Airport Shuttle Driver’s Overtime Claim Fails On Motor Carrier Exemption

The plaintiff in this case was a former driver of Southern Shuttle Services, Inc.’s airport shuttle vans, a shared-ride airport shuttle, which transported passengers to and from three South Florida airports (Miami International Airport, Palm Beach International Airport, and Fort Lauderdale-Hollywood International Airport). The plaintiff, like other shuttle drivers, was paid commission and tips, but not overtime compensation. After his employment ended, he brought suit against Southern Shuttle for alleged violations of the overtime pay provisions of the Fair Labor Standards Act (FLSA). Southern Shuttle moved for summary judgment, arguing that its airport shuttle van drivers fell under the FLSA’s Motor Carrier Act (MCA) exemption. A federal district court agreed, and the plaintiff appealed to the U.S. Court of Appeals for the 11th Circuit.

The plaintiff argued on appeal that Southern Shuttle failed to meet the first requirement of the MCA exemption because it was not subject to the Secretary of Transportation’s jurisdiction. In support of that position, the plaintiff argued that: (1) Southern Shuttle’s airport shuttle service did not make or derive revenue from interstate trips, such that the Secretary could exercise jurisdiction over it, and (2) the Secretary of Transportation had not in fact exercised jurisdiction over Southern Shuttle.

The circuit court affirmed the district court’s decision. The circuit court explained that even if the Secretary of Transportation had not in fact exercised jurisdiction over Southern Shuttle, the MCA exemption would still apply if the Secretary had the authority to do so. The circuit court then examined whether the Secretary had jurisdictional power over Southern Shuttle. That issue, in turn, depended on whether Southern Shuttle engaged in more than de minimus interstate commerce.

The circuit court then found that the “purely intrastate transport of passengers to and from an airport may, under certain circumstances, constitute interstate commerce and thus bring the transportation company within the jurisdiction of the Secretary of Transportation.” Next, it ruled that those circumstances were “present here.”

The circuit court explained that many of Southern Shuttle’s passengers to and from the airport had either just flown from, or were about to fly to, places outside the state of Florida. It also focused on Southern Shuttle’s connection to the Internet, noting that(i) a large portion of Southern Shuttle’s reservations were made via travel websites on the Internet; (ii) travelers purchased package deals from these Internet travel companies that included hotel accommodations and airfare in addition to transportation to and from the airport; (iii) the Internet travel companies provided their package-deal customers with a voucher for free airport transportation, which the customers used to board Southern Shuttle’s airport shuttles; and (iv) Southern Shuttle then used the collected vouchers to invoice the Internet travel company for payment. In other words, the appellate court explained, Southern Shuttle’s local transport of these package-deal travelers had a “practical continuity of movement” with the overall interstate journey. In sum, it ruled that Southern Shuttle had shown that it was subject to the Secretary of Transportation’s jurisdiction under the MCA.

The circuit court then decided that the plaintiff’s activities as an airport shuttle driver constituted “interstate commerce” within the meaning of the MCA, given that he performed Southern Shuttle’s core airport shuttle transport activity. Accordingly, it concluded, the district court had properly granted summary judgment to Southern Shuttle based on the motor carrier exemption to the FLSA. [Abel v. Southern Shuttle Services, Inc., 2010 U.S. App. Lexis 19567 (11th Cir. Sept. 21, 2010).]

FLSA Retaliation Claim Fails Where Plaintiff Had Expressed Concerns About Employees’ Overtime As Part Of His Job

The plaintiff in this case was the Sales & Marketing Director for the Master Builders Association of King and Snohomish Counties (MBA). The plaintiff asserted a claim under the anti-retaliation provision of the Fair Labor Standards Act (FLSA), contending that he had been discharged from his employment with MBA following his complaint that MBA employees were not being paid overtime as required by federal and state laws. MBA moved for summary judgment.

To prevail on a retaliation claim under the FLSA, a plaintiff must first make a prima facie showing that: (1) he or she engaged in activity protected by the FLSA; (2) the defendant took an adverse employment action; and (3) there was a causal link between the protected activity and the adverse action. If a plaintiff met this standard, the burden shifted to the employer to offer a legitimate, non-discriminatory reason for the adverse action. The burden thereafter shifted back to the plaintiff to demonstrate that the employer’s proffered reason was pretextual.

