Good day and welcome to my new blog, "The Employment and Labor Law Dispatcher" (that's me - the "dispatcher" of employment/labor law news and strategy pertinent to transportation managers). Like most "dispatchers," I intend to guide transportation companies down the correct path - avoiding unnecessary perils. Through this blog, I aspire to provide pertinent, timely nuggets of knowledge designed to assist transportation managers in their quest to operate successful, cost-effective and legally-compliant transportation companies. In doing so, I will draw on my experiences as a multi-jurisdictional, management-side employment and labor law attorney; my involvement with the Transportation Lawyers Association, various state trucking associations, and my interactions with clients "in the industry". Ideally, I will also use this blog to regularly entertain questions and comments from inquisitive readers.

As this is my inaugural post, and given my new, self-ascribed title of "dispatcher," I thought it would be exciting and apropos (yes, exciting) to address how federal wage and hour laws implicate trucking dispatchers. Specifically, this post will be the first in a series of three aimed at educating transportation managers about how to analyze whether dispatchers are properly classified as "exempt" from receipt of overtime compensation (and minimum wage) under the federal Fair Labor Standards Act (FLSA) which governs minimum wage and overtime pay.

Sadly, the inspiration for this post is the recent wave of expensive, single-plaintiff and class-action lawsuits involving claims by dispatchers for unpaid overtime compensation. The threat of these "wage and hour" lawsuits to motor carriers is considerable, because motor carriers typically—and often mistakenly—classify dispatchers as "exempt" from overtime (pursuant to the so-called "white collar" exemptions) and require these individuals to work in excess of forty hours per workweek. Given the FLSA's so-called "liquidated damages" or "double damages" penalty provision and the potential recovery of attorneys' fees, the stakes are high, and classification mistakes often prove costly.

The Basics of Overtime Pay "Exempt" Status

My apologies to those readers well versed in the minutiae of the FLSA "white collar" exemptions (you only have yourselves to blame), but as one 1980s hair band so aptly stated, its best to "start from the start." The "start," for purposes of FLSA exempt status, is a basic understanding of the so-called "salary basis test". Under the "salary basis test," a dispatcher employee (who is not considered "highly compensated") must:

• Regularly receive a predetermined amount of compensation each pay period on a weekly, or less frequent, basis, which cannot be reduced because of variations in the quality or quantity of the dispatcher's work; and
• Be paid not less than $455/week ($23,660 annually) (or in some instances, on a "fee basis," if the fee paid meets the minimum salary-level requirement);

At this point, it is appropriate to dispel two common misconceptions about "exempt" status under the FLSA. First, employees are not "exempt" as a consequence of job titles. In other words, there are no magic titles a motor carrier can assign to particular classes of employees (dispatchers, for example) to establish exempt status (i.e., use of the words "manager" or "supervisor" in connection with a particular job). Second, too many motor carriers mistakenly believe dispatchers are "exempt" simply by virtue of receiving salaries - this is not true. As explained in greater detail below, even dispatchers who receive salaries may be "non-exempt" and therefore entitled to overtime if such employees do not also perform the required type of workplace duties under the so-called "duties tests".

There are actually several "duties tests" under the FLSA. However, the two tests that are most pertinent in terms of analyzing whether trucking dispatchers are "exempt" from overtime include the: (1) "executive employee exemption;" and (2) "administrative employee exemption." In my experience, most motor carriers that classify dispatchers as "exempt," do so under the "administrative employee exemption." Application of these two tests can be convoluted, and the overall analysis is extremely fact-specific (so no "rules of thumb" here). However, a basic description of the duties tests are as follows:

Executive Employee Exemption

(in addition to passing the "salary basis" test, above, all of the following factors must be satisfied)

• Dispatcher's "primary duty" must be managing the business, or managing a customarily recognized department or subdivision of the business
• Dispatcher must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
• Dispatcher must have the authority to hire or fire other employees, or the dispatcher's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight

Administrative Employee Exemption

(in addition to passing the "salary basis" test, above, all of the following factors must be satisfied)

• Dispatcher's "primary duty" must be the performance of office or non-manual work directly related to the management or general business operations of the company or the company's customers' business; and
• Dispatcher's "primary duty" includes "the exercise of discretion" and "independent judgment" with respect to "matters of significance"

Each prong of these two duties tests require a fact-specific analysis. In that regard, motor carriers are advised to accept that circumstances that intuitively seem to fit the definition of "primary duty" or exercise of "independent judgment" may not—and motor carriers are cautioned against making assumptions without carefully analyzing the applicable regulations in connection with each specific fact situation.

Again, welcome. I am excited to launch The Employment and Labor Law Dispatcher, and hope you are too. If you have questions about this post, or about my experience in general, please feel free to e-mail me (or you may reach me at 715.834.3425). To that end, I have also included an obligatory disclaimer - it is located in my bio, please read it because it notifies you that this post: (1) does not create an attorney-client relationship: (2) does not offer advice concerning individualized fact situations or jurisdiction-specific advice; and (3) should not be construed as legal advice, but only as thought-provoking commentary.

Legal Disclaimer

The Employment and Labor Law Dispatcher Blog is made available by Ruder Ware to provide a general understanding of some of the legal issues relating to the transportation industry. This site does not provide specific legal advice and you should not use the information contained on this site to address your specific situation without consulting with legal counsel that is well versed in employment and labor laws and regulations. By using the Employment and Labor Law Dispatcher Blog site you understand that there is no attorney client relationship between you and Ruder Ware or any individual attorney. Postings on this site do not represent the views of our clients. This site may link to other information resources on the Internet. These sites are not endorsed or supported by Ruder Ware, and Ruder Ware does not vouch for the accuracy or reliability of any information provided therein.

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