No. 286.Circuit Court of Appeals, Second Circuit.
May 8, 1944.

Page 617

Appeal from the District Court of the United States for the Southern District of New York.

Action by Donald E. Gillette against Rockland Coaches, Inc., to recover $1,695.92 alleged to be due plaintiff from defendant under section 7 of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 207, as an employee of the defendant. From a judgment, 50 F. Supp. 617, for defendant dismissing the action with costs, the plaintiff appeals.


Ernest Mahler, of New York City (Charles R. Katz, of New York City, of counsel), for plaintiff-appellant.

Lexow Jenkins, of Suffern, N.Y. (David H. Moses and Morton Lexow, both of Suffern, N.Y., of counsel), for defendant-appellee.

Before AUGUSTUS N. HAND, CLARK, and FRANK, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

This is an appeal by the plaintiff, an employee of Rockland Coaches, Inc., from a judgment dismissing his complaint and granting summary judgment for the defendant under the Fifth Defense of the answer. The action was to recover overtime under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq. The complaint alleged that the plaintiff was employed by the defendant at the latter’s garage plant at Spring Valley, New York, and that pursuant to such employment he was required to perform, and did perform, the following services:

(a) checking and re-setting the socalled “National” ticket machines contained in each of 86 buses owned and operated by defendant;

(b) working at the gas pumps fueling buses;

(c) keeping records of oil supplied to buses;

(d) checking oil and tires;

(e) furnishing to drivers bridge tolls and tickets;

(f) changing insurance “stickers” on all buses; and

(g) fueling owners’ cars.

The complaint further alleged that during the period between October 24, 1938 and October 24, 1940, plaintiff was employed for some 2900 overtime hours and by reason of such overtime was entitled under the Fair Labor Standards Act to receive $1,695.92 as liquidated damages, plus a reasonable counsel fee.

The defendant alleged in its answer as a Fifth Defense that it was a local motor bus carrier as defined in Section 13(a)(9) of the Fair Labor Standards Act and as such was not governed by the provisions of Sections 6 and 7 which prescribe minimum wages and maximum hours for employees engaged in commerce among several states, or from any state to any place outside.

Section 13(a)(9) provides that Sections 6 and 7 shall not apply to “any employee of a street, suburban, or interurban electric railway, or local trolley or motor bus carrier, not included in other exemptions contained in this section.”

The defendant moved for a summary judgment in its favor on the ground that it is a “local * * * motor bus carrier” as defined in Section 13(a)(9) of the Fair Labor Standards Act of 1938. We think that the judgment to the defendant upon this motion was right and should be affirmed.

The sole question raised by this appeal is whether the defendant is subject to the provisions for wages and overtime of Sections 6 and 7 of the Fair Labor Standards Act, or is exempt from those provisions because, within the meaning of Section 13(a)(9), it is a “local * * * motor bus carrier” as held by the court below.

The defendant transports “commuters” in interstate commerce who in the morning travel from their homes to their places of work and return at night. These commuters constitute about 75% of its traffic, which in addition consists of school children, shoppers and the general public. During the rush hours there is a headway of approximately three minutes for each bus going to New York City in the morning, and for each bus going from New York City to New Jersey in the evening.

The routes of the company begin in Spring Valley and Nyack, New York, and

Page 618

go through Bergen County, New Jersey, to New York City over the George Washington Bridge. They terminate either at 167th Street near the George Washington Bridge, or at the Midtown Bus Terminal of New York, Inc., where other local motor bus operators from other points in New Jersey have their New York Terminus. The defendant picks up and discharges interstate passengers along its entire routes. These routes pass through suburban towns and villages in New Jersey and terminate in New York City, which is the principal place whither traffic goes and from which it comes. No baggage or bundles for the buses may be checked and only such luggage may be carried as can be handled by the passengers. There is a package or baggage rack in all buses for use by passengers but no trunks or packages are permitted of such size as to interfere with passengers in entering or leaving the bus.

The fares of all companies are fixed by zones, that is, from one municipality to another, rather than by mileage, and the buses will pick up and discharge interstate passengers all along their route. This is even true of buses marked “Express”. To what extent interstate carriers may be given intrastate privileges over certain portions of their interstate routes is quite immaterial because the question before us is only whether the defendant is a local interstate carrier under the Fair Labor Standards Act and, as an interstate carrier, would have no obligations under Sections 6 and 7 of that Act.

The defendant operates under a Certificate of War Necessity issued by the Office of Defense Transportation certifying its operations as for “local service” and has no certification for “road”, or “over the road”, or “long haul” services. The certificate was issued after the defendant had submitted a detailed report as to its past activities. In order to determine whether an operator is a “local” operator the Office of Defense Transportation has laid down three alternative tests, the first and third of which are met by the defendant. Executive Orders Nos. 8989, 9156, General Orders O.D.T. 11 and 21, Instructions page 9:

“Local bus service. The following instructions apply to bus operations in `local service’, which include (1) those wholly within any municipality or urban community and a zone extending 15 air miles from the boundaries thereof, or between contiguous municipalities or urban communities, or (2) round-trip schedules on which the average revenue per passenger carried is not more than 35 cents, or (3) round-trip schedules whose principal traffic consists of the movement of workers en route between their homes and their places of employment, or the movement of persons between military or naval establishments and nearby municipalities or urban communities.”

