On June 6, 2008, President Bush signed into law the SAFETEA-LU Technical Corrections Act of 2008. This legislation should have a tremendous impact on pending litigation involving overtime disputes under the Fair Labor Standards Act (FLSA).
Under the FLSA, employees subject to the authority of the Secretary of Transportation are exempt from the act's overtime requirements. Pursuant to the Motor Carrier Act, the Secretary of Transportation has the authority to prescribe requirements for employees of a motor carrier or motor private carrier. Since certain employees of a motor carrier or motor private carrier are subject to this authority, they have traditionally been exempt from the overtime requirements of the FLSA. This exemption is commonly referred to as the motor carrier exemption.
The motor carrier exemption covered many employees who transported goods in interstate commerce, regardless of the size of the vehicle used to transport those goods. However, on August 10, 2005, President Bush signed into law the Safe Accountable Flexible Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Section 4142 of SAFETEA-LU attempted to streamline the vehicle inspection process at US borders by allowing certain vehicles to pass without inspection. It did so by changing the definitions of motor carrier and motor private carrier to include only commercial motor vehicle transportation. Generally, a motor vehicle is not considered commercial unless it weighs more than 10,000 pounds.
Unfortunately for many employers, by changing these definitions, Congress inadvertently altered the motor carrier exemption. Under the language in effect after SAFETEA-LU, many workers previously exempt from the FLSA overtime requirements were no longer exempt because they drove vehicles weighing less than 10,000 pounds. To make matters worse, many employers were not aware that SAFETEA-LU eliminated their exemption from the overtime requirements of the FLSA. As a result, a number of class action lawsuits were filed throughout the country alleging overtime violations after August 10, 2005 involving trucks weighing less than 10,000 pounds. Courts have consistently held that the motor carrier exemption applied to such employees prior to August 10, 2005 but that the exemption did not apply after that date because of SAFETEA-LU.
Although Congress has since admitted this unintended consequence of SAFETEA-LU, it has taken almost three years to fix it. The Corrections Act, however, offers the opportunity for immediate relief for employers involved in FLSA litigation arising after SAFETEA-LU. Section 305 of the Corrections Act restores the definitions of motor carrier and motor private carrier to their exact form prior to the enactment of SAFETEA-LU. Also, the act (Section 121) indicates that these definitions are restored retroactively. In other words, the definitions of motor carrier and motor private carrier should be treated as if they were never changed by SAFETEA-LU in the first place. To the extent that courts apply the changes implemented by the Corrections Act retroactively, the motor carrier exemption should be restored from August 10, 2005 to June 6, 2008. The Corrections Act further states, however, that after June 6, 2008 such employers will be subject to overtime requirements notwithstanding the motor carrier exemption. Nonetheless, many employers involved in FLSA overtime litigation stemming from that time period have strong incentive to seek dismissal or a limitation on liability.
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