CONTI, District Judge.
Pending before the court is a motion for partial summary judgment ("Motion") (ECF No. 26), filed by defendant Frito-Lay, Inc. ("defendant" or "Frito-Lay") with respect to claims filed by plaintiffs Nancy Cerutti ("Cerutti"), James Coffman, John Constabile, Matthew Donaldson, Anthony Georgiana, Donald McKnight, Linda Massucci, Michael Massucci, Shaun Christopher, and John Arison (collectively, "plaintiffs"). Plaintiffs assert that Frito-Lay violated the Pennsylvania Minimum Wage Act of 1968 ("PMWA"), as amended, 43 Pa.Stat.Ann. §§ 333.101 et seq., by failing to pay them overtime ("OT") compensation as required by 43 Pa.Stat.Ann. § 333.104(c). Plaintiffs allege claims on behalf of themselves and others similarly situated. Because a class has not been certified at this time, however, only the named plaintiffs are before the court. For the reasons stated below, the court will grant in part and deny in part Frito-Lay's Motion.
Plaintiffs filed the instant action in the Court of Common Pleas of Fayette County, Pennsylvania and defendant removed plaintiffs' action to federal court, pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1453. (ECF No. 1.) After removal, plaintiffs filed an amended complaint ("Amended Complaint") asserting that Frito-Lay failed to pay overtime ("OT") compensation as required by the PMWA, for the period from April 21, 2006 through the present. (ECF No. 21.)
Frito-Lay argues it is entitled to partial summary judgment because: 1) plaintiffs were exempt from OT compensation under the Pennsylvania motor carrier exception ("PMCE") to the PMWA, which is codified in 43 Pa.Stat.Ann. § 303.105(b)(7), for the entire period in question; and 2) even if plaintiffs' were not exempt, Frito-Lay properly compensated plaintiffs for all OT hours worked utilizing the fluctuating workweek ("FWW") method of calculating OT compensation, described in 29 C.F.R. § 778.114. Plaintiff disputes those arguments.
Frito-Lay argues that the issues before the court are solely legal in nature. Plaintiffs agree with one caveat: plaintiffs indicate that a least one legal issue raised by defendant Frito-Lay, i.e., the calculation of when the hourly rate of pay is determined, must be resolved by a jury.
Frito-Lay is an international snack food manufacturing company engaged in manufacturing, sales and distribution of snack foods across the United States, Canada and Mexico. (SF ¶ 1; ECF No. 34.)
Frito-Lay compensated plaintiffs through a base salary and commissions on sales, pursuant to a collective bargaining agreement ("CBA") negotiated between the RSRs' union and Frito-Lay. (SF ¶ 4.) Under the CBA, plaintiffs were entitled to OT compensation for all time worked over forty hours in a workweek. Frito-Lay pays plaintiffs OT at one-half their regular rate of pay using the FWW method described in the federal code of regulations, 29 C.F.R. § 778.114. (Id. ¶ 5.) Frito-Lays' handbook explains the OT compensation method applicable to plaintiffs as follows:
Base Salary + any = TOTAL WEEKLY Commissions COMPENSATION Divide Total Weekly = HOURLY RATE OF PAY Compensation by Total hours worked for that week Take Hourly Rate of Pay, = OVERTIME PAID FOR multiply this number by .5, THAT WEEK then multiply by the number of overtime hours
(SF ¶ 5, ECF No. 34; Def.'s RSR Handbook, App. Ex. B, ECF No. 29.)
Federal Rule of Civil Procedure 56 provides in relevant part:
Fed. R. Civ. P. 56(a), (c)(1)(A), (B).
Marten v. Godwin, 499 F.3d 290, 295 (3d Cir.2007) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
An issue of material fact is in genuine dispute if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see Doe v. Abington Friends Sch., 480 F.3d 252, 256 (3d Cir.2007) ("A genuine issue is present when a reasonable trier of fact, viewing all of the record evidence, could rationally find in favor of the non-moving party in light of his burden of proof.") (citing Anderson, 477 U.S. at 248-52, 106 S.Ct. 2505; Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548).
Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).
In deciding a summary judgment motion, a court must view the facts in the light most favorable to the nonmoving party and must draw all reasonable inferences and resolve all doubts in favor of the nonmoving party. Doe v. Cnty. of Centre, PA, 242 F.3d 437, 446 (3d Cir.2001); Woodside v. Sch. Dist. of Phila. Bd. of Educ., 248 F.3d 129, 130 (3d Cir.2001); Heller v. Shaw Indus., Inc., 167 F.3d 146, 151 (3d Cir.1999). A court must not engage in credibility determinations at the summary judgment stage. Simpson v. Kay Jewelers, Div. of Sterling, Inc., 142 F.3d 639, 643 n. 3 (3d Cir.1998).
