Tag Archives: Motor Carrier Act Exemption

What Defines Commercial Motor Vehicles (CMVs) for Application of MCA Exemption Under Technical Corrections Act (TCA)? Courts Disagree

Two recent cases—one from the Eighth Circuit and one from a District court within the Ninth Circuit—continue to demonstrate that when it comes to application of the Motor Carrier Act’s exemption to the FLSA, for employees who drive commercial motor vehicles (CMVs) in interstate commerce, courts continue to be confused. Within days of the Eighth Circuit’s holding that it is the Gross Vehicle Weight Rating (GVWR) dictates whether a motor vehicle weighs 10,000 pounds or more, and thus reaches the threshold to be considered a CMV, a court in the District of Idaho held that the actual weight when loaded and not the GVWR dictates the weight for purposes of application of the MCA under the Technical Corrections Act (TCA). Both cases are discussed below.

8th Cir.: GVWR, Not Actual Weight, Is the Appropriate Criterion for Determining if the TCA Applies

McCall v. Disabled American Veterans

Initially, the Eighth Circuit discussed the historical background of the TCA, with respect to the MCA and SAFETEA-LU, the amendment that preceded the TCA:

Under the FLSA, “[e]mployees engaged in interstate commerce” are to be paid “one and one-half times” their regular salary rates for all work performed in excess of 40 hours per week. 29 U.S.C. § 207(a)(1). However, under the MCAE, the overtime-pay provision of § 207 does not apply to “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49.” 29 U.S.C. § 213(b)(1). “The Secretary of Transportation may prescribe … maximum hours of service of employees of … motor carrier[s] and … motor private carrier[s].” 49 U.S.C. § 31502(b)(1) and (2). As relevant here, “motor private carrier” is a person “transporting property by motor vehicle when … the property is being transported for sale, lease, rent, or bailment or to further a commercial enterprise .” 49 U.S.C. § 13102(15)(C).

In 2005, the SAFETEA–LU amended the definition of “motor private carrier” to mean “a person, other than a motor carrier, transporting property by commercial motor vehicle (as defined in section 31132).” 49 U.S.C. § 13102(15) (2005) (emphasis added). Section 31132 defines a “commercial motor vehicle” as one which “has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater.” 49 U.S.C. § 31132(1). Therefore, following enactment of the SAFETEA–LU, the overtime-pay provision of § 207 began to apply to drivers of vehicles with a GVWR less than 10,001 pounds.

Reasoning that the TCA did not do away with SAFETEA-LU’s measure of 10,000 pounds by using the GVWR, the court explained:

In 2008, the TCA deleted the § 13102(15) reference to a “commercial motor vehicle (as defined in section 31132)” and inserted the more generic language “motor vehicle,” which is its current form. 49 U.S.C. § 13102(15) (2008). Section 306 of the TCA also extended FLSA overtime protections to “covered employees,” defined as individuals who are employed as motor private carriers, “who perform[ ] duties on motor vehicles weighing 10,000 pounds or less.” (Emphasis added). Pub.L. 110–244, Title III, § 306, 122 Stat. 1572, 1621 (2008). In the Bulletin, the Department of Labor’s Wage and Hour Division stated that it “will continue to use the gross vehicle weight rating2 (GVWR) or gross combined vehicle weight rating in the event that the vehicle is pulling a trailer” to determine if a vehicle is one “weighing 10,000 pounds” or less. Therefore, the overtime-pay provision of § 207 applies to vehicles with a GVWR of 10,000 pounds or less. We accord appropriate deference to this interpretation of the FLSA by the Secretary of Labor. See Donovan v. Bereuter’s, Inc., 704 F.2d 1034, 1036 (8th Cir.1983) ( “[T]he Secretary[ of Labor]‘s interpretations are entitled to considerable weight.”).

McCall argues that he was a covered employee with overtime rights under the FLSA because the trucks that he operated actually weighed less than 10,000 pounds despite having GVWRs greater than 10,000 pounds. Upon review, we agree with the district court that GVWR, not actual weight, is the appropriate criterion for determining if the TCA applies to place a driver’s wage regulation under the FSLA rather than the Transportation Secretary. McCall operated trucks with GVWRs in excess of 10,000 pounds. He is not entitled to overtime under the FSLA.

Click McCall v. Disabled American Veterans to read the entire Opinion.

D.Idaho: Actual Weight, Not GVWR Determinative of Whether Vehicle Qualifies as CMV Under TCA

Garcia v. Western Waste Services, Inc.