MBA argued in its motion that the plaintiff had not engaged in protected activity because he had not “step[ped] outside” his professional role and taken a position “adverse” to his employer. MBA contended that the plaintiff’s concern over whether MBA employees were exempt or nonexempt fell within his job responsibilities as a director at MBA, and because he had never taken on a role adverse to MBA. MBA pointed to the plaintiff’s testimony as supporting the conclusion that it was his role and responsibility as a company director to raise the issue of exempt/nonexempt status. MBA further pointed to email from the plaintiff as supporting the conclusion that he was raising his concerns in his capacity as an MBA director, including his statement: “In my role as director I have a responsibility to our employees and to our company.” Additionally, MBA noted, the plaintiff also stated in his email that “we may be operating outside the law” and asked for clarification with respect to why “our employees are categorized as exempt.” MBA therefore argued that the plaintiff’s interests were clearly aligned with MBA, not against it, and that, as a result, his retaliation claim failed as a matter of law for failure to prove he engaged in protected activity.

In response, the plaintiff conceded that his overall responsibilities included flagging employment issues, such as wage and hour issues, but argued that he went far beyond the mere performance of his duties through repeated complaints and advocacy on behalf of MBA employees.

The court ruled in favor of MBA. It explained that the mere fact that the plaintiff raised objections on behalf of his subordinates did not establish protected activity. The relevant question was, instead, whether the plaintiff was acting outside of his professional role and “personally advocating on behalf of his” subordinates’ rights, and had taken a position adverse to MBA.

In the court’s view, the plaintiff’s testimony could be read to support his claim that he was, in part, acting on his subordinates’ behalf, and his email reflected his disagreement with MBA’s position on the issue of whether it had properly classified its employees as exempt. However, the court continued, even assuming the plaintiff took these steps at the bequest and on behalf of one or more MBA employees, he conceded that doing so “fell within his managerial responsibilities.” The court agreed with MBA that the language in the plaintiff’s email – including his use of the inclusive terms “we” and “our” and his explanation that he had “a responsibility to our employees and to our company” and believed the MBA might be exposed to legal liability – supported the conclusion that he remained in his professional role, acting on behalf of MBA in bringing the issue to its attention.

Accordingly, the court found no material factual dispute on the issue of whether the plaintiff had engaged in protected activity by stepping outside of his professional role and taking on a role adverse to MBA in relation to the issue of overtime pay. The court therefore concluded that the plaintiff failed to establish that he engaged in protected activity and MBA was entitled to summary judgment. [Stewart v. Masters Builders Ass’n of King and Snohomish Counties, 2010 U.S. Dist. Lexis 93356 (W.D. Wash. Sept. 8, 2010).]

Court Denies Employer’s Summary Judgment Motion in FMLA Retaliation Case

The plaintiff in this case began working for The Keiser School, Inc., in August 1995, where she was a graphics instructor. In April 2005, the plaintiff suffered a stroke, which led to a brain hemorrhage, partial paralysis to one side of the body, sensory deficit disorder and an array of lingering physical limitations. On May 2, 2005, the plaintiff notified Keiser of her need to take Family and Medical Leave Act-covered leave as a result of her stroke and resulting medical conditions.

On July 20, 2005, the plaintiff received medical release to return to teaching at Keiser and she informed Keiser that she would be returning to work on July 25, 2005. The plaintiff alleged that at that time, Keiser informed her that she had been replaced and could return to work only in a non-teaching capacity. Although Keiser agreed to reinstate the plaintiff as a full time faculty member on August 29, 2005, the plaintiff alleged that this was agreed upon only after she had obtained the services of an attorney who contacted attorneys for Keiser. When the plaintiff did return to work, she did so in an administrative capacity until resuming classroom teaching duties on August 29, 2005.

Upon her return to work, during the 2005/06 school year, the plaintiff was assigned to work introductory level classes offered in the evenings. She alleged that the class assignments were significantly different, less challenging and less prestigious than the classes she had formerly taught. Prior to suffering the stroke, the plaintiff had taught both introductory and advanced day and evening classes. Keiser contended that the plaintiff’s schedule was determined and assigned specifically taking into account letters from the plaintiff’s doctor, which restricted her working hours per week. During the summer period following the 2005/06 school year, the plaintiff was assigned to work in the library rather than teach any classes. The plaintiff again alleged that the summer class assignments represented a significant departure from her prior schedule and employment on account of her stroke.

During the school year of 2006/07, the plaintiff was again assigned only introductory level evening classes and assigned only library duties for the subsequent summer period. In that same summer period, classes that were formerly taught by the plaintiff were assigned to two male instructors. The plaintiff alleged that these instructors were assigned these courses despite the fact that they did not possess her teaching qualifications and were not as well regarded by students. Although at this time the plaintiff was allowed to teach her first advanced class following her stroke, she claimed this was only because students had specifically requested that she teach the course.