Plaintiffs argue that Frito-Lay violated the PMWA because it failed to record accurately all the hours worked by plaintiffs and failed to compensate them for all hours they worked. Plaintiffs contend they were entitled to be paid straight time at their regular rate of pay for all hours worked up to forty hours in a workweek, and OT compensation at not less than one and one-half times their regular rates of pay for all hours worked in excess of forty hours in a workweek, pursuant to 43 Pa. Stat.Ann. §§ 333.104(c). Plaintiffs allege that Frito-Lay willfully failed to pay them properly, in violation of the PMWA. "The question of how Plaintiff[s] spent [their] time is a question of fact, while whether those particular activities exclude [them]
Frito-Lay contends that the PMCE applies to all plaintiffs for the entire limitations
In 1935, Congress enacted the MCA. United States v. Am. Trucking Ass'ns, 310 U.S. 534, 538, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940) (discussing the purposes and policies of the MCA). An objective of the MCA was to ensure the safety of operations of the motor transportation industry. Id. at 538-39, 60 S.Ct. 1059. Congress empowered the Secretary of Transportation
In 1938, Congress enacted the Fair Labor Standards Act, as amended ("FLSA"), 29 U.S.C. §§ 201 et seq. The PMWA, enacted in 1968, mirrors in many respects the FLSA and "is also designed to protect employees who do not have real bargaining power." Commonwealth v. Stuber, 822 A.2d 870 (Pa.Commw.Ct.2003), affd, 580 Pa. 66, 859 A.2d 1253 (2004) (finding that definitions of "employ," "employer" and "employee" in the two acts are virtually identical).
This general rule, however, is subject to various exemptions in both the federal and state statutes. One federal exemption is the Federal Motor Carrier Exemption ("FMCE"), which provides in relevant part:
29 U.S.C. § 213(b)(1). Prior to August 10, 2005 and after June 6, 2008, under § 31502, the Secretary of Transportation was and is authorized to establish qualifications and maximum hours of service for "employees ... of a motor carrier." 49 U.S.C. § 31502(b)(1).
The PMCE, which is modeled after the FMCE, is set forth in 43 Pa.Stat.Ann. § 333.105(b)(7), which provides in relevant part:
43 Pa.Stat.Ann. § 333.105(b)(7).
"The `fundamental test' for determining whether the [FMCE] applies is whether `the employee's activities affect safety of operation' of motor vehicles and are therefore within the jurisdiction of the Secretary of Transportation." Dalton v. Sabo, Inc., Civ. No. 09-358, 2010 WL 1325613, at *2 (D.Or. Apr. 1, 2010) (quoting Levinson v. Spector Motor Serv., 330 U.S. 649, 671, 67 S.Ct. 931, 91 L.Ed. 1158 (1947)). "Generally, `[t]he duties of drivers affect safety of operation, so drivers employed by motor carriers covered by the Motor Carrier Act are subject exclusively to the authority of the Secretary of Transportation.'" Id. (quoting Mayan v. Rydbom Exp., Inc., Civ. A. No. 07-2658, 2009 WL 3152136, at *3 (E.D.Pa. Sept. 30, 2009) (citing Levinson, 330 U.S. at 664-65, 67 S.Ct. 931)).
The party seeking to invoke the FMCE carries the burden of proving "`plainly and unmistakably'" that it is entitled to the exemption. Packard v. Pittsburgh Transp. Co., 418 F.3d 246, 258 (3d Cir.2005) (quoting Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir. 1992)); Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190, 206, 86 S.Ct. 737, 15 L.Ed.2d 694 (1966). Exemptions from the FLSA constitute an affirmative defense construed narrowly against the employer. Packard, 418 F.3d at 250 (citing Madison v. Res. for Human Dev., Inc., 233 F.3d 175, 180 (3d Cir.2000)); Corning Glass Works v. Brennan, 417 U.S. 188, 196-97, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974); Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960). Under those considerations which are applicable to an analysis under the PMCE, Frito-Lay
The parties agree that at the time the PMCE was enacted—1990—certain employees of a Pennsylvania motor carrier were exempt from the OT provisions of both the FLSA and PMWA.
There are four time frames that the court must consider here: 1) pre-August 10, 2005, 2) between August 10, 2005 and April 26, 2006, 3) between April 26, 2006 and June 6, 2008, and 4) post-June 6, 2008. The applicable periods relate to the timing of various amendments to the MCA and the FLSA. It is noteworthy that no relevant amendments were made to the PMWA or the PMCE after August 10, 2005.
Prior to August 10, 2005, a motor carrier was defined in 49 U.S.C. § 31502 as "a person providing motor vehicle transportation for compensation." 49 U.S.C. § 31502(12) (2000). The jurisdiction of the federal Secretary of Transportation covered motor carriers and did not relate to the weight of vehicles driven by employees of motor carriers. The effect of the pre-2005 provisions of the MCA was to exempt all drivers employed by a motor carrier— irrespective of the weight of the vehicles— from the OT provisions of the FLSA. Brooks v. Halsted Commc'ns, Ltd., 620 F.Supp.2d 193 (D.Mass.2009).
