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N. J. Transit Policemen's Benevolent Association Local 304 v. New Jersey Transit Corp.

filed: December 2, 1986.

N. J. TRANSIT POLICEMEN'S BENEVOLENT ASSOCIATION LOCAL 304
v.
NEW JERSEY TRANSIT CORPORATION, APPELLANT



On Appeal from the United States District Court For the District of New Jersey - Newark, C. A. No. 85-2420.

Author: Stapleton

BEFORE: ADAMS and STAPLETON, Circuit Judges, and GARTH, Senior Circuit Judge.

Opinion OF THE COURT

STAPLETON, Circuit Judge.

This case presents a question of statutory interpretation. Did a savings clause subjecting New Jersey Transit Corporation (N.J. Transit) to "applicable laws of the United States related to . . . dealings between employees and employers" preserve its exemption from the overtime rules of the Fair Labor Standards Act (FLSA)? The district court found, based on the "plaint language" of the statute, that it did not. We conclude that the statute, when read with an eye to its purpose and to the regulatory scheme in existence at the time of its enactment, evidences an intent to preserve the FSLA overtime exemption.

I.

N.J. Transit, an instrumentality of the State of New Jersey that operates commuter rail service, was sued by New Jersey Transit Policemen's Benevolent Association, Local 304 (Local 304), for failure to comply with the provision of the Fair Labor Standards Act that requires employers to pay employees one and one-half times their regular wage for hours worked in excess of forty per week. 29 U.S.C. § 307(a) (1982). N.J. Transit moved to dismiss this claim, asserting that its employees fell within one of the categorical exemptions from the overtime rules listed in Section 213(b). The relevant provision exempts:

any employee of an employer engaged in the operation of a common carrier by rail and subject to the provisions of subchapter I of chapter 105 of title 49 [Part I of the Interstate Commerce Act]

29 U.S.C. § 213(b)(2) (1982).

In response to the motion to dismiss, Local 304 pointed out that N.J. Transit was not currently subject to the provisions of Interstate Commerce Act (ICA) and argued that it was accordingly not entitled to the exemption provided by Section 213(b)(2) of the FLSA. While N.J. Transit acknowledge that it was not now subject to Interstate Commerce Commission (ICC) regulation, it insisted that the 1976 statute removing commuter railroads such as N.J. Transit from the jurisdiction of the ICC included a savings clause which preserved their overtime exemption. This 1976 statute, now codified as amended at 49 U.S.C. § 10504, reads in relevant part as follows:

(b) The Interstate Commerce Commission does not have jurisdiction under this subtitle over rail mass transportation provided by a local public body if--

(1) the Commission would have jurisdiction but for this section; and

(2) the fares of the local public body, or its authority to apply to the Commission for changes in those fares, is subject to the approval or disapproval of the chief executive officer of the State in which the transportation is provided.

(c) Notwithstanding subsection (b) of this section, a local body, described in subsection (b), is subject to applicable laws of the United States related to--

(1) safety;

(2) the representation of employees for collective bargaining; and

(3) employment retirement, annuity, and unemployment systems or other provisions related to dealings between employees and employers.

49 U.S.C. § 10504 (1982). The parties agree that N.J. Transit satisfies the conditions for the Section 10504(b) exemption from ICC regulation. They disagree only with respect to the effect of the Section 10504(c) savings clause.

The district court denied N.J. Transit's motion to dismiss holding that the Section 10504(c) savings clause did not preserve the Section 213(b)(2) overtime exemption. It also determined that the order denying N.J. Transit's motion to dismiss involved "a controlling question of law as to which there is substantial ground for difference of opinion and [that] an immediate appeal from the order may advance the ultimate termination of the litigation." App. at 4. This court granted N.J. Transit's petition for appeal of the statutory construction question pursuant to 28 U.S.C. § 1292(b). Accordingly, the only issue before us is whether the Section 213(b)(2) overtime exemption is preserved by the Section 10504(c) savings clause. Our review of questions of statutory interpretation is plenary.

II.

"Where, as here, resolution of a question of federal law turns on a statute and the intention of Congress, we look first to the statutory language and then to the legislative history if statutory language is unclear." Blum v. Stenson, 465 U.S. 886, 896, 79 L. Ed. 2d 891, 104 S. Ct. 1541 (1984). In seeking to discern Congressional intent from the legislative text, a court must be mindful of the statute's object and policy and must read the disputed provision in the context of the entire statute and the provisions of related statutes. Richards v. United States, 369 U.S. 1, 11, 7 L. Ed. 2d 492, 82 S. Ct. 585 (1962); Commissioner of Internal Revenue v. Engle, 464 U.S. 206, 217, 78 L. Ed. 2d 420, 104 S. Ct. 597 (1984); Kokoszka v. Belford, 417 U.S. 642, 650, 41 L. Ed. 2d 374, 94 S. Ct. 2431 (1974).

A. The Text

The relevant provision states that, notwithstanding Section 10504(b), commuter railroads like N.J. Transit are "subject to applicable laws of the United States related to-- (1) safety; (2) the representation of employees for collective bargaining; and (3) employment retirement, annuity, and unemployment retirement, annuity, and unemployment systems or other provisions related to dealings between employees and employers." 49 U.S.C. § 10504(c) (1982). The district court read "dealings" in the last clause to mean "business interactions," which it found to include negotiations over collective bargaining agreements but not rules concerning wages or hours. App. at 41. We disagree. The use of the phrase "other provisions related to dealings between employees and employers" in conjunction with the preceding references to safety, labor negotiations, retirement, and unemployment implies that Congress had a broad conception of "dealings." Moreover, the district court's equation of dealings with negotiations would render the final clause of the provision redundant, given the language of Section 10504(c)(2) preserving laws "related to . . ...


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