In the second case, a court within the District of Idaho examined the identical issue and reached the opposite conclusion. That is the Idaho court held that the same regulation relied upon by the Eighth Circuit was not entitled to deference, because the statute at issue, the TCA, unambiguously eliminated SAFETEA-LU’s prior definition of a CMV (utilizing the GVWR) for vehicles not pulling a trailer. As such, the Garcia court held that the actual weight of the vehicle and not the GVWR dictates whether a vehicle is a CMV within the jurisdiction of the Secretary of Transportation (and whether the MCA applies).

Framing the issue, the court explained:

Garcia asserts that he is a “covered employee” under the TCA small vehicle exception due to his work as a mechanic and/or driver. To qualify for overtime pay as a mechanic, Garcia must show that: (1) he was a mechanic for a DOT-regulated motor carrier, (2) his work affected, in part, the safety of vehicles weighing 10,000 pounds or less, and (3) that the vehicles were in transportation in interstate commerce. Pub.L. No. 110–244, § 306(c). It is undisputed that Garcia worked as a mechanic for Western Waste, and that Western Waste is a DOT-regulated motor carrier. It is also clear that Garcia’s work affected the safety of all of Western Waste’s vehicles, which all travel in interstate commerce. Molitor Aff., ¶¶ 13–16, Dkt. 33–4. The main questions at issue are whether any of Western Waste’s vehicles weigh 10,000 pounds or less, and whether Garcia’s work on any such vehicles is sufficient to qualify him for the TCA exception.

Reasoning that the actual weight of the vehicle and not the hypothetical GVWR governs whether a vehicle meets the definition of a CMV under the TCA, the court explained:

(1) Vehicle Weight

The issue is how do you weigh a truck? Garcia asserts that Western Waste’s fleet has a number of service vehicles that weigh less than 10,000 pounds. Western Waste has 5 service vehicles that are used to transport portable toilets, run errands, and do service on other trucks and equipment. When the parties weighed three of Western Waste’s service vehicles on June 13, 2012, the actual weight of each vehicle, without a trailer, was less than 10,000 pounds. Thorne Aff., Dkt. 37–2. However, Western Waste argues that actual weight is not the appropriate measure of vehicle weight under the TCA. Instead, the GVWR or GCWR should be used. Western Waste points out that all of its service vehicles are equipped to pull, and regularly pull, a 5,740 pound trailer. Additionally, Western Waste states that there are several other trailers of unknown weight that the service vehicles regularly pull. Accordingly, Western Waste argues that all of its service vehicles have GCWRs that exceed 10,000 pounds.

The TCA does not specify how vehicle weight is to be determined. As mentioned above, SAFETEA–LU specifically provided that the GVWR or GCWR was used to determine vehicle weight. 49 C.F.R. § 390.5. The TCA dropped any reference to GVWR or GCWR, and simply refers to “motor vehicles weighing 10,000 pounds or less.” Thus, Congress appears to have abandoned the GVWR and GCWR standard for determining availability of the exemption.

After Congress passed the TCA, the Department of Labor (“DOL”) issued Field Assistance Bulletin No.2010–2 (“the Bulletin”) to explain its interpretation of the TCA. Specifically, the Bulletin announced that the Wage and Hour Division “will continue to use the [GVWR] or [GCWR] in the event that the vehicle is pulling a trailer” to determine vehicle weight. Id. This raises the question of whether the Bulletin’s interpretation of the TCA is entitled to deference.

After a discussion of the types of deference that a court owes to administrative regulations of that administrations own regulations, the court rejected DOL’s interpretation of the TCA, and held that the regulation at issue (defining the weight of a CMV) was unambiguous:

Under these standards, the Court concludes’ that the DOL’s interpretation of the TCA is not entitled to deference. It is not an attempt to interpret its own ambiguous regulation, and therefore is not entitled to deference under Auer. Additionally, it is not entitled to Chevron deference. When Congress enacted the TCA, it had the language of the SAFETEA–LU before it, and chose not to rely upon GVWR or GCWR to measure a vehicle’s weight for purposes of the TCA exception. In the Court’s view, the language in the TCA is not ambiguous. Therefore, the DOL’s interpretation, which is contrary to the plain language of the statute, is not warranted.

Moreover, the DOL Bulletin is not persuasive and runs afoul of the charge that the TCA exception be construed broadly. The DOL offers no explanation as to why it will continue to use GVWR or GCWR, despite the clear language of the statute not adopting that standard. Furthermore, using GVWR or GCWR narrows the number of employees covered by the TCA exception. Such a reading does not allow the Court to construe the TCA exception “to apply to the furthest reaches consistent with Congressional direction.” Klem, 208 F.3d at 1089. Therefore, in absence of any guidance from Congress and “a specific definition in the TCA, the ordinary meaning of ‘weight’ controls.” Glanville v. Dupar, Inc., CIV.A. H–08–2537, 2009 WL 3255292, *8 (S.D.Tex. Sept. 25, 2009).

