By: Jeff Glaser and Katy Smallwood

Seyfarth Synopsis: The Motor Carrier Act exemption to the FLSA (“MCE”) is a powerful defense against overtime claims brought by interstate truck drivers and others involved in the interstate shipment of goods.  Importantly, the exemption is not limited to drivers who cross state lines.  Instead, numerous courts have made clear that the exemption applies to intrastate drivers, so long as the drivers complete one leg of a larger interstate transport of goods and, thus, the goods they transport are part of the “continuous stream of interstate travel.”  Plaintiffs’ attorneys, however, continue to test the limits of the application of the MCE, particularly as it relates to drivers who complete trips solely within a single state.  One frequent angle of attack is to argue that the goods transported by intrastate drivers are not in the continuous stream of interstate travel, unless the shipper identified the final customer of the goods at the time of shipment.  The Eleventh Circuit Court of Appeals recently rejected this argument in a favorable decision for employers.

In Ehrlich, et al. v. Rich Products Corporation, the Eleventh Circuit affirmed the district court’s order finding that the plaintiffs, who worked for Rich Products as Route Sales Representatives, were exempt pursuant to the MCE.

The plaintiffs delivered frozen dessert products from a storage facility in Florida to retail locations throughout Florida.  The products, which were manufactured in Connecticut and other locations outside of Florida, arrived in Florida after what the Court described as a “long journey from their place of manufacture to the ultimate consumer.”  A third-party trucking company transported the products from the manufacturing facilities to a Florida warehouse where another third-party company loaded them onto shuttle trucks to take them from the warehouse to the delivery trucks driven by the plaintiffs.

The plaintiffs argued that the products’ journey ended at the warehouse, before being transported by the plaintiffs, because, at the time of shipment, Rich Products had not received specific orders from the customers who ultimately received the products.  The Court rejected this argument, explaining that “no such strict requirement applies” to the application of the MCE.

Rich Products, the Court concluded, intended a continuity of movement of the products through the warehouse and to the final customers because it made shipment decisions based on its projections of the demand for the products, and shipped only the volume of products that it reasonably expected to meet immediate customer demands.

Despite the fact that some products remained at the warehouse for several months, the Company’s “fact-based forecasting” confirmed its fixed and persisting intent, at the time of shipment, that the goods continue on in interstate commerce to the ultimate retail consumer.  Accordingly, the final leg of that journey, completed by the plaintiffs, constituted travel in interstate commerce.

In reaching its conclusion, the Court conclusively shut the door on the argument that a shipper must intend to deliver the product to a specific customer at the time of shipment in order to claim the MCE with respect to drivers who complete one leg of the journey.  In fact, the Court indicated that storage for up to six months would not necessarily defeat the fixed and persistent intent when the shipper made its shipment decisions based on fact-based projections.

This decision is a welcome addition to the growing body of case law affirming the application of the MCE to intrastate drivers who complete part of an interstate shipment of goods.