A putative class action brought by drivers who allege expenses were improperly deducted from their wages can continue, the U.S. Court of Appeals for the Third Circuit has ruled.
The appeals court affirmed a district judge’s denial of defendant Joseph Cory Holdings’ motion to dismiss the case.
The plaintiffs filed the case under the Illinois Wage Payment and Collection Act against Cory, a motor carrier and property broker, which deducted their wages for uniforms and goods damaged in transit. In its motion to dismiss, Cory argued that the Federal Aviation Administration Authorization Act pre-empts the IWPCA.
“The purpose of the FAAAA’s preemption clause is to prohibit states from effectively re-regulating the trucking industry and to promote ‘maximum reliance on competitive market forces.’ The preemption clause undoubtedly applies, for example, to state laws directly restricting types of goods that can be carried by trucks, tariffs, and barriers to entry. But state law may also be preempted if it has an indirect effect. This intent is patent in the FAAAA insofar as the preemption clause employs the phrase ‘related to’ immediately before ‘a price, route, or service of any motor carrier,’” according to Third Circuit Judge Michael Chagares’ opinion.
Turning to the present case, Chagares said, “Wage laws like the IWPCA are a prime example of an area of traditional state regulation, and we do not lightly conclude that such laws are superseded. Moreover, such laws are a part of the backdrop that motor carriers and all business owners must face in conducting their affairs. The IWPCA does not single out trucking firms, and it only concerns the relationship between employers and employees. While the fact that the IWPCA does not regulate affairs between employers and customers is not dispositive, it does demonstrate that the operation of the IWPCA is steps away from the type of regulation the FAAAA’s preemption clause sought to prohibit.”
With that in mind, Chagares and the court concluded that the IWPCA did not affect motor carrier business to the extent that the FAAAA’s authority would be impinged.
“We conclude that the IWPCA does not have a significant impact on carrier rates, routes, or services of a motor carrier and does not frustrate the FAAAA’s deregulatory objectives, as the impact of the IWPCA is too tenuous, remote, and peripheral to fall within the scope of the FAAAA preemption clause,” Chagares said.
Peter F. Burns of Genova Burns in Newark represents Joseph Cory and Shanon J. Carson of Berger Montague represents the plaintiffs. Neither responded to requests for comment.