On October 1, 1990, the federal Department of Transportation's Motor Carrier Safety Regulations applicable to drivers of commercial motor vehicles took effect. 49 C.F.R. §§ 390 et seq. Regulations set forth in 49 C.F.R. 395.3(a)
49 C.F.R. § 390.5.
Under these regulations, the Secretary of Transportation was not exercising jurisdiction over drivers of motor vehicles with a GVWR of 10,0000 pounds or less. Friedrich, 974 F.2d at 419. The Third Circuit Court of Appeals in Friedrich held that even though the Department of Transportation did not exercise jurisdiction over drivers of vehicles with gross weights of
On August 10, 2005, SAFETEA-LU was enacted. It changed the reference to a "motor carrier" in § 31502 to a "commercial motor vehicle." Pub.L. No. 109-59, 119 Stat. 1144 (emphasis added); Scott v. Raudin McCormick, Inc., No. 08-4045, 2009 WL 3561301, at *7 (Oct. 30, 2009) (citing Tews v. Renzenberger, Inc., 592 F.Supp.2d 1331, 1343 (D.Kan.2009); 49 U.S.C. § 13102(14)). A "commercial motor vehicle" is defined as:
49 U.S.C. § 31132(1)(A)-(D).
Under that change the Secretary of Transportation no longer had jurisdiction over drivers of light weight vehicles, i.e., vehicles with a GVWR of 10,000 pounds or less. Cf. Friedrich, 974 F.2d at 419.
On June 6, 2008, Congress passed the SAFETEA-LU Technical Corrections Act ("TCA"), 110 Pub.L. No. 244, 122 Stat. 1572., which amended certain provisions of the MCA and the FLSA. This act restored the "previous definition of `motor carrier' by replacing [in § 31502] `commercial motor carrier' with `motor carrier.'" Dalton, 2010 WL 1325613, at *3 (quoting Pub.L. No. 110-244 § 305(c) (2008)). Although, the "commercial motor vehicle" language was removed, the removal was not made retroactive.
Pub.L. No. 110-244, 122 Stat. 1572 § 306(b)(1) (emphasis added). The phrase "covered employee" is defined in the TCA as an individual:
Id. at § 306(c)(1)-(3); see Vidinliev v. Carey Int'l, Inc., 581 F.Supp.2d 1281, 1290-91 (N.D.Ga.2008).
Plaintiffs allege that defendant had actual knowledge that the scope of the exemption changed no later than April 26, 2006 and do not contest the applicability of the PMCE prior to that date. Frito-Lay did not dispute this allegation. (Pls.' Br. 5, App., Ex. 1, ECF No. 30-1 at 6 ¶ 7.) ("Through affidavits and deposition testimony, Defendant has established that they were unaware of the affect [sic] of the enactment of SAFETEA-LU had upon the Motor Carrier Act exemption as that exemption applied to their route salespersons until April, 2006.").
As a result of the TCA amendments to the MCA on June 6, 2008, which replaced the words "commercial motor vehicle" with the words "motor vehicle" in § 31502, the Secretary of Transportation regained the
Section 306(a) of the TCA, added a note with respect to the applicability to § 207 of the FLSA, providing in relevant part:
122 Stat. 1572, § 306(a) and (c). This change refers to the FLSA and not to the jurisdiction of the Secretary of Transportation under the MCA.
Frito-Lay argues that it is entitled to partial summary judgment for three reasons. First, Frito-Lay argues plaintiffs were exempt from OT requirements under the PMCE, the PMWA exemption for employees of motor carriers, for the entire limitations period of this action. See 43 Pa.Stat.Ann. § 333.105(b)(7). As previously noted, both the FLSA and the PMWA generally require an employer to pay OT to employees for hours worked over forty in a workweek, except in certain limited exceptions. 29 U.S.C. §§ 207(a)(1) and 213(b)(1); 34 Pa.Code § 231.41, 43 Pa.Stat. Ann. § 333.105; Stuber, 822 A.2d at 873 (the PMWA is interpreted in light of the FLSA; requirements for proof of an exemption under the PMWA reflect those required under the FLSA). Frito-Lay concedes that the SAFETEA-LU altered the jurisdiction of the Secretary of Transportation by changing the reference in § 31502 from a "motor carrier" to a "commercial motor carrier." Frito-Lay argues this alteration is irrelevant to plaintiffs' claims because the PMCE was not impacted by SAFETEA-LU. Frito-Lay contends that the PMCE does not incorporate amendments to the MCA, made subsequent to 1990, the year the federal law was incorporated into Pennsylvania law, and since the SAFETEA-LU amendments was enacted after the PMCE was promulgated, the truck weight limitation is not applicable to claims under the PMWA.
