A federal judge in the Southern District of California handed down a significant legal victory to the trucking industry by ruling that California's meal and rest break laws are preempted by federal law. See Dilts v. Penske Logistics LLC (Oct. 19, 2011). The Court found that California's laws interfere with the price, route, or service of a motor carrier, which in turn impacts competitive market forces. It remains to be seen whether the Ninth Circuit will affirm or reverse this unique decision.

Defendant Penske Logistics, LLC ("Penske") provided transportation and warehouse services for Whirlpool in California. During the relevant time frame, its employees were responsible for inventorying the appliances at its warehouses and loading the appliances onto trucks for delivery and installation to customers in California.

The plaintiffs, Mickey Lee Dilts, Ray Rios, and Donny Dushaj, worked as installers and truck drivers who filed a class action alleging that Penske failed to provide proper meal and rest breaks because it was improper for Penske to automatically deduct 30 minutes of work time to account for the employees' daily meal breaks without inquiring whether the employee was actually provided with a break.

Penske moved for summary judgment arguing that it is not required to comply with California meal and rest break laws because those laws are preempted by federal law. The Court acknowledged that this was a "close question" but agreed with Penske and found that these laws, which do not directly target the motor carrier industry, "bind Penske's prices, routes, or services and thereby interfere with competitive market forces within the industry."