Request By:
Hon. C. Edward Glasscock
BROWN, TODD & HEYBURN
Sixteenth Floor
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas C. Jacobs, Deputy Attorney General
You have asked this office to reconsider its opinion rendered as OAG 76-572 which concluded that the Kentucky Department of Labor had authority to enforce the overtime provisions of KRS 337.285 against Trucking Companies engaged in interstate commerce and employing "over the road" truck drivers. This conclusion was based on reasoning that KRS 337.285 does not conflict with or obstruct the purpose of the Motor Carrier Act and is authorized by the Federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. 218.
The issue presented is whether KRS 337.285 is pre-empted by, or conflicts with and is thus superseded by, the federal statutory scheme for certain trucking industry employees to the extent that the statute would otherwise require that those employees be paid time-and-one-half for all hours over forty worked in one week.
We have reviewed the authorities you have brought to our attention and based thereon and upon our own further research now conclude that OAG 76-572 must be rescinded.
The supremacy clause of the United States Constitution mandates the conclusions not only that federal law supersedes and renders void conflicting state law where the federal law is within the realm of powers delegated to the federal government, but also that, where Congress has selected an area within its domain for exclusive federal jurisdiction, the power of the states to adopt even non-conflicting or complementary laws in that area is displaced.
It is relatively obvious that where Congress has legislated upon a subject which is within its constitutional control and over which it has the right to assume exclusive jurisdiction and has manifested its intention to deal therewith in full, the authority of the states is necessarily excluded, and any state legislation on the subject is void . . Moreover, the state has no right to interfere or, by way of complement to the legislation of Congress, to prescribe additional regulations and what they deem auxiliary provisions for the same purpose. [16 Am. Jur. 2d, Constitutional Law § 207] [Emphasis Added]
The United States Supreme Court has made clear that "conflict" and "obstruction" (the basis of OAG 76-572) are not the only tests. In
Campbell v. Hussey, 368 U.S. 297, 7 L. Ed. 2d 299, 82 S. Ct. 327 (1961), the Supreme Court held that a Georgia law relating to tobacco marketing identification was pre-empted by the federal law on the subject even though they did not conflict, saying:
We do not have here the question whether Georgia's law conflicts with the federal law. Rather we have the question of pre-emption. Under the federal law there can be but one "official" standard - one that is "uniform" and that eliminates all confusion by classifying tobacco not by geographical origin but by its characteristics. In other words, our view is that Congress, in legislating concerning the types of tobacco sold at auction, pre-empted the field and left no room for any supplementary state regulation concerning those same types. . . [368 U.S. at 300-301, 7 L. Ed. 2d at 301-302] [Emphasis Added]
* * *
We have then a case where the federal law excludes local regulation, even though the latter does no more than supplement the former. Under the definition of types of grades of tobacco and the labeling which the Federal Government has adopted, complementary state regulation is as fatal as state regulations which conflict with the federal scheme. [citations omitted] [368 U.S. at 303, 7 L. Ed. 2d at 303] [Emphasis Added]
With the above in mind it is appropriate to turn our attention to a review of the legislative history of the Motor Carrier Act.
By 1935, almost all the states had passed legislation relating to the safety or operations of motor vehicle carriers. Some of this legislation established maximum hours of service for employees of motor carriers.
Levinson v. Spector Motor Service, 330 U.S. 649, 67 S. Ct. 931, 91 L. Ed. 1158 (1947). In Levinson, the Court stated:
Increased interstate movements of motor carriers then made necessary the Motor Carrier Act, 1935, . . . This Act vested in the Interstate Commerce Commission power to establish reasonable requirements with respect to qualifications and maximum hours of service of employees and safety of operations and equipment of common and contract carriers by motor vehicle. § 204 (a)(1)(2). Similar, but not identical, language was used as to private carriers of property by motor vehicle. § 204 (a)(3). The Act expressly superseded 'any code of fair competition for any industry, embracing motor carriers. . .' § 204(b). Section 203(b) listed many types of motor carriers which were exempted in general from the Act but that section significantly applied to all of them the provisions of § 204 as to qualifications, maximum hours of service, safety or operation and equipment. (330 U.S. at 657-658, 67 S. Ct. at 936, 91 L. Ed. at 1165-66). [Emphasis Added]
Title 49, U.S.C., Section 304(a), (Section 204(a) of the Motor Carrier Act) provides that the Secretary of Transportation 1 has, inter alia, the power:
(1) To regulate common carrier by motor vehicle as provided in this chapter, and to that end the Commission may establish reasonable requirements with respect to continuous and adequate service, transportation of baggage and express, uniform systems of accounts, records, and reports, preservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment.
(2) To regulate contract carriers by motor vehicle as provided in this chapter, and to that end the Commission may establish reasonable requirements with respect to uniform systems of accounts, records, and reports, proservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment. [Emphasis Added]
Pursuant to the directive to establish uniform systems of accounts, records and reports and the directive to establish maximum hours of service of employees, the Secretary of Transportation has established comprehensive regulations on hours of service of drivers, which require detailed uniform reports accounting for all of the hours of workdays of such drivers, regulate that may be worked by such drivers in driving or other duties. 49 C.F.R., Chapter III (Federal Highway Administration), Part 395.