Even under the ordinary meaning of weight, however, the weights of a truck and trailer which are commonly used together should be combined. Id. (holding that because the plaintiffs “operated vehicles, truck and trailer combined, with an actual weight of greater than 10,000 pounds,” the TCA was inapplicable). When Western Waste’s service vehicles are combined with the trailer, they exceed 10,000 pounds. However, there are unresolved factual questions as to whether all of the service trucks actually pull the trailer. Garcia contends that only one of the service trucks pulled the trailer during his employment. Garcia Decl., ¶ 4, Dkt. 37–1. Garcia’s allegations raise doubt as to whether all of the trucks should have a weight rating combined with the trailer. If vehicles # 25 and # 27 do not pull the trailer, as Garcia asserts, then they will have an actual weight and GVWR under 10,000 pounds. Thus disputed issues of fact remain.

Click Garcia v. Western Waste Services, Inc. to read the entire Memorandum Decision and Order.

Although not discussed here, the courts also fell on opposite sides of the “mixed fleet” question. For anyone facing this issue—whether an employee who drives both CMVs and non-CMVs for his or her employer within the same week—you would be well-advised to read these opinions on that issue as well.

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W.D.Mo.: Under Motor Carrier Act (MCA), Weight of Vehicle Measured by Gross Vehicle Weight Rating (GVWR) Which Includes the Weight of Trailer Pulled

McCall v. Disabled American Veterans Ernestine Schumann-Heink Missouri Chapter 2

This case was before the court on the parties dueling motions for summary judgment. Specifically, the motions addressed the applicability of the Fair Labor Standards Act (“FLSA”) to drivers employed by the defendants, in light of the Motor Carrier Act (“MCA”). As discussed here, the court was required to opine on the method by which the 10,001 pound threshold is calculated under the MCA, in order to determine whether a vehicle qualifies as a covered vehicle for the purposes of the MCA’s application to its driver(s). While the plaintiff argued that the actual weight of the truck, when loaded was less than 10,000 pounds, the court held that this was not dispositive of the issue. Instead, the court held that the plaintiff came within the MCA’s exemption to the FLSA because, “[t]he uncontroverted facts demonstrate[d] the truck’s gross vehicle weight rating (“GVWR”) exceeded 12,000 pounds.”

After surveying the MCA and the recent amendments thereto under SAFETA–LU and the TCA, the court- applying the post-TCA standard (due to the dates of plaintiff’s employment/claim) explained:

The TCA does not specify how the vehicle weight is to be determined: whether the vehicle is weighed loaded or unloaded, fueled or unfueled, or some sort of average is to be utilized. On November 4, 2010, the Department of Labor (“DOL”) issued Field Assistance Bulletin No.2010–2 (“the Bulletin”) to explain its interpretation of the TCA. Among other matters, the Bulletin announces DOL’s method for determining whether a vehicle weighs 10,000 pounds or less, stating the Wage and Hour Division “will continue to use the gross vehicle weight rating (GVWR) or gross combined vehicle weight rating in the event that the vehicle is pulling a trailer.”

The parties agree the Bulletin is entitled to deference because it represents DOL’s interpretation of statutory provisions it is charged with enforcing, but they disagree as to the Bulletin’s meaning. The Court believes the interpretation is quite clear: a vehicle’s GVWR is its weight for purposes of the TCA and, hence, applicability of the FLSA. If the vehicle is pulling a trailer, the combined GVWR of the vehicle and the trailer will be used. Plaintiff’s interpretation—that GVWR is to be used only if the vehicle is pulling a trailer makes no sense. There is no reason to use GVWR in one instance and not in another, and Plaintiff’s interpretation renders part of the Bulletin a nullity (or, at worst, surplusage) by purporting to have the Bulletin explain how vehicles are weighed if they pull a trailer but failing to explain how vehicles are weighed if they are not. The Court also notes DOL’s interpretation is reasonable because it not only leads to certainty but it is consistent with the Secretary of Transportation’s entire statutory and regulatory framework, which elsewhere typically relies on GVWR when referencing the weight of vehicles.

