Sleeper v. URS Midwest, Inc.

          ORDER RE MOTION FOR SUMMARY JUDGMENT AND SCHEDULING ORDER

          SHARON L. GLEASON, UNITED STATES DISTRICT JUDGE

         Before the Court at Docket 35 is Defendant URS Midwest, Inc.'s (“URS”) Motion for Summary Judgment. Plaintiff William Sleeper opposed at Docket 40. URS replied at Docket 44. Oral argument was held on April 30, 2018, at Anchorage, Alaska, before Judge Sharon L. Gleason.^[1]

         BACKGROUND

         URS provides vehicle transportation services for customers in the United States and Canada.^[2] Its Alaska drivers continue the transportation of vehicles that have been shipped to Alaska, delivering them to customers in Fairbanks, Prudhoe Bay, and other locations within the state.^[3]

         William Sleeper worked as a truck driver for URS from February 21, 2012, until October 26, 2016.^[4] During his employment for URS, Mr. Sleeper's primary route was between Anchorage and Prudhoe Bay.^[5] As compensation, URS paid Mr. Sleeper on a commission basis of 23 or 24% of the net revenue generated per line trip.^[6] Mr. Sleeper could also receive an amount of up to 3% of net revenue through the Quality Fund Bonus Program.^[7] Payment of these funds depended on Mr. Sleeper's successfully completing each trip without the vehicles he was transporting sustaining any damage.^[8] Mr. Sleeper was also paid $15 per hour for light maintenance and a flat fee of $100 for washing the truck and trailer assigned to him.^[9] Mr. Sleeper states that his job duties included a number of tasks in addition to driving and that he was not paid overtime despite regularly working over 8 hours per day and over 40 hours per week.^[10]

         On February 8, 2017, Mr. Sleeper filed a Complaint in the Superior Court for the State of Alaska, Third Judicial District at Anchorage.^[11] On March 31, 2017, URS removed the case to this Court pursuant to 28 U.S.C. § 1441.^[12] Mr. Sleeper asserts in the Complaint that “[d]uring the course of his employment, URS Midwest, Inc. required Mr. Sleeper to perform job duties other than truck driving, and for these additional duties, URS Midwest, Inc. did not pay any overtime payments for these duties, even if these required hours of work exceeded 40 per week.”^[13] Mr. Sleeper also asserts that he was never paid “for those hours that he worked that exceeded 40 hours a week, or exceeded 8 hours a day, even though Mr. Sleeper worked overtime hours pursuing the clear expectations of his employer.”^[14] Mr. Sleeper also asserts that URS “illegally withheld, and deducted, compensation he had earned as part of his commission pay . . . .”^[15] Based on these allegations, Mr. Sleeper brings claims against URS for violations of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et seq. (“FLSA”), and the Alaska Wage and Hour Act, AS 23.10.050, et seq. (“AWHA”).

         On February 19, 2018, URS filed the instant Motion for Summary Judgment.^[16]

         LEGAL STANDARD

         I. Jurisdiction and Applicable Law

         The Court has jurisdiction pursuant to 28 U.S.C. § 1331 because this is a civil action with certain claims arising under federal law, 29 U.S.C. § 201, et seq. The Court has supplemental jurisdiction over Plaintiff's related state law claims.^[17] The Court also has diversity jurisdiction pursuant to 28 U.S.C. § 1332 because this is a civil action between citizens of different states, and the amount in controversy exceeds $75, 000.00, exclusive of interest and costs.^[18]

         The Court applies federal procedural law; Alaska substantive law applies to the state law claims.^[19] Whether federal law preempts state law claims is a question of federal law.^[20]

         II. Standard for Summary Judgment

         Federal Rule of Civil Procedure 56(a) directs a court to grant summary judgment if the movant “shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” When considering a motion for summary judgment, “[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his [or her] favor.”^[21] To reach the level of a genuine dispute, the evidence must be such “that a reasonable jury could return a verdict for the non-moving party.”^[22] If the evidence provided by the non-moving party is “merely colorable” or “not significantly probative, ” summary judgment is appropriate.^[23]

         DISCUSSION

         The FLSA requires employers to pay overtime wages to employees who work more than 40 hours per week.^[24] Pursuant to the Motor Carrier Act (“MCA”) exemption under the FLSA, this requirement does not apply to employees who drive a motor vehicle “in interstate or foreign commerce.”^[25]

         The AWHA, like the FLSA, requires employers to pay overtime wages. AS 23.10.060 provides:

An employer who employs employees engaged in commerce or other business, or in the production of goods or materials in the state, may not employ an employee for a workweek longer than 40 hours or for more than eight hours a day. . . . If an employer finds it necessary to employ an employee for hours in excess of the[se] limits . . . overtime compensation for the overtime at the rate of one and one-half times the regular rate of pay shall be paid.^[26]

         AS 23.10.060(d) exempts several categories of employees from the overtime requirement, including:

[A]n individual employed as a line haul truck driver for a trip that exceeds 100 road miles one way if the compensation system under which the truck driver is paid includes overtime pay for work in excess of 40 hours a week or for more than eight hours a day and the compensation system requires a rate of pay comparable to the rate of pay required by this section.^[27]

         Mr. Sleeper contends that URS did not fulfill its requirements under the FLSA and AWHA and that he is entitled to damages as a result.^[28] In response, URS makes a number of assertions to support its motion for summary judgment. Each is discussed in turn below.

