Employment Law Daily No evidence MCA exemption applied to truckers’ transportation of fracking water
Wednesday, May 25, 2016

No evidence MCA exemption applied to truckers’ transportation of fracking water

By Kathleen Kapusta, J.D. In an appeal to a stipulated judgment requiring paying overtime to truck drivers who transported water to hydraulic fracking sites within Pennsylvania, the Third Circuit found that trucking companies Fast Rig Support and First Americans Shipping and Trucking failed to “plainly and unmistakably” show that the Motor Carrier Act exemption to the overtime provisions in the FLSA and the Pennsylvania Minimum Wage Act applied. The appeals court affirmed the district court’s judgment that there was no continuous movement of an unaltered item across state lines and insufficient evidence of interstate intent on the companies’ part (Mazzarella v. Fast Rig Support, LLC, May 23, 2016, Shwartz, P.). The named plaintiff worked for the defendants transporting water to hydraulic fracking sites within Pennsylvania. He claimed he and his coworkers often worked more than 40 hours in a week, but were paid overtime only for work performed above 45 hours per week, in violation of the overtime provisions of the FLSA and PMWA. Before trial was scheduled to begin, the district court ordered the parties to submit briefing on whether the defendants were subject to the MCA exemption. In support of applying the exemption, the defendants asserted that they contracted with gas-drilling companies to transport water from “retention ponds” to drill sites for hydraulic fracking and that after fracking is completed, they are occasionally hired to transport the water used in the fracking process to injection wells for disposal. Lower court proceedings. The district court, however, held that while the water they transported constituted property for purposes of applying the MCA, they failed to show the water and drivers were engaged in a “continuous stream of interstate travel.” It concluded that the water involved in the fracking process becomes “contaminated,” and “substantially modified,” and thus the defendants were engaged in “two separate commercial transactions;” one before the water becomes “tainted” and one after the fracking process is complete. Thus, there was no continuous movement of an unaltered item across state lines and “insufficient evidence of interstate intent” on the defendants’ part to apply the MCA exemption. The parties agreed to the entry of a conditional judgment awarding the plaintiffs $31,000, which allowed the defendants to appeal the lower court’s ruling. Continuity of movement. Framing the issue on appeal as whether the defendants engaged in transportation between a state and a place in another state, the Third Circuit noted that when the transportation takes place within a single state, the interstate commerce requirement may still be met by demonstrating that the employee’s work involves a “‘practical continuity of movement’ across State lines.” Here, the court pointed out that to show their employees were engaged in interstate commerce under the MCA exemption, the defendants had to show their transportation of water was part of a “continuous stream of interstate travel.” Evidence. While the defendants introduced three pieces of evidence they contended showed their drivers were involved in a continuity of movement in interstate commerce, the court disagreed. A DOT certificate authorizing them to engage in transportation as common carriers of property in interstate or foreign commerce provided no information about whether the drivers actually drove across state lines or otherwise engaged in interstate commerce. Similarly, an online news article about another company in Pennsylvania and regulatory decisions being made about the fracking industry provided at best general information that most fracking wastewater is trucked out of Pennsylvania to Ohio, but said nothing about any of the water the plaintiffs transported. Finally, a spreadsheet that appeared to record water shipments over a three-day period showed, at most, that specific shipments of water were tracked and bound for specific interim destinations within Pennsylvania before being used in the fracking process. None of this evidence, said the court, showed that the drivers or water were part of the practical continuity of movement in interstate commerce. And while the defendants asserted that water is sometimes picked up from sites in New York rather than Pennsylvania, and they were sometimes contracted to haul wastewater to Ohio, this was not backed up with evidence. Moreover, even if they presented evidence supporting these assertions, it would not, by itself, demonstrate their actions were a “clearly identifiable element of an integrated interstate distribution system.” “The mere fact that a journey which begins with Defendants transporting water from retention ponds and ends with water being driven from Pennsylvania into Ohio does not alone demonstrate Defendants were part of ‘an integrated system of interstate shipments’ sufficient to satisfy Defendants’ burden,” said the court. Noting that the relationship between the defendants, the fracking companies, and the movement of the wastewater out of state could theoretically be one involving a practical continuity of movement in interstate commerce, depending on, among other things, the intent of the shipper at the time shipment commenced, the role the defendants’ drivers played, whether the water was altered during the fracking process, and the steps for water removal and outgoing transportation, the court found that the defendants produced no evidence concerning these matters.

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