The trucking industry is one of the most, if not the most regulated industries in the country. Federal regulations touch every aspect of how a trucking company operates its business. Between permits, licenses, inspections, and many other even more complicated areas of regulations, the trucking industry is easily a front runner for being the most heavily regulated of industries.
But the news is not all bad regarding regulations in the trucking industry. True, it does complicate things quite a lot, but it also gives relief in other areas through preemption and replacing the myriad of state laws that would, if not preempted, make it even more difficult to operate. And in this web of regulations are rules that even prevent some federal laws from being implemented against a trucking company, under certain circumstances.
Federal Labor Standards Act
Among the areas in which transportation companies are exempt from federal laws are regarding the FLSA. For example, under the act anytime an employee works for more than 40 hours in a week, the company is required to pay that employee their hourly wage, plus have as much per hour, or time and a half. This does not apply to most salaried employees, and it typically does not apply to trucking employees who drive interstate.
It was this specific area of law and its application to them that a group of employees recently sued over in federal court. In that case, Clark v. Royal Transportation Co., a group of employee drivers who never went out of state on their routes complained when they had to work more than 40 hours, but were not paid time and a half. The company argued that because they could reasonably be expected to take out-of-state trips, and were part of a motor carrier transportation company, the FLSA was preempted and not applicable.
Court Rules on Behalf of Transportation Company
This was an interesting case that presented a fairly novel approach to how a transportation company must pay their employees. While the company did not send these specific drivers on out of state routes, they could have, and all the while maintained interstate routes as a company and with other drivers. As a result, the company was not required to pay time and half pay for the employees when they worked more than 40 hours. The case really came down to whether the employees could reasonably be expected to drive interstate for the company.
This was a big win for this company, but should put any company doing business both intrastate and interstate on notice as to how it pays its employees. This case sought to be a class action suit against a large company, but could equally hurt a small or medium sized trucking company. The standards for when FLSA requirements kick in is fact based, and a strategy should only be implemented after consulting a qualified transportation law team familiar with how the rules, laws, and regulations apply.
At Anderson and Yamada we have decades of experience guiding, counseling, and representing trucking and transportation companies in every aspect of transportation law. We would love to show you how we will add value to your business. Contact us today.