After teaching during the 2007/08 school year, the plaintiff was fired from her job at the end of April 2008. She alleged that she was informed of her termination on April 26, 2008 upon being told by Keiser’s president that there were no summer classes for her to teach and that she would be paid only through the following week. According to the plaintiff, there were classes available on the schedule for her to teach but they were only being offered to the two allegedly less qualified male instructors.

The plaintiff filed a lawsuit against Keiser with a variety of claims, including a retaliation claim under the FMLA. In response, Keiser filed a motion for summary judgment.

As the court explained, to state a prima facie claim for FMLA retaliation, a plaintiff must show: (1) that he or she engaged in statutorily protected expression; (2) that he or she suffered an adverse employment decision; and (3) that a causal link existed between the protected activity and the adverse action.

In its decision denying Keiser’s motion for summary judgment, the court focused on the third element of the plaintiff’s prima facie case of retaliation: the existence of any causal link between the plaintiff’s FMLA leave and any alleged and timely adverse actions taken against her. The court explained that, to establish a causal link, a plaintiff must show that the protected activity and adverse action were not fully unrelated. Evaluation of alleged adverse actions was not limited to a final decision to terminate or not to promote, the court noted. In determining whether a prima facie case of causation had been made, the court said, it had to evaluate the totality of the collective series of alleged adverse employment actions to determine whether a retaliation claim existed from the allegations.

The court explained that the plaintiff alleged a pattern of adverse actions taken by Keiser toward her beginning immediately after she returned from FMLA leave, including placement in administrative duties rather than teaching, denial of her prior advanced teaching position each term subsequent to FMLA leave, continual library assignments and ultimately termination. Keiser argued that the plaintiff could not establish a causal connection between her FMLA leave and the challenged employment actions on account of intervening events, namely, continued hourly work restrictions imposed by the plaintiff’s doctor. However, the court found, in assessing Keiser’s actions, the timing and nature of the actions taken against the plaintiff presented issues “sufficiently suggestive of retaliatory motive” for jury consideration.

The court did say that Keiser was “not without nondiscriminatory or retaliatory justifications” for the actions allegedly taken against the plaintiff. However, it concluded, the plaintiff, through her showing of “inconsistencies, contradictions and weaknesses” in Keiser’s proffered explanations, hasd succeeded in demonstrating issues of fact with which a reasonable jury could fail to believe Keiser. Therefore, because the plaintiff had produced sufficient evidence to support a jury finding of prima facie retaliation, it denied Keiser’s motion for summary judgment. [Moyes v. The Keiser School, Inc., 2010 U.S. Dist. Lexis 102810 (N.D. Fla. Sept. 28, 2010).]

Newspaper Reporters Found To Be Non-Exempt Under FLSA And Thus Entitled To Overtime

A number of California-based employees of Chinese Daily News, Inc. (CDN), a Chinese-language newspaper, filed suit against CDN under the Fair Labor Standards Act (FLSA), alleging that they had been wrongfully denied overtime compensation even though they were made to work in excess of eight hours per day and 40 hours per week. Both sides sought summary judgment on the question of whether CDN’s reporters were non-exempt employees (entitled to overtime) or exempt employees (not entitled to overtime). The district court granted summary judgment to the plaintiffs, holding that CDN’s reporters did not qualify for the “creative professional exemption.” CDN appealed to the U.S. Court of Appeals for the Ninth Circuit.

CDN argued that the district court had erred in holding on summary judgment that CDN’s reporters were non-exempt employees entitled to overtime. Specifically, CDN argued that its reporters were subject to the “creative professional exemption” and therefore were exempt employees not subject to the FLSA.

The Ninth Circuit explained that the FLSA exempts employers from paying overtime to “any employee employed in a bona fide . . . professional capacity.” To qualify as an exempt professional under federal law, an employee must be compensated “at a rate of not less than $455 per week,” and his or her “primary duty” must be the performance of exempt work. Moroever, an employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor as opposed to routine mental, manual, mechanical or physical work.

The Ninth Circuit observed that, as applied to journalists, the federal Department of Labor had construed the “creative professional exemption” in a 2004 regulation that has the force of law and that explained that “[t]he majority of journalists, who simply collect and organize information that is already public, or do not contribute a unique or creative interpretation or analysis to a news product, are not likely to be exempt.” The Ninth Circuit then noted that although it had not decided a case applying the creative professional exemption to journalists, other courts had explored the circumstances under which print journalists qualified for the exemption.

