Employer Law: Special Classes of Carriers

(a) The Interstate Commerce Commission consistently maintained that transportation with a State of consumable goods (such as food, coal, and ice) to railroad, docks, etc., for use of trains and steamships is not such transportation as is subject to its jurisdiction. (New Pittsburgh Coal Co. v. Hocking Valley Ry. Co., 24 I.C.C. 244; Corona Coal Co. v. Secretary of War, 69 I.C.C. 389; Bunker Coal from Alabama to Gulf Ports, 227 I.C.C. 485.) The intrastate delivery of chandleries, including cordage, canvas, repair parts, wire rope, etc., to ocean-going vessels for use and consumption aboard such vessels which move in interstate or foreign commerce falls within this category. Employees of carriers so engaged are considered to be engaged in commerce, as that term is used in the Fair Labor Standards Act. These employees may also be engaged in the “production of goods for commerce” within the meaning of section 3(j) of the Fair Labor Standards Act. See cases cited in § 782.7(c), and see Mitchell v. Independent Ice Co., 294 F. 2d 186 (C.A. 5), certiorari denied 368 U.S. 952, and part 776 of this chapter. Since the Commission has disclaimed jurisdiction over this type of operation (see, in this connection § 782.7(b)), it is the Division’s opinion that drivers, driver’s helpers, loaders, and mechanics employed by companies engaged in such activities are covered by the wage and hours provisions of the Fair Labor Standards Act, and are not within the exemption contained in section 13(b)(1). (See Hansen v. Salinas Valley Ice Co. (Cal. App.), 144 P. (2d) 896.)

(b) Prior to June 14, 1972, when the Department of Transportation published a notice in the FEDERAL REGISTER (37 FR 11781) asserting its power to establish qualifications and maximum hours of service of employees of contract mail haulers, thereby reversing the long-standing position of the Interstate Commerce Commission, the Administrator of the Wage and Hour Division had taken the position that employees engaged in the transportation of mail under contract with the Postal Service were not within the exemption provided by section 13(b)(1) of the Fair Labor Standards Act. As the result of the notice of June 14, 1972, the Administrator will no longer assert that employees of contract mail carriers are not within the 13(b)(1) exemption for overtime work performed after June 14, 1972, pending authoritative court decisions to the contrary. This position is adopted without prejudice to the rights of individual employees under section 16(b) of the Fair Labor Standards Act.

(c) Section 202(c)(2) of the Motor Carrier Act, as amended on May 16, 1942, makes section 204 of that act “relative to qualifications and maximum hours of service of employees and safety of operations and equipment,” applicable “to transportation by motor vehicle by any person (whether as agent or under a contractual arrangement) for a * * * railroad * * * express company * * * motor carrier * * * water carrier * * * or a freight forwarder * * * in the performance within terminal areas of transfer, collection, or delivery service.” Thus, drivers, drivers’ helpers, loaders, and mechanics of a motor carrier performing pickup and delivery service for a railroad, express company, or water carrier are to be regarded as within the 13(b)(1) exemption. (See Levinson v. Spector Motor Service, 330 U.S. 649 (footnote 10); cf. Cedarblade v. Parmelee Transp. Co. (C.A. 7), 166 F. (2d) 554, 14 Labor Cases, par. 64,340.) The same is true of drivers, drivers’ helpers, loaders, and mechanics employed directly by a railroad, a water carrier or a freight forwarder in pickup and delivery service. Section 202(c)(1) of the Motor Carrier Act, as amended on May 16, 1942, includes employees employed by railroads, water carriers, and freight forwarders, in transfer, collection, and delivery service in terminal areas by motor vehicles within the Interstate Commerce Commission’s regulatory power under section 204 of the same act. See Morris v. McComb, 332 U.S. 422 and § 782.2(a). (Such employees of a carrier subject to part I of the Interstate Commerce Act may come within the exemption from the overtime requirements provided by section 13(b)(2). Cf. Cedarblade v. Parmelee Transp. Co. (C.A. 7), 166 F. (2d) 554, 14 Labor Cases, par. 64,340. Thus, only employees of a railroad, water carrier, or freight forwarder outside of the scope of part I of the Interstate Commerce Act and of the 13(b)(2) exemption are affected by the above on and after the date of the amendment.) Both before and after the amendments referred to, it has been the Division’s position that the 13(b)(1) exemption is applicable to drivers, drivers’ helpers, loaders, and mechanics employed in pickup and delivery service to line-haul motor carrier depots or under contract with forwarding companies, since the Interstate Commerce Commission had determined that its regulatory power under section 204 of the Motor Carrier Act extended to such employees.

