On December 5, 2014, Winebrake & Santillo filed a brief with the Court of Appeals for the Third Circuit which seeks to reverse a district court’s grant of summary judgment against Transit drivers of Krapf’s Coaches, Inc. who allege that they were misclassified as overtime-exempt under the Motor Carrier Act Exemption to the overtime premium pay requirements of the federal Fair Labor Standards Act and Pennsylvania Minimum Wage Act. See Resch v. Krapf’s Coaches, Inc., 2013 U.S. Dist. LEXIS 123438 (E.D.Pa. Aug. 29 2013). Below is the contents of that brief
I. STATEMENT OF ISSUE PRESENTED FOR REVIEW
Whether the District Court erred in granting summary judgment for Krapf’s on the grounds that each Appellant fell within the Motor Carrier Act Exemption (“MCA Exemption”) to the FLSA and PMWA’s overtime pay mandate.
II. STATEMENT OF CASE
A. Relevant Facts
Defendant-Appellee Krapf’s Coaches, Inc. (“Krapf’s”) is a bus company located in West Chester, Pennsylvania. See Joint Appendix (“JA”) at 33a at ¶ 5 (Complaint); see also id. at 67a at ¶ 3 (Krapf’s Concise Statement of Undisputed Material Facts). Krapf’s operates a Transit Division, which provides shuttle services to, inter alia, private companies, non-profit organizations, and local colleges. See JA at 33a at ¶ 10 (Complaint); see also id. at 67a at ¶ 3 (Krapf’s Concise Statement of Undisputed Material Facts). Since 2009,[1] Krapf’s Transit Division has operated a total of thirty-two routes. See 91a-93a (Krapf’s Exhibit MSJ-1). Only four of these routes entailed travel outside of Pennsylvania. Id. Moreover, prior to May 2011, only one route entailed travel outside of Pennsylvania. Id.
Appellants are thirty-four current/former drivers employed by Krapf’s and assigned to its Transit Division. See generally JA at 32a-38a (Complaint). Krapf’s admits that Appellants worked over forty hours per week without receiving any extra overtime premium pay. See JA at 68a at ¶ 4 (Krapf’s Concise Statement of Undisputed Material Facts). According to Krapf’s, Appellants are exempt from the FLSA’s and PMWA’s overtime pay mandate under the MCA Exemption. Id.
During discovery, Krapf produced detailed data pertaining to each trip made by each Appellant during the relevant time period after November 2008. See JA at 565a-568a at ¶ 49 (Appellants’ Response to Krapf’s Concise Statement of Undisputed Material Facts); 136a (Krapf’s Exhibit MSJ-4). This data (which is uncontroverted) reveals that Appellants’ interstate trips were either non-existent or extraordinarily rare. As summarized in the following table,[2] of 13,957 total trips made by Appellants, only 178 (or 1.3%) required Appellants to cross state lines:
[Table Here]
Notably, sixteen Appellants never crossed state lines, eight Appellants traveled out-of-state only once, and an additional five Appellants traveled out-of-state on five or fewer occasions. Id.
B. Procedural History
On November 3, 2011, Joseph Resch (“Resch”) initiated this collective action lawsuit by filing a Complaint that demanded a jury trial. See JA at 32a (Complaint). Resch alleged that Krapf’s violated the FLSA and PMWA by failing to pay overtime premium compensation to himself and other drivers employed in Krapf’s Transit Division. Id.[3]
After Krapf’s answered, see JA at 39a, the parties conducted limited discovery concerning the propriety of conditionally certifying the collective under 29 U.S.C. § 216(b). See JA at 46a (January 9, 2012 Stipulated and Proposed Scheduling Order). On March 3, 2012, Resch moved for conditional certification, and on June 29, 2012, the District court entered an order conditionally certifying the action. See JA at 49a-57a (June 29, 2012 Memorandum Opinion and Order); see also Symczyk v. Genesis Healthcare Corp., 656 F.3d 189, 192-93 (3d Cir. 2011) (discussing FLSA conditional certification).
In July 2012, a notice form approved by the District Court was mailed to potential members of the collective. See JA at 58a-63a (July 18, 2012 Order). Ultimately, forty-three current/former drivers elected to join (or “opt-in” to) the action. See JA at 25a-29a (District Court Docket).[4] Nine drivers subsequently withdrew from the action, id., leaving a total of thirty-four plaintiffs (all of whom are Appellants herein).
Following the close of the FLSA opt-in period, the parties engaged in and completed discovery.
In April 2013, Krapf’s moved for summary judgment, seeking dismissal of Appellants’ FLSA claim on grounds that Appellants are overtime-exempt under the MCA Exemption. See JA at 66a.[5] Due to an apparent oversight, Krapf’s did not seek to dismiss Appellants’ PMWA claim. Id.
The summary judgment motion was fully briefed, and, on August 21, 2013, the District Court held oral argument. See id. at 29a (District Court Docket); 711a-757a (Transcript of Argument).
C. The District Court’s FLSA Summary Judgment Opinion
On August 29, 2013, the District Court entered a Memorandum and Order granting Krapf’s summary judgment motion and dismissing Appellants’ FLSA claim. See JA at 4a-21a.
Initially, the District Court rejected Krapf’s argument that so-called “continuum” trips to/from Pennsylvania-based transportation hubs (such as, for example, airports or Amtrak, Greyhound, or SEPTA stations) should be considered “interstate” trips for purposes of the MCA Exemption. See JA at 8a at n.6 (discussing Packard v. Pittsburgh Transportation Co., 418 F.3d 246 (3d Cir. 2005)).