For example, the Third Circuit concluded that none of the reporters at a chain of 19 local weeklies was exempt. The newspapers largely contained “information about the day-to-day events of their respective local communities . . . overlooked by the Pittsburgh metropolitan daily press.” The reporters primarily generated articles and features using what they knew about the local community, spent 50 to 60 percent of their time accumulating facts, and mostly filed recast press releases or information taken from public records. They wrote a feature article or editorial about once per month. The Third Circuit held that they were among the majority of reporters who were non-exempt. It noted that the work was not “the type of fact gathering that demands the skill or expertise of an investigative journalist for the Philadelphia Inquirer or Washington Post, or a bureau chief for the New York Times.”

In another case, the First Circuit similarly held that reporters and other employees employed by a small community newspaper were not exempt professionals. The day-to-day duties of the reporters involved “general assignment work” covering hearings, criminal and policy activity, and legislative proceedings and business events. Employees were not “asked to editorialize about or interpret the events they covered.” They, too, were therefore among the majority of reporters who were not exempt, even though their work occasionally demonstrated creativity, invention, imagination, or talent.

By comparison, the Ninth Circuit pointed out, a federal district court in the District of Columbia held that a Washington Post reporter whose “job required him to originate his own story ideas, maintain a wide network of sources, write engaging, imaginative prose, and produce stories containing thoughtful analysis of complex issues” was exempt. As a high-level investigative journalist who had held multiple positions of prominence at one of the nation’s top newspapers, the reporter was the sort of elite journalist whom the creative professional exemption was intended to cover.

In the CDN case, the Ninth Circuit explained, the parties submitted extensive evidence on summary judgment. Reporters stated in their depositions that they wrote between two and four articles per day, and that they very seldom did investigative reporting. The reporters proposed articles, but the editors gave considerable direction and frequently assigned the topics. One reporter explained that with having to write so much, “you didn’t have enough time to – really analyze anything.” Some time was spent rewriting press releases. There were no senior reporters or others with distinctive titles, and each of the reporters performed essentially the same tasks.

Editors’ declarations submitted by CDN, on the other hand, stated that articles included “background, analysis and perspective on events and news,” that CDN employed “some of the most talented reporters in the Chinese newspaper industry,” and that the reporters had “extensive control over their time, pace of work, and ideas for articles to write.” They stated that reporters had to cultivate sources, sift through significant amounts of information and analyze complicated issues. Several editors stated that they approved more than 90 percent of the topics suggested by reporters. Reporters’ salaries ranged from $2,060 to $3,700 per month.

The Ninth Circuit acknowledged that the evidence revealed disputes over how to characterize CDN’s journalists, but it stated that it agreed with the district court that, even when viewing the facts in the light most favorable to CDN, the reporters did not satisfy the criteria for the creative professional exemption. CDN’s Monterey Park (Los Angeles) operation, with 12 to 15 reporters and a local circulation of 30,000, was not quite as small or unsophisticated as the community newspapers in the First and Third Circuit decisions, the Ninth Circuit said. It found, however, that CDN was “much closer to the community newspapers described in those cases” than to the New York Times or Washington Post. “CDN’s articles do not have the sophistication of the national-level papers at which one might expect to find the small minority of journalists who are exempt,” the circuit court decided. Moreover, it added, the “intense pace” at which CDN’s reporters worked precluded them “from engaging in sophisticated analysis.” CDN’s reporters’ primary duties did not involve “conducting investigative interviews; analyzing or interpreting public events; [or] writing editorial[s], opinion columns or other commentary,” even if they engaged in these activities some of the time. Indeed, the circuit court found, many CDN articles could be characterized as “standard recounts of public information [created] by gathering facts on routine community events,” as opposed to the product of in-depth analysis. Characterizing CDN journalists as exempt would therefore be inconsistent with the Department of Labor’s intent that “the majority of journalists . . . are not likely to be exempt,” and with the requirement that FLSA exemptions be construed narrowly.

Accordingly, the circuit court affirmed the district court’s decision that CDN’s reporters were non-exempt employees who were entitled to the protections of the FLSA. [Wang v. Chinese Daily News, Inc., 2010 U.S. App. Lexis 19929 (9th Cir. Sept. 27, 2010).]

Circuit Court Rejects Claim That New Employer Was “Successor” To Former Employer For Purposes Of The FMLA

Factory 2-U was a retail store that sold discount clothing. At its height, Factory 2-U operated more than 200 stores in the western United States and employed more than 4,000 people. Seven stores were in the Tri-Cities area of southeastern Washington (Kennewick, Richland, and Pasco), and each of those stores had about 30 employees.

