699 F.2d 1060 (11th Cir. 1983), 81-7490, Alewine v. City Council of Augusta, Ga.

Docket Nº:81-7490, 81-7789.
Citation:699 F.2d 1060
Party Name:Jimmy Allen ALEWINE, et al., Plaintiffs-Appellants, v. CITY COUNCIL OF AUGUSTA, GEORGIA, Defendant-Appellee. C.D. JOINER, on behalf of himself and others similarly situated, Plaintiffs-Appellees, v. CITY OF MACON, Defendant-Appellant.
Case Date:March 07, 1983
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1060

699 F.2d 1060 (11th Cir. 1983)

Jimmy Allen ALEWINE, et al., Plaintiffs-Appellants,

v.

CITY COUNCIL OF AUGUSTA, GEORGIA, Defendant-Appellee.

C.D. JOINER, on behalf of himself and others similarly

situated, Plaintiffs-Appellees,

v.

CITY OF MACON, Defendant-Appellant.

Nos. 81-7490, 81-7789.

United States Court of Appeals, Eleventh Circuit

March 7, 1983

Page 1061

Charles L. Wilkinson, III, Augusta, Ga., for plaintiffs-appellants in No. 81-7490.

Stephen E. Shepard, Samuel F. Maguire, Stanley G. Jackson, Harris, McCracken & Jackson, N. Kenneth Daniel, Augusta, Ga., William T. Coleman, Jr., Washington, D.C., for City of Augusta.

O'Melveny & Myers, William T. Coleman, Jr., Washington, D.C., amicus curiae for American Public Transit Ass'n.

Jones, Cork, Miller & Benton, W. Warren Plowden, Jr., Macon, Ga., William T. Coleman, Jr., Washington, D.C., for defendant-appellant in No. 81-7789.

Mincey & Kenmore, David L. Mincey, Macon, Ga., Jacobs, Burns, Sugarman & Orlove, Linda Hirshman, Chicago, Ill., for plaintiffs-appellees in No. 81-7789.

Joseph M. Woodward, Beate Bloch, U.S. Dept. of Labor, Washington, D.C., for intervenor United States.

Appeal from the United States District Court for the Middle District of Georgia.

Appeal from the United States District Court for the Southern District of Georgia.

Before TJOFLAT and HATCHETT, Circuit Judges, and MORGAN, Senior Circuit Judge.

HATCHETT, Circuit Judge:

These cases, consolidated on appeal, require that we decide whether a municipality's operation of an urban mass transit system constitutes a traditional governmental function. If so, the tenth amendment limitation upon congressional exercise of the commerce power bars application of the overtime compensation provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C.A. Sec. 207 (Supp.1982), to those public employees engaged in urban mass transit service. If not, the overtime compensation provisions of the FLSA are applicable and require the municipality to pay mass transit employees time and one-half for all hours worked in excess of forty per work week. We hold that publicly-owned mass transit is not a traditional governmental function in these cases.

I. BACKGROUND

  1. Proceedings Below

    Jimmy Allen Alewine and a class of bus drivers of the Augusta Transit Department brought suit against the City Council of Augusta (Augusta) seeking to recover overtime pay under the FLSA, 29 U.S.C.A. Sec. 207 (Supp.1982), and under a similar provision of the Augusta City Code, Sec. 2-48. 1

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    The complaint alleged that Augusta's operation of a bus service was not a traditional governmental function; and therefore, the plaintiff drivers were entitled to overtime pay for all hours worked in excess of forty per week beginning May 1, 1976. The City of Augusta acknowledged that the FLSA on its face applied and required payment of overtime after forty hours, but contended that application of the FLSA was unconstitutional in light of the Supreme Court's invalidation of the overtime provisions as applied to certain state and local governmental employees in National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976).

    The district court held that the municipal bus system in Augusta is an integral operation of a traditional governmental function and therefore the FLSA's overtime provisions may not constitutionally apply to the system's employees. Alewine v. City Council of Augusta, 505 F.Supp. 880, 889 (S.D.Ga.1981). Exercising pendent jurisdiction over the municipal ordinance claim, the district court awarded partial backpay to the plaintiff bus drivers for hours worked in excess of forty per week since May 1, 1976. The court determined that, in view of the City of Augusta's good faith throughout the time period relevant to the lawsuit, equity required an award of less than full backpay for violation of the municipal ordinance. Thus, the court limited the plaintiffs' recovery to two-thirds of the back pay sought. 505 F.Supp. at 893-94. The plaintiff bus drivers bring this appeal.