Next, after generally discussing the MCA Exemption’s parameters, see JA at 13a-17a, the District Court observed: “The exemption does not apply if the ‘continuing [interstate] duties of the employee’s job . . . are so trivial, casual, and insignificant as to be de minimus.’” Id. at 14a (quoting 29 C.F.R. § 782.2(b)(3)); see also id. at 16a (“if the employee’s job duties are such that ‘he is . . . (or . . . is likely to be) called upon in the ordinary course of his work to perform either regularly or from time to time,’ interstate driving he comes within the motor carrier exemption” (quoting 29 C.F.R. § 782.2(b)(3)); id. at 15a (MCA Exemption applies if Appellants “could have reasonably been expected to cross state lines as part of their employment”); id. at 20a (“the relevant question is . . . whether [Appellants] could reasonably have been expected to drive interstate.”).
The District Court recognized the undisputed record evidence demonstrating that Appellants’ interstate trips were either non-existent or extraordinarily rare:
In this case, sixteen of the thirty-four opt-in plaintiffs never traveled outside of Pennsylvania. Of the eighteen plaintiffs who did travel interstate, eight traveled interstate once, and five traveled interstate on five or fewer occasions.
JA at 11a. Notwithstanding this evidence, the District Court held that the MCA Exemption barred Appellants’ FLSA claims. See id. at 20a-21a.
In reaching its holding, the District Court did not consider Appellants’ actual driving experiences. See JA at 15a. Instead, it focused on supposedly company-wide evidence such as: (i) the purportedly “indiscriminate” manner by which Krapf’s assigned drivers to various routes, see id. at 17a-18a; (ii) the fact that Krapf’s drivers must comply with various requirements for drivers of commercial motor vehicles, see id. at 18a-19a; and (iii) the fact that between 1.0% and 9.7% of the Transit Division’s revenue came from interstate routes, see id. at 19a-20a.
In the District Court’s view, the above evidence established that “all transit drivers, including [Appellants], could be assigned an interstate route,” JA at 20a. The district court concluded:
While these select [Appellants] happened to have been called upon to drive interstate rather infrequently during the relevant time period, that does not change the fact that the [Appellants] were subject to driving interstate at all times, and were reasonably likely to do so based on [Krapf’s] interstate routes.
Id. Finally, the District Court did not rule on Appellants’ PMWA claim, since Krapf’s summary judgment papers did not address it. See JA at 5a-6a at n.1.
D. Appellants’ Initial Appeal to this Court
Appellants attempted to appeal from the District Court’s August 29, 2013 Memorandum and Order. See Case Number 13-3947. However, because the August 29th Order did not resolve Appellants’ supplemental PMWA claims, this Court dismissed the appeal for lack of finality. See JA at 767a-771a.
On remand, Krapf’s moved for summary judgment as to Appellants’ PMWA claims. See JA at 30a. Krapf’s motion relied primarily on the District Court’s reasoning in its August 29, 2013 opinion entering judgment against Appellants on their FLSA claims. Appellants filed an opposition to the motion. Id.
On July 29, 2014, the District Court entered an order granting Krapf’s summary judgment motion, bringing finality to the district court proceedings. See JA at 22a. Therein, the District Court observed that MCA Exemption is interpreted identically under both the FLSA and the PMWA. Id.
III. RELATED CASES AND PROCEEDINGS
As discussed in section II.D supra, this is the second time that this matter has been before this Court. Appellants are not aware of any other case or proceeding that is in any way related to this appeal that is pending or about to be presented to this Court, any other court, or any state or federal agency.
IV. SUBJECT MATTER AND APPELLATE JURISDICTIONAL STATEMENT
The District Court had jurisdiction over Appellants’ FLSA claim under 29 U.S.C. §216(b) and 28 U.S.C. § 1331, and over their PMWA claim under 28 U.S.C. § 1367. This Court has appellate jurisdiction under 28 U.S.C. § 1291.
V. STATEMENT OF STANDARD OF REVIEW
The District Court’s summary judgment decisions are subject to de novo review. See Lawrence v. City of Philadelphia, 527 F.3d 299, 310 (3d Cir. 2008).
VI. SUMMARY OF ARGUMENT
The District Court correctly observed in its August 2013 opinion that the MCA Exemption (i) applies only if an Appellant’s “job duties are such that ‘he is . . . (or . . . is likely to be called upon in the ordinary course of his work to perform either regularly or from time to time” interstate driving, see JA at 16a (quoting 29 C.F.R. § 782.2(b)(3)); and (ii) does not apply if the “continuing [interstate] duties of [Appellants’] job . . . are so trivial, casual, and insignificant as to be de minimis,” see id. at 14a (quoting 29 C.F.R. § 782.2(b)(3)). In performing its analysis, however, the District Court committed reversible error by failing to perform an individualized analysis that gave sufficient weight to the actual driving experiences of the actual Appellants.
Appellants respectfully submit that this appeal exemplifies how even experienced and highly-regarded jurists can allow the summary judgment device to improperly infringe on the province of the jury. According to the District Court, “the relevant question is . . . whether [Appellants] could reasonably have been expected to drive interstate.” JA at 20a (emphasis supplied). Yet, construing all inferences in Appellants’ favor, a jury could easily conclude that the actual circumstances of the sixteen Appellants who drove 5,739 separate trips without ever crossing state lines do not reasonably harbor such an expectation. It is even more likely that the jury would conclude that out-of-state travel for these sixteen Appellants is “so trivial, casual, and insignificant as to be de minimis.” 29 C.F.R. § 782.2(b)(3); see also Pyramid Motor Freight Corp. v. Ispass, 330 U.S. 695, 708, 67 S. Ct. 954, 960, 91 Ed. 1184, 1192 (1947).
Of the remaining eighteen Appellants, eight of these Appellants crossed state lines only once, and an additional five crossed state lines fewer than five times. Faced with this individualized data, a jury could easily conclude that, for some or all of these Appellants, out-of-state travel was “so trivial, casual, and insignificant as to be de minimis.” Id.