(d) The determinations of the Interstate Commerce Commission discussed in paragraphs (a), (b), and (c) of this section have not been amended or revoked by the Secretary of Transportation. These determinations will continue to guide the Administrator of the Wage and Hour Division in his enforcement of section 13(b)(1) of the Fair Labor Standards Act.

(29 C.F.R. § 782.8 (Lexis Advance through the August 23, 2017 issue of the Federal Register. Pursuant to 82 FR 8346 (“Regulatory Freeze Pending Review”), certain regulations will be delayed pending further review. See Publisher’s Note under affected rules. Title 3 is current through August 4, 2017).)

(b) Supporting Transfer Operations
Defendant also claims that Plaintiffs participate in the flow of interstate and/or foreign commerce by supporting the transfer operations of imported petroleum products in and out of the FTZ. Examples of support provided by RTFC to refineries in FTZ122, in addition to responding to emergencies, include standing by, ready to address hazardous or unsafe situations during liquid transfers; providing a cooling spray when fuel, oil, or chemical products are being transferred from one tank to another or from storage to tankers for further transport; supervising and providing input into the transfer process; and operating an “18-wheeler” and a shuttle bus which are used for training and to transport  [*14] material and personnel to locations within FTZ122 (Decl. of Paul Swetish, Ex. B to Resp. to Pl’s MSJ; D.E. 167-4 at 3-5).

Defendant has offered no authority to support its allegation that because Plaintiffs are present at petroleum transfer operations or respond to emergencies in the FTZ, they are engaged in interstate or foreign commerce or both. While it is clear that they have a role in keeping operations safe for those who are engaged in interstate or foreign commerce, Plaintiffs are not transporting passengers, property, or both, as described in the exemption.

Defendant also argues that the transfer of goods such as firefighting equipment and supplies as well as food and fuel to firefighters in FTZ122 constitutes foreign commerce. However, the Secretary of Transportation has consistently maintained that transportation within a State of consumable goods (such as food, coal, and ice) to railroad, docks, et cetera, for use of trains and steamships is not subject to its jurisdiction. 29 C.F.R. § 782.8(a). Similarly, the delivery of equipment and supplies to ocean-going  [*15] vessels for use and consumption aboard the vessels which move in interstate or foreign commerce does not exempt the carriers from the overtime provisions of the FLSA. Id.
The activities described by Defendant appear to fall into the same category as the items described above. Although RTFC carriers moved items that may have assisted the refineries and the Port of Corpus Christi in their respective businesses, the goods and supplies themselves did not continue to flow in interstate commerce.

The regulations further explain:

[E]mployees of construction contractors are, within the meaning of the Fair Labor Standards Act, engaged in commerce where they operate or repair motor vehicles used in the maintenance, repair, or reconstruction of instrumentalities of interstate commerce (for example, highways over which goods and persons regularly move in interstate commerce). . . . Employees so engaged are not however, brought within the [MCA] exemption merely by reason of that fact. In order for the exemption to apply, their activities, so far as interstate commerce is concerned, must relate directly to the transportation of materials moving in interstate or foreign commerce within the meaning of  [*16] the Motor Carrier Act. Asphalt distributor-operators, although not exempt by reason of their work in applying the asphalt to the highways, are within the exemption where they transport to the road site asphalt moving in interstate commerce.
29 C.F.R. § 782.7(a) (internal citations omitted) (emphasis added). Similarly, in order for RTFC to be entitled to the exemption, its drivers’ activities must relate directly to the transportation of material moving in interstate or foreign commerce within the meaning of the MCA. Defendant has not shown that Plaintiffs have engaged in such activities. See, also, 29 C.F.R. § 782.7(c) (Drivers transporting goods in and about a plant producing goods for commerce and chauffeurs or drivers of company cars or buses transporting officers or employees from place to place in the course of their employment in an establishment which produces goods for commerce do not fall within the MCA exemption.) Accordingly, Defendant has not shown that it is entitled to summary judgment on this issue.
(Martinez v. Refinery Terminal Fire Co. (S.D.Tex. Dec. 27, 2013, No. 2:11-CV-295) 2013 U.S.Dist.LEXIS 180827, at *13-16.)

