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Khan v. IBI Armored Services

February 22, 2007


The opinion of the court was delivered by: VITALIANO, D.J.


Rahaman Khan ("Khan"), formerly an employee of defendant IBI Armored Services, Inc. ("IBI"), has brought suit for unpaid overtime wages. His claim was tried before the Court sitting without a jury. Having heard and observed the testimony of the witnesses, reviewed the photographic and documentary exhibits received in evidence, and considered the arguments of counsel, this Memorandum of Decision, pursuant to Federal Rule of Civil Procedure 52, constitutes the Court's findings of fact and conclusions of law.

Khan's claim arises under the Fair Labor Standards Act of 1938 ("FLSA"), 52 Stat. 1060, as amended, 29 U.S.C. § 201 et seq., and this Court has jurisdiction pursuant to 28 U.S.C. § 1331. Khan asserts a parallel and ancillary claim under the New York Minimum Wage Act, N.Y. Lab. Law § 650 et seq.,*fn1 over which this Court has jurisdiction pursuant to 28 U.S.C. § 1367.

The dispute between the parties is intense but has a pencil thin focus. With little and insignificant exception, the essential facts are not in dispute. The parties agree that Khan worked for IBI; that IBI was engaged in interstate commerce; that from time to time, Khan worked more than 40 hours per week; and that, when he did so, Khan was not paid at an hourly overtime rate. The parties even agree on the number of hours of uncompensated overtime work performed by Khan and that, applying the time and a half standard, Khan would have been entitled to $7,744.25 in overtime pay, if his duties were covered under the FLSA. In fact, all that was tried to the Court was defendant's affirmative defense that Khan was not entitled to overtime pay at all because the work Khan performed for IBI was exempt from the overtime compensation provisions of the FLSA under the Motor Carrier Exemption provision of that Act ("Motor Carrier Exemption"), § 13(b)(1), 29 U.S.C. § 213(b)(1).


Under the FLSA, an employee engaged in interstate commerce must be paid at least time and a half his ordinary wage for each hour worked in excess of 40 hours per week. 29 U.S.C. § 207(a).*fn2 The Act's legislative history suggests three overlapping purposes of the overtime provision: (i) to prevent workers who are willing to work abnormally long hours from taking the jobs of others who are not so willing; (ii) to "spread the work" by giving employers an incentive to hire more employees rather than to overwork an existing group of employees; and (iii) to protect workers from the dangers of oppressive working hours. Southland Gasoline Co. v. Bayley, 319 U.S. 44, 48, 63 S.Ct. 917, 87 L.Ed. 1244 (1943); Mechmet v. Four Seasons Hotels, Ltd., 825 F.2d 1173, 1175-76 (7th Cir. 1987); Freeman v. Nat'l Broad. Co., 846 F. Supp. 1109, 1112 (S.D.N.Y. 1993), rev'd on other grounds, 80 F.3d 78 (2d Cir. 1996). "The requirement of such increased pay is a remedial measure adapted to the needs of an economic and social program rather than a police regulation adapted to the rigid enforcement required in a safety program." Levinson v. Spector Motor Serv., 330 U.S. 649, 657, 67 S.Ct. 931, 91 L.Ed. 1158 (1947).

Prior to the FLSA, Congress had enacted the Motor Carrier Act ("MCA") of 1935, Pub. L. No. 74-255, 49 Stat. 543 (now codified as amended in scattered sections of 49 U.S.C.). The MCA's purpose was to promote efficiency, economy, and safety in interstate motor transport. Southland Gasoline Co., 319 U.S. at 48; Masson v. Ecolab, Inc., No. 04-cv-4488, 2005 WL 2000133, at *5 (S.D.N.Y. Aug. 17, 2005). As such, it gave the Interstate Commerce Commission ("ICC") -- and now, the Department of Transportation -- authority to regulate the trucking industry, as it had previously regulated the rail industry. M. Fortunoff of Westbury Corp. v. Peerless Ins. Co., 432 F.3d 127, 130 (2d Cir. 2005). Among the powers delegated to the ICC was the power to regulate the maximum hours of "common carriers" and "contract carriers." Masson, 2005 WL 2000133, at *5. In its current form, the MCA allows the Secretary of Transportation to "prescribe requirements for qualifications and maximum hours of service of employees of, and standards of equipment of, a motor private carrier, when needed to promote safety of operation." 49 U.S.C. § 31502(b)(2).