Plaintiffs argue the SAFETEA-LU provisions are applicable and they were not exempt from the OT requirements of the PMWA pursuant to the PMCE after the enactment of those provisions. Plaintiffs maintain that SAFETEA-LU affected changes in the application of the PMCE because changes in the MCA which affected
Second, and in the alternative, Frito-Lay argues that to the extent the PMCE incorporates SAFETEA-LU, drivers for companies whose fleets included trucks with a GVWR both over and under 10,001 pounds continued to qualify for the exemption at all times. Frito-Lay asserts that SAFETEA-LU only affected the definition of qualifying employers, and had no effect on qualifying employees. Defendant maintains that its employees were not covered by SAFETEA-LU, and that the earliest possible date the employees could be covered would be June 6, 2008—the date Congress enacted the TCA.
Third, even if the court, as a matter of law, determines that Frito-Lay is liable to plaintiffs for OT compensation for the applicable time period, Frito-Lay asserts that it properly compensated plaintiffs under the PMWA by voluntarily paying OT compensation to plaintiffs for hours worked over forty in a workweek, using the FWW method of calculating OT compensation set forth in 29 C.F.R. § 778.114. Defendant maintains that courts have found the FWW method of calculating OT compensation lawful in Pennsylvania. Plaintiffs respond that the Motion should be denied because Frito-Lay did not carry its burden of showing that Pennsylvania considers the FWW lawful under the instant circumstances. Plaintiffs argue there is a genuine issue of material fact about whether defendant met the threshold requirements of affording defendant the option to pay plaintiffs OT compensation pursuant to the federal FWW method. Each argument will be addressed.
Defendant contends the amendments to the MCA have no impact on the PMCE because, as a principle of statutory construction, the PMCE does not incorporate any amendments to the MCA made after the date of the enactment in 1990 of the PMCE. Defendant relies upon Appeal of Free, 301 Pa. 82, 151 A. 583 (1930). In Free, the Pennsylvania Supreme Court recognized:
Free, 151 A. at 584. Defendant's reliance, however, is misplaced in the particular context of this case.
The issue before the Pennsylvania Supreme Court in Appeal of Free was the proper interpretation of the phrase "under existing law" in the context of the disposition of fines imposed upon persons under the Automobile Code of July 7, 1913, 1913 Pa. Laws 672, as amended, for conviction of driving under the influence of alcohol. Appeal of Free, 151 A. at 583. Section 22 of 1913 Pa. Laws 672 provided that fines collected for violations of the act were to be paid to the state treasurer to support state highways. Id. York County, Pennsylvania, claimed that it was entitled to the funds, pursuant to the Special Act of April 3, 1867, 1867 Pa. Laws 719, which provided:
Appeal of Free, 151 A. at 583 (quoting 1867 Pa. Laws 719, sec. 1) (emphasis added).
In discussing that issue in a general vis-á-vis specific context, the Pennsylvania Supreme Court in McKinney v. Foster, 391 Pa. 221, 137 A.2d 502 (1958), instructed:
McKinney v. Foster, 137 A.2d at 506-07 (emphasis added). Notably, the court in Appeal of Free and in McKinney each interpreted the statute in effect at the time of the offense.
Defendant's argument assumes that the reference in 43 PA.STAT.ANN. § 333.105(b)(7) to 49 U.S.C. § 3102(b)(1) and (2) refers to a statute of specific reference—as opposed to a statute of general reference. This assumption belies the parenthetical following 49 U.S.C. § 3102(b)(1) and (2) "(relating to the requirements for qualifications, hours of service, safety and equipment standards)". The provisions of 49 U.S.C. § 31502
As discussed supra, in 1990 when the PMCE was enacted, the jurisdiction of the Secretary of Transportation under the MCA was not conditioned on truck weight. Amendments to § 31502 of the MCA in 2005, however, in effect limited the Secretary of Transportation's jurisdiction conditioned upon truck weight. The amendments to the MCA in 2008 restored that jurisdiction. Because amendments to the MCA made after 1990 changing the jurisdiction of the Secretary of Transportation relating to "requirements for qualifications, hours of service, safety and equipment standards," 43 PA.STAT. ANN. § 333.105(b)(7),
Plaintiffs rely upon Pennsylvania rules of statutory construction to support this conclusion. The pertinent provision, which helps inform this court's conclusion, is:
1 PA. CONS.STAT. § 1937 (emphasis added). Therefore, the reference to the jurisdiction of the Secretary of Transportation in the PMCE refers to the Secretary's jurisdiction on the date in issue, not the jurisdiction applicable in 1990.
Frito-Lay disputes the applicability of the rule of statutory construction set forth in 1 PA.CONS.STAT. § 1937 ("section 1937") on the basis that section 1937 is only applicable to another Pennsylvania statute, regulation or ordinance, and is not applicable where the statute makes reference to a federal statute in an area where Congress has not exercised its powers under the Supremacy Clause. Defendant contends the construction principle was intended to apply to statutes issued by a public body within Pennsylvania, where changes to the incorporated provision would be under the control of the Pennsylvania legislature.
