In an example of what can be described as an "unintended consequence" of the revisions made to the federal Motor Carrier Act in 2005, a federal court in Georgia recently held that an employee whose primary duties involve picking up and delivering documents for his employer in a personal vehicle is not exempt from the Fair Labor Standard Act's (FLSA) overtime requirements because he does not qualify for the motor carrier exemption.
In an example of what can be described as an "unintended consequence" of the revisions made to the federal Motor Carrier Act in 2005, a federal court in Georgia recently held that an employee whose primary duties involve picking up and delivering documents for his employer in a personal vehicle is not exempt from the Fair Labor Standard Act's (FLSA) overtime requirements because he does not qualify for the motor carrier exemption. See Dell'Orfano v. IKON (August 29, 2006).
In IKON, the employee, Dell'Orfano, worked as a customer service representative. His primary duties involved picking up documents from IKON customers and transporting them to IKON's document duplication facility, then delivering the duplicated documents back to the customers. He drove either his personal vehicle or a van supplied by IKON to perform these duties.
Dell'Orfano filed a collective action against IKON, claiming he was improperly denied overtime pay in violation of the FLSA. IKON asked the court to enter judgment against Dell'Orfano, claiming he was covered by the motor carrier exemption and, therefore, the company did not improperly deny him overtime pay. The court denied IKON's motion, holding that there was no question that the motor carrier exemption did not apply to Dell'Orfano after August 10, 2005, when the definitions in the Motor Carrier Act were amended, which had the impact of changing who is covered by the FLSA’s motor carrier exemption.
The FLSA requires an employer to pay a minimum wage and overtime to all non-exempt employees for hours worked over 40 in one week. There are several exemptions to the overtime requirement including the widely used "motor carrier exemption." The motor carrier exemption applies to employees "with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service" under the Motor Carrier Act. Under the Motor Carrier Act, the Secretary of Transportation has the authority to establish qualifications and maximum hours of service for employees of “motor carriers” and “motor private carriers” who drive vehicles in interstate commerce.
Prior to August 10, 2005, the term “motor carrier” as used in the Motor Carrier Act was defined as “a person providing motor vehicle transportation for compensation.” The term “motor private carrier” was defined as “a person, other than a motor carrier, transporting property by motor vehicle” when (1) the transportation occurs in interstate commerce; (2) the person is the owner, lessee, or bailee of the property being transported; and (3) the property is being transported for sale, lease, rent, or bailment to further a commercial enterprise. The term “motor vehicle” is defined in the Motor Carrier Act as “a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on the highway in transportation.”
Thus, before August 10, 2005, the FLSA’s motor carrier exemption applied to all employees who drove a motor vehicle in interstate commerce regardless of the size of the motor vehicle or the number of passengers transported in the vehicle.
On August 10, 2005, the “Motor Carrier Safety Reauthorization Act of 2005," Title IV of the "Safe Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users" ("SAFETEA-LU"), changed the definition of “motor carrier” and “motor private carrier” by inserting the word “commercial” before “motor vehicle” in each definition. A commercial motor vehicle is defined as one that has a gross vehicle weight or rating of at least 10,001 pounds (or is used to transport more than 8 passengers for compensation or more than 15 passengers not for compensation or transports hazardous material).
The changes were significant in the IKON case because the vehicles Dell'Orfano drove were not commercial motor vehicles. Accordingly, the court held that he was not covered by the motor carrier exemption after the date of the revisions to the Motor Carrier Act.
Employers' Bottom Line:
This case is significant because it demonstrates the impact of the changes to the definitions in the Motor Carrier Act. Before these changes, employees who delivered non-hazardous materials in vehicles weighing less than 10,001 pounds (which includes cars and most light trucks – for example, a Ford F150 pickup truck weighs around 6,500 pounds) likely would have been covered by the motor carrier exemption but now are not covered because they do not drive commercial motor vehicles.
Apparently the impact on the motor carrier exemption was an unintended consequence of the changes to the definitions to the Motor Carrier Act and there is legislation pending that would reinstate the motor carrier exemption; however, nothing has been passed at this time.
We will continue to keep you updated on developments in this area. If you have any questions regarding this issue or other labor or employment related issues, please contact the Ford & Harrison attorney with whom you usually work.