The Fifth Circut Court of Appeals held a staff leasing company who hires truck drivers and assigns them to work for motor carrier clients is subject to the Motor Carrier Act exemption to the Fair Labor Standards Act ("FLSA") and, therefore, is not required to pay drivers' overtime. The FLSA requires employers to compensate employees engaged in commerce for all hours worked overt forty each week at the rate of one and one-half times their regular rate. The statute also exempts certain employers from its overtime requirements.
In Songer v. Dillon Resources, Inc., No. 09-10803 (5th Cir. Sept. 3, 2010) the Fifth Circuit determined that the Motor Carrier Act exemption to the FLSA applied to the staff leasing company by virtue of (1) the Secretary of Transportation having jurisidction over the company and (2) the plaintiffs engaging in activities that directly affect the operational safety of motor vehicles transporting property in interstate commerce. Despite plaintiffs assertion that the staff leasing company is not a motor carrier under the jurisdiction of the Secretary of Transportation, the court held the staff leasing company, as joint employer with the motor carrier, is subject to the Secretary's jurisdiction. The fact certain plaintiffs did not travel interstate was inconsequential according to the court since the staff leasing company was engaged in interstate commerce and the drivers could reasonably have been expected to make an interstate run for the company.