Defendant maintains that incorporating such a provision with all future amendments of a federal statute would be an abdication of legislative responsibility and
The issue before the Pennsylvania Supreme Court in Insurance Federation of Pennsylvania was whether the Pennsylvania Department of Insurance could mandate binding arbitration for an uninsured motorist and underinsured motorist coverage dispute. The issue of incorporating an amendment to a federal statute that was originally incorporated into a Pennsylvania statute was not before the Court. That issue was before the Pennsylvania Commonwealth Court in Charter Hospital of Bucks County, Pa., Inc. v. Commonwealth, 111 Pa.Cmwlth. 576, 534 A.2d 1125, 1129-30 (Pa.Commw.Ct.1987).
In Charter Hospital, the Commonwealth Court of Pennsylvania determined that pursuant to Pennsylvania's Statutory Construction Act, 1 PA. CONS.STAT. § 1937, a self-destructive clause of the Pennsylvania Health Care Facilities Act exclusionary provision did not constitute an unlawful delegation of legislative authority to the federal Secretary of Health, Education and Welfare. The court reasoned that the type of legislation in that case fit a status-finding description—as opposed to rule-making—by asking for a determination about whether the exclusionary provision was inconsistent with a federal regulatory scheme. In discussing the lawfulness of the delegation of legislative authority of Pennsylvania's General Assembly to the federal Secretary of Health Education and Welfare, the court in Charter Hospital stated:
The law is well settled that:
Charter Hospital, 534 A.2d at 1129-30.
Defendant attempts to distinguish Charter Hospital on the basis that the Pennsylvania legislature does not need approval from the federal government to implement the PMWA. This distinction is not persuasive; rather, this court is persuaded that the intent of the PMCE is a status-finding type of legislation, as opposed to a rule-making type. Incorporating the reference to the jurisdiction of the federal Secretary of Transportation into the PMCE does not delegate to the federal government unlimited power to set a general policy for the state. Instead, like in Charter Hospital, it allows the Pennsylvania legislature to insure the PMCE exempts employees who have the status of being subject to the jurisdiction of the federal Secretary of Transportation. Therefore, the court finds that the PMCE incorporates the provisions of § 31502.
Plaintiffs do not contest that the safe harbor provisions of the TCA are applicable here. (Pls.' Br. 5-6, ECF No. 30.) Because it is undisputed that Frito-Lay did not become aware of the SAFETEA-LU's
Here, the parties agree that SAFETEA-LU added a GVWR for the Secretary of Transportation to have jurisdiction to set qualifications and safety standards for employees of employers that are motor carriers. The parties agree that if an employer operates only vehicles over 10,001 pounds its employees are exempt from the OT requirements pursuant to the FMCE and, if amendments to the MCA are applicable to the PMCE, are exempt under the PMCE. Defendant and plaintiffs disagree, however, that post-SAFETEA-LU, but pre-TCA, in the situation where an employer may operate vehicles over and under the 10,000-pound threshold, an analysis of each individual employee's activities is required to determine whether an employee of that employer was subject to the jurisdiction of the Secretary of Transportation. Specifically, the parties disagree about whether during that period an employee's job requirements are considered in determining the applicability of the exemption from OT requirements of the FLSA and the PMWA. The issue raised is whether there is an exemption for employees of employers that operate vehicles with gross weights under and over 10,000 pounds—i.e., hybrid fleets, even though the employee may only operate a vehicle with a GVWR of 10,000 pounds or less.
Several courts have considered this issue with different outcomes depending upon the circumstances before the court. With respect to how the SAFETEA-LU change in referring to a "commercial motor carrier," rather than just a "motor carrier," applied prior to the 2008 change made by the TCA, which restored the reference to only a "motor carrier," the district court in Vidinliev
Vidinliev, 581 F.Supp.2d at 1294. The court noted that federal regulations promulgated by the Department of Labor ("DOL") indicate that the inquiry involves a two-part test and that the second part of the test focuses on the "`class of work involved in the employee's job.'" Id. (citing 29 C.F.R. § 782.2(a) (emphasis added)). "Evidence regarding the makeup of [the employer's] vehicle fleet simply does not conclusively determine the character of the [employees'] activities." Id.
