Opinion

Greene v. Metropolitan Transportation Authority

Court: District Court, E.D. New York
Filed: Sep 19, 2024
Cited by: 0 cases
Authority: More cited than 31.6%

“[S]urplusage[ ] does not warrant rewriting the text of a statute whose meaning is plain and produces no absurd results.”

How later courts described this case

“[S]urplusage[ ] does not warrant rewriting the text of a statute whose meaning is plain and produces no absurd results.”
holding that where statutory text is “unambiguous, [the Court’s] inquiry begins with the statutory text, and ends there as well”
“[B]ecause the FLSA is a remedial act, its exemptions ... are to be narrowly construed. Indeed, an employer bears the burden of proving that its employees fall within an exempted category of the Act.”
examining “statutory history” to solve statutory interpretation question under federal law

Written by the judges who cited it.

The opinion

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK For Online Publication Only

----------------------------------------------------------------------X FILED

JAMIE GREENE, LAMELL ARMOR, CLERK

FABIAN SAUGAR, JOHN BRENNAN,

and ARTHUR BENNETT, on behalf of 9/19/202 4 3:14 pm

themselves and all others similarly situated, U.S. DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

Plaintiffs, LONG ISLAND OFFICE

MEMORANDUM & ORDER

22-cv-3300 (JMA) (ST)

-against-

METROPOLITAN TRANSPORTATION AUTHORITY,

LONG ISLAND RAILROAD, METRO-NORTH

RAILROAD, STATEN ISLAND RAILWAY, MTA

CONSTRUCTION AND DEVELOPMENT, MTA

REGIONAL BUS OPERATIONS, MTA BRIDGES

AND TUNNELS, and NEW YORK CITY TRANSIT

AUTHORITY,

Defendants.

----------------------------------------------------------------------X

AZRACK, United States District Judge:

Plaintiffs Jamie Greene, Lamell Armor, Fabian Saugar, John Brennan, and Arthur Bennett,

on behalf of themselves and all others similarly situated (“Plaintiffs”) sued Defendants

Metropolitan Transportation Authority, Long Island Railroad, Metro-North Railroad, Staten Island

Railway, MTA Construction And Development, MTA Regional Bus Operations, MTA Bridges

And Tunnels, and New York City Transit Authority (“Defendants” or “MTA”) alleging—among

other things—delayed wage payments, overtime violations, and related damages under the Fair

Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”).1 (See First Am. Compl.,

1 Plaintiffs Jamie Greene, Lamell Armor, Fabian Saugar, and John Brennan (“Railroad Worker Plaintiffs”)

work for either the Long Island Railroad or Metro-North Railroad. (ECF No. 46, at 1; see also ECF No. 24, at ¶¶ 11–

34.) Plaintiff Arthur Bennett, who works for the Manhattan and Bronx Surface Transit Operating Authority

(“MaBSTOA”), is not a “Railroad Worker Plaintiff.” (Id.; see also ECF No. 24, at ¶¶ 31–32.)

ECF No. 24.) The Court presumes familiarity with the background of this case.

Presently before the Court is Defendants’ Motion to Dismiss Plaintiff’s First Amended

Complaint in Part under Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”).2 (ECF No.

45.) In a Report and Recommendation issued on February 26, 2024 (“R&R”), United States

Magistrate Judge Steven L. Tiscione recommended that (1) Plaintiffs’ NYLL overtime and

frequency of pay claims should be dismissed, and (2) Plaintiffs’ FLSA claims against the Railroad

Worker Plaintiffs should be dismissed as well. (ECF No. 67.) Defendants filed timely objections

to the R&R, and Plaintiffs responded to those objections. (ECF Nos. 68–69).

On March 30, 2024, this Court (1) entered an order “adopt[ing] the R&R’s analysis and

recommendations as to the NYLL overtime claims and dismisse[d] those claims;” and noted that

it would “address Plaintiffs’ objections to the NYLL frequency of pay claims and the FLSA claims

in a separate order.” (ECF No. 70, at 2.) This is that separate order.

I. LEGAL STANDARD

A district court may “accept, reject, or modify, in whole or in part, the findings or

recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); see also FED. R. CIV. P.

72(b)(3); Grassia v. Scully, 892 F.2d 16, 19 (2d Cir. 1989). When a party makes specific

objections, the court reviews de novo those portions of the R&R to which objection is made. See

id.; see also FED. R. CIV. P. 72(b)(3); Kruger v. Virgin Atl. Airways, Ltd., 976 F. Supp. 2d 290,

2 Plaintiffs allege four causes of action in their First Amended Complaint: (i) Fair Labor Standards Act: Late

Payment––Brought by all Plaintiffs on behalf of the FLSA Kronos Collective, (First Am. Compl. ¶¶ 91–102, ECF No.

