Law and Arbitration Offices of Donald T Ryce

CAVEAT:  It should be stressed that the following analysis simply represents the views of the author, that no definitive rulings or interpretations have been issued by DOL or the courts, and that both potential employee-plaintiffs and employers affected by SAFETEA-LU and the Technical Corrections Act of 2008 should consult with their own attorneys regarding the issues discussed herein.

            Employers do not have to pay overtime to “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service.” 29 U.S.C. § 213(b)(1). This is known as the Motor Carrier Act exemption.  In the past, an employee was subject to regulation by the Secretary if the job involved operating a “motor vehicle”. However, on August 10, 2005, Congress enacted and the President signed into law the Safe Accountable Flexible Efficient Transportation Equity Act – A Legacy for Users (“SAFETEA-LU”).  One of the many changes in the law was that  SAFETEA-LU called for the addition of the word “commercial” before “motor vehicles” in the definition of “motor private carrier,” requiring entities wishing to qualify as “motor private carriers” after August 10, 2005 to conduct business in “commercial" vehicles, e.g., vehicles weighing over 10,000 pounds, large passenger vehicles, or vehicles used to transport hazardous material, etc. In most circumstances, that meant the employees would have to operate vehicles weighing over 10,000 pounds to fall within the motor carrier exemption.

            The result, apparently unintentional, was to remove the Section 13(b)(1) "motor carrier" exemption from the operations of many employers. Several plaintiffs have since filed successful FLSA lawsuits on the theory that the plaintiffs who in the past would have been subject to the exemption were not operating commercial vehicles and therefore were owed overtime.

            As soon as Congress realized what it had done, some Congressional members sought to undo the damage by retroactively removing the word "commercial" from the definition. For several years that attempt was unsuccessful. However, on June 6 of this year, the President signed into law the Technical Corrections Act of 2008 with respect to SAFETEA-LU.  That law, inter alia, retroactively removed "commercial" from the statute and provided that the problematic 2005 amendment was to be "treated as not being enacted.”

            However, Congress managed to confuse the issue yet again by inserting seemingly contradictory provisions in the law.  Another section of the Technical Corrections Act reads as follows: 

SEC. 306. APPLICABILITY OF FAIR LABOR STANDARDS ACT REQUIREMENTS AND LIMITATION ON LIABILITY.

 (a) APPLICABILITY FOLLOWING THIS ACT.--Beginning on the date of enactment of this Act, section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) shall apply to a covered employee notwithstanding section 13(b)(1) of that Act (29 U.S.C. 213(b)(1)).

 (b) LIABILITY LIMITATION FOLLOWING SAFETEA-LU.--

 (1) LIMITATION ON LIABILITY.--An employer shall not be liable for a violation of section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) with respect to a covered employee if--

    (A) the violation occurred in the 1-year period beginning on August 10, 2005;  and

    (B) as of the date of the violation, the employer did not have actual knowledge that the employer was subject to the requirements of such section with respect to the covered employee.

 (2) ACTIONS TO RECOVER AMOUNTS PREVIOUSLY PAID.--Nothing in paragraph (1) shall be construed to establish a cause of action for an employer to recover amounts paid before the date of enactment of this Act in settlement of, in compromise of, or pursuant to a judgment rendered regarding a claim or potential claim based on an alleged or proven violation of section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) occurring in the 1-year period referred to in paragraph (1)(A) with respect to a covered employee.

 (c) COVERED EMPLOYEE DEFINED.--In this section, the term "covered employee" means an individual--

 (1) who is employed by a motor carrier or motor private carrier (as such terms are defined by section 13102 of title 49, United States Code, as amended by section 305);

 (2) whose work, in whole or in part, is defined--

    (A) as that of a driver, driver's helper, loader, or mechanic;  and

    (B) as affecting the safety of operation of motor vehicles weighing 10,000 pounds or less in transportation on public highways in interstate or foreign commerce, except vehicles--

     (i) designed or used to transport more than 8 passengers (including the driver) for compensation;

     (ii) designed or used to transport more than 15 passengers (including the driver) and not used to transport passengers for compensation;  or

     (iii) used in transporting material found by the Secretary of Transportation to be hazardous under section 5103 of title 49, United States Code, and transported in a quantity requiring placarding under regulations prescribed by the Secretary under section 5103 of title 49, United States Code;  and

 (3) who performs duties on motor vehicles weighing 10,000 pounds or less.

            Thus, under Section 306(b), only one-year relief from liability (commencing August 10, 2005) is provided for employers.  Considered in a vacuum, the language of Section 306(b) would suggest that Congress had decided to give only a limited reprieve to employers ambushed by the 2005 addition of the word “commercial,” and some groups, such as NELA, have taken that position. However, that view does not take into account the retroactive removal of the word "commercial", with the result that it is no longer possible to bring a lawsuit alleging an overtime violation based upon the “commercial” vehicle theory under any conceivable construction of SAFETEA-LU as amended. 

            In short, the retroactive amendment [See Section 121(a), (b)] clearly has the effect of restoring the motor carrier exemption to its pre-August, 2005 status for the time period between August 10, 2005 and June 6, 2008.  The only tenable explanation for the existence of Section 306(b) is that it was an aborted effort to limit the consequences of the 2005 addition of the word “commercial,” but that the pro-employer forces ultimately won complete relief for affected employers by enacting the retroactive removal of the word “commercial”   This view is supported by the fact that proposed amendments that appeared to make the provision specific to the motor carrier exemption were rejected.  Why Congress did not simply remove Section 306(b) from the Technical Corrections Act remains a mystery.

            On the other hand, Section 306(a) of the new act states that Section 7 (the overtime provisions) of the Fair Labor Standards Act applies to certain employees "notwithstanding section 13(b)(1) of that Act."  In other words, as of June 6, 2008, the motor carrier exemption no longer applies to "covered employees" as defined by the Technical Corrections Act.  The exemption issue now is not whether the vehicle qualifies as "commercial," but rather whether the employee is a "covered employee" under the new law. For most employees performing duties on vehicles weighing 10,000 pounds or less, that means that effective June 6, 2008 the employer cannot claim the Section 13(b)(1) exemption.