Recognizing that it had already delegated authority to the ICC with regard to motor carrier employees, Congress specifically exempted these employees from coverage under the overtime provision of the FLSA. Precisely, the FLSA exempts "any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to" the MCA, 49 U.S.C. § 31502. 29 U.S.C. § 213(b)(1) (emphasis added). As this statutory exemption's language makes clear, it matters not whether the Secretary of Transportation has actually exercised authority by promulgating regulations; instead the exemption applies wherever the Secretary has authority to do so. See Southland Gas. Co., 319 U.S. at 47-48; Martin v. Coyne Int'l Enters., Corp., 966 F.2d 61, 63 (2d Cir. 1992). The exemption was adopted so as to avoid any problems that might arise if two government agencies had overlapping jurisdiction. Southland Gasoline Co., 319 U.S. at 48-49; Masson, 2005 WL 2000133, at *5.

In Levinson, the Supreme Court addressed a finding of the ICC that truck "loaders" fell within the ambit of its authority under the MCA; a result that would categorically exempt these employees from the overtime pay provision of the FLSA. The ICC had found as follows:

The large carriers, . . . particularly those who have important operations from terminal to terminal, employ men variously called loaders, dockmen, or helpers, and hereinafter called loaders, whose sole duties are to load and unload motor vehicles and transfer freight between motor vehicles and between the vehicles and the warehouse. The evidence makes it entirely clear that a motor vehicle must be properly loaded to be safely operated on the highways of the country. If more weight is placed on one side of the vehicle than on the other, there is a tendency to tip when rounding curves. If more weight is placed in the rear of the vehicle, the tendency is to raise the front wheels and make safe operation difficult. Further, it is necessary that the load be distributed properly over the axles of the motor vehicle. Proper loading is not only necessary when heavy machinery, steel, and other like commodities are being transported, but is of importance when normal package freight is handled. If several packing cases weighing from 150 to 200 pounds are loaded on one side of a motor vehicle or at one end thereof, and lighter freight on the other side or at the other end, safe operation is difficult. The great majority, if not all, of the carriers whose operations are of sufficient size or character to justify the employment of loaders handle freight of such weight that proper loading is necessary.

Levinson, 330 U.S. at 652 n.2. The Court upheld the ICC's finding that "loaders" fall within its authority, at least where "a substantial part of [the loader's] activities affect[] the safety of interstate motor carrier operations." Id. at 668. Levinson instructs that, in determining the scope of the Motor Carrier Exemption, "[t]he fundamental test is simply that the employee's activities affect safety of operation." Id. at 671.

In the companion case to Levinson, the Supreme Court made clear, however, that it had not granted the ICC unlimited power to regulate anyone whom it deems a "loader." The Court explained that the mere handling of freight at a terminal, before or after loading, or even the placing of certain articles of freight on a motor carrier truck may form so trivial, casual or occasional a part of an employee's activities, or his activities may relate only to such articles or to such limited handling of them, that his activities will not come within the kind of "loading" which is described by the Commission and which, in its opinion, affects safety of operation.

Pyramid Motor Freight Corp. v. Ispass, 330 U.S. 695, 708, 67 S.Ct. 954, 91 L.Ed. 1184 (1947).*fn3

Therefore, although a court must accept the ICC's general findings regarding loading and safety, Pyramid instructs lower courts to inquire into both the general character and extent of an individual employee's duties in determining whether those duties bring the employee within the jurisdiction of the regulator, now the Department of ...

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