The plaintiffs in Vidinliev argued that, in order to meet the SAFETEA-LU definition, the defendants were required to show that each plaintiff "engaged in more than a de minimus number of interstate trips in commercial motor vehicles." Id. The court reasoned that under the plaintiffs' standard, "[a]n entire class of employees may be `exempt even though the interstate driving on [sic] particular employees was sporadic and occasional, and in practice some drivers would not be called upon for long periods to perform any such work.'" Id. (citing 29 C.F.R. § 782.2(c)(1) and Morris v. McComb, 332 U.S. 422,
In Brooks v. Halsted Communications, Ltd., 620 F.Supp.2d 193 (D.Mass.2009), the district court dealt with a similar issue. In that case, ninety-nine percent of the named defendants' trucks weighed less than 10,000 pounds. Those defendants argued that their employees were exempt from the OT provisions of the FLSA because the defendants were motor carriers over which the Secretary of Transportation had the power to establish working conditions for their employees. The defendants predicated their position upon their having at least one commercial motor vehicle with which they provided transportation for compensation. The court summed up the defendants' argument by stating:
Id. at 199.
The plaintiffs in Brooks argued:
Id. at 200. The court noted the plaintiffs' emphasis on the inconsistency of the defendants' citing "49 U.S.C. § 31132(1) for the definition of `commercial motor vehicle' in order to establish their entitlement to the exemption, while ignoring the very next provision of this section—31132(2)— which defines `employee' as `an operator of a commercial motor vehicle....'" Id.
In holding in the plaintiffs' favor the court quoted from a DOL field bulletin:
Id.
The court recognized that in this context DOL bulletins—as opposed to DOT's bulletins—are entitled to diminished interpretive weight, but noted they should be still be considered.
In Brooks, no driver operated a commercial motor vehicle or was ever likely to do so. In discussing "whether a `hybrid' motor carrier—i.e., one with drivers operating vehicles weighing both above and below 10,000 pounds-was obliged to pay FLSA overtime to its drivers of lighter vehicles before June 6, 2008," the court cited decisions which addressed the issue. Brooks, 620 F.Supp.2d at 200-02. The court noted that other district court decisions, which favored the employees, focused on the duties of the employees and included Hernandez v. Brink's, Inc., No. 08-20717-CIV, 2009 WL 113406 (S.D.Fla. Jan. 15, 2009) (holding that mixed fleets containing both commercial and noncommercial vehicles should be treated for FLSA purposes as two separate sub-fleets); Tews, 592 F.Supp.2d at 1346 (rejecting argument that "the mere presence of commercial motor vehicles in [a] fleet renders all employee-drivers exempt under the MCA exemption"); Vidinliev, 581 F.Supp.2d 1281 (denying summary judgment regarding the applicability of the MCA exemption for claims arising after August 10, 2005 where the defendant operated a mixed fleet of commercial and noncommercial motor vehicles); and Kautsch v. Premier Commc'ns, 502 F.Supp.2d 1007 (W.D.Mo.2007) (finding that the MCA exemption did not apply to the plaintiffs' claims after August 10, 2005 because they did not operate commercial motor vehicles). Brooks, 620 F.Supp.2d at 200-01.
The court in Brooks factually distinguished decisions potentially supporting the defendants' focus on an employer's fleet. See Collins v. Heritage Wine Cellars, Ltd., No. 07-CV-1246, 2008 WL 5423550, at **19, 20 n. 11 (N.D.Ill. Dec. 29, 2008) (the plaintiffs overwhelmingly drove vehicles over 10,000 pounds and drove noncommercial vehicles only on a "few occasions"; court conceded that a factual scenario where "at all times," plaintiffs drove vehicles under 10,001 pounds would support a different result); Tidd v. Adecco USA, Inc., No. 07-11214, 2008 WL 4286512, at **3-4 (D.Mass. Sept. 17, 2008) (finding a "more sensible" approach to subjecting an employer to one body of regulations as to some of its drivers and another regulatory regime as to others was an "either-or" interpretation). In considering the failure of the court in Tidd to include "any discussion of the TCA [in] its analysis" the court in Brooks stated:
Brooks, 620 F.Supp.2d at 200-03.
Frito-Lay relies heavily upon Mayan in arguing that an individual employee's activities are irrelevant. Defendant contends
In Mayan, the district court considered whether the SAFETEA-LU altered which motor carrier employees were properly categorized as exempt under the FMCE. The court focused on the plain language of the SAFETEA-LU statute and concluded that SAFETEA-LU only altered which employers would be considered motor carriers, and made no changes to the definition of employees under the law. As a result, the court determined that the employee plaintiffs continued to be covered by the FMCE after the enactment of SAFETEA-LU, and were not entitled to any OT compensation under either the FLSA or the PMWA, regardless of the size of the trucks they drove.
In Mayan the court noted that few courts that had considered the issue at that time, but of those that had, the majority of courts ruled inapposite to the court's holding in Mayan.
