Barlow v. Logos Logistics, Inc.
| Decision Date | 20 July 2014 |
| Docket Number | Case No. 10–cv–14371. |
| Citation | 34 F.Supp.3d 686 |
| Parties | Gerald BARLOW, et al., Plaintiffs, v. LOGOS LOGISTICS, INC. and Apptree, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
OPINION TEXT STARTS HERE
Ordered accordingly. Reed E. Eriksson, Oliver Law Group, P.C., Nick Suciu, III, Alyson L. Oliver, Rochester, MI, for Plaintiffs.
Paul E. Robinson, Sullivan & Leavitt, Northville, MI, for Defendants.
At issue is whether the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., requires a staff leasing agency to pay overtime wages to drivers whom it has leased to a motor carrier and whose work directly affects the safety of vehicles in interstate commerce. The Court finds that it does not.
Both companies denied liability. In pretrial motions, the companies principally argued that an FLSA exemption for employees covered by the Motor Carrier Act (“MCA”), 49 U.S.C. § 31502, relieved them of liability. The Court agreed in part. It granted summary judgment to Logos on that theory after finding that Logos was a motor carrier subject to the Secretary of Transportation's jurisdiction and that the Drivers' activities directly affected the safety of vehicles in interstate commerce. But the Court denied summary judgment to Apptree. Because Apptree was not a motor carrier, the Court concluded that it could benefit from the exemption only if all considerations bearing on the economic reality of the situation showed that the agency jointly had jointly employed the Drivers with Logos. Factual disputes, however, prevented the Court from resolving the joint employment question on summary judgment.
The case went to trial on the joint employment issue. Although Apptree moved for a directed verdict after the close of evidence, the Court permitted the case to go to the jury. And the Court instructed the jury to consider nineteen factual questions on a special verdict form relevant to the legal issue of whether a joint employment relationship existed. The jury returned a mixed verdict.
After trial, the Court questioned the assumption that Apptree's liability depends on a finding of joint employment considering the economic reality of the Drivers' employment relationships. The Court therefore requested supplemental briefing from the parties and an amicus brief from the DOT.
The FLSA requires employers to pay employees engaged in commerce at one and one-half their regular rate of pay for all time worked in excess of forty hours per week. See 29 U.S.C. § 207(a)(1). But exempt from the FLSA's overtime wage provisions is “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service” under 49 U.S.C. § 31502. 29 U.S.C. § 213(b)(1). The Court holds that this exemption bars the Drivers' overtime claims against Apptree.
Section 31502 empowers the Secretary to prescribe the “qualifications and maximum hours of service of employees of ... a motor carrier.” 2 49 U.S.C. § 31502(b)(1). As interpreted, this section gives the Secretary jurisdiction over workers (1) who are employed by a motor carrier engaged in interstate commerce and (2) whose activities directly affect the safety of vehicle operations. See Vaughn v. Watkins Motor Lines, Inc., 291 F.3d 900, 904 (6th Cir.2002); Benson v. Universal Ambulance Serv., Inc., 675 F.2d 783, 785 (6th Cir.1982). Because the Court has already determined that the Drivers meet the second requirement and that Logos is a motor carrier, the focus is now on whether the Drivers were also employees of Logos when they worked for Apptree.
A few courts have concluded that leased drivers are employees. For example, Moore v. Universal Coordinators, Inc., 423 F.2d 96 (3d Cir.1970), held that drivers leased to a private motor carrier were its employees and exempt from the FLSA's overtime wage requirements. Interpreting the portion of § 31502 concerning “employees ... of a private motor carrier,” the court observed that the Secretary had promulgated regulations concerning the qualifications and hours of employees that applied to leased drivers. Id. at 98. And the court concluded that the Secretary had not exceeded his power in doing so, because the primary purpose of the MCA was to grant the “Secretary power to regulate carriers' employees in the interest of safety of operation.” Id. at 98–100.
Other courts have reached similar results. See, e.g., Songer v. Dillon, 618 F.3d 467 (5th Cir.2010); Tidd v. Adecco USA, Inc., No. 07–11214, 2010 WL 996769 (D.Mass. Mar. 16, 2010). But whereas Moore relied heavily on the Secretary's understanding of the MCA without reference to the companies' relative responsibilities for managing or paying the leased drivers, other decisions pursued a more fact-bound analysis.
