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Certification from United States District Court for Western District of Washington in Sampson v. Knight Transportation, Inc.

Supreme Court of Washington, En Banc

September 5, 2019

CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON IN VALERIE SAMPSON and DAVID RAYMOND, on their own behalf and on behalf of all others similarly situated, Plaintiffs,
v.
KNIGHT TRANSPORTATION, INC., an Arizona corporation, KNIGHT REFRIGERATED, LLC, an Arizona limited liability company, and KNIGHT PORT SERVICES, LLC, an Arizona limited liability company, Defendants.

          YU, J.

         This case arises from a putative class action employment lawsuit involving commercial truck drivers who are paid on a piecework basis. We have been asked by Judge Cpughenour of the United States District Court for the Western District of Washington to answer the following certified question: "Does the Washington Minimum Wage Act require non-agricultural employers to pay their piece-rate employees per hour for time spent performing activities outside of piece-rate work?" Order, Sampson v. Knight Transp., Inc., No. C17-0028-JCC, at 17 (W.D. Wash. June 14, 2018).

         The answer is no. All workers must be compensated for all hours worked in a workweek in accordance with the Minimum Wage Act (MWA), ch. 49.46 RCW. For nonagricultural workers, WAC 296-126-021 validly allows employers to demonstrate compliance with the MWA's guaranty that Washington workers receive a minimum wage for each hour worked by ensuring that the total wages for the week do not fall below the statutory minimum wage for each hour worked. Accordingly, the plaintiffs in this case fail to demonstrate as a matter of law that they were uncompensated for time spent "loading and unloading, pre-trip inspections, fueling, detention at a shipper or consignee, washing trucks, and other similar activities." Order at 17.

         Factual Background and Procedural History

         Plaintiffs Valerie Sampson and David Raymond (collectively Sampson) are Washington residents who worked as commercial truck drivers for defendants Knight Transportation Inc., Knight Refrigerated LLC, and Knight Port Services LLC (collectively Knight). Plaintiffs brought this putative class action on behalf of themselves and others similarly situated for several alleged violations of Washington wage and hour laws. At issue here is Sampson's claim that piece-rate drivers must receive separate hourly compensation for all time spent "on-duty not-driving."[1]

         Knight uses two methods to compensate its drivers. Long-haul drivers- those that deliver loads across the United States and Canada-are paid a mileage-based piece rate, based on estimated miles rather than actual miles driven (mileage rate). The per-mile rate varies depending on the length of the trip and is intended to compensate the driver for time spent driving as well as for routine nondriving tasks associated with the trip, including weighing loads, filling out paper work, conducting vehicle inspections, securing and caring for cargo, performing maintenance activities, fueling and washing the truck, and up to two hours of wait time[2] at the shipper or consignee facility. Because these nondriving activities take roughly the same amount of time regardless of the length of the trip, shorter trips are paid at a higher per-mile rate than longer trips. Long-haul drivers are also paid an extra flat fee for certain additional duties, such as hand loading/unloading, making extra stops, waiting more than two hours at the shipper or consignee, and crossing borders.

         Short-haul drivers-those that pick up loads from major ports in Washington and deliver them across the Pacific Northwest-are paid a flat rate for each round trip (load rate). The load rate is determined by several factors, including the trip length and type of load. Like the mileage rate for long-haul drivers, the load rate is intended to cover all routine nondriving tasks. And like long-haul drivers, short-haul drivers receive extra pay for additional activities, such as long wait times and assisting with loading and unloading. The district court determined that both the mileage rate and load rate qualify as "piece rates" pursuant to Washington law because drivers are paid for tasks completed and not the amount of time worked. Id. at 13 (citing Erickson v. Dep't of Labor & Indus., 185 Wash. 618, 620, 56 P.2d 713(1936)).

         Sampson argues that both compensation schemes violate the MWA because drivers spend time completing tasks for which they are not paid. Instead, the time spent on nondriving tasks is "subsumed within [the] mileage or load rate." Id. at 14. Sampson argues that the MWA requires employers to pay their employees "per hour" worked and that the workweek averaging used by Knight does not compensate for actual hours worked. Id.

         The district court acknowledged that it had previously rejected similar claims as not cognizable under Washington law, but it agreed with Sampson that those prior holdings were called into question by our recent decision in Carranza v. Dovex Fruit Co., 190 Wn.2d 612, 416 P.3d 1205 (2018), and therefore certified the following question to this court.[3] Order at 15.

