Appeal from the United States District Court for the Eastern District of Pennsylvania. D.C. No. 90-01615
Before: Sloviter, Chief Judge, Stapleton, and Rosenn, Circuit Judges
This appeal raises an interesting question of entitlement to overtime compensation arising out of the interfacial tensions of two federal regulatory statutes, the Motor Carrier Act of 1935 (MCA), Act of August 9, 1935, c. 498, 49 Stat. 543 and the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 209, 216 (West Supp. 1992). The plaintiffs are a group of field engineers previously employed by U.S. Computer Services, d/b/a CableData (CableData) who seek overtime compensation pursuant to the FLSA. The plaintiffs frequently traveled interstate as part of their job duties, carrying tools, component parts, and equipment in order to install, maintain, or repair customers' computers. The district court held that the plaintiffs were exempt from the FLSA's overtime compensation requirements pursuant to the FLSA's Motor Carrier Act exemption. The plaintiffs appealed and we affirm.*fn1
The material facts are not in dispute. CableData is a privately-owned corporation headquartered in California. It provides computer hardware and software, installation, maintenance, and repair service of its computer equipment to its customers engaged in the cable television business. The plaintiffs were assigned to the company's Northeast Region Office, located in Broomall, Pennsylvania. This office regularly services customers located in Pennsylvania, New York, New Jersey, Delaware, Maryland, Washington D.C., Virginia, West Virginia, and other states as needed.
The primary duties of the plaintiffs were to provide technical expertise to CableData's customers and to perform installation, preventive maintenance, diagnostics, and repairs on the customers' computer hardware. The plaintiffs routinely traveled to customer sites, both in and out of Pennsylvania, in order to perform these services. If the customer sites were within four to six hours' drive, the field engineers drove their personal vehicles and transported their tool kits, replacement parts and equipment. For customer sites located at a greater distance, the field engineers traveled by air and drove rental automobiles from the airport.
The plaintiffs filed a complaint against CableData seeking overtime compensation allegedly due pursuant to the FLSA, the Pennsylvania Minimum Wage Act of 1968 (PMWA), 43 P.S. §§ 333.101-333.115 (West Supp. 1992), and the Pennsylvania Wage Payment and Collection Law (WPCL), 43 P.S. §§ 260.1-260.11a (West Supp. 1992). CableData filed a motion for summary judgment under the MCA, and the plaintiffs filed a cross-motion for summary judgment. The court granted summary judgment in favor of CableData with respect to the plaintiffs' FLSA claims and subsequently certified the judgment pursuant to Fed. R. Civ. P. 54(b).*fn2
In granting summary judgment, the court concluded: (1) the plaintiffs were subject to the MCA exemption from the FLSA's overtime compensation requirements; (2) the United States Department of Transportation (DOT) retained the authority to establish maximum hours of employment for the plaintiffs, notwithstanding the lightweight vehicle exemption promulgated by the DOT; and (3) the court was prohibited from reaching a contrary result in the absence of Congressional action limiting the DOT's power to regulate motor private carriers by passenger automobile. The plaintiffs appealed and the Secretary of Labor filed an amicus curiae brief.*fn3 We have jurisdiction to hear this interlocutory appeal pursuant to 28 U.S.C. § 1292(b).
To obtain a summary judgment, the proponent of the motion has the initial burden of identifying evidence, from the sources enumerated in Fed.R.Civ.P. 56(c), which demonstrates the absence of a genuine issue of material fact and which establishes the movant's entitlement to judgment as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). When confronted with a properly supported motion for summary judgment, the opposing party is required to produce, from the same sources enumerated in Rule 56, contrary evidence which would support its position. Id. at 250. In reviewing a grant of summary judgment, we must draw all possible inferences from the record in the light most favorable to the party opposing the motion. Bechtel v. Robinson, 886 F.2d 644, 647 (3d Cir. 1989).