         1. Motor Carrier Act Exemption

         URS asserts that Mr. Sleeper was exempt from FLSA overtime wage requirements, pursuant to the MCA exemption. The FLSA exempts “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 31502 of Title 49.”^[29] Section 31502(b) permits the Secretary to establish:

(1) qualifications and maximum hours of service of employees of, and safety of operation and equipment of, a motor carrier;^[30] and (2) qualifications and maximum hours of service of employees of, and standards of equipment of, a motor private carrier, ^[31] when needed to promote safety of operation.

         The Secretary of Transportation's power “extends to those classes of employees and those only who: (1) Are employed by carriers whose transportation of passengers or property by motor vehicle is subject to his jurisdiction under section 204 of the Motor Carrier Act . . . and (2) engage in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce with the meaning of the Motor Carrier Act.”^[32]

         URS asserts that Mr. Sleeper was exempt from the FLSA overtime wage provision under the MCA exemption pursuant to 29 C.F.R. § 782.3 because he drove a motor vehicle in interstate or foreign commerce.^[33] Mr. Sleeper maintains that the MCA exemption does not apply to him because he “never traveled outside of Alaska” for URS during the timeframe at issue.^[34]

         A truck driver may engage in interstate commerce so as to fall under the MCA even if he does not travel out of state. “Transportation within a single State is in interstate commerce within the meaning of the Fair Labor Standards Act where it forms a part of a ‘practical continuity of movement' across State lines from the point of origin to the point of destination.”^[35]

         Mr. Sleeper's circumstances mirror those of the plaintiff in Klitzke v. Steiner Corp., a salesman who “contend[ed] that because his route [was] entirely within the state of Oregon, his hours of work [were] not subject to regulation by the Secretary.”^[36] There, the plaintiff delivered products that had been shipped to his company's Oregon warehouse from out of state vendors. As the Ninth Circuit explained, the plaintiff's “route is entirely within Oregon, but over half of his deliveries are items received from out of state.”^[37] The Circuit held that the goods from out of state that the plaintiff delivered entirely intrastate were in “continuous transportation” until delivered to customers. Therefore, the plaintiff's intrastate deliveries constituted engaging in interstate commerce.^[38] Similarly, the vehicles Mr. Sleeper delivered within Alaska had originated from out of state. As Mr. Sleeper explained during his deposition:

Counsel for URS: “[W]here would you typically start your routes for United Road?”

Mr. Sleeper: “At-at our yard.”

Counsel: “At the yards in Anchorage?”

Mr. Sleeper: “At our yard in Anchorage, yes, because most of the vehicles that I hauled had special outfitting requirements. So they were shipped up here . . . to our yard in Anchorage, and that's where I would load them.”

Counsel: I see. So to be clear, the automobiles you were transporting would first come from a ship into Anchorage, correct?

Mr. Sleeper: Right.

Counsel: Do you know where those ships were originating from?

Mr. Sleeper: Well, Tacoma, I think.

Counsel: Washington?

Mr. Sleeper: Seattle-Tacoma, Washington, yeah.^[39]

         Based on the foregoing, it is clear that Mr. Sleeper's deliveries were part of the “continuous transportation” of vehicles that originated in other states, such that the MCA exemption applies. Viewing the evidence in the light most favorable to Mr. Sleeper, he has not shown there are disputed material facts on this issue and URS is entitled to judgment as a matter of law as to the FLSA overtime wage claim.^[40]

         To the extent that Mr. Sleeper relies on the FLSA for his claim that URS unlawfully withheld or deducted wages by not paying him the Quality Fund bonus, this claim fails.

         While the FLSA guarantees employees a minimum wage and overtime pay, Mr. Sleeper's contentions regarding illegal withholdings and deductions are based on an agreed-upon bonus system and are unrelated to the FLSA's requirements.^[41]

         At oral argument, counsel for Mr. Sleeper argued that URS had violated the FLSA by failing to pay him the minimum wage for sleeper berth hours. Counsel relied on Ridgeway v. Wal-Mart Stores, Inc., which held that under California law, employers must pay truck drivers at least the minimum hourly wage during mandatory layover periods.^[42]Mr. Sleeper's Complaint does not assert that URS violated the FLSA by failing to pay minimum wage, and the parties did not brief this issue.^[43] Furthermore, during his deposition Mr. Sleeper affirmed that he was “not claiming . . . [to be] owed compensation for time in the sleeper berth.”^[44] At oral argument, the Court advised Mr. Sleeper that he could file a motion seeking to amend his complaint; he has not done so. Accordingly, the Court declines to further address this argument.^[45]

         For the foregoing reasons, summary judgment is granted to URS on Mr. Sleeper's claims under the FLSA.

         2. Preemption of AWHA Claim ^[46]

         URS asserts that Mr. Sleeper's AWHA claim also fails because it is preempted by federal law.^[47] As the United States Supreme Court has explained,

A fundamental principle of the Constitution is that Congress has the power to preempt state law. Even without an express provision for preemption, we have found that state law must yield to a congressional Act in at least two circumstances. When Congress intends federal law to “occupy the field, ” state law in that area is preempted. And even if Congress has not occupied the field, state law is naturally preempted to the extent of any conflict with a federal statute. We will find preemption where it is impossible for a private party to comply with both state and federal law . . . and where under the circumstances of a particular case, the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. What is a sufficient obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects . . . .^[48]

         URS contends that the Court should find Mr. Sleeper's AWHA claim is conflict preempted because “[c]ompliance with the AWHA as it concerns line haul truck drivers subject to the authority of the Secretary of Transportation completely undermines the loosening of overtime and ...