If this action proceeds to trial, Appellants will describe their actual work experiences and will direct the jury to the uncontroverted trip data confirming that they either never or almost never crossed state lines. Appellants will argue that “the proof is in the pudding”: if out-of-state travel was anything more than a de minimis part of an Appellant’s job, then the Appellant’s trip data would reflect a meaningful quantity of out-of-state trips. This is not an unreasonable argument.
The jury, after considering all the evidence (including Krapf’s evidence, as described in the District Court’s opinion), is well-equipped to determine matters such as whether each Appellant was “reasonably expected” to travel over state lines, whether out-of-state travel fell within the “ordinary course” of an Appellant’s work, see 29 C.F.R. § 782.2(b)(3), and whether each Appellant’s out-of-state travel was “so trivial, casual, and insignificant as to be de minimis,” id.
Also, it should be remembered that the FLSA and the PMWA are remedial statutes and, as such, their exemptions are to be narrowly construed. Yet, by undertaking an analysis that places almost no emphasis on an Appellants’ actual driving experience, the District Court endorsed a business model that enables transportation companies to avoid paying overtime to the entire workforce by merely mixing in a few interstate trips and asserting that all drivers might be expected to drive such trips. Avoiding the federal and state overtime mandates should not be so easy.
VII. ARGUMENT
A. The Summary Judgment Standard
The Supreme Court very recently reversed an appellate court for “fail[ing] to adhere to the axiom that in ruling on a motion for summary judgment, ‘[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.’” Tolan v. Cotton, __ U.S. __, 134 S. Ct. 1861, 1863, 188 L. Ed. 2d 895, 897 (2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202, 216 (1986)). The “‘judge’s function’ at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’” Tolan, 134 S. Ct. at 1866, 188 L. Ed. 2d at 901 (quoting Anderson, 477 U.S. at 249, 106 S. Ct. at 2511, 91 L. Ed. 2d at 212). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, . . .” Anderson, 477 U.S. at 255, 106 S. Ct. at 2513, 91 L. Ed. 2d at 216.
Put differently, the non-moving party is not required to produce conclusive evidence. See Cloverland-Green Spring Dairies, Inc. v. Penna. Milk Marketing Bd., 298 F.3d 201, 217 (3d Cir. 2002). “Instead, it need only offer sufficient evidence for a reasonable jury to find the facts necessary for a decision in its favor.” Id.
The above safeguards should be strictly followed since summary judgment deprives the non-movant of the chance to present her case to a jury of her peers. As Justice Black observed:
The right to confront, cross-examine and impeach adverse witnesses is one of the most fundamental rights sought to be preserved by the Seventh Amendment provision for jury trials in civil cases. The advantages of trial before a live jury with live witnesses, and all the possibilities of considering the human factors, should not be eliminated by substituting trial by affidavit and the sterile bareness of summary judgment.
Adickes v. S. H. Kress & Co., 398 U.S. 144, 176, 90 S. Ct. 1598, 1618, 26 L. Ed. 2d 142, 164-65 (1970) (Black, J., concurring).[6]
B. The MCA Exemption – Like All Overtime Exemptions – Must Be Narrowly Construed Against the Employer
Both the FLSA and PMWA entitle employees to overtime premium pay equaling one and one-half times their regular pay rate for hours worked over 40 per week. See 29 U.S.C. § 207(a)(1); 43 P.S. § 333.104(c). In Parker v. NutriSystem, Inc., 620 F.3d 274 (3d Cir. 2010), this Court described the public policy underlying the overtime premium pay mandate:
Congress enacted the FLSA “to protect all covered workers from substandard wages and oppressive working hours, ‘labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.’” Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 739, 101 S. Ct. 1437, 67 L. Ed. 2d 641 (1981) (quoting 29 U.S.C. § 202(a)). The Act was designed “to ensure that each employee covered by the Act would receive ‘[a] fair day’s pay for a fair day’s work’ and would be protected from ‘the evil of overwork as well as underpay.’” Id. (quoting 81 Cong. Rec. 4983 (1937) (message of President Roosevelt)).
The legislative history of the overtime compensation provisions of the FLSA reveal a threefold purpose underlying them: (1) to prevent workers who, perhaps out of desperation, are willing to work abnormally long hours from taking jobs away from workers who prefer shorter hours, including union members; (2) to spread available work among a larger number of workers and thereby reduce unemployment; and (3) to compensate overtime workers for the increased risk of workplace accidents they might face from exhaustion or overexertion. Mechmet [v. Four Seasons Hotels, Ltd.], 825 F.2d at 1175-76 (7th Cir. 1987) (citing H.R. Rep. No. 1452, 75th Cong., 1st Sess. (1937); S. Rep. No. 884, 75th Cong., 1st Sess. (1937)).
Id. at 279; accord A.H. Phillips v. Walling, 324 U.S. 490, 493, 65 S. Ct. 807, 808, 89 L. Ed. 1095, 1098-99 (1945); Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739, 101 S. Ct. 1437, 1444, 67 L. Ed. 2d 641, 653 (1981).[7] The Supreme Court has held that this “broad remedial goal of the [FLSA] should be enforced to the full extent of its terms.” Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 173, 110 S. Ct. 482, 488, 107 L. Ed. 2d 480, 491 (1989).
Consistent with the above principles, the MCA Exemption – like all overtime exemptions – must be “construed narrowly[] against the employer,” and the employer “bears the burden of proving ‘plainly and unmistakably’ that the drivers qualify for the MCA [E]xemption.” Packard v. Pittsburgh Transp. Co., 418 F.3d 246, 250 (3d Cir. 2005) (citing Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir. 1992)) (emphasis supplied); accord Pignataro v. Port Auth. of New York and New Jersey, 593 F.3d 265, 268 (3d Cir. 2010); Lawrence, 527 F.3d at 310; Davis v. Mountaire Farms, Inc., 453 F.3d 554, 556 (3d Cir. 2006).
