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.