Plaintiff contends this interpretation thwarts Congress’ intent by diminishing the reach of the FLSA. The Court disagrees. Before 2005, the Secretary of Transportation had authority over all motor private carriers regardless of the weight of the vehicle, and the FLSA did not apply to any motor private carriers. With the passage of SAFETEA–LU in 2005, Congress removed the Secretary’s authority over motor private carriers using vehicles with a GVWR of 10,000 pounds or less—and thereby expanded the FLSA’s reach. The TCA restores the Secretary’s authority to all motor private carriers regardless of a vehicle’s weight, but specifies that the FLSA’s reach will remain as it was expanded with SAFETEA–LU’s passage. In short, the TCA expanded the Secretary’s authority, but it was not intended to further expand the FLSA’s reach—it remained exactly where it was before the TCA was passed.

Thus the court concluded:

There is no dispute that the GVWR of the vehicle Plaintiff drove exceeded 10,000 pounds. Therefore, the FLSA does not apply and the moving Defendants are entitled to judgment as a matter of law.

Click McCall v. Disabled American Veterans Ernestine Schumann-Heink Missouri Chapter 2 to read the entire Order and Opinion.

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D.N.J.: Absent Exercise of Discretion in Loading Trucks, Loader Not Subject to Motor Carrier Act (MCA) Exemption

Chellis v. New Century Transp., Inc.

This case was before the court on the defendant’s motion to dismiss the complaint for failure to state a claim.  Defendant asserted that, on its face, plaintiff’s complaint demonstrated that plaintiff was exempt under the motor carrier act, because plaintiff pled that he was a truck loader.  However, the court disagreed, citing plaintiff’s additional allegation that he did not exercise any discretion in loading the trucks.

Significantly, the Complaint alleged the following:

“(1) Plaintiff worked as a truck loader for Defendant. (Compl.¶ 16) Plaintiff’s duties consisted of executing load plans developed by his superiors. (Id. at ¶¶ 19–20) Plaintiff did not have responsibility for exercising his own discretion or judgment when loading. (Id. at ¶¶ 22–24) Despite working in excess of forty fours a week, Plaintiff was not paid overtime.”

Holding that Plaintiff’s allegations were sufficient, the court reasoned:

“To fall within the exemption, a loader’s duties must include “the proper loading of his employer’s motor vehicles so that they may be safely operated on the highways of the country.” 29 C.F.R. § 782.5(a). An employee has safety of operation duties when:

he has responsibility when such motor vehicles are being loaded, for exercising judgment and discretion in planning and building a balanced load or in placing, distributing, or securing the pieces of freight in such a manner that the safe operation of the vehicles on the highways in interstate or foreign commerce will not be jeopardized.

Id.

The parties’ disagreement stems principally from statutory construction. Defendant argues that the regulation is disjunctive. Therefore, Plaintiff need only have duties “in placing, distributing, or securing the pieces of freight” to fall within the exemption. Id.

Plaintiff argues that “for exercising judgment and discretion in planning” modifies subsequent clauses. Id. Merely placing freight on a truck does not fall within the exemption absent the responsibility for using discretion and judgment for such placement. Because Plaintiff alleges that he could not exercise discretion, he was not a loader as defined by the regulation.

Considering the staggering use of disjunctives and conjunctives in the same sentence, the disagreement is understandable. Although this Circuit has not addressed the issue, the balance of courts around the country tend to agree with Plaintiff.  See, e.g., Lewis v. Eskridge Trucking Co., 2011 WL 4598189, *1 (11th Cir.2011) (emphasizing discretion and responsibility in analyzing the loader exemption); Vaughn v. Watkins Motor Lines, Inc., 291 F.3d 900, 904 (6th Cir.2002) (“the plaintiffs and [defendant] disagree as to whether these two dockworkers exercised the judgment and discretion necessary to be considered loaders.”); Shultz v. Kelley, 431 F.2d 1364, 1368 (10th Cir.1970) (a loader must “exercis[e] judgment and discretion in (1) planning and building a balanced load or (2) placing, (3) distributing, or (4) securing the pieces of freight.”). The Court agrees with this analysis.

Here, Plaintiff clearly alleges that he did not have responsibility for exercising judgment or discretion when loading the trucks. (See Compl. ¶¶ 22–26) Therefore, the exemption does not apply and the Motion will be denied.”

Click Chellis v. New Century Transportation, Inc. to read the entire Order Denying Defendant’s Motion to Dismiss.

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5th Cir.: Weight of Pickup and Trailer Combined to Calculate Gross Vehicle Weight (Whether 10,001 LBs) Under MCA Exemption

Albanil v. Coast 2 Coast, Inc.