Moreover, “if the record is unclear as to some exemption requirement, the employer will be held not to have satisfied its burden.” Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir. 1991) (emphasis supplied). Thus, Krapf’s must not only clear the high hurdle of demonstrating that each Appellant is individually exempt even after all reasonable inferences are construed in his/her favor; it also must demonstrate that each Appellant falls “plainly and unmistakably” within the narrow confines of the MCA Exemption.
C. The MCA Exemption Does Not Apply Where the Employee’s “Interstate” Driving Activities are De Minimis
The MCA Exemption excludes from the FLSA’s overtime pay mandate[8] “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of title 49.” 29 U.S.C. § 213(b)(1).
The Department of Labor (“DOL”) interprets the parameters of the MCA Exemption as follows:
The exemption of an employee from the hours provisions of the [FLSA] under section 13(b)(1) depends both on the class to which his employer belongs and on the class of work involved in the employee’s job. The power of the Secretary of Transportation to establish maximum hours and qualifications of service of employees, on which exemption depends, extends to those classes of employees and those only who: (1) Are employed by carriers whose transportation of passengers or property by motor vehicle is subject to his jurisdiction under section 204 of the Motor Carrier Act, and (2) engage 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 Motor Carrier Act.
29 C.F.R. § 782.2(a) (internal citations omitted and emphasis supplied); see also 49 U.S.C. § 31502(a)-(b) (limiting the Department of Transportation’s (“DOT”) jurisdiction to “interstate” transportation by employees of “motor carriers” and “private motor carriers.”).
Appellants do not dispute that Krapf’s is a motor carrier subject to the Motor Carrier Act or that their driver duties place them within the “class” of employees who “directly affect the safety of operation of motor vehicles.” 29 C.F.R. § 782.2(a). Rather, Appellants allege that they do not fit within the MCA Exemption because their duties do not sufficiently involve “transportation on the public highways of passengers or property in interstate or foreign commerce.” 29 C.F.R. § 782.2(a); see also 49 U.S.C. §§ 31502(a), 13501 (defining “interstate” to include transportation that crosses state borders).
The application of the MCA Exemption, however, is by no means automatic. As the Supreme Court recognized in Pyramid Motor Freight Corp. v. Ispass, an employee does not fit within the MCA Exemption if her covered activities are “de minimis” and only represent a “trivial, casual or occasional” part of her employment. 330 U.S. 695, 708, 67 S. Ct. 954, 960, 91 Ed. 1184, 1192 (1947); see also Friedrich v. U.S. Computer Services, 974 F.2d 409, 416 (3d Cir. 1992) (“The Supreme Court has recognized a de minimis exception to the application of the MCA [Exemption].”) (citing Pyramid). Similarly, this Court has observed that the MCA Exemption applies “only where the employees regularly travel interstate or reasonably are expected to do interstate driving.” Id. at 417 (emphasis supplied).
Consistent with this authority, the DOL has promulgated regulations for determining whether a driver’s purported interstate activity is of such character to fit within the MCA Exemption:
As a general rule, if the bona fide duties of the job performed by the employee are in fact such that he is (or, in the case of a member of a group of drivers, driver’s helpers, loaders, or mechanics employed by a common carrier and engaged in safety-affecting occupations, that he is likely to be) called upon in the ordinary course of his work to perform, either regularly or from time to time, safety-affecting activities of the character described in paragraph (b)(2) of this section, he comes within the exemption in all workweeks when he is employed at such job.
29 C.F.R. § 782.2(b)(3) (emphasis supplied); see also JA at 16a (quoting 29 C.F.R. § 782.2(b)(3)).
Moreover, as the DOL regulations explain, the driver’s interstate activities must be of some substance and exceed the Pyramid court’s de minimis standard:
[W]here the continuing duties of the employee’s job have no substantial direct effect on such safety of operation or where such safety-affecting activities are so trivial, casual, and insignificant as to be de minimis, the exemption will not apply to him in any workweek so long as there is no change in his duties.
29 C.F.R. § 782.2(b)(3)(emphasis supplied); see also JA at 14a (quoting 29 C.F.R. § 782.2(b)(3)).
The de minimis requirement makes good sense. As Judge Mukasey cogently explained: “To extend the MCA Exemption to any driving activity, no matter how infrequent or trivial, would be to encourage employers to send their employees on a minimal number of interstate trips simply to avoid the overtime compensation provisions of the FLSA.” Masson v. Ecolab, Inc., 04-cv-4488, 2005 U.S. Dist. LEXIS 18022, *22-23 (S.D.N.Y. Aug. 17, 2005).
In applying the above principles, district courts have relied on objective factors such as the driver’s actual number of out-of-state trips to determine if he/she falls within the MCA Exemption. See, e.g., Sturm v. CB Transp., Inc., 943 F. Supp. 2d 1102, 1113 (D. Idaho 2013) (observing that courts utilize “objective criteria” to determine if driver was reasonably expected to make interstate trips and that the MCA Exemption will not apply “‘if there is no possibility of driving interstate or the possibility is remote’”); Barrios v. Suburban Disposal, Inc., 12-cv-3663, 2013 U.S. Dist. LEXIS 175155, *20 (D.N.J. Dec. 11, 2013) (“[T]he Court cannot find, based on these two [interstate] trips, that all Plaintiffs had a reasonable expectation of driving interstate routes.”); Dauphin v. Chestnut Ridge Transp., Inc., 544 F. Supp. 2d 266, 276 (S.D.N.Y. 2008) (denying employer’s summary judgment motion based on the MCA Exemption because, inter alia, “the evidence is in conflict regarding how often drivers . . . traveled across state lines as part of their regular runs”).
D. Application of the MCA Exemption Requires an Individual Examination of the Actual Job Activities of the Specific Employees Asserting Unpaid Overtime Claims
Consistent with the principles described in subsection B, supra, the Supreme Court has stated on two separate occasions that the MCA Exemption requires an individual analysis of actual job circumstances of those individuals asserting unpaid overtime claims. This condition has been adopted by several Circuit Courts, including this Court, as well as numerous district courts.