2. Interstate Commerce
Defendant also argues that Plaintiffs participated in interstate commerce because they were expected to drive out of state. To be engaged in interstate  [*17] commerce requires either the actual transport of goods across state lines, or the intrastate transport of goods in the flow of interstate commerce. Barefoot v. Mid-America Dairymen, Inc., 826 F.Supp. 1046, 1049 (N.D. Tex. 1993). “[I]t is the character of the activities rather than the proportion of either the employee’s time or of his activities that determines the actual need for the [Secretary’s] power to establish reasonable requirements with respect to qualifications, maximum hours of service, safety of operation and equipment.” Morris, 332 U.S. at 431-432 (internal citations and quotations omitted). When interstate trips are a “natural, integral and apparently inseparable part of the common carrier service of the employer and his drivers,” and where, in the normal course of business, interstate commerce trips are “distributed generally throughout the year and their performance [is] shared indiscriminately by the drivers and [is] mingled with the performance of other like driving services,” employees are subject to the MCA exemption even where not all drivers drive in interstate commerce. Id., 332 U.S. at 433.
However, an employee’s minor involvement in interstate commerce does  [*18] not necessarily subject that employee to the Secretary of Transportation’s jurisdiction for an unlimited period of time. Reich v. American Driver Service, Inc., 33 F.3d 1153, 1155-1156 (9th Cir. 1994) (citing Baird v. Wagoner Transp. Co., 425 F.2d 407, 412-413 (6th Cir. 1970)). The Federal Highway Administration (FHWA), a division of the DOT, issued an interpretation of its jurisdiction to regulate the qualifications and maximum hours of service of commercial motor vehicle drivers engaged in interstate or foreign commerce. According to the FHWA, in order to establish jurisdiction over a carrier, the carrier must have been engaged in interstate commerce within a reasonable period of time prior to the time at which jurisdiction is in question. 46 Fed. Reg. 37902-02, 1981 WL 115508 (F.R.), July 23, 1981.

The carrier’s involvement in interstate commerce must be established by some concrete evidence such as an actual trip in interstate commerce or proof, in the case of a “for hire carrier,” that interstate business had been solicited. If jurisdiction is claimed over a driver who has not driven in interstate commerce, evidence must be presented that the carrier has engaged in interstate commerce  [*19] and that the driver could reasonably have been expected to make one of the carrier’s interstate runs. Satisfactory evidence would be statements from drivers and carriers, and any employment agreements.

Evidence of driving in interstate commerce or being subject to being used in interstate commerce should be accepted as proof that the driver is subject to [DOT jurisdiction] for a 4-month period from the date of the proof. The FHWA believes that the 4-month period is reasonable because it avoids both the too strict week-by-week approach and the situation where a driver could be used or be subject to being used once and remain subject to jurisdiction [of the DOT] for an unlimited time.

(Martinez v. Refinery Terminal Fire Co. (S.D.Tex. Dec. 27, 2013, No. 2:11-CV-295) 2013 U.S.Dist.LEXIS 180827, at *16-19.)

MOHAJERIAN LAWYERS REPRESENT EMPLOYERS THROUGHOUT CALIFORNIA

Filed Under: Labor & Employment, Motor Vehicle Act