Ninth Circuit affirms hybrid pay plan’s safe harbor, clarifies “off-the-clock” knowledge standard: Williams v. J.B. Hunt Transport, Inc.

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In Williams v. J.B. Hunt Transport, Inc. (9th Cir. 2025) 151 F.4th 1020, the Court of Appeals for the Ninth Circuit affirmed that a hybrid pay plan for truck drivers qualified for the Lab. Code § 226.2(a)(7) safe harbor and clarified the standard for an employer’s constructive knowledge of off-the-clock work.

Plaintiffs, California-based truck drivers, filed a putative class action alleging Labor Code violations related to a hybrid hourly and piecemeal pay plan. The piecemeal compensation was based on “total eligible activities” minus hourly pay and did not include pay for unproductive time. The district court denied class certification and granted Defendant summary judgment on all but Plaintiffs’ § 2802 expense reimbursement claim and derivative UCL and PAGA claims. The court found that the pay plan qualified for the § 226.2(a)(7) safe harbor because Plaintiffs always received at least minimum wage in addition to their piecemeal earnings. A jury returned a verdict for Defendant, and the district court found in favor of Defendant on the remaining claims. Plaintiffs appealed the final judgment and the denial of their motion to retax costs.

On appeal, the Ninth Circuit affirmed the judgment and the denial of Plaintiffs’ motion to retax costs. It rejected Plaintiffs’ argument that Defendant’s pay scheme was an improper “piece-rate scheme masquerading as a hybrid scheme.” The court reasoned that Defendant paid at least minimum wage for all hours worked and therefore was eligible for the safe harbor of § 226.2(a)(7). The Ninth Circuit distinguished Gonzales v. CarMax Auto Superstores, LLC (9th Cir. 2016) 840 F.3d 644, finding that Defendant did not “borrow” from piece-rate pay to meet minimum wage obligations and never promised to pay exact amounts as piece-rate compensation. The court also found that Plaintiffs did not demonstrate that Defendant knew or should have known they were performing off-the-clock work. Citing Jong v. Kaiser Found. Health Plan, Inc. (2014) 226 Cal. App. 4th 391, the court held that the fact Defendant had access to log-in/log-out times did not, by itself, demonstrate that it should have known the off-the-clock work was occurring. Regarding Plaintiffs’ Labor Code section 226(a) wage statement claims, the Ninth Circuit found that Plaintiffs failed to show Defendant’s violations were “knowing and intentional” and failed to make arguments before the district court that were raised on appeal.

Regarding the trial portion of the case, the Ninth Circuit found that the district court did not abuse its discretion by excluding evidence of other drivers’ cell phone use under Rule 403 or by excluding evidence under Rule 407 that Defendant changed its reimbursement policy after Plaintiffs filed their lawsuit. Finally, the Ninth Circuit found that the district court did not abuse its discretion when it awarded Defendant costs for its expert witness’ travel expenses or for depositions that were not used in trial, following Haagen-Dazs Co., Inc. v. Double Rainbow Gourmet Ice Creams, Inc. (9th Cir. 1990) 920 F.2d 587.

Full opinion

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