In Pyramid, the Supreme Court addressed the application of the MCA Exemption to employees performing “loading” activities who were seeking unpaid overtime wages under the FLSA. 330 U.S. 695, 67 S. Ct. 954, 91 Ed. 1184. On multiple occasions, the Pyramid court stated that any analysis of the MCA Exemption must be performed on an employee-by-employee basis for only those individuals asserting FLSA claims, observing:
The District Court must determine simply whether or not the respective employees who seek to recover overtime compensation under § 7 [of the FLSA] are excluded from the benefits of that Section because they are within [the MCA Exemption]. . . . Whether or not an individual employee is within any such classification is to be determined by the judicial process.
If none of the alleged “loading” activities of the respective respondents, during the periods at issue, come within the kind of activities which, according to the [Interstate Commerce] Commission,[9] affect the safety of operation of motor vehicles in interstate or foreign commerce within the meaning of the Motor Carrier Act, then those respondents of which that is true are entitled to the benefits of § 7 of the Fair Labor Standards Act. On the other hand, if the whole or a substantial part of such alleged “loading” activities of the respective respondents, during the periods at issue, does come within the kind of activities which, according to the Commission, affect such safety of operation, then those respondents who were engaged in such activities are excluded from the benefits of such § 7.
id. at 707-08 (emphasis supplied); see also id. at 698 (directing the district court to “determine whether or not the activities of each respondent consisted” of work covered by the MCA Exemption) (emphasis supplied); id. at 707 (“the District Court, in applying § 204 of the Motor Carrier Act to respondents, will determine whether or not the activities of each respondent, either as a whole or in substantial part, come within the Commission’s definition of the work of a ‘loader.’”) (emphasis supplied); id. at 708 (“The District Court shall give particular attention to whether or not the activities of the respective respondents included that kind of ‘loading’ which is held by the Commission to affect safety of operation.”) (emphasis supplied).
Eight months later, the Supreme Court’s Morris v. McComb, 332 U.S. 422, 68 S. Ct. 131, 92 L. Ed. 44 (1947) opinion reaffirmed the Pyramid court’s individualized analysis requirement. Specifically, the Morris court stated:
There is noting in the record showing the extent to which the respective [employees] devoted themselves to the several classes of work above mentioned and, if there were an action to recover overtime compensation for individual employees, it would be necessary to determine that fact. However, as this is an action only for an injunction relating to future practices, the situation can be met by limiting the injunction to the appropriate classifications of workers.
Id. at 430 (emphasis supplied). This Court, as well as the Seventh and Fourth Circuits, recognized the individualized analysis required under Pyramid and Morris.
First, in Harshman v. Well Service, Inc., the Western District of Pennsylvania held that the test to determine if employees are entitled to overtime premium pay is “whether each plaintiff, during the relevant time periods, performed duties which substantially affected the safety operation of defendant’s pump trucks in interstate commerce” to qualify for the MCA Exemption. 248 F. Supp. 953, 958 (W.D. Pa. 1965) (emphasis supplied). In affirming the Harshman decision, this Court relied on “the reasons so well stated in the opinion of Judge Marsh, 248 F. Supp. 953.” Harshman v. Well Service, Inc., 355 F.2d 206 (3d Cir. 1965).
Second, in Goldberg v. Faber Industries, Inc., 291 F. 2d 232 (7th Cir. 1961), the Seventh Circuit reversed the district court’s holding that certain employees were not entitled to overtime premium compensation under the MCA Exemption. Id. at 233, 235. In reaching its conclusion, the Goldberg court stated:
The District court was in error in holding the employer’s operations were controlling. The test is the nature of the transportation performed by the employees. The exemption in the Fair Labor Standards Act depends upon the activities of the individual employees.
Id. at 235 (emphasis supplied).
More recently, in Troutt v. Stavola Brothers Inc., 107 F.3d 1104 (4th Cir. 1997), the Fourth Circuit observed:
[T]he Supreme Court has been equally clear that when there is a factual question as to whether a particular employee is within one of these covered [MCA Exemption] classifications that question is decided in the judicial process and on an individual basis.
Id. at 1108 (emphasis in original).[10]
Several district courts have echoed these findings by requiring that employers present evidence that each individual employee plainly and unmistakably fit within the parameters of the MCA Exemption. See, e.g., Dauphin, 544 F. Supp. 2d at 274 (“Because the [MCA E]xemption ‘depends upon the activities of the individual employees,’ a defendant generally must present evidence as to the character of the activities of each plaintiff in order to determine whether he or she is subject to the exemption.”); id. at 275 (criticizing the defendant for not offering “evidence establishing the character of the activities of each plaintiff”); Sturm, 943 F. Supp. 2d at 1113 (MCA Exemption “as applied to an individual employee depends upon the activities of the individual; what is controlling is the character of the activities involved in the performance of his or her job.”); Masson v. Ecolab, Inc., 04-cv-4488, 2005 U.S. Dist. LEXIS 18022, at *17-18 (“Because ‘the exemption depends . . . upon the activities of the individual employees,’ [defendant] must present evidence as to ‘the character of the activities involved in the performance’ of each plaintiff’s job in order to determine whether [defendant] owes individual employees overtime compensation. Hence, the activities of one or a few plaintiffs cannot justify a blanket exemption as to all plaintiff-employees.”) (internal citations omitted); McGee v. Corporate Express Delivery Systems, 01-cv-1245, 2003 U.S. Dist. LEXIS 20855, *2-3 (N.D.Ill. Nov. 26, 2003) (“[Defendant] is not entitled to summary judgment because it has failed to heed this Court’s earlier directive that to show each plaintiff is exempt from the overtime provisions of the FLSA, it must come forth with evidence that each plaintiff was engaged in activities that are covered by the [MCA Exemption].”).
