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Pasadena California Business & Commercial Law Blog

Seeking Employee Background Checks? Get It Right or Get Sued

It is entirely common for employers to seek consumer reports and background checks on prospective and current employees. However, the law governing how the employer can go about this can be tricky, and if done wrong leads to a massive legal nightmare. The most recent example of this is Gilberg v. Cal. Check Cashing Stores, LLC.

When seeking these consumer reports, employers are required to provide disclosure and obtain consent from the prospective or current employee. The manner in which the disclosure and consent are handled is strictly proscribed by the Fair Credit Reporting Act ("FCRA").

FedEx Looks to Shake Up Delivery Industry

As discussed previously on this blog, the transportation market is rapidly evolving both in terms of the laws governing it and in the nature of the business itself. Now, FedEx is looking to bring the next innovation along as it announced plans for last-minute robot delivery for companies such as Pizza Hut and Walmart.

This new development will be tested over the summer of 2019. The plan is to use robots, drones, and self-driving cars to deliver goods to customers that reside near store locations. It is believed that this could account for fifty percent or more of deliveries.

Beyond California, Litigation in Other States Could Also Upend the Trucking Industry

In California, the ongoing litigation around the definition of an employee versus independent contractor and the rules for meal and rest breaks threaten to upend the trucking industry. While these issues are understandably garnering significant attention, there are others across the country that could also have a large impact. Currently, a case in Arkansas may leave the industry forced to undergo massive change.

In October 2018, a federal court in Arkansas took on a case against PAM Transport. The lawsuit centered on the time and activities drivers were required to be paid minimum wage for. Notably, this included time on the road sleeping that may normally be logged as off duty. PAM transport sought to have the case dismissed but their motion was denied.

Supreme Court Deals Blow to Trucking Companies Seeking Arbitration

In a recent Federal Arbitration Act ("FAA") decision, the United States Supreme Court unanimously made getting to arbitration more difficult for trucking companies. In Oliveira v. New Prime, the Supreme Court determined that it was for a court, not an arbitrator, to decide if the exemption in Section 1 of the FAA applies. More importantly for truckers, the Court decided that the Section 1 exemption applied to all truck drivers, whether employees or independent contractors. This means the FAA cannot be used to compel arbitration of claims involving truck drivers.

In this case, Oliveira was a driver who provided services for New Prime, an interstate transportation company, as an independent contractor. He brought suit arguing New Prime violated minimum wage requirements and various labor statutes. New Prime's contract with Oliveira required the parties to arbitrate. However, when New Prime sought to have the case taken to arbitration their motion was denied. New Prime's appeal eventually made its way to the Supreme Court

New Labor Commissioner Decision Demonstrates Continuing Attacks on Independent Contractor Truck Driver Model

As discussed previously on this blog, recent legal developments have complicated the business plans of trucking companies that use independent contractors as drivers. These have included the Dynamex decision that changed the 30-year-old test of whether a worker is an employee or an independent contractor, but appears applicable only in certain circumstances and for only certain legal claims. This was followed by lawsuits to invalidate Dynamex and a federal district court decision finding that Dynamex was pre-empted by federal law. Compounding this confusion, California passed a law late last year that exposed large retailers to new potential liability. The bill, SB 1402, meant companies could be jointly liable when they hire companies that have violated state employment laws. Now shippers could be liable for violations caused by the motor carriers they hire.

A New Year Brings New Hope to Retailers

Despite untimely obituaries written for brick and mortar stores, your everyday physical stores staved off extinction. Lately, they've also started to pick up some wins over online sellers, as they not only defend their business models but also strike back. As we kick off 2019, these brick and mortars appear to be finding new hope.

FMCSA Determines that California Meal and Rest Break Rules are Preempted

On December 21, 2018, the Federal Motor Carrier Safety Administration (FMCSA) granted petitions submitted by the American Trucking Associations (ATA) and the Specialized Carriers and Rigging Association (SCRA) requesting a determination that the State of California's Meal and Rest Break rules (MRB Rules) are preempted under 49 U.S.C. 31141 as applied to property-carrying commercial motor vehicle (CMV) drivers covered by the FMCSA's Hours of Service (HOS) regulations. Basically, ATA and SCRA argued that the MRB should not apply to commercial truck drivers because federal HOS rules already regulated driver breaks. The extensive public comments filed in response to the petitions and considered by the FMCSA can be found at the regulations.gov website.

The California Trucking Association Files Its Case Against Dynamex

As discussed previously on this blog, the Dynamex Operations West v. Superior Court decision upended California's independent contractor market with a new test for whether a worker will be considered an employee. The new test was particularly problematic for the trucking industry. As such, several cases have arisen to challenge the Dynamex decision. The Western States Trucking Association (WTSA) challenged the case. Additionally, a recent California District Court decision determined federal law pre-empts Dynamex. Of course, there is a still a long way to go before Dynamex's fate is decided.

California District Court Finds Dynamex ABC Test Preempted by FAAAA

Since April 30, 2018, when the California Supreme Court issued its decision in Dynamex Operations West. v. Superior Court, California motor carriers, as well as many other businesses, have been struggling to deal with the unexpected new "ABC test" for deciding who is an independent contractor and who is an employee. Under its problematic B prong, the new Dynamex test requires that for a person to be an independent contractor the work he or she does must be outside the usual course of the hiring entity's business. For a basic motor carrier, it is hard to argue that a truck driver is performing a service outside the usual course of the motor carrier's business. But now, a new Central District Court has found that federal law preempts Dynamex for determining the classification of truck drivers.

California Continues to Pressure the Trucking Industry Nationwide

Backed by many in the trucking industry, the Environmental Protection Agency is planning to implement new limits on commercial truck emissions. The new limits appear to be in response to California pushing ahead with laws of its own.

While the State of California also favors nationwide rules, the trucking industry appears to back the move by the EPA because it could put off even stricter regulations that California might implement. California's role in the process has led to all sides seemingly hoping the EPA would take action.

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