Appeals court reverses District Court on overtime pay

The 7th Circuit Court of Appeals has reversed a District Court’s finding that a tow truck driver was not entitled to overtime pay.

Bobby Johnson was a tow truck driver for Hix Wrecker for about four months, during which he worked 12-hour shifts. In the U.S. District Court, Southern District of Indiana, Johnson and Hix filed cross motions for summary judgment, with Hix claiming that Johnson was not entitled to overtime pay due to the motor carrier exemption to the Fair Labor Standards Act. Johnson argued he was not subject to the exemption and that the company’s owners and corporate secretary were individually liable for unpaid overtime wages.

The FLSA requires employers to pay overtime to employees who work more than 40 hours a week, according to 29 U.S.C. Section 207(a)(1). Ordinarily, the employees of a motor carrier that engages wholly in intrastate commerce are subject to the Secretary of Labor’s jurisdiction, and consequently to the overtime and maximum hours provisions of the FLSA. In contrast, the employees of a motor carrier that engages in interstate commerce may come under the Secretary of Transportation’s jurisdiction under the Motor Carrier Act 49 U.S.C. Section 31502. Under Section 31502(b), the Secretary of Transportation, rather than the Secretary of Labor, has the power to prescribe these employees’ qualifications and maximum hours of service.

Employees subject to the Secretary of Transportation’s jurisdiction are exempt from the FLSA’s maximum hour and overtime provisions, and the motor carrier has the burden to show that an employee is exempt, the 7th Circuit noted.

Many motor carriers engage in both interstate and intrastate commerce, but a motor carrier employee cannot be subject to the jurisdiction of both the Secretary of Labor and the Secretary of Transportation simultaneously. Citing Goldberg v. Faber Indus., Inc., 291 F.2d 232, 234-35 (7th Cir. 1961), the Circuit Court held that an employee comes within the Secretary of Transportation’s jurisdiction so long as the employee is “subject, at any time, to be[ing] assigned to interstate trips.”

In the District Court, Hix submitted an affidavit from its corporate secretary, Gail Neil, in support of its claim that the FLSA motor carrier exemption applied to Johnson because the company routinely provides out-of-state services. The appeals court disagreed.

In its opinion, Bobby Johnson Jr. v. Hix Wrecker Service Inc., et al., No. 09-3023, the court held that Neil’s affidavit did not show that Hix engaged in interstate commerce within a “reasonable period of time” prior to the time during which it claims the exemption for Johnson. It also held that the affidavit did not establish that Johnson was subject to being used in interstate commerce during the four-month period or during any other “reasonable period of time.”

Johnson argued that the District Court erred in not finding that he was entitled to summary judgment on his claim that the owners and secretary – as employers under the FLSA –  were liable for unpaid wages. The District Court, finding that Johnson was exempt, did not address that issue, so the appeals court remanded for further proceedings consistent with its opinion.