Oil Field Employers Post-McMaster: Still Searching for Clarity on the TCA’s Impact on the Motor Carrier Act Exemption

In McMaster v. Eastern Armored Services, Inc., No. 14-1010 (March 11, 2015), the Third Circuit Court of Appeals issued one of the first  federal appellate court  opinions discussing the SAFETEA-LU Technical Corrections Act of 2008 (TCA). The TCA is an uncodified amendment to the Fair Labor Standards Act of 1938 (FLSA) that, according to the Third Circuit, creates a “carveout” from the Motor Carrier Act Exemption (MCAE). Under the MCAE, professional motor carriers are generally exempt from the overtime requirements of the FLSA. The Third Circuit explained that the TCA “waives the exemption for motor carrier employees who, in whole or in part, drive vehicles weighing less than 10,000 pounds.”

Since its enactment, very few federal cases have discussed the scope and operation of the TCA. Indeed, although the TCA establishes a multi-factor test regarding the circumstances in which “covered employees” qualify for its exception to the MCAE, the courts that have addressed it have applied the TCA with limited analysis. 

Before the district court, the employer—an armored car provider—and the plaintiff, Ashley McMaster—an armored car driver and guard— stipulated to a set of facts including (a) that McMaster spent 49 percent of her days on vehicles weighing less than 10,000 pounds, and (b) that she drove such vehicles interstate. The Third Circuit affirmed the district court’s finding that, on the stipulated facts, the plaintiff satisfied the criteria of a “covered employee” under the TCA. Therefore, she was entitled to overtime compensation. 

In reaching this conclusion, the Third Circuit rejected the analysis of several district courts, which suggested that the MCAE remained absolute after the TCA. Importantly, the Third Circuit expressly did not decide or address what the phrase “in part” actually means for the purposes of the TCA, instead stating that “[w]hatever ‘in part’ means, it is certainly satisfied by McMaster, who spent 49% of her days on vehicles less than 10,000 pounds.” Thus, while McMaster helps define the outer scope of non-exempt activities, ambiguity remains for mixed activities falling below the 49 percent figure.

This decision is noteworthy for what it did not address. McMaster did not discuss (1) the MCAE, (2) what minimal level of involvement with small vehicles can trigger FLSA coverage, (3) situations in which the primary duty of an employee is to drive vehicles weighing over 10,000 pounds, or (4) whether FLSA coverage is applied on a weekly or some other basis.

This decision may impact oil field employers using the MCAE if their employees drive or load vehicles weighing less than 10,000 pounds, even if the employees also drive heavier vehicles.

Ultimately, the McMaster decision simply confirmed what the text of the TCA already makes clear: “‘covered employees’ are entitled to overtime.” Oil field employers will have to wait for future decisions to provide more clarity on exactly how the TCA analysis should proceed.

Jennifer G. Betts is an associate in the Pittsburgh office of Ogletree Deakins.