Congress enacted the MCA in 1935, to promote efficiency, economy, and safety in the rapidly burgeoning motor transportation industry. See United States v. Am. Trucking Ass'ns., Inc., 310 U.S. 534, 538-39, 84 L. Ed. 2d 1345, 60 S. Ct. 1059, (1940). To advance these goals, the MCA gave the Interstate Commerce Commission (ICC) authority to establish requirements for recordkeeping, safety of operation, qualifications, and maximum hours of work for "common carriers" and "contract carriers" by motor vehicle. See 49 U.S.C. § 304(a)(1) & (2) (repealed). The Act also gave the ICC similar regulatory power over employees of "private carriers" by motor vehicle if the ICC found that such requirements were necessary to promote the safety of operation. See id. at § 304(a)(3) (repealed).
In 1938, Congress enacted the FLSA to protect covered workers from substandard wages and oppressive working hours. See Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981), cert. denied, 471 U.S. 1054, 85 L. Ed. 2d 480, 105 S. Ct. 2116 (1985). The FLSA required employers to compensate such employees at a minimum of one and one-half times their standard hourly wages for time worked per week in excess of forty hours. See 29 U.S.C. § 207(a)(1). Congress ensured that regulatory jurisdiction under the MCA and the FLSA would not overlap by providing that the FLSA did not apply where the ICC already had power to set maximum hours. See Levinson, 330 U.S. at 661-62. Specifically, the FLSA exempted from its overtime requirements, "any employee with respect to whom the [ICC] has power to establish qualifications and maximum hours of service pursuant to the provisions of section 304 of Title 49." See 29 U.S.C. § 213(b)(1). It is the employer's burden to affirmatively prove that its employees come within the scope of the overtime exemption and any exemption from the Act must be proven plainly and unmistakably. Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir. 1991) (citations omitted).
In 1966, Congress transferred the authority to regulate under section 304 of the MCA from the ICC to the DOT. See Act of Oct. 15, 1966, P.L. 89-670, § 6(e)(6)(C), 80 Stat. 939; 49 U.S.C. § 1655(e)(6)(C). In 1983, Congress repealed section 304 and recodified the section without substantive change as 49 U.S.C. § 3102. See Act of Jan. 12, 1983, P.L. 97-449, § 7(b), 96 Stat. 2444. Section 3102 gives the DOT authority to regulate "motor carriers"*fn4 and "motor private carriers."*fn5 Motor private carriers are those that are neither common nor contract carriers, and that (1) transport property by motor vehicle in interstate commerce; (2) are the "owner, lessee, or bailee of the property being transported"; and (3) transport the property "for sale, lease, rent, or bailment, or to further a commercial enterprise". See 49 U.S.C. § 10102(16).
Preliminarily, the plaintiffs present two statutory-based claims, contending that CableData does not fit within the plain language of the MCA exemption. First, they assert that the MCA exemption from the FLSA overtime requirements does not apply to motor private carriers because section 3102(a)(1) applies to transportation "described in sections 10521 and 10522 of this title" and these sections speak only of "motor carriers", which are later defined to mean motor common carriers and motor contract carriers, 49 U.S.C. § 10102(13). However, section 3102(a)(1) simply refers to sections 10521 and 10522 for a description of the type of transportation subject to the DOT's jurisdiction, that is, interstate transportation. See e.g., Griffin v. Consolidated Foods Corp., 587 F. Supp. 921, 922 (W.D.N.C. 1984), aff'd, 771 F.2d 826 (1985). The plaintiffs' proffered interpretation would render section 3102(b)(2) meaningless.
Second, the plaintiffs argue that the DOT does not have the power to regulate them because they were engaged in a business other than transportation and the transportation in question was in furtherance of their primary business of servicing computer equipment. Under the "primary business test", the ICC lacks jurisdiction over the transportation of property by motor vehicle by a person engaged in a non-transportation business when the transportation is within the scope of and furthers the primary business of such person. 49 U.S.C. § 10524(a).