Following an award of summary judgment to the defendants in this case plaintiffs appealed.  Specifically, the court below determined that plaintiffs were exempt from the FLSA’s overtime provisions, pursuant to the so-called Motor Vehicle Act (MCA) exemption.  As discussed here, the plaintiffs disputed the methodology used to calculate the gross vehicle weight of the vehicles they drove for defendants and subsequently, whether same qualified as “commercial motor vehicles” under the motor carrier act.  Affirming the court below, the Fifth Circuit held that the weight of both the pickup truck hauling the trailer and the trailer itself must be considered together in calculating the gross vehicle weight.  Here, since the weight of the vehicle, when added to the trailer was over 10,000 pounds (and the nature of plaintiffs’ interstate driving was undisputed), the Fifth Circuit affirmed the holding below.

Discussing this issue the Fifth Circuit reasoned:

“The first issue on appeal is whether the Motor Carrier Act (“MCA”) exemption to the FLSA’s overtime requirements applies. Appellants challenge the district court’s conclusion that it does. This issue involves determining whether C2C operated “commercial motor vehicles” during the relevant time period. A “commercial motor vehicle” is defined by statute as a “self-propelled or towed vehicle used on the highways in interstate commerce to transport passengers or property, if the vehicle has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater” or meets certain other criteria not relevant here. The parties dispute whether the weight of the pickup truck and the trailer may be combined to reach the 10,001 pound threshold, as stated in a Department of Transportation regulation, or whether the use of the disjunctive “or” in the statutory definition requires them to be considered separately. We hold that the district court correctly combined the weights of the pickup and trailer to conclude that the MCA exemption applies, and that summary judgment was appropriate on Plaintiffs’ overtime claims.”

Also addressed in the opinion, but not discussed here at length, the Fifth Circuit reversed the trial court’s sua sponte order granting defendants summary judgment on plaintiffs’ minimum wage allegation– an issue no party briefed in their papers.  The appellate court reasoned that such a sua sponte order denied plaintiffs the fair opportunity to address the issues.

Click Albanil v. Coast 2 Coast, Inc. to read the entire Opinion.

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S.D.Ind.: Court Erred In Resolving MCA Exemption Issues on Motion for Conditional Certification; On Reconsideration Motion Granted

Thompson v. K.R. Drenth Trucking, Inc.

This case was before the court on plaintiffs’ motion for reconsideration of the court’s order denying their motion for conditional certification of a collective action.  The case arose out of allegations that defendants violated the Fair Labor Standards Act (“FLSA”) by failing to pay a certain group of truck drivers (“plaintiffs”) overtime premiums.  Initially, the court denied Plaintiffs’ Motion.  In doing so, “the Court held that the Motor Carrier Act exemption applied to [the] named Plaintiffs… thus rendering them ineligible for overtime pay and unsuitable collective action representatives.”  In their motion for reconsideration, the plaintiffs asserted that the court had previously erred by inappropriately resolving the merits of the Motor Carrier Act exemption, with respect to the named-plaintiffs at the conditional certification stage.  The court agreed, and upon reconsideration granted conditional certification.

The court explained:

“In the February 11, 2011 Entry (Dkt.68), this Court acknowledged that the issue of whether Thompson and Hayden engaged in interstate commerce was “hotly contested.” Plaintiffs emphasized that both Thompson and Hayden were Non–Recyclable Drivers who regularly transported non-recyclable materials within the State of Indiana. Plaintiffs argued that since they never engaged in interstate commerce as part of their “regular” or “normal” duties, Thompson and Hayden are suitable collective action representatives. KRD counters that any of its drivers, including Thompson and Hayden, “could be called upon at any time to carry any load, whether intrastate or interstate,” meaning the MCA exemption applies. (Dkt. 71 at 4). And, indeed, Thompson and Hayden each crossed Indiana state lines on one occasion to transport KRD equipment to South Carolina.

In its prior entry, the Court found KRD’s argument persuasive, determining that the MCA exemption applied to Thompson and Hayden. In other words, even if Thompson and Hayden rarely crossed state lines (or, for that matter, hauled recyclable material destined for out-of-state purchasers), they could have been called upon to do so in their regular course of work. For this reason, the Court denied Plaintiffs’ motion for conditional certification.

Having now reviewed a more thorough body of case law, the Court finds that it erred by, in effect, making a merits determination at this early stage. As Plaintiffs emphasize, they have a “lenient” burden at this stage of the proceedings and, as such, courts do not reach the merits of Plaintiffs’ FLSA claims. Fravel v. County of Lake, 2008 WL 2704744, at *2 (N.D.Ind. July 7, 2008) (citations omitted). However, it is worth noting that even at this early stage, a court must also ensure that the proposed class representatives are adequate.”

Luckily for the plaintiffs here, the court recognized its initial error and corrected it almost immediately.  The court’s decision serves as a reminder that courts simply do not resolve the merits of an FLSA case at the conditional certification stage.

