Seventh Circuit Exempts Interstate School Bus Drivers From FLSA Overtime Requirements

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
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Last month, in Almy v. Kickert School Bus Line, Inc., No. 13-1273 (July 16, 2013), the Seventh Circuit Court of Appeals joined the Second, Third, Ninth, and Eleventh Circuits,in finding that school bus drivers who transport students across state lines fall within the “motor-carrier exemption” to the Fair Labor Standards Act (FLSA), and are thus ineligible for overtime pay.

Robert T. Almy, an employee of Kickert School Bus Line, Inc. filed the suit. Almy, who who lived on the border between Indiana and Illinois, worked in both states as a school bus driver, He drove his bus to pick up children at private Illinois schools and transported them to their homes in Indiana. He also drove chartered trips for Illinois schools, taking passengers to destinations within Indiana. Almy believed that Kickert had improperly failed to pay him overtime compensation when he worked more than 40 hours in a week. Accordingly, he filed suit under the FLSA and Illinois’s wage laws.

The FLSA contains a “motor carrier exemption” from its overtime provisions on the ground that the exclusive authority to set maximum hours for certain employees of motor carriers is vested in the Secretary of Transportation by the Motor Carrier Act (MCA). However, a section of the MCA also provides that the Secretary of Transportation does not have jurisdiction “under this part over . . . a motor vehicle transporting only school children and teachers to or from school.”

Based on the MCA’s reference to excluding vehicles transporting children to and from school, Almy argued that the Secretary of Transportation did not have the exclusive jurisdiction to set his maximum hours. Thus, Almy claimed that he did not fall within the FLSA’s motor carrier exemption, but rather was subject to the FLSA’s ordinary overtime pay requirement. In doing so, he relied on a Northern District of Illinois decision, Mielke v. Laidlaw Transit, Inc., in which the court determined that school bus drivers were not exempt under the motor carrier exemption of the FLSA. The problem for Almy was that the section of the MCA regarding school bus drivers is found in an entirely separate subtitle from the maximum hours’ requirement. The district court thus found that the limitation on the Secretary of Transportation’s jurisdiction extended only to those powers granted in the same subtitle as the school bus exemption. Since the power to set maximum hours was outside of the subtitle including the school bus exemption, the district court found in favor of Kickert, holding that the FLSA motor carrier exemption applied to Almy.

The Seventh Circuit affirmed. In a unanimous decision, the court made a distinction between economic regulations and safety regulations under the MCA. According to the court, the exclusive authority held by the Secretary of Transportation to set maximum hours falls under the safety regulations subtitle of the MCA, while the limitation on the Secretary of Transportation’s jurisdiction over school bus drivers falls within the economic regulations subtitle of the statute. As a result, the Seventh Circuit held that the Secretary of Transportation had the exclusive authority to set Almy’s maximum hours and the FLSA overtime requirements did not apply pursuant to that statute’s motor carrier exemption.

By narrowing the exemption and preventing a subsection of school bus drivers from seeking relief under the FLSA, the Seventh Circuit has now resolved a disagreement among its district courts as to whether school bus drivers who drive across state lines are exempt from the FLSA’s overtime requirements. As a result, the Seventh Circuit has given carriers employing interstate school bus drivers better clarity regarding their obligations under the FLSA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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