Congress adopted section 10524(a) because of a proliferation of "buy-sell" agreements whereby carriers attempted to avoid ICC regulation. See Ryder Truck Lines, Inc. v. United States, 716 F.2d 1369, 1373 n.4 (11th Cir. 1983), cert. denied, 466 U.S. 927 (1984). By purchasing the goods to be transported and then selling them upon reaching their destination, the carriers avoided ICC rate and licensing requirements as well as federal excise taxes. Id. Section 10524(a) has no application in this case. The section merely exempts motor private carriers from the licensing, permit, and certificate requirements imposed upon motor carriers by the ICC pursuant to 49 U.S.C. §§ 10921-10935; it does not serve to deprive the DOT of its power to regulate the qualifications and maximum hours of service of employees of motor private carriers pursuant to 49 U.S.C. § 3102(b)(2). See Am. Trucking Ass'n, Inc. v. I.C.C., 672 F.2d 850, 851 (11th Cir. 1982) (common and contract motor carriers are subject to ICC regulation but motor private carriers are exempt from such regulation). The MCA exemption thus applies independent of the ICC's jurisdiction over a motor private carrier.
The record shows that the plaintiffs transported property by motor vehicle in interstate commerce, that CableData owned the property transported, and that the plaintiffs transported the property to further CableData's commercial enterprise.*fn6 Therefore, the plaintiffs literally fell within the MCA exemption to the FLSA. The plaintiffs argue, however, that the DOT has waived its regulatory power under the MCA exemption because it has not sought to regulate operations such as CableData's.
In 1984, Congress enacted the Motor Carriers Safety Act (MCSA), 49 App. U.S.C. § 2501 et seq., which directed the DOT to issue various regulations to further safety in the operation of "commercial motor vehicles." Commercial motor vehicles are those vehicles weighing over 10,000 pounds, designed to transport more than 15 passengers, or used in the transportation of hazardous materials. Id. at § 2503(1); 49 C.F.R. § 390.5. In response to the MCSA, the Federal Highway Administration (FHWA) amended the Federal Motor Carrier Safety Regulations (FMCSRs), see 49 C.F.R. § 390.1-390.37 (Nov. 15, 1988).*fn7 The DOT regulations do not apply to the plaintiffs because the motor vehicles driven by them in their duties for CableData weigh less than 10,000 pounds.
The district court concluded that the DOT's failure to exercise its power to regulate does not mean that it has waived it. The court relied on Southland Gasoline Co. v. Bayley, 319 U.S. 44, 87 L. Ed. 1244, 63 S. Ct. 917 (1943). In that case, the plaintiffs, employees of a motor private carrier, argued that the ICC had no power to regulate their working hours prior to the time it issued regulations for private carriers. At that time, the ICC had authority to establish working hours for private carriers "if need therefor is found." See 319 U.S. at 47 (citing MCA § 204(a)(3); 49 U.S.C. § 304(a)(3) (repealed)). The employees asserted that because the ICC did not regulate or make a finding that regulation was necessary prior to 1940, they were entitled to overtime compensation under the FLSA up until the time the ICC found need to regulate. The Court rejected this argument and held that the requirement to make a finding of need before issuing regulations did not affect the existence of the ICC's power to regulate. See 319 U.S. at 47-48; accord Levinson, 330 U.S. at 661.
Similar to the statute at issue in Southland, section 49 U.S.C. § 3102(b)(2) allows the DOT to regulate working hours of private carriers only where "needed to promote safety of operation". The district court reasoned that because section 3102 recodified section 304 without substantive change, Southland is controlling.*fn8 Moreover, in 1984, Congress amended section 3102 to require that the DOT "consider the costs and benefits" of amending the section, but it did not limit the section to apply only to commercial motor vehicles. See 49 U.S.C. § 3102(d). The district court thus found that the DOT's failure to find regulation necessary in a particular area does not mean that the DOT has waived its power to regulate pursuant to section 13(b)(1) of the FLSA.
In 1977, the DOT published an interpretation of the FMCSRs:
The [FMCSRs] were designed primarily to apply to medium and heavy-duty commercial vehicles, and in many instances the Regulations are not suitable for passenger cars. Various parts of the FMCSR contain exemptions for the operation and driving of passenger automobiles. The Bureau, therefore, has not required compliance with the Regulations by private carriers of property ...