E. The District Court Erred by Failing to Perform an Individual Analysis Limited to the Activities of Each Appellant
As discussed in subsection D, supra, the Supreme Court and multiple Circuit Courts have held that application of the MCA Exemption should be based on an individualized analysis limited to those employees asserting unpaid overtime claims.[11] The District Court, however, refused to perform this mandated analysis. See JA at 15a-17a. Instead, it relied on general “company policy and activity” to hold that Appellants “‘could reasonably be expected to do interstate driving’” regardless of their actual employment circumstances based solely on their assignment to Krapf’s Transit Division. Id. at 17a (quoting Friedrich, 974 F.2d at 412). This analysis was improper and represents reversible error.
F. Viewing All Evidence in Appellants’ Favor, a Reasonable Jury Could Find that Krapf’s Fails to Satisfy its Heavy Burden of Demonstrating that Each Appellant “Plainly and Unmistakably” Qualifies for the MCA Exemption
The record before the District Court also contains ample evidence enabling a jury to determine on an individual basis that Appellants do not “plainly and unmistakably” qualify for the MCA Exemption. In particular, the record evidence is sufficient to enable a jury to conclude that Appellants were not reasonably expected to do interstate driving because their actual interstate activity was so “trivial, casual, and insignificant as to be de minimis.” This is so for three independent reasons. First, sixteen of the thirty-four Appellants never traveled out-of-state as part of their employment with Krapf’s, defusing any reasonable expectation that they would ever have to travel interstate. See pages 25-26, infra. Second, the remaining eighteen Appellants’ interstate transportation activities were so minimal that a jury could find that their interstate activity was de minimis and that they were not likely to be called upon in the ordinary course of their work for Krapf’s to travel interstate. See pages 27-28, infra. Third, the District Court’s holding that Appellants could reasonably be expected to be assigned trips outside of Pennsylvania is contradicted by the fact that, in actuality, there was minimal opportunity to do so. See pages 28-29, infra. These facts alone, or in combination, could convince a jury that Appellants do not fit within the narrow confines of the MCA Exemption. Thus, the District Court erred by finding every Appellant to be overtime-exempt.
1. Sixteen Appellants Never Traveled Outside of Pennsylvania
Of the thirty-four Appellants, the parties agree that sixteen never traveled out-of-state as part of the 5,739 trips they drove for Krapf’s during the applicable three-year statute of limitations period. See pages 2-3, supra. Based on this evidence alone, a jury could find that these sixteen Appellants could not reasonably be expected to travel interstate because during the course of their entire employment they never were called upon to do so.
Other district court judges have held that a driver’s lack of actual interstate travel is sufficient to deny summary judgment in an MCA Exemption case. For example, in Arranda v. Southwest Transport, Inc., 11-cv-21222, 2012 U.S. Dist. LEXIS 34763 (S.D. Fla. Mar. 15, 2012), the court explained:
The plaintiff never left the state of Florida for purposes of his employment with the defendant. The plaintiff never agreed to leave the state of Florida for work, nor was he ever asked to do so. While the defendant owner, Robert Muriedas indicated that the defendant could have been asked to leave the state of Florida, the plaintiff never left the state. Accordingly, the undersigned finds that the second above-mentioned prong has not been met, and summary judgment should be granted [in favor of the plaintiff] to the extent that the [MCA Exemption] does not apply to the plaintiff in this matter because the plaintiff’s class of work did not involve interstate commerce.
Id. at *19; see also Goldberg, 291 F.2d at 234 (reversing lower court’s finding that 15 drivers who never crossed state lines qualified for the MCA Exemption); Packard, 418 F.3d at 258 (MCA Exemption did not apply to drivers who did not travel outside Pennsylvania.).[12]
2. The Remaining Eighteen Appellants’ Interstate Travel Activities are Minimal
The parties agree that, during the relevant time period, eighteen Appellants crossed state lines on only 178 (or 2.2%) of 8,218 trips. See pages 2-3, supra. Moreover, eight of these eighteen Appellants traveled out-of-state only once during the relevant time period, with an additional five Appellants traveling out-of-state on five or less occasions. Id.
Again, a jury could find this insignificant number of interstate trips to be de minimis, and thus these eighteen Appellants could not reasonably expect to travel out-of-state in the ordinary course of their employment with Krapf’s because they almost never did so. Judge William Martini of the District of New Jersey recently relied on similar de minimis amounts of interstate travel to find that drivers did not have a reasonable expectation of driving interstate routes:
in considering whether [all nine] Plaintiffs reasonably could have expected to drive interstate routes, the Court notes that Barrios, Cruz, Cabrera, Marin, and Salazar each worked for Suburban for seven years or more, and that during their time at Suburban only one of them, Marin, ever drove an interstate route. There is no evidence that any Plaintiffs ever serviced one of Suburban’s customers in New York, Connecticut, or Maryland. Though Marin went on interstate trips for Suburban twice during his eight-year employment, the Court cannot find, based on these two trips, that all Plaintiffs had a reasonable expectation of driving interstate routes
Barrios, 12-cv-3663, 2013 U.S. Dist. LEXIS 175155, at *20.
Here, the undisputed fact that only 2.2% of the 8,218 trips these eighteen Appellants made were interstate, demonstrates that it is highly unlikely that these individuals would have ventured out of Pennsylvania on any given day or would have a reasonable expectation to do so. Moreover, as indicated in the table at pages 2-3, supra, most of these eighteen Appellants’ out-of-state travel falls well below the 2.2% average. However, the District Court’s summary judgment decision prevents these Appellants from making this common sense argument to the jury.
Appellants do not assert that victory is assured for the eighteen Appellants who almost never traveled across state lines. However, their general lack of interstate travel certainly can lead a jury to reasonably find the MCA Exemption to be inapplicable.
