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By: R. Eddie Wayland, TCA General Counsel
The Third Circuit Court of Appeals found that two trucking companies’ employees were not subject to the Motor Carrier Act (“MCA”) exemption to FLSA overtime requirements and that the Pennsylvania Minimum Wage Act (“PMWA”) applied. The companies, Fast Rig Support and First Americans Shipping and Trucking, failed to “plainly and unmistakably” show that the exemption applied.
The plaintiff worked for the trucking companies transporting water to hydraulic fracking sites within Pennsylvania. He and other employees often worked more than 40 hours a week. He claimed that they were only paid overtime for work performed over 45 hours a week, which was in violation of the overtime provisions of both the FLSA and the PMWA. Regarding the applicability of the MCA exemption, the issue was whether the water and drivers involved were engaged in a “continuous stream of interstate travel.” The trial court found that the trucking companies failed to show that they were engaged in a continuous stream of interstate travel. Specifically, the court found that because the water involved in the fracking process becomes contaminated and substantially modified, the trucking companies were involved in two separate commercial transactions: one before the water became contaminated and one after the process was complete. Therefore, there was no continuous stream of an unaltered item across state lines.
The trucking companies offered three pieces of evidence that their drivers were part of a continuous stream of interstate travel. First, the trucking companies argued that a Department of Transportation certificate authorizing them to engage in transportation as common carriers of property in interstate commerce showed that they were engaged in the continuous stream of interstate travel. The court, however, ruled that this certificate did not show whether the drivers actually had engaged in interstate commerce. Second, the trucking companies pointed to an online article about another company in Pennsylvania that dealt with fracking wastewater that was driven from Pennsylvania to Ohio. Again, the court pointed out that the article did not shed any light on the water the defendant trucking companies actually transported. Finally, the court found insufficient a spreadsheet the trucking companies offered that showed records of water shipments over a three-day period which were tracked and bound for specific interim destinations within Pennsylvania before being used in the fracking process.
The court noted that the trucking companies could potentially be involved in a continuity of movement in interstate commerce, especially if, among other things, there was intent of the shipper at the time of the shipment. However, the court found that the trucking companies did not show the drivers or water was part of the continuity of movement in interstate commerce, and thus were not exempt under the MCA.
Trucking companies should not automatically assume that their truck drivers fall under the MCA overtime exemption in all circumstances. The analysis relevant to making this determination may include a number of factors, such as: if the product temporarily resides in a warehouse during transport before reaching its final destination; (2) if the product is altered during transport; (3) the shipper’s intent concerning the delivery of the product when the transportation commences; and (4) if the employer’s enterprise “involve[s] an integrated system of interstate shipments.” When in doubt, companies should consult legal counsel knowledgeable with the transportation industry.
R. Eddie Wayland is a partner with the law firm of King & Ballow. You may reach Mr. Wayland at (615) 726-5430 or at email@example.com. The foregoing materials, discussion and comments have been abridged from laws, court decisions, and administrative rulings and should not be construed as legal advice on specific situations or subjects.
August 9, 2016