Tews v. Renzenberger, Inc.

• Decision Date: 06 January 2009
• Docket Number: Case No. 08-2064-JWL.
• Citation: 592 F.Supp.2d 1331
• Parties: Gary TEWS et al., Plaintiffs, v. RENZENBERGER, INC., Defendant.
• Court: U.S. District Court — District of Kansas

592 F.Supp.2d 1331

Gary TEWS et al., Plaintiffs, v. RENZENBERGER, INC., Defendant.

Case No. 08-2064-JWL.

United States District Court, D. Kansas.

January 6, 2009.

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Ashlea G. Schwarz, George A. Hanson, Stueve Siegel Hanson LLP, Kansas City, MO, Charles G. Frohman, Donald H. Nichols, Paul J. Lukas, Nichols Kaster, PLLP, Minneapolis, MN, for Plaintiffs.

Daniel B Boatright, Spencer Fane Britt & Browne LLP KC, Kansas City, MO Jeannie M. Deveney, Shawn M. Ford, Spencer Fane Britt & Browne, Overland Park, KS, for Defendant.

MEMORANDUM & ORDER

JOHN W. LUNGSTRUM, District Judge.

Plaintiffs, individuals currently or formerly employed by defendant Renzenberger, Inc. as road drivers, filed this suit on behalf of themselves and others similarly situated seeking overtime compensation pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207. In July 2008, the court conditionally certified this case as a collective action under 29 U.S.C. § 216(b) on behalf of all road drivers who worked for defendant at any time from August 10, 2005 to the present, other than those individuals who were employed as road drivers exclusively in California during that time period.

Defendant does not dispute that it is a covered employer for purposes of the FLSA, does not dispute that plaintiffs often worked more than 40 hours per workweek and does not dispute that it has not paid overtime compensation to plaintiffs. According to defendant, plaintiffs, at all pertinent times, have been exempt from the overtime provisions of the FLSA. Indeed, it is undisputed by the parties that plaintiffs, until August 10, 2005, were exempt from the FLSA's overtime provisions under the "motor carrier" exemption. 29 U.S.C. § 213(b)(1). On August 10, 2005, the Motor Carrier Act was amended in certain respects such that plaintiffs contend the motor carrier exemption ceased applying to them on that date. Defendant contends that the motor carrier exemption continued to apply to plaintiffs after August 10, 2005. Defendant concedes, however, that Congress, in June 2008, effectively eliminated the availability of the motor carrier exemption for employees operating non-commercial motor vehicles in interstate commerce such that, beginning in June 2008, the motor carrier exemption no longer applies to the vast majority of plaintiffs. Nonetheless, defendant has continued to deny overtime compensation to plaintiffs on the grounds that, regardless of the applicability of the motor carrier exemption, plaintiffs at all times have been and remain exempt from the overtime provisions of the FLSA by virtue of the rail carrier exemption, 29 U.S.C. § 213(b)(2).

The parties have filed cross-motions for summary judgment asking the court to resolve whether plaintiffs are exempt from the overtime provisions of the FLSA under the rail carrier exemption. In their motion for summary judgment, plaintiffs also ask the court to resolve whether plaintiffs, beginning on August 10, 2005, are exempt from the overtime provisions of the FLSA under the motor carrier exemption. The parties recognize, of course, that the court need not address the motor carrier exemption if it concludes that plaintiffs are exempt from the overtime provisions of the FLSA under the rail carrier exemption.

I. Facts

Defendant Renzenberger, Inc., a Kansas corporation headquartered in Lenexa, Kansas, provides rail crew transportation services by motor vehicle to railroads, including Norfolk Southern Railway, Union Pacific Railroad and Burlington Northern & Santa Fe Railroad. Defendant's sole business is the provision of rail crew transportation services and it offers such services only to the railroad industry. It does not offer its services to the general public and, in fact, defendant's contracts with its railroad clients prohibit defendant from transporting anyone other than railroad employees.

Plaintiffs in this case are current and former "road drivers" employed by defendant. Defendant's road drivers are primarily responsible for transporting rail crews, primarily engineers and conductors, by motor vehicle to and from various destinations. Because road drivers are most often utilized to "relieve" rail crews who have exhausted their federally mandated maximum hours of service and to replace those crews with "fresh" crews, road drivers provide motor vehicle transportation services to and from rail yards, hotels and any number of random points along a rail line, generally within a 250-mile radius of a terminal area.¹ In performing their jobs, road drivers travel on public highways and cross state lines as their trips require.