3. The Overwhelming Majority of Krapf’s Transit Routes were Intrastate Providing Limited Opportunity for Interstate Travel
During the relevant period, Krapf’s Transit Division had thirty-two fixed routes. See JA at 91a-93a. Of these, only four routes required drivers to cross state lines at any time. Id. Moreover, prior to May 2011, only one route entailed travel outside of Pennsylvania. Id. Thus, the odds were significantly higher that Appellants would be assigned an entirely intrastate route rather than one possessing interstate stops.[13]
This general unavailability of interstate routes provides the jury with yet another reason to find that Appellants could not reasonably be expected to drive out of Pennsylvania as part of their employment because their interstate driving activities were so trivial, casual and insignificant as to be de minimis.
G. The Facts Relied on by the District Court Do Not Warrant a Finding that Appellants Could Reasonably be Expected to be Called Upon to Perform Interstate Travel, Either Regularly or from Time to Time
In support of its conclusion that all Appellants could have reasonably be expected to be called upon to drive interstate, either regularly or from time to time, the District Court relied on three alleged facts. First, the District Court cited “the indiscriminate nature of [Krapf]’s assignment procedure [as] undisputed evidence that [Appellants] could be reasonably expected to drive interstate.” JA at 17a-18a; see also id. at 20a (“[Krapf’s] has establish[ed] through undisputed facts that all [T]ransit drivers, including [Appellants], could be assigned an interstate route.”). Second, the district court referenced Krapf’s efforts “to ensure that [T]ransit drivers comply with the federal requirements for interstate driving so that every [T]ransit driver can drive interstate at any time.” Id. at 18a. Third, the District Court found summary judgment was appropriate because Krapf’s Transit Division “was significantly engaged in interstate commerce” based on the fact that between 2009 and 2012, its annual revenue from interstate routes ranged between 1.0% and 9.75%. Id. at 19a-20a.
As discussed below, these alleged facts are insufficient to plainly and unmistakably demonstrate that Appellants individually fit within the MCA Exemption.
1. The Purported Potential that Appellants “Could” Be Assigned an Interstate Trip is Belied By Unrebutted Statistics Demonstrating their Lack of Actual Interstate Activity
The District Court relied heavily on Krapf’s purportedly indiscriminate scheduling procedures and adherence to federal interstate driving requirements as a basis for finding that Appellants “could have been assigned to drive interstate.” However, this supposed potential for Appellants to be called upon to cross state lines is not supported by Krapf’s records of Appellants’ actual interstate travel.
Rather, the facts demonstrate that it is extraordinarily unlikely that each Appellant would have ventured out of Pennsylvania as part of his/her duties on any given day based not only on a review of the actual trips Appellants drove, but also the general lack of interstate routes within the Transit Division during the relevant period. See pages 25-29, supra. Thus, the District Court erred by relying almost exclusively on this “potential” for interstate travel to hold Appellants were exempt.
Several District Courts have recognized this flaw, and refused to find that employees are covered by the MCA Exemption based on the “possibility” for interstate travel through the indiscriminate assigning of routes. See, e.g., Sturm, 943 F. Supp. 2d at 1114 (“Because the [MCA Exemption] does not apply if the potential of driving interstate is remote, an employer does not establish that there was a reasonable expectation that its employees could drive interstate when it merely indiscriminately fills vacant interstate routes with drivers who otherwise have regular, intrastate routes.”); id. at 1116 (holding that the defendant’s policy of “requiring all drivers to maintain DOT compliance” so that any driver could be called “at any time to drive interstate, is similarly insufficient to carry the day.”); Kosin v. Fredjo’s Enterprises, Ltd., 88-cv-5924, 1989 U.S. Dist. LEXIS 1491, *12 (N.D.Ill. Feb. 13, 1989) (“That unexpected vacancies may be filled indiscriminately does not establish that all drivers could at some time travel interstate routes.”) McGee, 01-cv-1245, 2003 U.S. Dist. LEXIS 20855, at *21-24 (denying an employer’s summary judgment motion and holding “to demonstrate a driver is exempt from the overtime provisions of the FLSA, [an employer] must do more than simply assert that it assigned routes indiscriminately. Rather, it must show that because of its assignment procedure, the driver was likely to engage in interstate commerce for the week”) (emphasis supplied).
Again, the potential for interstate travel by Appellants based on the purported indiscriminate nature of the assignment of routes and the fact that Krapf’s adheres to federal requirements for employing interstate drivers may ultimately convince a jury that Appellants plainly and unmistakably fit within the MCA Exemption. However, based on the actual statistics demonstrating their minimal interstate travel, and making all inferences in Appellants’ favor, a jury also could find that Appellants were not reasonably expected to drive instate because their actual interstate trips do not exceed the de minimis standard.
As just one example, Appellant Harry Johnson worked 144 weeks in Krapf’s Transit Division during the relevant period, performing 687 trips. See JA at 136a. However, during his nearly three-years of employment, Appellant Johnson never traveled out of Pennsylvania. Id. Based on an individualized analysis of Mr. Johnson’s employment circumstances, a jury could find that he could not reasonably be expected to travel out-of-state or that his interstate travel was trivial, casual and insignificant because, in nearly three years of employment, he never left Pennsylvania. Thus, the steps Krapf’s took to create the purported “potential” for interstate trips were meaningless.
2. Krapf’s Revenue from Interstate Activity is Not Relevant to Whether Appellants’ Activities Qualified them for the MCA Exemption
The District Court also cited to the percentage of annual revenues Krapf’s Transit Division received from interstate activity as a factor demonstrating Appellants were exempt. This fact is relevant to whether Krapf’s is a motor carrier covered by the Motor Carrier Act. See subsection C supra (discussing 29 C.F.R. § 782.2(a) and how the MCA Exemption analysis requires an examination of the nature of both the employer’s and employees’ activities). However, Krapf’s revenue data is irrelevant to whether Appellants could each be reasonably expected to drive interstate or if their interstate activities were more than de minimis. See Goldberg, 291 F.2d 235 (“The District court was in error in holding the employer’s operations were controlling. The test is the nature of the transportation performed by the employees.”).
