F.3d at 
     558.

  The Ninth Circuit's Dilts decision very clearly spells out that 
California's labor laws, particularly related to intrastate truck 
drivers in this case, are not be preempted under the 1994 F4A pre-
emption provision:

       Although we have in the past confronted close cases that 
     have required us to struggle with the ``related to'' test, 
     and refine our principles of FAAAA preemption, we do not 
     think that this is one of them. In light of the FAAAA 
     preemption principles outlined above, California's meal and 
     rest break laws plainly are not the sorts of laws `related 
     to' prices, routes, or services that Congress intended to 
     preempt. They do not set prices, mandate or prohibit certain 
     routes, or tell motor carriers what services they may or may 
     not provide, either directly or indirectly . . . They are 
     normal background rules for almost all employers doing 
     business in the state of California. Dilts, 769 F.3d at 647.

  Therefore, Part (A) of Section 611 goes far beyond addressing the 
concern that drivers may face different rules in different States in 
interstate commerce. If enacted, it would deny drivers who operate 
under one set of rules, in one State, coverage under laws designed to 
ensure adequate rest on the job. The language also legislatively 
overturns a body of case law that has consistently upheld labor 
protections for truck drivers.


                part b: preempting fair pay for truckers

  Part (B) of Section 611 restricts the ability of States to improve 
truck driver working conditions and pay. The language dictates that the 
``piece rate'' (or pay-by-the-load) a trucking company offers as 
compensation to a driver supersedes State laws that require 
compensation for time a driver spends doing tasks such as loading or 
unloading or being detained--in other words, any time a truck's wheels 
are not turning.


                       california piece-rate pay

  Several Federal district court and California State appellate court 
decisions between 2011 and 2013 have redefined piece-rate pay in 
California. Piece-rate or per-trip pay is common in many industries, 
such as trucking, agriculture, automotive repair shops, and others. 
Prior to 2011, employers who paid by the trip or piece were considered 
to be in compliance with Federal and State minimum wage laws provided 
that an employee's average hourly wage (total compensation over a work 
period divided by total hours worked) was at the minimum wage level or 
higher.
  The problem, however, was that ``non-productive'' work hours--such as 
a truck driver waiting at a loading dock, or a strawberry picker 
waiting to be transported to and from the field, or an auto repair shop 
employee waiting in between jobs--was untracked and unpaid. A series of 
class action cases brought against employers for unpaid time all were 
found in favor of employees. In each decision, employers were found to 
be in violation of California's minimum wage law if they calculated 
average hours worked through piece rate because, if non-productive time 
is not separately compensated, the employees were not compensated at 
all. Two cases involved truck drivers--one for Safeway and one for Con-
way Freight--and the courts specifically found that pay by the load (as 
calculated in the trucking industry) did not provide compensation for 
activities such as loading and unloading because they were not included 
in the piece-rate.
  In response to these decisions, California passed a new law 
(effective January 1, 2016) requiring the following for anyone paid on 
a piece-rate basis:
  Separate tracking of compensation for the time to take rest and 
recovery breaks, which must be paid at an hourly rate of the greater of 
the State minimum wage or the employee's average hourly wage for the 
week (Importantly, based on a separate 2012 court decision, employers 
do not have to require employees to take a break--employers must permit 
it and relieve the employees of duties or pay them for the rest break)

[[Page 3517]]

  Separate compensation for ``non-productive'' time under the 
employer's control that is not being compensated in the piece-rate 
formula, at an hourly rate no less than minimum wage.
  The effect of this new law is employers will have to begin tracking 
non-productive time, which gets at the heart of the detention time 
issue in trucking.
  If part (B) of Section 611 is enacted, interstate and intrastate 
truck drivers in California will be stripped of these protections that 
specifically track pay for time detained. Congress should be looking at 
ways to help the men and women in the trucking industry to earn living 
wages, not passing laws that further put the squeeze on drivers as they 
fight gridlock to deliver loads.


                          congressional intent

  Finally, some of my colleagues on the other side of the aisle have 
argued that the Ninth Circuit Court of Appeals Dilts decision 
undermines Congressional intent. In fact, Section 611 represents a 
sweeping expansion of Federal pre-emption that Congress enacted in 
1994. The Conference Report (H. Rept. 103-677) accompanying the 1994 
law (P.L. 103-305) very clearly lays out the background and situation 
Congress was intending to address--direct economic regulation of 
intrastate trucking by States, through direct actions such as ``entry 
controls, tariff filing and price regulation, and types of commodities 
carried''.
  The trucking industry was deregulated by Congress in the Motor 
Carrier Act of 1980. The Conference Report accompanying the 1994 law 
notes that, in 1994, 41 States continued to regulate intrastate prices, 
routes, and services of motor carriers and 26 States strictly regulated 
trucking prices. The Report further states that such regulations were 
usually designed to ensure that prices ``are kept high enough to cover 
all costs and are not so low as to be `predatory'. Price regulation 
also involves filing of tariffs and long intervals for approval to 
change prices.'' In other words, States were still directly dictating 
the rates and prices motor carriers could charge for movement of goods 
through the particular State.
  The broad pre-emption language was added in Conference. The House 
bill had no provision, and the Senate bill had a provision narrowly 
tailored to apply pre-emption to intermodal all-cargo air carriers. The 
Senate provision was inserted to address an inequity in which the Ninth 
Circuit Court of Appeals, in a separate decision, determined that 
Federal Express (FedEx) was not subject to intrastate economic 
regulations for motor carriers because FedEx could rely on preemption 
under the Airline Deregulation Act of 1978 because it was an air 
carrier. See Fed. Express Corp. v. Cal. Pub. Utils. Comm'n, 936 F.2d 
1075 (9th Cir. 1991), cert denied, 112 S.Ct. 2956 (1992). UPS, however, 
remained regulated as a motor carrier, ``putting it at a competitive 
disadvantage in a number of States.'' H. Rept. 103-677. After the 
Federal Express Corporation decision, California and other States began 
to enact laws extending the pre-emption to other carriers affiliated 
with direct air carriers, but some segments of the motor carrier 
industry, such as owner-operators, were still subject to regulation. 
Therefore, Congress was attempting to fix a glaring competition issue 
that placed certain companies at an advantage.
  The law in 1994, which still stands today, also enumerated that 
States could continue to exercise regulatory authority in areas such as 
safety, vehicle size and weight, insurance requirements, and hazardous 
materials routing. Almost all of the 21 laws that would be pre-empted 
by Section 611 were in place in some form in 1994, yet Conferees never 
mentioned meal or rest break laws as problematic, or part of what was 
being contemplated under the types of troublesome activity at the State 
level that was impeding commerce.
  Therefore, it is disingenuous to imply that Section 611 is simply a 
restoration of Congressional intent in 1994, because Congress never 
contemplated meal and rest breaks when enacting the law.


                               conclusion

  Section 611 has no place in a Federal Aviation Administration 
reauthorization bill. This is a trucking issue. Last year, the 
Conference Committee on the FAST Act (P.L. 114-94) rejected this 
identical language. I strongly opposed this provision in the FAST Act 
and continue to strongly oppose it in this bill.
  Section 611 is strongly opposed by the Teamsters, safety advocates, 
and the American Association for Justice. The trucking industry is 
split on Section 611. Smaller owner operators--which represent more 
than 90 percent of the companies in the industry--strongly oppose 
Section 611.
  If the intent is really to solve an interstate commerce problem, this 
language completely--and purposefully--misses the mark. It is an 
expansive hacking away at the ability of a State to promote healthy 
working conditions for truck drivers.

                          ____________________