SAFETEA-LU changed the definition of “motor carrier” so that that motor carrier exemption under the Fair Labor Standards Act was no longer available to employers operating vehicles under 10,000 pounds. Section 305 of the TCA reversed this change, restoring the definition of motor carrier to its pre-SAFETEA-LU state. (See original blog posts on this subject in June and July 2008).
The TCA also contains language suggesting that this change was retroactive, and changes made by SAFETEA-LU to the motor carrier exemption should be treated as never having been enacted. This would mean that employers who were eligible for the motor carrier exemption prior to Aug. 10, 2005 (the date SAFETEA-LU was enacted) retained their eligibility through the enactment of the TCA on June 6, 2008.
Since the TCA was enacted, several employers have attempted to use this retroactivity provision as ground for summary judgment in litigation against them for failure to pay overtime as required by the Fair Labor Standards Act. As of January 9, 2009, five federal district courts (in California, Georgia, Kansas, Missouri, and Texas) have issued opinions regarding the retroactivity of the TCA’s change to the motor carrier exemption. All five courts have held against the employer, ruling that the provision restoring the motor carrier exemption will not be applied retroactively because (1) Congress has not indicated clear intent for retroactivity and (2) if it was applied retroactively, it would nullify other sections of the TCA, specifically section 306, which provides a limit on liability for violations of the FLSA overtime provisions for one year after the enactment of SAFETEA-LU.
So, what does this mean for employers involved in litigation for alleged violations of SAFETEA-LU overtime provisions after Aug. 10, 2005? It appears that those employers can rely on section 306, which limits liability for such violations for one year after SAFETEA-LU was enacted or until the employer had actual knowledge that is was no longer eligible for the motor carrier exemption, whichever is earlier.