In Dilts v. Penske Logistics LLC, Penske employees working as drivers and installers brought a class action suit alleging that Penske failed to properly provide meal and rest breaks under California law, even though it automatically deducted a 30 minute meal break from the work time of each driver and installer.  The employees’ duties included loading appliances from warehouses in California, transporting the appliances to locations within California, and installing the appliances.  The Court reviewed the legislative history of the FAAAA, and determined first that it could apply to intrastate activities, and that Penske’s activities were those of a motor carrier. 

 

The Court recognized that employee meal and rest breaks are traditionally regulated by the states.  However, the principles set out by Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) and Rowe v. New Hampshire, 552 U.S. 364 (2008) provide that the law need not directly regulate motor carriers to be preempted; instead, it is enough that the effect of the regulation would be that motor carriers would have to offer services different than what may be dictated by the market.  If the regulation at issue directly or indirectly binds the motor carrier to a rate, route, or service, and thereby interferes with competitive market forces, preemption may be found.

 

The Court recognized that requiring motor carriers to have their drivers take meal and rest breaks in accordance with state law would necessarily force drivers and alter their routes so they could have places to take their breaks, and it would limit the routes they could take.  The Court also recognized the impact on the services Penske could offer, as each driver’s daily deliveries would be reduced by the meal and rest breaks.  The connection of the meal and rest breaks to schedules, origins, and destinations was found to be far from tenuous.  Moreover, the effects on the routes and services combined were found to affect Penske’s prices.  These laws are not merely wage laws (which are not preempted) because they provide substantive restrictions on breaks taken. 

 

Finally, the Court ruled that the safety exception to the FAAAA did not apply.  Building on the foundations of Rowe and American Trucking Association v. City of Los Angeles, 559 F.3d 1046 (9th Cir. 2009), the Court made it clear that the safety exception applies to situations of motor vehicle safety, not general public health concerns.  Thus, it distinguished between laws impacting the health and safety of an employee from, for example, laws regulating the towing and removal of vehicles.