    In a similar case, C.D. Joiner and a class of employees of the Macon Transit System sued the City of Macon (Macon) seeking a monetary recovery for hours worked in excess of forty per week since May 1, 1976, and a permanent injunction compelling Macon to pay time and one-half for overtime in the future. The plaintiff class alleged that a public transit system such as that in Macon, which serves only a portion of the community's citizens, is not a traditional governmental function. Taking the contrary position, Macon contended that employees of a publicly-owned mass transit system provide a traditionally governmental service and are therefore not covered by the FLSA. Even if public mass transit were considered a traditional governmental function, Macon argued that the invalidation of the overtime provisions to certain state and local governmental employees in National League precludes application of those provisions to all local government employees in the absence of a constitutionally valid amendment to the FLSA.

    The district court found that the City of Macon's urban mass transit system is not an integral operation in the areas of traditional governmental functions and therefore held the overtime provisions of the FLSA constitutionally inapplicable to the plaintiff class of municipal transit employees. In addition, the district court rejected the City of Macon's argument that, because the overtime provisions of the FLSA have been held inapplicable to certain state and local governmental employees, the overtime provisions are inapplicable to all such employees in the absence of a congressional re-enactment of a constitutionally valid amendment. Citing the FLSA's severability clause, 2 which calls for application in the event the FLSA is found unconstitutional as applied to certain employees, the district court entered partial summary judgment for the plaintiff class of employees. 3 The City of Macon brings this appeal.

  2. Facts

    Alewine v. City Council of Augusta

    Prior to 1950, local bus service in Augusta was provided by the Georgia Power Company. In 1950, the Augusta Coach Company, a privately-owned corporation, purchased the service from Georgia Power and began operating local bus service under a franchise granted by the City of Augusta. Citing

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    steady decreases in net income and working capital, Augusta Coach notified the City of Augusta in early 1973 that it intended to discontinue service. In April, 1973, the City of Augusta executed an option to purchase the assets of the Augusta Coach Company and for six months thereafter, Augusta provided operating assistance to Augusta Coach while an application for federal assistance under UMTA was prepared. By letter dated November 7, 1973, the City of Augusta purchased the assets of Augusta Coach with federal assistance and commenced local transit operations through the Augusta Transit Department on November 21, 1973.

    Augusta stipulated that had it not been for the federal grant it would not have purchased the assets of the Augusta Coach Company. Subsequent applications for capital assistance and operating grants were approved by the Urban Mass Transportation Administration. Under the terms of the grant contract, the City of Augusta guaranteed that its acquisition of the bus system would not adversely affect the system's employees, that all existing rights and benefits of employees would be continued, and that it would enter into a collective bargaining relationship with the plaintiff bus drivers' union. This guarantee was required by UMTA, 49 U.S.C.A. Sec. 1609(c) (1976).

    The bus service provided by the Augusta Transit Department is similar to that provided by the Augusta Coach Company prior to the public takeover. Fixed route scheduled bus service and charter services are provided. The transit department retained the drivers and non-operating personnel employed by the Augusta Coach Company and continues to charge passengers a fare for riding the bus. Although non-operating employees are paid overtime compensation at time and one-half for hours beyond forty per work week, the plaintiff bus drivers are paid overtime only after forty-eight hours.

    Since the City of Augusta's acquisition of the local transit system, the federal government through the Urban Mass Transportation Administration has been extensively involved with the system. The federal government has provided funding for approximately 80% of the transit department's total capital outlays. With federal assistance, Augusta has purchased new buses, constructed new bus shelters, and renovated the transit department's maintenance garage. One-half of the system's operating deficit is financed by the federal government. Furthermore, were it not for the operating grants from the federal government, the City of Augusta could not afford to operate the local transit system.

    On this record, the district court held that the FLSA may not constitutionally apply to the plaintiff employees of the transit department because "the operation of the City Transit Department of Augusta is an integral operation of traditional governmental function." 505 F.Supp. at 889. The district court further held that Augusta had not waived its constitutional defense by accepting federal funds pursuant to the UMTA, 49 U.S.C.A. Sec. 1602 (Supp.1982), and that the terms of the agreement between Augusta and the federal government did not require compliance with the FLSA. Recognizing the difficulty of the question and the sparse guidance provided by National League, the district court concluded, however, that traditional governmental functions need not be "time honored, hoary, or historic," but include "those which the public...

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