Defendant's road drivers typically transport rail crews in vans that seat eight or fewer passengers, including the driver. Some road drivers, however, operate larger vans (deemed "commercial motor vehicles") on some occasions. Commercial motor vehicles, however, make up only four percent of defendant's fleet of vehicles. In other words, ninety-six percent of defendant's vehicles seat no more than eight passengers.

II. Standard

Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact" and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court views all evidence and reasonable inferences in the light most favorable to the nonmoving party. Clements v. Serco, Inc., 530 F.3d 1224, 1227 (10th Cir.2008) (citing Fye v. Okla. Corp. Comm'n, 516 F.3d 1217, 1222-23 (10th Cir.2008)). In addition, exemptions under the FLSA must be "narrowly construed" against the employers seeking to assert them in light of the FLSA's "broad remedial aims." Id. (quoting Ackerman v. Coca-Cola Enters., 179 F.3d 1260, 1264 (10th Cir.1999)); accord Rodriguez v. Whiting Farms, Inc., 360 F.3d 1180, 1184 (10th Cir.2004). Further, as the employer, defendant bears the burden of proving that plaintiffs fit "plainly and unmistakably" within the terms and spirit of the asserted exemption. Clements, 530 F.3d at 1227; Rodriguez, 360 F.3d at 1184.

Accordingly, defendant is not entitled to summary judgment unless it can establish that the undisputed facts (or plaintiffs' version of any disputed facts) plainly and unmistakably fit within the asserted exemption. See Welding v. Bios Corp., 353 F.3d 1214, 1218 (10th Cir.2004). If there are genuine and material factual disputes such that defendant could meet its burden of proof only if the jury resolved the factual disputes in its favor, then the matter is not appropriate for summary judgment and it should proceed to trial. See id. If, however, the summary judgment record, when construed most favorably to defendant, does not clearly and unmistakably establish the asserted exemption, then summary judgment may be entered for the appropriate plaintiffs. See id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

III. Rail Carrier Exemption

All parties move for summary judgment on the issue of whether plaintiffs are exempt from the overtime provisions of the FLSA under the rail carrier exemption, 29 U.S.C. § 213(b)(2). Under § 213(b)(2), the overtime provisions of the FLSA do not apply to "any employee of an employer engaged in the operation of a rail carrier subject to part A of subtitle IV of Title 49."² Defendant urges that its road drivers clearly fit within the exemption because defendant unquestionably is "engaged in the operation of a rail carrier." According to defendant, its services are indispensable to the operation of its clients who are "rail carriers subject to part A of subtitle IV of Title 49." Plaintiffs, on the other hand, contend that a proper reading of § 213(b)(2) requires defendant to establish that it is "subject to part A of subtitle IV of Title 49," not simply that it provides indispensable services to railroads who are subject to part A of subtitle IV of Title 49. The legislative history underlying the rail carrier exemption supports plaintiffs' interpretation of the exemption.³

A. Legislative History of the Rail Carrier Exemption

When the FLSA was enacted in 1938, the rail carrier exemption exempted from the overtime provisions of the FLSA "any employee of an employer subject to the provisions of part 1 of the Interstate Commerce Act." See Magnussen v. Ocean S.S. Co. of Savannah, 162 F.2d 77 (2d Cir. 1947); accord Cederblade v. Parmelee Transp. Co., 166 F.2d 554, 555 (7th Cir. 1948). Part 1 of the Interstate Commerce Act, sections 1 through 27 of Title 49 of the United States Code, regulated railroad operations. See Cederblade, 166 F.2d at 555. As explained in some detail by the district court in Keele v. Union Pacific Railroad Co., 78 F.Supp. 678 (S,D.Cal. 1948), when the FLSA was first introduced in the Senate in 1937, the Act's provisions included all railroad employees with the exception of those employees employed in an executive, professional or administrative capacity. Id. at 681. The railroad industry objected to the inclusion of railroad employees. Id. Ultimately, the rail carrier exemption was proposed to address the objection of the railroad industry. See id. at 681-82. Supporting the amendment, one congressman explained:

For a long period of time the House has eliminated railroad workers from various acts which apply to industrial workers. This was done in the case of the Wagner Labor Relations Act, again in the passage of the Social Security Act, and prior to that in the passage of the National Recovery Act. The railroads and the railroad industry have their own social and labor legislation. As you know, they have the Adamson Hours of Service Act, the Railroad Labor Act with its Mediation and Arbitration Boards, and they have the Railroad Retirement Act. Therefore there is sufficient precedent for the committee to accept the amendment of the distinguished gentleman from Ohio and in doing so eliminate all...