One of the major purposes of the Motor Carrier Act was to create a national safety program, in part through the establishment of maximum hours for drivers.
Southland Gasoline Co. v. Bayley, 319 U.S. 44, 47, 63 S. Ct. 917, 919 (1943);
U.S. v. American Trucking Ass'ns., 310 U.S. 534, 539, 60 S. Ct. 1059, 1061, (1940). The setting of a maximum number of hours that employees may work in a week is obviously intended to prevent accidents due to fatigue.
Starrett v. Bruce, 391 F.2d 320, 323 (10th Cir. 1968), cert.denied, 393 U.S. 971, 89 S. Ct. 404 (1968).
Three years later, in 1938, the Fair Labor Standards Act became law. 29 U.S.C. § 207 of the FLSA provides, in general, that employees engaged in interstate commerce who work more than forty hours in one work week shall be compensated at the rate of time-and-one-half for each hour worked over forty. However, 29 U.S.C. § 213(b) of the FLSA declares that the overtime pay requirements contained in section 207 of the FLSA do not cover:
(1) Any employee with respect to whom the [Secretary of Transportation] has power to establish qualifications and maximum hours of service pursuant to the provisions of Section 304 of Title 49.
Certain employees of common carriers by motor vehicle operating in interstate commerce are subject to maximum hours regulation by the Secretary of Transportation under 49 U.S.C. § 304(a), and thus, it is clear that the maximum hours overtime pay requirements of section 207 of the FLSA are not applicable to those employees. When the FLSA was passed in 1933, this exception for the employees covered by the Motor Carrier Act was one of only two exemptions provided. 2
It was thus the intent of Congress that regulation of motor carriers was to be accomplished fully and solely under the Motor Carrier Act and not under the FLSA. This exemption from the "maximum hours" provisions of the FLSA was based on the peculiar ways maximum hours related to safety in the motor carrier industry and on the peculiar structure of the motor carrier industry which makes the standard forty-hour workweek inappropriate. It was thus the clear intent of Congress to exempt trucking industry employees engaged in interstate commerce from overtime pay.
The trucking industry structure and its wage structure have developed under the careful guidance of federal regulation. Every hour of a truck driver's workday is subject to extensive regulation, reporting requirements and monitoring by the federal government. This federal regulation is all part of the National Transportation Policy declared by Congress, the main purpose of which is "developing, coordinating and preserving a national transportation system by water, highway, and rail, as well as by other means, adequate to meet the needs of the commerce of the United States, of the Postal Service and of the national defense." Part of the policy and one of the means of achieving the main purpose is the encouraging of the "fair wages and equitable working conditions." (Act of September 8, 1940, c. 722, Title I, § 1, 54 Stat. 899).
This industry structure might well have developed entirely differently had the trucking industry been subjected completely to the maximum hours and overtime pay provisions of the FLSA. Subjecting the industry to such provisions, Congress recognized, would have the effect of stimulating a change in the structure of the industry in the form of a shift to a more regular or standardized workweek for those employees in safety-related operations such as driving. Such a standardized workweek would limit the continuity and speed of service and not meet the needs of the national transportation system envisioned by the Congress. It is to be noted that the exemption from the FLSA overtime pay provisions does not cover employees engaged in work not affecting the safety of the operation of the trucking industry since requiring overtime pay for them would not affect the structure of the industry and the adequacy of service.
It is also important to note that Congress did not exempt motor carriers from the minimum wage provisions of the FLSA since imposing a minimum wage on the trucking industry would not affect its structure or the adequacy of its service. In light of the decision of Congress not to exempt truckers from the minimum wage provisions of the Act, the decision to exempt them from the maximum hours provisions of the Act becomes all the more significant and indicative of the overriding importance which Congress placed on the Motor Carrier Act. The Supreme Court has held that the Secretary of Transportation, under the Motor Carrier Act, has the power to set the maximum hours of motor carriers employees even if they spend only three to four percent of their work time in safety-related interstate services.
Morris v. McComb, 332 U.S. 422, 65 S. Ct. 131 (1947). Of perhaps more significance, it is the mere possession by the Secretary of the power to regulate employees in safety-related activities, though not exercised, that automatically excludes employees from the FLSA maximum hours provisions.
Morris v. McComb, supra, 332 U.S. at 434, 68 S. Ct. at 137;
Levinson v. Spector Motor Service, supra, 330 U.S. at 678, 67 S. Ct. at 946-947, 91 L. Ed. at 1175;
Baird v. Wagoner Transportation Co., 425 F.2d 407, 410, (6th Cir. 1970); cert. denied, 400 U.S. 829, 91 S. Ct. 58 (1970).
