The motor carrier exemption under the FLSA exempts from overtime those employees for whom the Secretary of Transportation has power to establish qualifications and maximum hours of service. The employees must be: (1) employed by carriers whose transportation of passengers or property by motor vehicle is subject to the Secretary's jurisdiction under the Motor Carrier Act; and, (2) engage 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 commerce within the meaning of the Motor Carrier Act ("MCA").
There is often little dispute over whether the employee's duties affect safety, i.e. employee is a driver, or that the employer is a "motor carrier." Disputes do often arise, however, over whether the employer operates in "interstate commerce." Significantly, even if a carrier's transportation does not cross state lines, the interstate commerce requirement is satisfied if the goods being transported within the borders of one State are involved in a "practical continuity of movement" in the flow of interstate commerce. The "nature of a shipment is . . . determined . . . by the essential character of the commerce, reflected by the intention formed prior to shipment, pursuant to which the property is carried to a selected destination by a continuous or unified movement."
Indeed, wholly intrastate commerce satisfied interstate requirement when part of "continuing transportation" or "where the vehicles do not actually cross State lines but operate solely within a single State, if what is being transported is actually moving in interstate commerce." Thus, intrastate transportation can satisfy the interstate commerce requirement of MCA if the shipper has a "fixed and persisting transportation intent beyond the terminal storage point at the time of shipment.
Against this legal backdrop, there is directly applicable precedent standing for the proposition that interstate transportation of empty containers, e.g. pallets, empty cases, is sufficient to bring an entity within the flow of interstate commerce. If empty cases are being transported interstate, it may well be unnecessary to determine whether a company's intrastate distribution of out-of-state products also met the interstate commerce requirement.
The Takeaway
FLSA cases involving classes of truck drivers claiming overtime can yield tremendously large liabilities and damage awards, as these employees are usually making very good earnings and working many overtime hours. If an entity is successful in proving that the drivers fall with the motor carrier exemption, the entire case goes away. In short, that is a magic bullet.
Defendants in FLSA cases where the issue is interstate commerce must think "out of the box" and think of where there are channels of movement of either product or equipment (e.g. empties) that facilitate the movement of the product. Showing that those materials move interstate may be enough to show the "practical continuity" needed to establish interstate commerce and successfully defend a FLSA suit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