This court finds persuasive the rationale of the majority of other district courts which addressed the issue raised here and concludes that under SAFETEA-LU an employee's activities are considered in determining whether or not he or she is subject to the authority of the Secretary of Transportation and therefore exempt under the PMCE from OT compensation requirements of the PMWA. Post-SAFETEA-LU, but pre-TCA, an analysis of each individual employee's activities is required to determine whether an employee was subject to the jurisdiction of the Secretary of Transportation. With the exception of Cerutti, the record is not sufficiently developed for the court to reach any conclusion about whether plaintiffs never had to drive a truck with a gross vehicle weight over 10,000 pounds or whether they had some responsibility to do so. Except for Cerutti, who the parties agreed drove a truck with a GVWR of more than 10,000 pounds, defendant did not carry its burden on partial summary judgment on this issue for the period from April 26, 2006 until the date of the enactment of the TCA on June 6, 2008. Summary judgment will be granted in favor of defendant on this issue only with respect to the claim of Cerutti.
As discussed above, on June 6, 2008, the TCA restored the jurisdiction of the federal Secretary of Transportation over employees of motor carriers who drive vehicles with a GVWR of less than 10,001 pounds. The impact of this change upon plaintiffs was to restore their exempt status under the PMCE, while their nonexempt status under the FMCE was maintained due to a note providing that employees driving vehicles under 10,001 pounds remained covered under the OT compensation provisions of the FLSA. As noted supra, the PMCE provides in relevant part:
43 PA.STAT.ANN. § 333.105(b)(7) (emphasis added).
As a matter of statutory construction, this court applying Pennsylvania law is bound to follow the law the Pennsylvania
Here, the plain language of the PMCE unambiguously indicates that any employee over whom the federal Secretary of Transportation has the power to establish qualifications and maximum hours of service is exempt from both the minimum wage and OT provisions of the PMWA. This court cannot circumvent the PMWA by adding a note like that added in the TCA with respect to the applicability of the FLSA. See Id. ("We are not free to ignore the clear language of a Pennsylvania statute merely because by rewriting the statute we arguably would act consistently with a legislative policy.").
With respect to the FMCE, the exemption is based upon the jurisdiction of the Secretary of Transportation, i.e., "any employee with respect to whom the [Secretary of Transportation] has power to establish qualifications and maximum hours of service" pursuant to the provision of section 31502 of Title 49. 29 U.S.C. § 213(b)(1); 49 U.S.C. § 31502(b)(1) (employees of a motor carrier). The FMCE, however, is impacted by the additional provision of § 306(a) and (c) of the TCA, which carved out a limitation under the FLSA for the OT compensation exemption, providing in relevant part:
Pub.L. No. 110-244, 122 Stat. 1572 § 306(a) (emphasis added). The phrase "covered employee" is defined in the TCA as an individual:
Id. § 306(c)(1), (2)(A)(B). This additional limitation is not applicable to the PMCE because an employee's status under the PMCE turns solely on the jurisdiction of the Secretary of Transportation. Therefore, upon enactment of the TCA, plaintiffs were once again exempt under the PMCE, even though they may not be exempt under the FMCE. As a matter of Pennsylvania statutory construction, federal courts must apply the Pennsylvania law and cannot change it to reflect perceived legislative policy. Barshak, 106 F.3d at 506. After June 6, 2008, the date of the enactment of the TCA, the PMCE applies to plaintiffs because that law restored their status as employees who were subject to the authority of the Secretary of Transportation. As a result, they fall within the statutory language of the PMCE. To the extent the Pennsylvania legislature intends the PMCE to follow the FMCE, the Pennsylvania legislature must change Pennsylvania
Frito-Lay argues that even if plaintiffs were found to be nonexempt employees under the PMWA for all or part of the limitations period, it properly compensated them for all OT hours worked under the FWW method. Frito-Lay maintains the FWW method is permissible under the PMWA, pursuant to the PMWA regulation set forth in 34 PA.CODE § 231.43(d). To calculate OT on the salary portion, Frito-Lay utilizes the federal regulation set forth in 29 C.F.R. § 778.114.
Frito-Lay maintains the FWW method is utilized in nearly every state, including Pennsylvania. Defendant alleges that under the FWW method an employee's "regular rate" for purposes of calculating OT fluctuates on a weekly basis based upon the actual number of hours worked during a workweek, as opposed to the standard forty hours. Defendant divides the weekly salary by the total number of hours worked, resulting in a "regular rate" that is considered the straight-time compensation for all hours worked during that week.
With respect to commissions, the parties agree that plaintiffs receive a salary plus commissions. Frito-Lay alleges with respect to a nonexempt employee who receives commissions on a weekly basis, the federal regulations require that commissions be added to the employee's other earnings for that week for purposes of determining the employee's regular rate. 29 C.F.R. §§ 778.118, 778.119. It relies upon Lance v. Scotts Lawn Service, Inc., No. 04-5270, 2005 WL 1785315, at *18 (N.D.Ill. July 21, 2005) (rejecting the plaintiff's argument that commissions are not included in determining an employee's regular rate under the FWW method), and Perez v. RadioShack Corp., No. 02-cv-7884, 2005 WL 3750320, at **18-19 (N.D.Ill. Dec. 14, 2005), as instances where these regulations have been applied to employers using the FWW method.