24); (ii) New York Labor Law: Late Payment––Brought by all Plaintiffs on behalf of the New York Late Payment

Class, (id. at ¶¶ 103–110); (iii) Fair Labor Standards Act: Overtime Rate––Brought on behalf of Plaintiffs Greene,

Armor, Saugar, and Brennan (“Railroad Worker Plaintiffs”) on behalf of the FLSA Shift Differential Collective, (id.

at ¶¶ 111–122); and (iv) New York Labor Law: Overtime Rate––Brought on behalf the Railroad Worker Plaintiffs

and the New York Shift Differential Collective, (id. at ¶¶ 123–130). In the instant motion, Defendants move to dismiss

the entirety of Plaintiffs’ second, third, and fourth causes of action. Defendants do not, however, move to dismiss the

first cause of action as to all Plaintiffs. (R&R at 22, n.10, ECF No. 67.) Defendants only move to dismiss the FLSA

late payment claims brought by the “Railroad Worker Plaintiffs.” (Id.)

296 (E.D.N.Y. 2013) (“A proper objection is one that identifies the specific portions of the R&R

that the objector asserts are erroneous and provides a basis for this assertion.”), aff’d, 578 F. App’x

51 (2d Cir. 2014). But where “a party makes only conclusory or general objections, or simply

reiterates the original arguments,” the court reviews the R&R “strictly for clear error.” See

Washington v. Gilman Mgmt. Corp., 2023 WL 6211022, at *3 (E.D.N.Y. Sept. 25, 2023); see also

Thomas v. City of N.Y., 2019 WL 3491486, at *4 (E.D.N.Y. Jul. 31, 2019) (same).

To accept those portions of an R&R “to which no timely objection has been made,”

however, “a district court need only satisfy itself that there is no clear error on the face of the

record.” Lorick, 2022 WL 1104849, at *2 (quoting Ruiz v. Citibank, N.A., 2014 WL 4635575, at

*2 (S.D.N.Y. Aug. 19, 2014)); see also Jarvis v. N. Am. Globex Fund, L.P., 823 F. Supp. 2d 161,

----------------------------

163 (E.D.N.Y. 2011). Clear error will be found only when, upon review of the entire record, the

Court is “left with the definite and firm conviction that a mistake has been committed.” United

States v. Snow, 462 F.3d 55, 72 (2d Cir. 2006) (quoting United States v. Garcia, 413 F.3d 201,

222 (2d Cir. 2005)).

Additionally, to survive a motion to dismiss under Rule 12(b)(6), a complaint must plead

“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint is properly dismissed where,

as a matter of law, “the allegations in a complaint, however true, could not raise a claim of

entitlement to relief.” Twombly, 550 U.S. at 558. When resolving a motion to dismiss, the Court

must assume all well-pled facts to be true, “drawing all reasonable inferences in favor of the

plaintiff.” Koch v. Christie’s Int’l PLC, 699 F.3d 141, 145 (2d Cir. 2012). That tenet, however,

does not apply to legal conclusions. See Iqbal, 556 U.S. at 678. Pleadings that offer only “labels

and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.”

Twombly, 550 U.S. at 555. Moreover, in analyzing a motion to dismiss under Rule 12(b)(6), the

Court is limited to the “facts stated in the complaint or in documents attached to the complaint as

exhibits or incorporated in the complaint by reference” or “matters of which judicial notice may

be taken.” Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir. 1991).

II. DISCUSSION

Applying de novo review to portions of the R&R to which Plaintiffs objected, the Court

adopts the R&R in part and respectfully overrules it in part with respect to Plaintiffs’ claims.

A. Defendants’ Second Objection: Plaintiffs’ NYLL Frequency of Pay Claims

The R&R recommends the Court grant Defendants’ motion to dismiss Plaintiffs’ NYLL §

191 frequency of pay claims. (See R&R at 17–21, ECF No. 67.) The R&R concluded that

Defendants are exempt from NYLL § 191(1)(b)’s frequency of pay provisions because the MTA

and its subsidiaries constitute a “governmental agency” under NYLL § 190(3). (See id. at 21.)

Plaintiffs object to this conclusion, arguing that the MTA and its subsidiaries are non-exempt

“employers” under NYLL § 190(3), and thus must comply with NYLL § 191(1)(b). (See Pls.’

Obj. at 3–4, ECF No. 68.) For the below reasons, the Court adopts the R&R’s recommendation to

grant Defendants’ motion to dismiss Plaintiffs’ NYLL frequency of pay claims.

1. Applicable Law

Article 6 of the NYLL—New York State’s wage theft statute—sets forth various

requirements relating to an employer’s pay practices. See N.Y. Lab. Law §§ 190 et seq. Two

provisions contained therein are at the heart of this dispute.