Click Thompson v. K.R. Drenth Trucking, Inc. to read the court’s Entry on Plaintiffs’ Motion to Reconsider.

 

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11th Cir.: Intrastate Travel Of SuperShuttle Drivers Satisfied Motor Carrier Act Exemption, Because Many Customers Were “Through Ticketed” Based On Internet Travel Packages

Abel v. Southern Shuttle Services, Inc.

This case was before the Eleventh Circuit for the second time.   Plaintiff, a former driver of Defendant Southern Shuttle Services, Inc.’s airport shuttle vans, filed the action under the FLSA seeking unpaid overtime pay.  In the first appeal, the Eleventh Circuit vacated the district court’s entry of summary judgment in Southern Shuttle’s favor because Southern Shuttle’s airport shuttle service did not fall within the “taxicab exemption” to the FLSA’s overtime provisions. See Abel v. S. Shuttle Servs., Inc., 301 F. App’x 856 (11th Cir.2008). After remand, Southern Shuttle filed a second motion for summary judgment, arguing that its airport shuttle van drivers fall under the Motor Carrier Act exemption in 29 U.S.C. § 213(b)(1). The district court agreed and granted Southern Shuttle summary judgment.  On appeal, the Eleventh Circuit affirmed.

The Court outlined the following facts pertinent to its inquiry:

“Southern Shuttle operates a shared-ride airport shuttle, known as “SuperShuttle,” that transports passengers to and from three South Florida airports (Miami International Airport, Palm Beach International Airport and Fort Lauderdale-Hollywood International Airport).  From December 19, 2005 to June 24, 2007, Abel worked for Defendant Southern Shuttle as a shuttle driver, driving passengers to and from airports. Abel, like all shuttle drivers, was paid commission and tips, but not overtime compensation. Abel’s employment ended after he refused to transport a passenger with a payment voucher and made the passenger exit the shuttle van, in violation of Southern Shuttle’s policy.

The shuttles are large nine- and ten-person passenger vans. The shuttles pick up passengers at one of the airports and take them to any location in the area (such as a residence, office or hotel), or pick them up at any location in the area and take them to one of the airports. Shuttle drivers do not transport passengers to or from locations outside of Florida. Some shuttle passengers are transported to the airports so they can travel via air carrier to other states or countries. Other shuttle passengers are transported from the airports after having flown from other states or countries.

Many shuttle passengers arrange for shuttle transportation by contacting Southern Shuttle directly. Passengers traveling to the airport make reservations ahead of time and schedule a trip to the airport. Similarly, passengers traveling from the airport check in at a SuperShuttle airport kiosk or counter or with a curbside representative to be assigned to the next available shuttle.

Southern Shuttle’s president, Mark Levitt averred that: (1) “[a] large portion of the reservations made with Southern Shuttle are through internet package deals wherein a traveler buys a package deal from a third party company that includes airfare, hotel accommodations and transportation to and from the airport”; (2) “the traveler receives a voucher for free transportation to and from the airport and provides the voucher to Southern Shuttle in lieu of payment”; and (3) “Southern Shuttle then prepares an invoice to the third party company for payment.”  These third party companies include internet travel web sites such as Expedia.com, Travelocity, Orbitz, CheapTickets, a German company called Viator, a company in the United Kingdom called Get a Bed, and American Express, among others.”

Affirming the lower court’s decision, the Eleventh Circuit reasoned:

“[T]he Supreme Court’s Morris decision involved a general cartage business that primarily transported steel around the Detroit area either within local steel plants or to and from local steel plants. 332 U.S. at 427, 68 S.Ct. at 133. A small percentage of the employer’s trips, roughly four percent, involved transporting miscellaneous freight to and from Detroit boat docks, railroad depots and freight terminals. Id. at 427 & n. 7, 68 S.Ct. at 133 & n. 7. Although these trips did not cross state lines, they nonetheless met the de minimus interstate commerce requirement because they transported freight “in interstate commerce, either as part of continuous interstate movements or of interstate movements begun or terminated in metropolitan Detroit.” Id. at 427, 432-33, 68 S.Ct. at 133, 136.

