On Appeal from the U.S. District Court for the Western District of Pennsylvania. (D.C. Civil No. 02-89). District Judge: The Honorable Arthur J. Schwab.
The opinion of the court was delivered by: Pollak, District Judge
Before: NYGAARD*fn1 and GARTH, Circuit Judges, and POLLAK,*fn2 District Judge.
In this appeal, appellant-defendant Pittsburgh Transportation Co. ("PTC") seeks to establish that drivers for its ACCESS transit service ("ACCESS drivers"), including plaintiffs-appellees, are not eligible for overtime under the Fair Labor Standards Act ("FLSA"). The precise question before us is whether the ACCESS drivers, who would ordinarily be eligible for overtime, become ineligible by virtue of a provision of the Motor Carrier Act ("MCA") that vests authority in the Secretary of Transportation to regulate certain aspects of interstate transport. Those within the Secretary's sphere of authority under the MCA are excluded from the overtime provisions of the FLSA. The District Court concluded that this so-called "MCA exemption" from the FLSA was not applicable here, and that the ACCESS drivers therefore remained eligible for overtime pay. We agree with that conclusion, although we reach it by a different route, and will affirm the judgment of the District Court.
PTC's ACCESS service, not available to the general public, provides transportation to elderly and disabled persons who are unable to use other forms of public transportation. Under a contract with ACCESS Transportation Systems, Inc., a federally-funded program to provide such services, PTC's ACCESS program serves roughly 5,000 people with disabilities and 125,000 seniors. Most of these passengers have "unconditional" eligibility, which requires a certification of need based on review by a spec l panel, while others are eligible based on certain more temporary conditions.
PTC provides ACCESS service within a defined service area in Allegheny County that includes the Pittsburgh Amtrak and Greyhound stations. PTC also provides some ACCESS service to and from the Pittsburgh International Airport, which is outside its regular service area. PTC's ACCESS service operates entirely within Pennsylvania, and ACCESS drivers do not transport passengers across state lines. It is unclear what portion of ACCESS service involves train or bus terminals. Trips to the airport are a very minor part of ACCESS's aggregate operations,*fn3 but it is the case that most, if not all, of the ACCESS drivers have made at least a few trips to the airport. Because PTC assigns the airport trips indiscriminately along with other trips, any ACCESS driver may be called upon to drive such trips.
Unlike conventional bus systems, PTC's ACCESS service does not have regular, set routes, or set stops or schedules from day to day. Rather, PTC schedules passengers' trips each day to provide the most efficient service possible. To use the service, eligible passengers must schedule their trips at least one day in advance, by telephoning schedulers at either PTC or ACCESS. Although limited same-day trips may also be scheduled when space is available, ACCESS drivers do not pick up or drop off passengers except as scheduled in advance through the central schedulers. A passenger purchases a ticket for the service in advance, presenting the ticket to the ACCESS driver as payment. Tickets for ACCESS service are not linked in any way to tickets for interstate travel, or indeed intrastate travel, on non-ACCESS transit services.
Because PTC contends that its ACCESS drivers are excluded from the FLSA's overtime protection, it has refused to pay the drivers more than their ordinary hourly wage when they work more than 40 hours per week. It is undisputed that the drivers regularly work over 40 hours per week, and that they are entitled to recover overtime compensation for the excess hours if they are not subject to the FLSA's MCA exemption.
After the ACCESS drivers filed this action in the United States District Court for the Western District of Pennsylvania, seeking to confirm their entitlement to FLSA overtime pay, both parties filed motions for partial summary judgment on the question of the drivers' entitlement to overtime protection. The District Court denied PTC's motion, and granted the ACCESS drivers' motion in part.
The District Court ruled that the ACCESS drivers were not excluded from the protections of the FLSA, and remained entitled to overtime, because they were not within the Secretary of Transportation's authority to regulate interstate transport. According to the District Court, the ACCESS drivers were not engaged in interstate transport because the ACCESS service (which does not physically provide transport outside of Pennsylvania) does not involve "through ticketing" arrangements with interstate transport.
The court then entered final judgment for the ACCESS drivers, based on the parties' stipulation as to the amount of compensatory damages and the court's determination of appropriate liquidated damages and attorneys' fees. PTC timely filed this appeal, challenging the underlying liability determination.
The issues presented here have also been raised, but not decided, in three actions in the Western District of Pennsylvania involving ACCESS drivers for PTC and for another transportation company in the Pittsburgh area, Laidlaw Transportation, Inc. ("Laidlaw"). One of these actions, Eugene J. Kott, et al. v. Pittsburgh Transportation Co., No. 02-0089, has been dismissed without prejudice pending the resolution of this appeal. In Spivak v. Pittsburgh Transportation Co., No. 98-984 (W.D. Pa. May 28, 1999), the District Court found that PTC could apply the MCA exemption to plaintiff Machall Spivak, an ACCESS driver. However, because Spivak did not dispute that he was engaged in interstate transportation while making airport trips, the Spivak decision does not directly address the issues presented here. In the third action, Greenwood v. Laidlaw Transit Services, Inc., No. 01-0728, the District Court has denied both parties' motions for summary judgment. Laidlaw has submitted an amicus brief supporting PTC's position on this appeal.
Our review of the District Court's grant of partial summary judgment is plenary. Madison v. Res. for Human Dev., Inc., 233 F.3d 175, 180 (3d Cir. 2000).
Appellant PTC seeks reversal of the District Court's grant of partial summary judgment to its ACCESS drivers, as to liability on the drivers' claims for overtime pay under Section 7 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207(a)(1). PTC claims that the drivers are exempt from the FLSA's overtime requirements under the Motor Carrier Act ("MCA") exemption, set forth at 29 U.S.C. § 213(b)(1). It is well settled that exemptions from the FLSA are construed narrowly, against the employer. Madison, 233 F.3d at 183. Accordingly, PTC bears the burden of proving "plainly and unmistakably" that the drivers qualify for the MCA exemption. See Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir. 1992).
Section 7 of 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. 29 U.S.C. § 207. The exemption said by PTC to be applicable here, the MCA exemption, appears in Section 13(b)(1) of the FLSA, and provides that overtime pay is not required for "any employee with respect to whom the Secretary of Transportation has power to establish ...