         Issue

         Does the MWA require nonagricultural employers to pay their piece-rate employees per hour for time spent performing activities outside of piece-rate work?[4]

         Analysis

         The MWA "establishes] minimum standards of employment within the state of Washington," including setting the minimum wage. RCW 49.46.005(1). The MWA states that "every employer shall pay to each of his or her employees who has reached the age of eighteen years wages at a rate of not less than [the applicable minimum wage] per hour." RCW 49.46.O2O(1)-(3). The statute does not restrict employers to a specific compensation structure but does require that employees be compensated at least the minimum wage for each hour worked. Carranza, 190 Wn.2d at 619.

         With limited exceptions, WAC 296-126-021 allows employers to measure compliance with the MWA by dividing an employee's total wages earned in a week by the total hours worked. If the result equals or exceeds the minimum wage, the requirements of the MWA have been met. This method is commonly referred to as "workweek averaging." If the result falls below the hourly minimum wage, the employer must augment the final compensation to meet the statutory requirements.

         Knight contends that WAC 296-126-021 specifically authorizes workweek averaging of all hours worked as an allowable method of measuring compliance with the MWA for piece-rate workers like the truck drivers here. Sampson argues that in light of Carranza, WAC 296-126-021 must be interpreted to authorize workweek averaging of piecework wages only with hours spent on the piecework. That is, hours spent on tasks outside the piecework must be separately compensated at an hourly rate at least equal to the applicable minimum wage. Alternatively, Sampson argues that WAC 296-126-021 is not a valid implementation of the MWA.

         This is the fourth certified question we have received in the last several years from federal courts relating to piecework compensation and the MWA, but it is the first where we are required to directly rule on the validity of WAC 296-126-021 's workweek averaging test for compliance for nonagricultural workers. See Hill v. Xerox Bus. Servs., LLC, 191 Wn.2d 751, 752, 760, 426 P.3d 703 (2018) (a payment plan that includes as a metric an employee's "production minutes" does not qualify as a piecework plan); Carranza, 190 Wn.2d at 626-27 (agricultural piece-rate pickers, who are not subject to WAC 296-126-021, must be paid separate hourly compensation for the time they spend performing tasks outside of piece-rate picking work); Lopez Demetrio v. Sakuma Bros. Farms, 183 Wn.2d 649, 662-63, 355 P.3d 258 (2015) (agricultural employers required to pay piece-rate workers separately for rest breaks at a rate calculated by workweek averaging of production hours).[5] We now hold that WAC 296-126-021 sets forth a valid method of measuring compliance with the MWA for nonagricultural employees paid on a piecework basis. Contrary to the dissent's characterization, the court in Carranza limited its holding to agricultural workers because WAC 296-126-021 expressly excluded agricultural workers. 190 Wn.2d at 624; WAC 296-126-001(2)(c).

         A. We answer the certified question as framed by the district court

         As a preliminary matter, we must decide whether to answer the certified question as presented by the district court or exercise our discretion to reformulate the question. See, e.g., Allen v. Dameron, 187 Wn.2d 692, 701, 389 P.3d 487 (2017); Order at 17. Knight argues that the question as presented implicitly accepts Sampson's premise that the nondriving tasks at issue are outside the scope of the piece-rate compensation. Knight asks us to reframe the question to read, "Does the MWA prohibit piecework pay from compensating for all activities necessary or incidental to the production of the units of output?" Resp'ts/Defs.' Corrected Answering Br. at 10-11. We decline to do so. What work is accounted for by piece-rate compensation is a factual question for the district court to resolve. Carranza, 190 Wn.2d at 615-16. The district court has asked for our guidance on a narrow legal question, and we confine our answer to the scope of the question as presented.

         We answer certified questions de novo and in light of the certified record from the federal court. Carlsen v. Glob. Client Sols., LLC, 171 Wn.2d 486, 493, 256 P.3d 321 (2011); see also RCW 2.60.030(2).

         B. The plain language of WAC 296-126-021 allows workweek averaging of all hours for nonagricultural workers paid on a piecework basis

         The Department of Labor and Industries (Department) has long understood WAC 296-126-021 to allow workweek averaging of all hours worked for nonagricultural employees paid on a piecework basis. Sampson would have us interpret the regulation as requiring separate hourly pay for non-piece-rate work. This interpretation is not supported by the plain language of the regulation. Because the Department's long-held ...


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