Again, even if Krapf’s annual revenues were an appropriate factor to consider as part of the review of the class of work involved in Appellants’ jobs, the unrebutted statistics of Appellants’ actual interstate travel could convince a jury to find that Krapf’s failed to fulfill its burden of demonstrating that Appellants plainly and unmistakably fall within the MCA Exemption.
VIII. CONCLUSION
In conclusion, Appellants respectfully request that this Court reverse the district court’s summary judgment orders.
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[1] Because a three-year limitations period applies to Appellants’ FLSA and PMWA claims, see 29 U.S.C. § 255(a); Gonzalez v. Bustleton Servs., 08-cv-4703, 2010 U.S. Dist. LEXIS 23158, *19 (E.D. Pa. Mar. 5, 2010), the time period relevant to this action runs from November 3, 2008 (the date falling three years prior to the filing of the complaint) until the present.
[2] See JA at 136a (Krapf’s Exhibit MSJ-4).
[3] Resch’s FLSA claim was asserted as a collective action pursuant to 29 U.S.C. § 216(b). See JA at 35a at ¶ 20 (Complaint). Resch did not pursue his PMWA claim as an opt-out class action pursuant to Federal Rule of Civil Procedure 23. However, those individuals who affirmatively opted-in to the action under 29 U.S.C. § 216(b) also are permitted to pursue the PMWA claim asserted in the Complaint. See id at 35a at n.1. (citing O’Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 580 (6th Cir. 2008)).
[4] One of these drivers – Anita King – joined the action prior to the district court’s conditional certification order. See JA at 24a (District Court Docket).
[5] Appellants did not move to decertify the collective action.
[6] “Since the Supreme Court removed the summary judgment procedure from disfavored status in the 1980s, some have observed that the pendulum has swung too far in the opposite direction.” Doe v. Abington Friends School, 480 F.3d 252, 258 (3d Cir. 2007) (citing Arthur R. Miller, The Pretrial Rush to Judgment, 78 N.Y.U. L.Rev. 982 (2003)); accord Hon. Patricia M. Wald, Summary Judgment at Sixty, 76 Tex. L.Rev. 982 (2003)); Hon. Mark W. Bennett, Essay: From the “No Spittin’, No Cussin’ and No Summary Judgment” Days of Employment Discrimination Litigation to the “Defendant’s Summary judgment Affirmed Without Comment” Days: One Judge’s Four-Decade Perspective, 57 N.Y. L. SCH. L. REV. 685 (2012-13); see also Melvin v. Car-Freshener Corp., 453 F.3d 1000, 1003-04 (8th Cir. 2006) (Lay, J., dissenting) (“Too many courts in this circuit, both district and appellate, are utilizing summary judgment in cases where issues of fact remain.”); Gallagher v. Delaney, 139 F.3d 338, 342 (2d Cir. 1998) (recognizing “dangers of robust use of summary judgment to clear trial dockets”); In re One Star Class Sloop Sailboat, 517 F. Supp. 2d 546, 555 (D. Mass. 2007) (“Today, commentators are in near unanimous agreement that federal courts overuse summary judgment as a case management tool.”).
[7] Pennsylvania courts have recognized the similar remedial purpose behind the PMWA’s overtime pay requirement. See Chevalier v. General Nutrition Ctrs., Inc., GD-13-017194, 2014 Pa. Dist. & Cnty. Dec. LEXIS 145, *33-34 (Allegheny Cty. Oct. 20, 2014) (“The purpose of the portion of the PMWA governing overtime was to alter the behavior of employers. The goal was to cause employers to hire new workers in lieu of paying existing employees to work overtime by making overtime more expensive.”).
[8] Appellants do not dispute that the MCA Exemptions to the overtime premium pay protections of the FLSA and the PMWA are virtually identical, compare 29 U.S.C. § 213(b)(1) with 43 P.S. § 333.105(b)(7), or that they should be applied in an identical manner, see Mayan v. Rydbom Express, Inc., 07-cv-2658, 2009 U.S. Dist. LEXIS 90525, *32-33 (E.D. Pa. Sept. 30, 2009).
[9] The DOT took over authority to regulate motor carriers from the Interstate Commerce Commission in 1966. See Friedrich, 974 F.2d at 411.
[10] However, earlier this year, a divided Fifth Circuit rejected the use of an employee-by-employee analysis holding that only a “company-wide analysis” was required under Fifth Circuit precedent to determine the application of the MCA Exemption. See Allen v. Coil Tubing Services, L.L.C., 755 F.3d 279, 284 (5th 2014). Justice James L. Dennis wrote an eighteen page dissent that, inter alia, criticized the majority’s failure to perform the individualized analysis required by the authority cited above. See id. at 288-307.
[11] Such an individual analysis is not necessarily inconsistent with this action proceeding to trial as a collective action. The District Court might conclude that the presentation of all thirty-four Appellants’ testimony in a single trial (during which the parties also will present “common” evidence of Krapf’s business practices and common damages analysis) is more efficient than the individual trials that will ensue if the collective is “decertified.” Of course, the propriety of collective litigation is a matter for the District Court to consider on remand. See Zavala v. Wal-Mart Stores Inc., 691 F.3d 527, 534-37 (3d Cir. 2012) (discussing FLSA decertification analysis). If the District Court believes that the individualized analysis required by the above decisions makes the collective unmanageable, the appropriate remedy is decertifying the FLSA collective, not the dismissal of each Appellants’ substantive legal claims.
[12] The Packard court focused on whether the drivers’ continuum trips qualified as participation in interstate commerce sufficient to fulfill the MCA Exemption even though they never traveled across state lines. Id.
[13] These odds are supported by the statistical analysis of Appellants’ actual driving activity. See subsections F.1-3, supra.