Opinion ID: 68934
Heading Depth: 2
Heading Rank: 2

Heading: Overtime Claim and the Motor Carrier Exemption

Text: The FLSA requires employers to pay employees time-and-a-half for any hours worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1). This provision, however, “shall not apply with respect 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 is deemed to have such 5 power, and thereby the motor carrier exemption is triggered, if two requirements are met: (1) the employee is employed by a carrier “whose transportation of passengers or property by motor vehicle is subject to his jurisdiction under section 204 of the Motor Carrier Act”; and (2) the employee “engage[s] 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). “[T]he Secretary of Transportation need not actually exercise his power to regulate under the Motor Carrier Act; an exemption under section 13(b)(1) is created so long as the Secretary has the authority to regulate over a particular category of employees.” Spires v. Ben Hill County, 980 F.2d 683, 686 (11th Cir. 1993). Mena does not appear to dispute that the first prong of the exemption was satisfied because the Secretary not only has power to exercise jurisdiction over McArthur, but has in fact exercised such jurisdiction. McArthur is registered with the DOT and has an assigned DOT registration number. McArthur’s trucks and drivers have been the subject of DOT inspections and the company maintains records as required by DOT regulations. Mena, therefore, clearly was employed by a carrier that is subject to the jurisdiction of the Secretary of Transportation. 6 Turning to the second prong, we must determine whether Mena personally engaged in activities directly affecting the safety of operation of motor vehicles in transportation on public highways of property in interstate commerce. Mena concedes that he drove on public highways and that this affected the safety of operation of motor vehicles. Thus, we need only address whether he transported property in interstate commerce. It is undisputed that Mena’s job activities took place wholly within the state of Florida. Nonetheless, for the purposes of the Motor Carrier Act, “purely intrastate transportation can constitute part of interstate commerce if it is part of a ‘continuous stream of interstate travel.’ For this to be the case, there must be a ‘practical continuity of movement’ between the intrastate segment and the overall interstate flow.” Walters v. American Coach Lines of Miami, Inc., 575 F.3d 1221, __ (11th Cir. 2009) (citations omitted). A critical factor in determining the shipment’s essential character is the shipper’s “fixed and persisting intent” at the time of the shipment. 29 C.F.R. § 782.7(b)(2); see also Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217, 223-24 (2d Cir. 2002).2 2 The Interstate Commerce Commission has held that there is not fixed and persisting intent to engage in interstate commerce where: (1) “[a]t the time of shipment there is no specific order being filled for a specific quantity of a given product to be moved through to a specific destination beyond the terminal storage”; (2) “the terminal storage is a distribution point or local marketing facility from which specific amounts of the product are sold or allocated”; and (3) “transportation in the furtherance of this distribution within the single State is specifically arranged only after sale or allocation from storage.” 29 C.F.R. § 782.7(b)(2). Some courts have 7 In the instant case, we are persuaded that Mena transported property in interstate commerce. Uncontroverted testimony establishes that much of the property that Mena transported previously had been manufactured in other states by McArthur’s parent company and delivered to McArthur’s Miami warehouse. Because McArthur delivered dairy and other refrigerated products to customers, the property transported was perishable and usually of a reasonably short shelf-life. The property was pre-packaged and not modified once it reached McArthur’s warehouse. Cf. Roberts, 921 F.2d at 816 (finding that the fixed and persisting intent test was not satisfied where shipper did not intend for the interstate shipment of raw soybeans, but rather expected them to be processed intrastate into “a new commodity, one that had been materially changed in ‘character, utility, and value’” before leaving the state) (citation omitted). From there the products were distributed to McArthur’s customers based on standing orders and customers’ concluded that they may only conclude that a fixed and persisting intent is absent if all three of these factors are met. See, e.g., Baird v. Wagoner Transp. Co., 425 F.2d 407, 411 (6th Cir. 1970). We are, however, in accord with other circuits that have held that this “standard has been refined, if not phased out,” in favor of the more general consideration that draws a fixed and persisting intent “from all of the facts and circumstances surrounding the transportation.” International Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am. v. Interstate Commerce Comm’n, 921 F.2d 904, 908 (9th Cir. 1990) (citations omitted); see also Roberts v. Levine, 921 F.2d 804, 812 (8th Cir. 1990); Central Freight Lines v. Interstate Commerce Comm’n, 899 F.2d 413, 421 (5th Cir. 1990). It is also noteworthy that this circuit did not discuss the above 3-factor test in its most recent motor carrier exemption case; instead, it merely emphasized that we are “guided by practical considerations” when determining whether an employee’s activities are part of interstate commerce for the purposes of the FLSA. See Walters, 575 F.3d 1221. 8 projected needs, as calculated by customers’ past purchases.3 Under these circumstances, McArthur’s warehouse was nothing more than a temporary storage hub used to facilitate the orderly distribution of products through interstate commerce. Additionally, some deliveries, such as those by Mena to Sky Chefs, a company that then sold those products to airlines for passenger consumption on domestic and international flights, were bound for destinations outside of Florida. Thus, Mena’s transportation of these products was part of the “practical continuity of movement” across state lines. See Walters, 575 F.3d 1221 (holding that intrastate shuttle service for cruise passengers from an airport to a seaport was part of the practical continuity of movement of interstate travel). Because McArthur established both elements of the motor carrier exemption, Mena cannot avail himself of the benefits of the overtime pay provision found in 29 U.S.C. § 207(a)(1). The district court did not err in granting summary judgment as to this claim.