Other cases make clear that trips within a single state are made in interstate commerce when they are part of “a practical continuity of movement of the goods” in interstate commerce. Walling v. Jacksonville Paper Co., 317 U.S. at 568, 63 S.Ct. at 335 (involving wholesale distributor of paper products made outside the state but transported only to customers within the state); see also Baez, 938 F.2d at 181-82 (involving armored trucks delivering to Florida banks checks and other instruments bound for banks outside Florida); Galbreath v. Gulf Oil Corp., 413 F.2d 941 (5th Cir.1969) (involving oil company’s transport within Georgia of petroleum products originating from refineries in Texas and Mississippi); Opelika Royal Crown Bottling Co. v. Goldberg, 299 F.2d 37 (5th Cir.1962) (involving wholesale soft drink distributor transporting drinks bottled in Georgia from Alabama warehouse to Alabama customers and returning empty bottles to Alabama warehouse, where other trucks took them back to Georgia).

The Third Circuit distinguished the transportation of passengers from goods. See Packard v. Pittsburgh Transp. Co., 418 F.3d 246 (3d Cir.2005). The employer in Packard provided transportation to the elderly and disabled in Allegheny County, which included trips to train and bus stations and to the airport. Id. at 248-49. The Third Circuit concluded that this transportation service did not fall within the Secretary’s jurisdiction because it was not “in practical continuity with a larger interstate journey.” Id. at 258. Because Morris involved transportation of goods not passengers, the Third Circuit looked at cases arising in other contexts that defined interstate transportation of passengers, including United States v. Yellow Cab Co., 332 U.S. 218, 67 S.Ct. 1560, 91 L.Ed. 2010 (1947), overruled on other grounds by Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), a Sherman Act case.

In Yellow Cab, the Supreme Court described interstate commerce as “an intensely practical concept drawn from the normal and accepted course of business.” Id. at 231, 67 S.Ct. at 1567. Because “the limits of an interstate shipment of goods” may be different than “the commonly accepted limits of an individual’s interstate journey,” courts must “mark the beginning and end of a particular kind of interstate commerce by its own practical considerations.” Id. In light of these practical considerations, the Supreme Court concluded that, “in the absence of some special arrangement,” a taxi ride to or from a railroad station at the beginning or end of an interstate journey ordinarily is a local trip that is not within interstate commerce. Id. at 231-32, 67 S.Ct. at 1567. However, where the railroad “contract[s] with the passengers to supply between-station transportation in Chicago,” the taxi ride “is clearly a part of the stream of interstate commerce.” Id. at 228, 67 S.Ct. at 1565-66. The Supreme Court explained that “[w]hen persons or goods move from a point of origin in one state to a point of destination in another, the fact that a part of that journey consists of transportation by an independent agency solely within the boundaries of one state does not make that portion of the trip any less interstate in character.” Id. at 228, 67 S.Ct. at 1566.

Relying on the distinctions drawn in Yellow Cab, the Third Circuit noted that the transportation of the elderly and disabled in Packard “involves no joint fare or ticketing arrangement, and no prior arrangement of any kind, contractual or otherwise, with the railroads, airlines, or other companies.” Packard, 418 F.3d at 258. The Third Circuit cited “through ticketing” as “one example of a common arrangement involving both intra and interstate portions of passenger transport” but concluded that it was “not the only means of establishing that passenger transport operating intrastate is in practical continuity with a larger interstate journey.” Id. (emphasis omitted). Highlighting the “lack of coordination with other transportation,” such as through “a prepackaged tour,” the Third Circuit concluded that the transportation service in Packard was “purely intrastate.” Id.

4. Southern Shuttle

Guided by the interstate commerce principles in Walters, Morris and Yellow Cab, we conclude that the purely intrastate transport of passengers to and from an airport may, under certain circumstances, constitute interstate commerce and thus bring the transportation company within the jurisdiction of the Secretary of Transportation. Those circumstances are present here.

Many of Southern Shuttle’s passengers to and from the airport have either just flown from, or are about to fly to, places outside the state of Florida. A large portion of Southern Shuttle’s reservations are made via travel websites on the internet. Travelers buy package deals from these internet travel companies that include hotel accommodations and airfare in addition to transportation to and from the airport. The internet travel companies provide their package-deal customers with a voucher for free airport transportation, which the customers use to board Southern Shuttle’s airport shuttles. Southern Shuttle then uses the collected vouchers to invoice the internet travel company for payment. In other words, Southern Shuttle’s local transport of these package-deal travelers has a “practical continuity of movement” with the overall interstate journey.

Furthermore, Southern Shuttle’s arrangement with internet travel companies to provide airport shuttle service for their package-deal customers meets the “common arrangement” requirement discussed in Walters. Indeed, Southern Shuttle’s voucher system resembles in many respects the voucher system the bus company used for cruise ship passengers in Walters. In sum, we conclude that Southern Shuttle has shown that it is subject to the Secretary of Transportation’s jurisdiction under the MCA.