NYLL § 190(3) broadly defines the types of “employer[s]” that are subject to the NYLL’s

frequency of pay provisions: “‘Employer’ includes any person, corporation, limited liability

company, or association employing any individual in any occupation, industry, trade, business or

service.” Id. NYLL § 190(3) does, however, exempt governmental agencies from the NYLL’s

coverage. (See id.) The statute reads in full:

“‘Employer’ includes any person, corporation, limited liability company, or

association employing any individual in any occupation, industry, trade,

business or service. The term ‘employer’ shall not include a governmental

agency.”

Id. (emphasis added).

NYLL § 191 outlines the frequency by which “every employer”––as defined by NYLL §

190(3)––must pay certain categories of employees. N.Y. Lab. Law § 191(1). Section 191 applies

only to “employers,” not governmental agencies. Id. As applicable here, qualifying “employers”

must pay railroad workers each week and comply with certain mailing requirements:

“A railroad worker shall be paid on or before Thursday of each week the

wages earned during the seven-day period ending on Tuesday of the

preceding week; and provided further that at the written request and

notification of address by any employee, every railroad corporation, with

the exception of those commuter railroads under the jurisdiction of the

metropolitan transportation authority, shall mail every check for wages of

such employee via the United States postal service, first class mail.”

N.Y. Lab. Law § 191(1)(b) (emphasis added).

The statutory history of both provisions is particularly relevant here.

NYLL § 190 was enacted in 1966. See N.Y. Lab. Law § 190, as added by L. 1966, ch.

548, § 2. At the time of its enactment in 1966, NYLL § 190(3)’s definition of “employer” and its

exclusion of “governmental agenc[ies]” therefrom read: “‘Employer’ includes any person,

corporation or association employing any individual in any occupation, industry, trade, business

or service. The term ‘employer’ shall not include a governmental agency.” Id. § 190(3). Although

NYLL § 190 has been amended eight times since its enactment in 1966, NYLL § 190(3)’s

definition of “employer” has only undergone one change. In 2002, the New York State legislature

amended NYLL § 190(3)’s definition of “employer” to include “limited liability company.” N.Y.

Lab. Law § 190(3), as amended by L. 2002, ch. 281, § 1, eff. Aug. 6, 2002. NYLL § 190(3)’s

exclusion of “governmental agenc[ies]” from its definition of “employer,” however, has never

been amended in any way.

NYLL § 191(1)(b) was also enacted in 1966. See N.Y. Lab. Law § 191, as added by L.

1966, ch. 548, § 2. Prior to its 1987 amendment, NYLL § 191(1)(b) simply required railroad

workers to be paid—on or before Thursday of each week—the wages earned in the preceding

week. See id. In 1987, however, the New York State legislature amended NYLL § 191(1)(b) to

include a mailing requirement for qualifying employers, adding the phrase: “and provided further

that at the written request and notification of address by any employee, every railroad corporation,

with the exception of those commuter railroads under the jurisdiction of the metropolitan

transportation authority, shall mail every check for wages of such employee via the United States

postal service, first class mail.” N.Y. Lab. Law § 191, as amended by L. 1987, ch. 404, § 1.

2. Analysis

The critical question presented is whether the MTA (together with its subsidiaries) qualifies

as an exempt “governmental agency” or a non-exempt “employer” under Article 6 the NYLL.3

The R&R recommended that this Court dismiss Plaintiffs’ NYLL frequency of pay claims because

the MTA (and by extension, its subsidiaries) is an exempt governmental agency “as a matter of

plain text” under NYLL § 190(3). (See R&R at 21, ECF No. 67.) The Court agrees and adopts

the R&R’s recommendation.

3 If Defendants qualify as an exempt “governmental agency,” Plaintiffs’ frequency of pay claims must be

dismissed under Article 6 of the NYLL as a matter of law. See N.Y. Lab. Law § 190(3). But Plaintiffs claims may

proceed if the Court determines Defendants qualify as non-exempt “employers” under § 190(3). See id.

“Where the statutory language is clear and unambiguous, the court should construe it so as

to give effect to the plain meaning of the words used.” Patrolmen’s Benev. Ass’n of City of New

York v. City of New York, 41 N.Y.2d 205, 208 (1976). And when a term is not defined by statute,

courts may “look to its ordinary meaning found in contemporary dictionary definitions,” that is, in

dictionaries that were available when the statute was enacted. Mader v. Experian Info. Sols., Inc.,

56 F.4th 264, 269 (2d Cir. 2023) (citation omitted); -se-e -al-so- -W-a-ls-h- v-. N--ew- -Y-o-rk- S-t-at-e -C-om--pt-ro-l-le-r,

