February 16, 2017 5:00 PM, EST
Penske Agrees to Settlement in California Meal and Rest Break Lawsuit

Penske Logistics has agreed to pay 344 drivers a total of $750,000 to settle a longstanding class-action lawsuit over a California meal and rest break law.

After nearly nine years of litigation, including an appeal to the 8th U.S. Circuit Court of Appeals and an unsuccessful attempt by Penske for a Supreme Court review, the parties reached a preliminary settlement of the remaining certified claims on Feb. 4, subject to final court approval in May.

“Penske is pleased to have reached an agreement with the plaintiffs’ counsel to settle this dispute," said a company statement. "The company did not admit any wrongdoing and believes it would have prevailed based on the merits of the claims, but we look forward to the court approving the settlement and putting an end to this protracted litigation.”

Penske Logistics, of Reading, Pennsylvania, ranks No. 22 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.

“The settlement was reached as a result of good faith but contentious negotiations between counsel for plaintiffs and counsel for defendant, culminating in a full day of mediation with respected mediator Mark Rudy,” according to a preliminary court order approving the agreement.

The net settlement amount totals $332,500, after deductions for requested attorney’s fees of $225,000, costs of $135,000, class representative incentive awards of $15,000 for each of the class representatives and settlement administration costs of about $12,500, according to a court filing outlining the terms of the agreement.

That will leave a net average payment of $965.11 per class member, according to the order.

The money will go to all persons employed by Penske in California facilities as driver/installers or helper/installers assigned to the Whirlpool Account at any time from January 17, 2004, through December 31, 2009, the order said.

The meal-break law requires employers to provide a “duty-free” 30-minute meal break for employees who work more than five hours a day. The law also mandates a second “duty-free” 30-minute meal break for those who work more than 10 hours a day.

Penske had argued that the California law interfered with the federal pre-emption clause in the Federal Aviation Administration Authorization Act of 1994.

The F4A law blocks state laws from interfering with carriers’ operations relating to “prices, routes or services.”

Final court approval of the settlement is set for a fairness hearing May 22 in a San Diego federal courtroom.