PENNSYLVANIA RECORD

PHILADELPHIA – On May 12, a federal appeals court affirmed a lower court’s decision in a class action lawsuit that prevents drivers for a West Chester-based charter bus company from being eligible for overtime compensation pay.

Judge Patty Shwartz, of the U.S. Court of Appeals for the Third Circuit, and in speaking for colleagues Judge Thomas L. Ambro and Judge Thomas I. Vanaskie, ruled in favor Krapf’s Coaches, Inc. (KCI), and against the class of 34 KCI drivers led by Joseph Resch.

“Because plaintiffs fall within the ‘Motor Carrier Act exemption’ to these statutes’ overtime provisions, the District Court correctly granted summary judgment to KCI and we will therefore affirm,” Shwartz said.

Resch filed the initial action in November 2011, seeking unpaid overtime through both the Fair Labor Standards Act of 1938 (FLSA) and the Pennsylvania Minimum Wage Act of 1968 (PMWA).

Shwartz explained the plaintiffs in question were KCI’s Transit Division drivers who provided bus and shuttle service on both intrastate and interstate routes.

“Plaintiffs, at some point during the relevant time period of 2009 through 2012, worked more than forty hours in a week without receiving overtime pay. Of the 13,956 total ‘trips’ plaintiffs drove, 178 required them to cross state lines. Sixteen plaintiffs never crossed state lines, eight crossed state lines only one time, and five crossed state lines fewer than five times,” Shwartz said.

Though given the opportunity to certify the group as plaintiffs in his lawsuit, Resch’s suit was ultimately defeated through the trial court’s citation of exemptions to the FLSA and PMWA, with respect to motor carrier drivers.

Shwartz said, “This appeal requires consideration of two statutes: the FLSA and the Motor Carrier Act of 1935 (MCA). The FLSA ‘requires employers to pay overtime compensation to employees who work more than forty hours per week, unless one or another of certain exemptions applies.’

“The MCA vests in the Department of Transportation power to establish reasonable requirements with respect to qualifications and maximum hours of service of employees and safety of operation and equipment of common and contract carriers by motor vehicle,” the exemption of which is the contested issue of the litigation.

Shwartz outlined the criteria by which the Third Circuit judged the matter.

“Two considerations dictate whether the MCA exemption applies: the class of the employer and the class of work the employees perform. Specifically, the MCA exemption applies if the employer is a carrier subject to the DOT’s jurisdiction and the employee is a member of a class of employees that ‘engages in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the MCA,’” Shwartz explained.

As KCI is a “motor carrier” company subject to the auspices of the DOT, the first consideration prong of the legal criteria was satisfied.

“We must therefore examine whether plaintiffs—many of whom rarely or never crossed state lines—satisfy the second requirement by being a member of a class of employees engaging ‘in activities of a character directly affecting the safety of operation of motor vehicles in the transportation…of passengers or property’ in interstate commerce,” Shwartz said.

Shwartz found such interstate travel a vital component of KCI’s business operations.

“The undisputed evidence establishes that, during the relevant time period, 6.9 percent of all trips drivers took were interstate, as much as 9.7 percent of the Transit division’s annual revenues derived from interstate routes, and KCI always operated at least one interstate route per month,” Shwartz said.

“With regard to distribution of interstate routes, KCI had a ‘company policy’ of training its drivers on as many routes as possible, retaining discretion to assign drivers to drive either interstate or intrastate routes – at any time – on which they had been trained, and disciplining any driver who refused.”

Given this evidence, Shwartz and her colleagues therefore found it appropriate to uphold the lower court’s decision to bar the drivers from overtime compensation.

“Because KCI is an employer under the jurisdiction of the DOT and plaintiffs are members of a class of employees who could reasonably be expected to drive interstate routes as part of their duties, the MCA exemption to the FLSA applies and plaintiffs are ineligible for FLSA overtime wages,” Shwartz wrote.

The plaintiffs had been seeking back pay damages liquidated damages and pre-judgment interest, attorney’s fees, court costs and any other relief the Court deemed proper in this matter.

The plaintiffs were represented by Peter D. Winebrake, R. Andrew Santillo and Mark J. Gottesfeld of Winebrake & Santillo, in Dresher.

The defendant was represented by Randall C. Schauer and Jennifer J. Hanlin of Fox Rothschild, in Exton.

U.S. District Court for the Eastern District of Pennsylvania case 2:11-cv-06893

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com