The Interstate Commerce Commission has described the business of interstate motor bus carriers as “local” in respect to the maximum hours of service of its employees when there is mass transportation morning and evening and frequent schedules are maintained, as between Newark, Jersey City and New York. Likewise it has relieved transportation carriers (on the ground that they are “local”) from keeping a driver’s log containing records of the time of each stop and of each crossing of a state line while on a schedule over a regular route “mainly in urban and suburban areas and when such regular route is not longer than 35 miles”. Ex parte No. M.C. 2, 24 M.C.C. 415.

Similarly in Chapter 15, Article 1, Section 1 of Rules and Regulations, the City of New York has defined a Short Haul Omnibus as “an intrastate or interstate omnibus operating to or from a point not more than fifty miles from Columbus Circle in the City of New York”. See decision in Bus Depot Holding Company v. Valentine, 288 N.Y. 115, 41 N.E.2d 913. Record on Appeal, page 626.

We think it clear that the Wages and Hours Administrator has given the words “local * * * motor bus carrier”, in Section 13(a) (9), a meaning that excludes the defendant from the wages and hours provisions of Sections 6 and 7 of the Fair Labor Standards Act. In the First Annual Report of the Administrator he said (at p. 25) that “under Section 13(a)(9), employees of a motor bus carrier, which confines its operations to the limits of one city and its suburbs have been regarded as exempt.” Surely the defendant’s mass transportation of commuters in and out of New York City by its buses brings it within the exemption referred to by the Administrator. On March 6, 1944, in another Bulletin, we find the following:

“The Administrator stated that he believed that `local trolley or motor bus carrier’ should be defined with reference to

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the type of service rendered and the characteristics peculiar to that service as distinguished from non-local or over-the-road carriage. There exist certain indicia which lend themselves to a determination of whether a carrier is, in fact, a local carrier. The indispensable characteristic of a local motor bus carrier is that it is a carrier which serves an integrated commercial or industrial area for the purposes of carrying persons to and from their work in offices and factories, children to and from school daily, and other persons attending to necessary routine business. ”

In addition to the foregoing general language of the Wage and Hour Administrator he has enumerated twelve indicia of a local bus carrier, the first three of which he has said were the most significant. We append them with the comment by defendant’s counsel as to the general conformity to the tests.[1]

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The Administrator further states that “no hard or fast rule is possible and determination will depend upon appraisal of all of the facts.”

In addition to the foregoing the Administrator did not intervene on the trial of this action or on this appeal as has been done by public agencies in other cases. Overstreet v. North Shore Corp., 318 U.S. 125, 63 S.Ct. 494, 87 L.Ed. 656. The Administrator also said in his bulletin of March 6, 1944, that the foregoing tests “were in accord with recent court decisions”, evidently referring to the decision of the District Court in the case at bar and to that of the Sixth Circuit in Conley v. Valley Motor Transit Company, 139 F.2d 692. The last decision broadly reached

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the same conclusion that we have arrived at here upon a similar state of facts.

It seems evident from the above that the Administrator has acquiesced in the view that the defendant is a local interstate carrier and that he has added the weight of his interpretation, as the officer charged with the administration of the provisions relating to the wages and hours of employees, to that of the Office of Defense Transportation and of the Interstate Commerce Commission.

The decision of the District Court is further supported by the affidavit of George F. Cassidy, a traffic consultant of wide experience whose conclusion is not materially traversed that:

“In the metropolitan zone around New York City the interstate local operators are those who have routes of less than fifty miles and who transport commuters, shoppers, workers and school children. The usual practice is for the person to pay his fare to the driver upon boarding or leaving the bus, and receive from the driver a receipt. Most of these companies also have multiple trip arrangements whereby a ticket from a book is presented to the driver in lieu of cash. Most of these short haul or local operators pick up and discharge interstate passengers all along their routes and even where, because of prior franchises, there may be restrictions, it does not change the character of their operation.”

There can be no doubt that the defendant’s buses are maintained and run in general conformity to the twelve tests set forth by the Administrator. It is true that proof was lacking as to test No. 12, namely, that: “The annual average revenue per passenger carried on a local bus route is less than 20 cents.”

But the Administrator states in his Bulletin of March 6, 1944, that “the first three tests * * * are the most significant”, that “minor variations from the pattern will not defeat the exemption” and that “no hard and fast rule is possible, and a determination would depend upon an appraisal of all the facts”. Moreover, No. 12 is an indicium applicable to suburban interstate traffic in general, while suburban traffic in and out of New York City is specially burdened by high bridge and tunnel tolls. Cf. 6 M.C.C. 25, 36. There are, therefore, considerations applicable to the New York Metropolitan Area that would justify a somewhat higher average fare than in other parts of the country.

