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D.Mass.: Where 10% of Business Comprised of Sales of Automobiles, Defendant Not “Primarily Engaged in the Business of Selling Such Vehicles”
Carroca v. All Star Enterprises and Collision Center Inc.
Although not often the subject of litigation, pursuant to 29 U.S.C. § 213(10)(a), certain employees of automobile dealerships are exempt from the FLSA’s overtime requirements. Specifically, that statute exempts from overtime:
any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers…
In this case, the court was called upon, in part, to decide whether defendant—90% of its business was the repair of automobiles, with the remaining 10% of the business comprised of the sale of automobiles—qualified as such an automobile dealership. The court held, as a matter of law, that such a business does not qualify for the exemption.
The court reasoned:
All Star admits that Carroca was employed as an auto body repairman. D. 19 ¶ 5; D. 23 ¶ 5. Assuming without deciding that an auto body repairman is a “salesman, partsman, or mechanic,” the next question, which the parties dispute, is whether Carroca was “employed by a nonmanufacturing establishment primarily engaged in the business of selling [automobiles, trucks, or farm implements] to ultimate purchasers.” The Department of Labor has issued 29 C.F.R. § 779.372, which defines what it means to be “primarily engaged” in said business. According to the regulation, “[a]s applied to the establishment, primarily engaged means that over half of the establishments [sic] annual dollar volume of sales made or business done must come from sales of the enumerated vehicles.” Id.; see Donovan v. Bereuter’s, Inc., 704 F.2d 1034, 1036–37 (8th Cir.1983) (construing “the legislative history as indicating that Congress intended the exemption to be narrowly applied and was not designed to exempt those dealers who engage in the retail sales of automobiles to a limited degree”).
Here, as All Star acknowledges, D. 22 at 2, All Star has the burden of proof with respect to the applicability of the exemption. Hines v. State Room Inc., 665 F.3d 235, 240 (1st Cir.2011). Here, All Star has not met that burden where All Star admits that only “approximately ten percent” of All Star’s business constitutes automobile sales. Pl. Stmt. of Facts, D. 19 ¶ 2; Def. Resp., D. 23 ¶ 2; see Def. Resp. to Interrog. ¶ 5 (stating that “vehicle sales constitute approximately 10% of the business of Allstar; approximately 90% of the business consists of vehicle repair”). Thus, All Star is incorrect that it falls within the FLSA overtime exemption under 29 U.S.C. § 213. Accordingly, the exemption does not apply to All Star and it is bound by the overtime provisions under 29 U.S.C. § 207.
Click Carroca v. All Star Enterprises and Collision Center Inc. to read the entire Memorandum and Order.
N.D.Ga.: “Yard Hostler” Not Exempt Under The Motor Carrier Act; Defendant Failed To Show That He “Affected The Safety Or Operation Of Motor Vehicles In Transporting Property In Interstate Or Foreign Commerce On The Public Highways”
Billingslea v. Southern Freight, Inc.
The case was before the Court on Defendant’s motion for summary judgment. Defendants’ sought summary judgment finding that Plaintiff, a “yard hostler,” was exempt from the overtime provisions of the FLSA. Although it was not disputed that Defendant was/is a Motor Carrier, subject to the MCA, the Court determined that Defendant had failed to demonstrate that Plaintiff was individually exempt, because there was no showing that as a “yard hostler” he “affected the safety of operation of motor vehicles in transporting property in interstate or foreign commerce on the public highways.” Therefore, Defendant’s motion was denied.
The Court highlighted the following applicable facts:
“Defendant employed Plaintiff as a “yard hostler” at the Nestle distribution facility from August 2008 until November 2008, when he voluntarily resigned [Doc. 22-2, ¶ 20]. Prior to his employment, Defendant required Plaintiff to undergo a drug test and satisfy various physical requirements, consistent with standards set by the Department of Transportation [Doc. 22-2, ¶ 9]. Plaintiff satisfactorily completed the drug test and met the physical requirements [Doc. 22-2, ¶ 10]. Also, prior to his employment, Plaintiff was trained in relevant safety procedures and protocols for his position and acknowledged in writing that he received training on those procedures [Doc. 22-2, ¶ 11].