Frito-Lay argues it properly calculates plaintiffs' OT compensation by including their base salary and any commissions attributable to that week in calculating the
Frito-Lay asserts that the FWW method is permissible under the PMWA. Frito-Lay relies upon Evans v. Lowe's Cos., Inc., Civ. A. No. 3:03-cv-0438, 2004 U.S. Dist. LEXIS 8335 (M.D. Pa. April 29, 2004); Friedrich v. U.S. Computer Systems, Inc., Civ. A. No. 90-1615, 1996 WL 32888 (E.D.Pa. Jan. 23, 1996); and a Pennsylvania's Labor Law Compliance Division ("PLLCD")
Plaintiffs argue that defendant's FWW method of compensating plaintiffs for OT work is not permitted by the PMWA because it does not comport with the general OT rule of the PMWA set forth in 34 PA.CODE § 231.41. Plaintiffs are not paid a flat sum for a day's work or paid a flat sum for a particular job, pursuant to 34 PA.CODE § 231.43(b). Plaintiffs agree that defendant's method of paying OT compensation at the rate of one-half plaintiffs' regular rate of pay is permitted under section 231.43(b), but disagree that it is permitted under section 231.43(d)(3). Plaintiffs argue that under section 231.43(d)(3), Frito-Lay is obligated to pay plaintiffs at the rate of one and one-half of their regular pay. Plaintiffs rely upon Friedrich, 1996 WL 32888 at **8-11.
Plaintiffs assert defendant does not comport with the requirements of section 231.43(d)(3) because the basic rate is not established by agreement or understanding before the work is commenced. The parties agree that commissions are factored into plaintiffs' basic rates of pay. Because the commissions are not paid until after the fact, plaintiffs argue that defendant
Plaintiffs rely upon Turner v. Mercy Health System, 2010 Phila. Ct. Com. Pl. LEXIS 146 Mar. 10, 2010) (holding that an eight-hour a day, eighty-hour a week method of paying OT to employees is unlawful under Pennsylvania law) for the proposition that section 231.43(7)(d) must be read by its plain meaning. In analyzing the plain language of 34 PA.CODE § 231.43(7)(d), the state trial court stated:
Turner, 2010 Phila. Ct. Com. Pl. LEXIS 146, at *13.
In Pennsylvania, an employer shall be deemed to not have violated the OT compensation provisions of the PMWA if the employer meets provisions of 34 PA.CODE § 231.43, which provides in relevant part:
34 PA.CODE § 231.43(b), (d)(3) (emphasis added).
Section 231.43(d)(3) clearly requires that OT pay be computed at "1½ times" the rate established by the agreement or understanding. Id. Under a plain reading of that regulation, Frito-Lay cannot have it both ways. Frito-Lay concedes that it paid plaintiffs pursuant to 34 PA.CODE § 231.43(d). If so, it cannot comply with that section without paying plaintiffs at an OT rate of one and one-half times the plaintiffs' regular rate. Therefore, the court need not predict whether Pennsylvania courts would recognize the FWW method of OT payment. Similarly, the court need not consider communications from the Pennsylvania Department of Labor and Industry, discussing whether Pennsylvania law would recognize the FWW.
Prior to April 26, 2006, the parties do not dispute that plaintiffs were exempt from the PMWA under the PMCE. It is also undisputed that as of April 26, 2006, all plaintiffs, with the exception of Cerutti, drove Frito-Lay vehicles with a GVWR of 10,000 pounds or less. It, however, is unclear, whether those plaintiffs were subject to being required to drive a vehicle with a GVWR over 10,001 pounds. Therefore, for the period from April 26, 2006 until June 6, 2008—the date of enactment of the TCA—discovery may be needed to permit the record to be fully developed concerning whether those employees were subject to the exemption. Summary judgment must be granted in defendant's favor at least against Cerutti because it is undisputed she drove trucks over 10,001 pounds.
For the period after the enactment of the TCA—June 6, 2008—the PMCE applies to plaintiffs because that law restored their status as employees who were subject to the authority of the Secretary of Transportation. They fall within the statutory language of the PMCE. To the extent the Pennsylvania legislature wants to follow the FLSA exemption set forth in § 306 of the TCA, the Pennsylvania legislature must change the law. This court cannot legislate.
With respect to whether Frito-Lay's method of compensating plaintiffs according to the FWW would be lawful in Pennsylvania, the court finds this question is irrelevant because Frito-Lay's OT payment to plaintiff in the amount of one-half times their regular pay for hours worked over forty in a week does not comport with either 34 PA.CODE § 231.43(b) or (d)(3).
Frito-Lay's Motion must be denied in part and granted in part because: 1) the PMCE incorporates amendments to the federal MCA relating to employees over whom the Secretary of Transportation has authority to regulate qualifications and
49 C.F.R. § 395.3.
29 C.F.R. § 778.114(a).