By 2004, however, Factory 2-U had filed for bankruptcy. In September 2004, the bankruptcy court approved the sale of Factory 2-U’s existing leasehold on the Pasco store (and 39 other store leaseholds) to Dollar Tree Stores, Inc., a chain retail store that sold a variety of items, including clothing, for one dollar. Apart from the leases, Dollar Tree purchased no other assets of Factory 2-U.

At the end of September 2004, the Factory 2-U store in Pasco closed its doors. Dollar Tree opened for business at the Pasco location four weeks later. During those four weeks, Dollar Tree reconfigured the store. First, a construction crew remodeled the interior to support a Dollar Tree store, in accordance with Dollar Tree’s specifications. Second, a set-up team prepared the inventory, stocked the shelves with Dollar Tree’s merchandise, and performed other preparatory work. Finally, on October 30, 2004, Dollar Tree opened for business in the former location of Factory 2-U, with 15 to 25 Dollar Tree employees.

In September 2004, the plaintiff in this case, who had been the full-time store manager of the Pasco Factory 2-U store, filled out an application for employment with Dollar Tree. Dollar Tree hired her as an assistant manager of the Dollar Tree store at the same Pasco location. Even though the store was closed for four weeks, the plaintiff’s employment was continuous. During the first two weeks of the renovations in Pasco, the plaintiff trained at a pre-existing nearby Dollar Tree store. After her two week training, the plaintiff assisted with the preparatory work at the Pasco store. When the Pasco store opened, the plaintiff began full time work at that store as an assistant manager. Only one other former Factory 2-U employee worked at the new Dollar Tree store in Pasco after its opening.

From September 2004 until May 2005, the plaintiff worked as assistant manager at the Pasco Dollar Tree. In May 2005, the plaintiff’s mother experienced serious health problems, and the plaintiff provided assistance and care for her. Dollar Tree granted the plaintiff some amount of unpaid leave but less than the plaintiff requested. The plaintiff either quit or was fired in late May or June 2005.

The plaintiff contacted the Department of Labor, which initiated an investigation of whether Dollar Tree had violated the Family and Medical Leave Act. The DOL concluded that Dollar Tree’s actions had violated the FMLA and informed the parties of its conclusion. During the negotiations that followed, Dollar Tree offered the plaintiff reinstatement to her former position at the Pasco store, a partial payment of $5,000 toward lost wages and certain other benefits such as accrued sick leave. Although the plaintiff had sought more than $20,000 in lost wages, she accepted the offer and began work again on April 14, 2006.

After her reinstatement, the plaintiff continued working at the Pasco Dollar Tree store until she quit voluntarily in December 2006. The plaintiff then filed suit against Dollar Tree, seeking the full amount of her lost wages. After the district court held that Dollar Tree was not a successor in interest under the FMLA and granted summary judgment to Dollar Tree, the plaintiff appealed.

As the Ninth Circuit observed, the FMLA entitles “an eligible employee” to take family or medical leave for several enumerated reasons, including to care for a close relative. The term “eligible employee” means, among other things, an employee who has been employed for at least 12 months by the employer with respect to whom leave is requested. That is, an employee is not eligible for family or medical leave until he or she has worked for an employer for 12 months. The term “employer” generally means a person or entity engaged in commerce with a minimum number of employees. Additionally, however, the term “employer” includes any “successor in interest of an employer.”

In this case, the plaintiff challenged a denial of leave that occurred several months shy of her one year anniversary of employment with Dollar Tree. The FMLA covers the purpose of that leave, to care for a seriously ill parent. But, without the “successor in interest” provision, the plaintiff was not an “eligible employee.” The dispositive question before the court, therefore, was whether Dollar Tree was a “successor in interest” to Factory 2-U.

The Ninth Circuit found that Dollar Tree was not a successor in interest to Factory 2-U. It examined a variety of factors, pointing out that Dollar Tree did not acquire any of Factory 2-U’s merchandise; that Dollar Tree sold a wide variety of merchandise whereas Factory 2-U sold clothing only; that Dollar Tree sold items for $1 only whereas Factory 2-U sold clothing at many different prices; that there was almost no continuity of work force given that only the plaintiff and one other Factory 2-U employee had been hired by Dollar Tree; and that there was no overlap in upper management between Factory 2-U and Dollar Tree. Therefore, the Ninth Circuit concluded, the district court had properly granted summary judgment to Dollar Tree. [Sullivan v. Dollar Tree Stores, Inc., 2010 U.S. App. Lexis 19932 (9th Cir. Sept. 27, 2010).]

Reprinted with permission from the January 2011 issue of the Employee Benefit Plan Review – From the Courts.  All rights reserved.