Motor Carrier Exemption Carve Out Exists for Drivers of Vehicles Under 10,000 Pounds: Third Circuit | Practical Law

Motor Carrier Exemption Carve Out Exists for Drivers of Vehicles Under 10,000 Pounds: Third Circuit | Practical Law

In McMaster v. Eastern Armored Services, Inc., the US Court of Appeals for the Third Circuit held that the Corrections Act carves out an exception to the Motor Carrier Act exemption under the Fair Labor Standards Act (FLSA), entitling motor carrier employees who drive vehicles weighing less than 10,000 pounds to overtime pay. The Court affirmed the district court's finding that an employee who drove these vehicles during nearly half of her employment fell within the exception to the motor carrier exemption and was due overtime pay.  

Motor Carrier Exemption Carve Out Exists for Drivers of Vehicles Under 10,000 Pounds: Third Circuit

by Practical Law Labor & Employment
Law stated as of 13 Mar 2015 • USA (National/Federal)
In McMaster v. Eastern Armored Services, Inc., the US Court of Appeals for the Third Circuit held that the Corrections Act carves out an exception to the Motor Carrier Act exemption under the Fair Labor Standards Act (FLSA), entitling motor carrier employees who drive vehicles weighing less than 10,000 pounds to overtime pay. The Court affirmed the district court's finding that an employee who drove these vehicles during nearly half of her employment fell within the exception to the motor carrier exemption and was due overtime pay.
In McMaster v. Eastern Armored Services, Inc., the US Court of Appeals for the Third Circuit held that the Corrections Act of 2008 carves out an exception to the Motor Carrier Act Exemption, entitling motor carrier employees who drive vehicles weighing less than 10,000 pounds to overtime pay under the FLSA. The Court affirmed the district court's finding that an employee who drove these vehicles during nearly half of her employment fell within the exception to the motor carrier exemption and was due overtime pay. (No. 14-1010, , (Mar. 11, 2015).)

Background

Employers generally must pay hourly employees overtime compensation for all hours worked over 40 in a particular workweek. The federal Motor Carrier Act provides an exemption from that requirement for certain hourly employees who perform driving or similar job duties that affect the safety of vehicles on public highways in interstate commerce (29 U.S.C. § 213(b)(1); 49 U.S.C. §§ 31502(b), 13102).
The Corrections Act narrows the Motor Carrier Act exemption for "covered employees," defined in the Corrections Act as those who work for a motor carrier and whose job affects the safe operation of vehicles weighing less than 10,000 pounds, not including vehicles designed to transport hazardous materials or more than eight passengers (122 Stat 572, § 306(c)).
Ashley McMaster worked as a driver and guard for an armored courier company that was a "motor carrier," as defined by the Motor Carrier Act. For just over half of her workdays, McMaster was in vehicles heavier than 10,000 pounds. On other days, she was in vehicles that were less than 10,000 pounds. McMaster did not ride in vehicles designed to transport hazardous materials or more than eight passengers.
McMaster was paid the same hourly rate for all hours she worked, including when she worked over 40 hours in a workweek. She did not receive overtime pay.
McMaster filed an FLSA overtime claim and the district court granted summary judgment in her favor. Her employer appealed.

Outcome

The Third Circuit affirmed the district court's decision, holding that:
  • The Corrections Act carved out an exception to the Motor Carrier Act exemption.
  • Covered employees under the Corrections Act are eligible for overtime pay.
The court relied on the plain language of the Corrections Act, noting that the Act expressly provided that the overtime provisions of the FLSA apply to employees covered by the Corrections Act, notwithstanding the Motor Carrier Act exemption (McMaster, , at *2).
The Third Circuit concluded that:
  • McMaster was a covered employee under the Corrections Act because:
    • approximately half of her trips were on public interstate highways in vehicles lighter than 10,000 pounds;
    • none of the vehicles in which she traveled transported hazardous materials or eight or more passengers; and
    • her employer was a federal motor carrier.
  • Other circuit courts have suggested in dicta that covered employees under the Corrections Act are entitled to overtime, including Allen v. Coil Tubing Servs., 755 F.3d 279 (5th Cir. 2014) and McCall v. Disabled American Veterans, 723 F.3d 962 (8th Cir. 2013).
  • The district court holdings that the Motor Carrier Act exemption still appliesdespite the Corrections Act, are based on a Seventh Circuit policy statement that the court rejected (McMaster, , at *3).

Practical Implications

The Third Circuit's decision in McMaster is the first time a circuit court has held that covered employees under the Corrections Act are entitled to overtime pay, despite the Motor Carrier Act exemption. Though the Fifth and Eighth Circuits have also noted the plain language of the Corrections Act, neither has yet held that covered employees are entitled to overtime pay. Motor carriers should review the exempt status of any employees who operate vehicles weighing less than 10,000 pounds. Those employers, particularly in the Third, Fifth and Eighth Circuits, should consider revising that status, based on the result in McMaster.