C. Secretary’s MCA Jurisdiction over Abel’s Work-Related Activities

We next address the second requirement: whether the Secretary’s jurisdiction extends to Abel’s work-related activities at Southern Shuttle. To satisfy this requirement, Southern Shuttle must show that Abel “engage[d] in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the Motor Carrier Act.” 29 C.F.R. § 782.2(a). Abel does not dispute that, as an airport shuttle driver, he engaged in activities that directly affected the safety of operation of motor vehicles in the transportation of passengers on the public highways. Thus, the only issue presented is whether Abel’s activities as an airport shuttle driver constituted “interstate commerce” within the meaning of the MCA. Here, the issue is easily resolved because Abel performed Southern Shuttle’s core airport shuttle transport activity. Having already concluded that Southern Shuttle’s airport shuttle service was transportation of passengers in interstate commerce that subjected it to the Secretary’s jurisdiction, we conclude that Abel’s activities in driving the airport shuttle also constitute interstate commerce.”

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5th Cir.: As Plaintiffs’ Joint Employer, Staff Leasing Company Qualified As “Motor Carrier” Subject To MCA Exemption From FLSA’s Overtime Pay Requirements, Because “Actual” Employer Was A “Motor Carrier”

Songer v. Dillon Resources, Inc.

This case was before the Fifth Circuit on Plaintiffs’ appeal of an Order granting Defendant, a staff leasing company, summary judgment finding that they were entitled to assert the MCA exemption, because the company they leased Plaintiffs to was a motor carrier entitled to assert the exemption.  The Fifth Circuit affirmed the decision, essentially holding that the staff leasing company Defendant was entitled to assert the exemption of the actual employer. 

Plaintiffs did not dispute that Sunset Ennis and Sunset Logistics (the “actual” employers), two trucking companies, were motor carriers subject to the Secretary’s power. Instead, they argued that Dillon, a staff leasing agency, was not a motor carrier within the meaning of the MCA. Defendants assert that because the Sunset companies are motor carriers and the Sunset companies are joint employers with Dillon, Dillon is also a motor carrier within the meaning of the MCA.

Reasoning that the the staff leasing company was entitled to assert the Motor Carrier Exemption, if the “actual” employer was entitled to assert same, the Fifth Circuit stated:

“While Fifth Circuit precedent is limited on this issue, other courts have held that a staff leasing company who provides employees for a motor carrier and operates as a joint employer with the carrier meets the requirements of 29 C.F.R. § 782.2(a)(1). See, e.g., Moore v. Universal Coordinators, Inc., 423 F.2d 96, 99-100 (3d Cir.1970) (holding that truck drivers were employees of both noncarrier truck driver leasing company and private motor carrier and therefore MCA exemption extended to leasing company). The Moore court analyzed the MCA and the FLSA, and determined that Congress intended to regulate employees of carriers in the interest of safety. Id. at 99. Therefore, the Secretary’s power had to extend to leased drivers and to the leasing company that employed them. Id. at 99-100.

In a more recent case, the district court cited Congressional safety concerns as the rationale for extending the exemption:

The [MCA] exemption, as explained in Moore, safeguards the Secretary['s] authority to regulate the qualifications and maximum hours of employees whose work affects the “safety of operation” of a motor carrier…. Refusing to extend the [MCA] exemption to the staffing agency defendants would therefore facilitate what Congress sought to prohibit-circumvention of the Secretary’s regulatory authority.  Tidd v. Adecco USA, Inc., No. 07-11214-GAO, 2010 WL 996769, at *2 (D.Mass. Mar.16, 2010) (citing Moore, 423 F.2d at 98-99).

Applying Moore and Tidd, the evidence supports a finding that Dillon, as joint employer with Sunset Logistics and Sunset Ennis, is a carrier subject to the Secretary’s jurisdiction. Dillon is a staff leasing company who provides drivers to Sunset Logistics and Sunset Ennis to fulfill interstate work orders from clients for compensation. Our review of the record reflects the following evidence: Dillon hires and trains the drivers and is responsible for their payroll, the Sunset companies are responsible for control of the drivers’ day-to-day operations, and Dillon is reimbursed for wages and benefits paid to the drivers and receives a fee when the drivers are assigned. These facts are similar to Tidd, in which the staffing agency defendants were held as joint employers to FedEx, a motor carrier, and, therefore, subject to the Secretary’s jurisdiction. See Tidd, 2010 WL 996769, at *2-3. Accordingly, we hold that the first requirement for jurisdiction under the MCA-i.e., that Plaintiffs work for carriers engaged in interstate commerce-is met. See Barefoot, 1994 WL 57686, at *2.”

To read the entire opinion, click here.

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