The appellant argues that the exemption from the wages and hour provisions of the Fair Labor Standards Act is not applicable to the case at bar because of the final words of Section 13(a)(9) “not included in other exemptions contained in this section”. Section 13(b) provides that:

“The provisions of section 7 shall not apply with respect to (1) any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935.”

We cannot see that Section 13(b) has any relevancy here. It refers to an exemption which is given employees as to whom the Interstate Commerce Commission may establish qualifications and maximum hours of service pursuant to Section 204(a) of the Motor Carrier Act, 49 U.S.C.A. § 304(a). It was held by the Supreme Court in United States v. American Trucking Associations, 310 U.S. 534, 60 S.Ct. 1059, 84 L.Ed. 1345, that the power of the Interstate Commerce Commission under Section 204(a) is confined to those employees whose duties affect safety of operation and there is no claim that the plaintiff is such an employee. The contention that the plaintiff is not subject to the exemption set forth in 13(a)(9), or is given a double exemption, or any additional exemption by reason of the final words of 13(a)(9), seems entirely without basis.

For the foregoing reason the judgment is affirmed.


IndiciaAppellee’s Operations

1. The fare on a local bus route All appellee’s buses are equipped
is either paid to the driver with National Cash Register Devices
directly or deposited in a (fols. 54, 96) and a passenger when
coin box. Tickets are not entering the bus pays his fare either
sold at terminals or other in cash or by a slip from a commutation
designated places for single ticket (fol. 54), or, in some instances,
trips. School tickets, weekly by a ticket (fol. 54), and receives
passes or commutation tickets a receipt from a continuous
are in some instances, tape (fol. 54) (Exhibit B).
however, used on local carriers.

2. The fare on a local bus route The fares of appellee are based on
is either a single fare for zones (fols. 57, 90) 6 MCC 25 and
the entire route or is based 27 MCC 255 — Tariffs filed with Interstate
on the number of zones Commerce Commission (p.
through which a person travels. 8, supra). See Exhibit (B).
The fare is not based
on the number of miles

3. Buses of a local carrier Appellee’s buses travel at a headway
traverse the same route at of ½ hour all day long and
frequent intervals, usually three minutes at rush hours in the
with a headway of less than morning, and in the evening (fol. 53)
one hour, and make frequent (fol. 87). Appellee’s buses pick up
stops at designated places and discharge interstate passengers
ordinarily spaced at a given all along their route (fols. 55, 95).
number of feet. These operating Stops are designated by the Police
schedules are generally Department in N.Y. City.
speeded up during the
morning and evening peak

4. The buses used on local Appellee’s buses are known as the
routes differ from the over-the-road Class A in local traffic (fol. 96) and
buses in that the have room for standees (fol. 96).
seats in the former are more
narrowly spaced and the
aisle is wider to accommodate

5. Local buses are built not Average scheduled operating speed
to exceed a speed of approximately of appellee’s buses is twenty miles
45 miles per hour, an hour.
while the top speed of the See Schedules.
over-the-road bus approximates
65 miles per hour.
The scheduled operating
speed of a local bus is from
10 to 20 miles per hour
while that of the over-the-road
bus is from 30 to 40
miles per hour.

6. Local buses are geared for Most of appellee’s buses are so
the quick acceleration necessary geared.
for short runs in congested

7. Local buses do not maintain No baggage or luggage is carried
space for baggage, having at except what the passenger may have
best a package rack for small himself and only a rack is maintained
items such as lunch boxes (fol. 56) for such bundles as
and packaged merchandise. passenger may carry himself.
Over-the-road buses have
space set aside in the rear,
on the roof or within the
bus for luggage, commonly
required in traveling considerable

8. Drivers of local buses are Appellant concedes that appellee’s
ordinarily paid on an hourly drivers are paid on an hourly basis
rather than a mileage basis. (fol. 83).

9. Drivers of local buses do not No route of appellee is more than
make runs which prevent thirty-five miles in length so that
them from returning home a driver may be able to return home
each day after work. after each work day.

10. Local bus carriers do not Appellee makes no such connections.
maintain schedules designed
to make connections with
over-the-road carriers nor
are they engaged in carriage
which is a continuation of
over-the-road travel or preliminary
thereto, or a part

11. The statistical pattern of No proof in Record.
national over-the-road travel Appellee is exclusively a commuting
indicates a falling off of business or short haul line.
during the winter, early
spring and fall months with
a sharp increase during the
late spring and summer,
traceable to pleasure trips
taken during vacation periods.
The statistical pattern
for local bus travel depicts
a low degree of travel during
the late spring and summer

*12. The annual average revenue No proof either way in the Record.
per passenger carried on a
local bus route is less than
20 cents.

* U.S. Dept. of Labor, Wage and Hour Decision found that this was an arbitrary division for statistical purposes only (See p. 47, infra).

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