In Levinson, the Supreme Court stated:
Congress, in the Fair Labor Standards Act, does not attempt to impinge upon the scope of the Interstate Commission safety program. It accepts that program as expressive of a pre-existing congressionally approved project. Section 13(b)(1) of the Fair Labor Standards Act, thus requires that we interpret the scope of § 204 of the Motor Carrier Act in accordance with the purposes of the Motor Carrier Act and the regulations issued pursuant to it. It is only to the extent that the Interstate Commerce Commission does not have power to establish qualifications and maximum hours of service pursuant to said § 204, that the subsequent Fair Labor Standards Act has been made applicable or its Administrator has been given congressional authority to act. This interpretation puts safety first, as did Congress. . . . (330 U.S. at 677, 67 S. Ct. at 945).
It was thus for the purpose of achieving a national transportation system through federal regulation and for the purpose of promoting safety in the trucking industry that the Motor Carrier Act was made to override the FLSA on the question of maximum hours and overtime pay. In Levinson, 330 U.S. at 661-662, 67 S. Ct. at 938, 91 L. Ed. at 1167-68 (1947), the Supreme Court noted that Congress gave primary importance to the Motor Carrier Act:
The logic of the situation is that Congress, as a primary consideration, has preserved intact the safety program which it and the Interstate Commerce Commission have been developing for motor carriers since 1936. To do this, Congress has prohibited the overlapping of the jurisdiction of the Administrator of the Wage and Hour Division, United States Department of Labor, with that of the Interstate Commerce Commission as to maximum hours of service. Congress might have done otherwise. It might have permitted both Acts to apply. There is no necessary inconsistency between enforcing rigid maximum hours of service for safety purposes and at the same time, within those limitations, requiring compliance with the increased rates of pay for overtime work done in excess of the limits set in § 7 of the Fair Labor Standards Act. Such overlapping, however, has not been authorized by Congress and it remains for us to give full effect to the safety program in which Congress has attached primary importance, even to the corresponding exclusion by Congress of certain employees from the benefits of the compulsory overtime pay provisions of the Fair Labor Standards Act. [Emphasis Added]
The Court emphasized in Levinson that Congress deliberately chose to rely on absolute limitations on working hours rather than overtime pay to enforce the maximum hours in the motor carrier industry, one reason being that increased pay tends to encourage employees to seek overtime work. 330 U.S. at 657, 67 S. Ct. at 936; 91 L. Ed. at 1165. Congress thus considered and rejected the idea of using premium pay to enforce maximum hour limitations in the motor carrier industry. It undoubtedly also considered the effects of such premium pay on the structure of the motor carrier industry, as discussed above. Thus, by its deliberate choice and action and by the extensive regulation of the trucking industry, Congress has pre-empted the area of maximum hours and overtime pay for those trucking employees subject to the Motor Carrier Act, 49 U.S.C. § 304.
Even complementary legislation by the states in this area is thus out of place and not allowable. Any attempt by the Kentucky Legislature to require premium pay for all hours worked over forty hours in this industry would be inconsistent with the decision of Congress that such premium pay was not the appropriate way to enforce maximum hours in this industry because of the effect which it would have on the industry structure developed under federal supervision and on the safety of operations by encouraging employees to seek overtime work.
A state court decision which is of significance is
People of New York v. Dawson, 12 WH Cases 582 (1955), in which Justice Zimmer of the Buffalo, N.Y. City Court held that a New York statute regulating hours of labor of truck and bus drivers was pre-empted by the Federal Motor Carrier Act. Justice Zimmer noted that "the Interstate Commerce Commission was given exclusive power to regulate contract carriers by motor vehicle and to establish reasonable rules and regulations to have a uniform system in the trucking business between the different states." 12 WH Cases at 584. The development of a uniform system will be endangered by individual states imposing maximum hours and overtime pay requirements on the trucking industry, just as the uniform system established by Congress for the tobacco industry in
Campbell v. Hussey, supra, was endangered by the Georgia tobacco sales law. In each of these cases, the necessary conclusion is that the state law, even if non-conflicting or complementary, is pre-empted by the federal law because Congress has already fully occupied the area. This must be the result with respect to the maximum hours-overtime requirements since there is a latent conflict, as noted by the Supreme Court, in that premium pay for overtime encourages employees to seek overtime work which may be in excess of the absolute maximum hours established by the Secretary of Transportation.
Moreover, the requirement of premium pay for hours in excess of maximum hours established by the state governments would frustrate the uniform system of books, accounts, and reports established by the Secretary of Transportation pursuant to the direction of Congress in the Motor Carrier Act. The uniform system of reports and accounts covering the hours worked by truck drivers would have to be adapted to the provisions of each state's overtime law, thus destroying the uniformity. There is no room for such variations in the federal scheme, and the conclusion of pre-emption necessarily follows.
By reason of the foregoing and in light of a thorough analysis of 29 U.S.C. 218 (a) as that subsection interrelates with 29 U.S.C. § 207, and 213(a) it is the opinion of this office that KRS 337.285 cannot be applied to Motor Carrier employees exempted by 29 U.S.C. § 213(b).
OAG 76-572 is hereby rescinded.
Footnotes
Footnotes
1 When the Department of Transportation was created in 1966, the duties of the Interstate Commerce Commission relative to the regulation of motor vehicles and interstate commerce were transferred to the Secretary of Transportation.
2 The other exemption was for employees of an employer subject to the provisions of Part I of the Interstate Commerce Act.