As a yard hostler at the Nestle distribution facility, Plaintiff drove a “hostler tractor,” which he connected to freight trailers in order to transport the trailers from a staging area to loading docks at the facility [Doc. 22-2, ¶ 12]. Once Plaintiff moved a given trailer to the distribution facility loading dock, the freight in that trailer would be unloaded into the facility; afterwards, Plaintiff would use a hostler tractor to return emptied trailers to the staging area [Doc. 22-2, ¶ 13]. Nothing in the record indicates that Plaintiff ever drove a hostler tractor or any trucks on a public roadway or interstate highway, or that Defendant ever assigned Plaintiff the duty of driving any vehicles on a public roadway or interstate highway. Instead, the record indicates that Plaintiff performed all of his duties as a yard hostler on private property at the distribution facility.
In addition to his core duties, Plaintiff performed various additional tasks designed to promote safety at the distribution facility. At the start of each of his shifts, Plaintiff inspected his assigned hostler tractor for any noticeable maintenance or damage issues [Doc. 22-2, ¶ 14]. If any such issues existed, he reported them to an on-site administrator and made a written report detailing the issues [Doc. 22-2, ¶ 14].
Plaintiff also inspected trucks, trailers, and freight that arrived at the distribution facility. When Plaintiff received refrigerated trucks that he was assigned to transfer, he ensured that the fuel and temperature levels of the truck remained satisfactory during the transfer [Doc. 22-2, ¶ 15]. When Plaintiff received a sealed freight trailer, he often used a bolt cutter to break the trailer’s seal and opened one of the trailer’s back doors before backing the trailer onto the loading dock [Doc. 22-2, ¶ 16]. After opening the back door of a given trailer, Plaintiff would assess whether the freight inside the trailer had shifted during transport or posed any danger to unloaders [Doc. 22-2, ¶ 16]. Plaintiff also inspected trailers that he transported for any noticeable damage, such as broken taillights or flat tires [Doc. 22-2, ¶ 19]. Plaintiff reported such damage to the administrative office and would then move the trailer to the maintenance area of the distribution facility yard [Doc. 22-2, ¶ 19].
When other yard hostlers backed trailers up to the distribution facility’s loading dock, Plaintiff helped “spot” those trailers [Doc. 22-2, ¶ 17]. When Plaintiff backed trailers up to the loading dock, he often chocked the trailer tires to ensure that the trailer did not slide or roll unintentionally after being parked at the loading dock [Doc. 22-2, ¶ 18].
Defendant compensated Plaintiff on an hourly basis and internally classified him as exempt from the overtime compensation requirements of the FLSA, based on its interpretation of an exemption provision in the MCA [Doc. 22-2, ¶ 23].
Defendant and SFI clearly fall into the class of employers whose motor-vehicle transportation the Secretary of Transportation could, and did, regulate. In viewing the evidence in the light most favorable to Plaintiff, however, the Court concludes that Defendant has not borne its burden of showing that Plaintiff, through the actual work that he performed as a yard hostler, “plainly and unmistakably” fell within the terms of the motor carrier exemption to the overtime compensation requirement found in the FLSA. Hodgson, 472 F.2d at 47.”
After discussing the application of the MCA to drivers, driver’s helpers, loaders and/or mechanics, the Court held that Defendant had failed to show Plaintiff, a “yard hostler,” was individually covered by the MCA, because Defendant’s had failed to show that his work affected the safety of operations of motor vehicles in transporting property in interstate or foreign commerce on the public highways. In doing so, the Court drew a clear line between simply safety involved internally at Defendant’s facility, and the safety involved in operating the vehicles outside, on public roadways, in interstate commerce.
“Defendant emphasizes the numerous safety-related activities that Plaintiff undisputedly undertook as a yard hostler and stresses the effect that those activities arguably had on the safe operation of trucks and trailers used to transport property through interstate commerce. But the second prong of the motor carrier exemption test contains two wholly independent parts. To bear its burden of showing that Plaintiff fell within the motor carrier exemption, Defendant was required to show that Plaintiff performed the work of either a driver, driver’s helper, loader, or mechanic, and that such work directly affected the safety of operation of motor vehicles in transporting property in interstate or foreign commerce on the public highways. Though the record reflects that some of Plaintiff’s activities as a yard hostler promoted the safe operation of trucks and trailers transporting property through interstate commerce, nothing in the record indicates that those activities were those of a driver, driver’s helper, loader, or mechanic as defined by the FLSA regulations. Without more, the Court finds summary judgment in Defendant’s favor on the basis of the motor carrier exemption inappropriate.”