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A Puerto Rican trucking company must pay its drivers overtime wages, even though similar companies operating in the 50 states are exempt from the overtime requirements of the Fair Labor Standards Act. That was the conclusion of a three-judge panel of the 1st U.S. Circuit Court of Appeals in Herman v. Hector Nieves Transport, Inc. No. 00-1594. Chief Judge Juan R. Torruella, who was joined in his opinion by Judges Kermit V. Lipez and Norman H. Stahl, wrote that no court had previously considered “whether the ‘motor carrier exemption’ to the overtime provisions of the Fair Labor Standards Act (FLSA) includes a trucking company whose routes are entirely within the boundaries of Puerto Rico.” By answering that question in the negative in the March 26 decision, the panel upheld U.S. District Judge Jose Antonio Fuste’s finding that the company, Hector I. Nieves Transport, Inc., owed its drivers more than $800,000 in wages and penalties. The motor carrier exemption, codified at 29 U.S.C. � 207, provides that the overtime requirements of the FLSA do not apply to employees whose working hours are regulated by the U.S. Department of Transportation (DOT). Since truckers’ hours were already regulated by the DOT for safety reasons, it was thought unnecessary to extend the new requirements to them. Nieves would be subject to overtime requirements only if its truckers’ hours were already regulated by the DOT. By statute, the DOT may establish maximum hours for certain employees of motor carriers operating in the 50 states. In some cases, motor carriers operating between the 50 states and “a place in a territory or possession of the United States” will fall under DOT’s scrutiny, but only “to the extent the transportation is in” the 50 states. 49 U.S.C. �13501(1)(C). OUTSIDE THE EXEMPTION The panel concluded that, “a plain reading of the statutory language places truck routes occurring entirely within the boundaries of Puerto Rico outside the exemption . . . .” Nieves argued that Section 13501(1)(C) was ambiguous when considered alongside other seemingly inconsistent provisions of the transportation code, thus calling for a more creative act of interpretation by the court. The panel rejected that argument, stating that the other provisions were either irrelevant to the question at hand or did not detract from the clarity of Section 13501(1)(C). Furthermore, the panel dismissed Nieves’ claims that the fact that its handling of hazardous waste is regulated by the DOT means that it is also subject to DOT’s regulation of hours and ambiguities concerning the department’s jurisdiction in international waters abutting the 50 states also makes ambiguous Puerto Rico’s status under Section 13501(1)(C). Nieves’ arguments on appeal were narrower than those it presented to Fuste. For instance, in the lower court, Nieves claimed that the motor carrier exemption relieved it not only of the duty to pay overtime, but even of paying a minimum wage, citing Herman v. Hector I. Nieves Transport, Inc. 91 F.Supp. 2d 435 (D.P.R. 2000). According to Fuste, Nieves had yet another argument when it first came under the investigation of the DOL in 1995 — that its drivers were independent contractors. Nieves abandoned that argument once litigation began. It was, in part, because of such facile shifts in its rationale that Fuste concluded that Nieves’ violations of the FLSA were willful and awarded double damages. After hearing the testimony of Nieves’ truckers, Fuste calculated that they worked at least 12 hours a day on average, and sometimes as much as 22 hours a day. Their weekly average was 72 hours. Nieves did not pay an hourly wage (and in fact kept no records of its truckers’ hours, in violation of the FLSA), but set a fixed amount for each trip, ranging from $5 to $60. Figured on an hourly basis, the truckers’ pay amounted to less than the U.S. minimum wage. Fuste awarded close to $130,000 to bring the pay of 79 truckers up to minimum wage, nearly $300,000 for overtime pay for 101 drivers, doubled those awards because of Nieves’ persistent refusal to obey the law even after court proceedings were begun, and enjoined the company from committing future violations. According to Charles Medalen, an attorney advisor with DOT’s Federal Motor Carrier Safety Administration, DOT regulations state that truckers may drive no more than 10 hours at a time, with eight-hour breaks between shifts. Under that formula, a trucker could drive as much as 16 hours in a single day, but could not drive more than 70 hours in eight consecutive days.

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