Songer v. Dillon, 618 F.3d 467 (5th Cir.2010), is representative. While recognizing the MCA's aim of promoting safety, the Songer court ultimately concluded that the drivers were subject to the Secretary's jurisdiction because a commercial hauler and staff leasing agency jointly employed them. Id. at 472–73. The court's reliance on joint employment is significant. Far from using joint employment casually to describe the situation of drivers receiving a paycheck from one company and receiving directions from another, the court understood the phrase to signify a legal concept taken from employment law. Hence, to determine if the hauler and agency were joint employers, the court turned to an unpublished district court case that evaluated a similar situation using the FLSA's economic reality test, see id. at 473 (citing Tidd v. Adecco USA, Inc., No. 07–11214, 2010 WL 996769 (D.Mass. Mar. 16, 2010))—a multi-factor test that requires examining the “circumstances of the whole business activity” to see if an employment relationship exists, Donovan v. Brandel, 736 F.2d 1114, 1116 (6th Cir.1984). The court then proceeded to analyze the hauler's and the agency's relative responsibilities for hiring, training, payroll, control, and operations—all considerations relevant to the economic reality test. See Songer, 618 F.3d at 473. And having found a joint employment relationship existed, the court held that the exemption applied. See Songer, 618 F.3d at 473.
Though the Songer court said little about why it considered either joint employment or the economic reality test important, by using both, the court suggested that the economic reality of a situation determines if the Secretary of Transportation has jurisdiction over a leased employee. The resulting decision thereby subjected the Secretary's jurisdiction over drivers to the particular managerial and contractual arrangements adopted by each motor carrier.
Initially, the parties here modeled their analysis after the same unpublished decision on which Songer relied. See, e.g., Pl.'s Resp. re Sec. Mot. Summ. J. 11–12, ECF No. 28 (citing Tidd, 2010 WL 996769). They accordingly argued at summary judgment and at trial that the motor carrier exemption applies only if—considering the economic reality of the relationship—Apptree jointly employed the Drivers with Logos. Although the Drivers urge the Court to continue using this framework, see Pl.'s Second Post–Trial Br. 5–8, ECF No. 72, the Court finds it sets forth the wrong approach.
The basic error in the approach is that it requires interpreting the MCA through the FLSA. Both the concept of joint employment and the economic reality test come from cases and regulations interpreting the FLSA. See, e.g., 29 C.F.R. § 791.2 (joint employment); Goldberg v. Whitaker House Co-op., Inc., 366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961) (economic reality test). But language in the FLSA does not govern the motor carrier exemption's question; the meaning of “employees” in the MCA does. See Levinson v. Spector Motor Service, 330 U.S. 649, 676–77 & n. 19, 67 S.Ct. 931, 91 L.Ed. 1158 (1947). The FLSA language setting forth the motor carrier exemption is only an acknowledgment that the Department of Labor's jurisdiction yields to that of the DOT. See id. at 661, 676–77, 67 S.Ct. 931; cf. Southland Gasoline Co. v. Bayley, 319 U.S. 44, 48–49, 63 S.Ct. 917, 87 L.Ed. 1244 (1943) (). Asking whether the economic reality test shows a motor carrier jointly employed a driver with a leasing agency makes little sense—unless one assumes that both statutes share a common definition of “employees.”
Whether the Drivers think the two statutes have the same meaning in all cases or just in cases involving the motor carrier exemption is unclear, but plainly the text cannot be a chameleon with the same words bearing different meanings in different contexts. See Clark v. Martinez, 543 U.S. 371, 382–83, 386, 125 S.Ct. 716, 160 L.Ed.2d 734 (2005) (). Whatever meaning “employees” in § 31502 has for determining who is subject to the motor carrier exemption it must also have for assessing the Secretary's authority to prescribe qualifications for loaders and mechanics. The “lowest common denominator, as it were, must govern” all of the law's applications. Clark, 543 U.S. at 380, 125 S.Ct. 716 (2005). And if this is true—as it must be—the Drivers' argument here implies that the Secretary should consult FLSA cases involving the economic reality test and, by extension, Department of Labor regulations concerning joint employment to determine what authority § 31502—a section within the MCA—grants. That cannot be correct.
There are also other reasons to reject the argument. For one, existing interpretations of the FLSA and MCA are irreconcilable. The FLSA defines the...
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