Are drivers of a motor carrier who rarely or never drive the carrier's interstate routes covered by the motor carrier exemption of the Fair Labor Standards Act? Yes, according to the U.S. Court of Appeals for the Third Circuit in Resch v. Krapf's Coaches, Inc., Case No. 14-3679 (3d Cir. May 12, 2015).
The plaintiff in this case drove intrastate routes in Pennsylvania for the Transit Division of a bus charter company. The company operated 32 bus and shuttle routes, only 4 of which crossed state lines. The company classified its drivers as exempt from overtime under the FLSA's motor carrier exemption. The plaintiff filed a collective action against the company alleging failure to pay overtime in violation of the FLSA and the Pennsylvania Minimum Wage Act (PMWA). He claimed that the motor carrier exemption did not apply to him because he drove only on intrastate routes. The company moved for summary judgment on the ground that the drivers were correctly classified as exempt. The drivers opposed the motion, noting that during the relevant time period they crossed state lines only 178 (1.3%) of their 13,956 trips, that 16 of the 34 drivers never crossed state lines, 8 did so only once, 5 did so fewer than 5 times, and that interstate trips generated only between 1% and 9.7% of the Transit Division's revenue during that time period.
The district court granted summary judgment to the company, holding that to prove the exemption, it did not need to show that each driver traveled interstate, but only that the drivers reasonably could have been expected to cross state lines as part of their employment. In the court's view, the most important indicator of whether the drivers reasonably could have been expected to drive interstate was the assignment procedure used by the employer. In this case, the dispatcher had the discretion to assign interstate routes to any driver and the driver could be disciplined for refusing the assignment. The employer also ensured that the drivers maintained their DOT qualifications to allow them to drive interstate. The court further found that the Transit Division was significantly engaged in interstate commerce by deriving 1% to 10% of revenue during the relevant time period from interstate commerce.
The Third Circuit affirmed, holding that the drivers were exempt under the FLSA and the PMWA, which the parties had stipulated involved the same analysis. Noting the potential safety hazards caused by mere minutes of driving by an unqualified driver, the court observed that the Motor Carrier Act was passed to prevent accidents due to fatigue, without regard to the adequacy of compensation. Therefore, the Department of Transportation is empowered to set the maximum hours of service, and the motor carrier exemption prohibits the overlapping jurisdiction of the U.S. Department of Labor. There was no dispute that the company was a motor carrier subject to DOT jurisdiction. The court held that the drivers were members of a class of employees engaging in "activities of a character directly affecting the safety of operation of motor vehicles in the transportation . . . of passengers or property" in interstate commerce. Even though they rarely or never crossed state lines, they were members of a class of employees who reasonably could be expected to do so. The court rejected the drivers' reliance on the de minimis exception because a driver's work directly affects the safety of operation of the carrier during every moment he or she is driving. The court also found it significant that the company derived up to 9.7% of its Transit Division profit from interstate trips.