34 N.Y.3d 520, 524 (2019) (“In the absence of a statutory definition, [courts] construe words of

ordinary import with their usual and commonly understood meaning, and in that connection have

regarded dictionary definitions as useful guideposts in determining the meaning of a word or

phrase.”)). Black’s Law Dictionary defines “governmental agency” at the time of the bill’s passage

as “[a] subordinate creature of the sovereign created to carry out a governmental function. [It is]

frequently, a political subdivision or corporation.” Governmental Agency, Black’s Law

Dictionary (4th ed. 1968) (emphasis added). The MTA and its subsidiaries fall within this

definition, and the only other court to consider the issue found that the MTA qualifies as a

governmental agency.4 See D’Antonio v. Metropolitan Transp. Authority, 2008 WL 582354, at

*5 (S.D.N.Y. Mar. 4, 2008). Plaintiffs offer no authority to the contrary, and this Court is unable

to locate any.5 (See R&R at 18–19, ECF No. 67; see also (Defs.’ Resp. at 3, ECF No. 69).)

4 Plaintiffs argue that this Court should not rely on D’Antonio because, according to Plaintiffs, that court did

not fully grapple with the question of whether the MTA qualifies as an exempt governmental agency under NYLL §

190(3). Plaintiffs also maintain that the cases Judge Wood cited in D’Antonio do not support her interpretation of

NYLL § 190(3). To be sure, this Court recognizes that the D’Antonio court held that the MTA and NYCTA both

qualified as exempt governmental agencies, and therefore do not fall under the terms of § 190(3), only after noting

that the plaintiff did “not offer contrary authority or even respond to the MTA and NYCTA’s argument” that they so

qualified. D’Antonio, 2008 WL 582354, at *5. Moreover, the Court also agrees that the cases Judge Wood cited in

D’Antonio appear to have little relevance to the question of how to interpret NYLL § 190(3) as applied to the MTA.

Nevertheless, considering the Court’s textual, statutory history, and legislative history analyses below, it still agrees

with the D’Antonio court’s ultimate conclusion.

5 Notably, courts have also broadly construed “governmental agency” to include counties, municipalities, and

towns. See Arciello v. Cnty. of Nassau, 2019 WL 4575145, at *8 (E.D.N.Y. Sept. 20, 2019).

Accordingly, the Court agrees with the R&R’s conclusion that the MTA (and by extension, its

subsidiaries) is an exempt governmental agency “as a matter of plain text” under NYLL § 190(3).

(See R&R at 21, ECF No. 67.)

To support their argument that the MTA is a non-exempt “employer” under Article 6,

Plaintiffs argue that the R&R improperly ignored the text of NYLL § 191(1)(b)––which Plaintiffs

contend has a clear textual implication: the “MTA is a ‘railroad corporation,’ not a governmental

agency.”6 (See Pls.’ Obj. at 3–4, ECF No. 68.) Practically speaking, Plaintiffs’ argument is as

follows: the mentioning of the MTA in § 191(1)(b)––which exempts the MTA from certain

mailing requirements––implies that the MTA is an “employer” and thus must be subject to the

remaining provisions of Article 6 of the NYLL. (See id.; see also R&R at 21.) But nothing in §

191(1)(b)’s text says (or even implies) that § 191(1)(b) should be read so broadly. Section 191

only applies to qualifying “employers” as defined by § 190(3). N.Y. Lab. Law § 191(1). Section

191 does not, however, apply to a “governmental agency” that is exempted from the definition of

“employer.”7 N.Y. Lab. Law § 190(3). Because the Court agrees that the plain text of Article 6

6 See, e.g., N.Y. Lab. Law § 191(1)(b) (“A railroad worker shall be paid on or before Thursday of each week

the wages earned during the seven-day period ending on Tuesday of the preceding week; and provided further that at

the written request and notification of address by any employee, every railroad corporation, with the exception of

those commuter railroads under the jurisdiction of the metropolitan transportation authority, shall mail every check

for wages of such employee via the United States postal service, first class mail.”) (emphasis added).

7 In passing, Plaintiffs suggest that the R&R’s interpretation of NYLL § 191(1)(b) renders the MTA’s reference

“superfluous.” (See Pls.’ Obj. at 6, ECF No. 68.) But even assuming arguendo that Plaintiffs are right, this Court’s

“preference for avoiding surplusage constructions is not absolute.” Lamie v. U.S. Tr., 540 U.S. 526, 536 (2004); see

also Marx v. Gen. Revenue Corp., 568 U.S. 371, 385 (2013). And that preference does not control here. In Barton v.

Barr, the Supreme Court acknowledged that its interpretation of one immigration statutory provision rendered another

provision superfluous. 590 U.S. 222, 239 (2020). Nonetheless, it explained that “redundancies are common in

statutory drafting” and that “[s]ometimes the better overall reading of the statute contains some redundancy.” Id.; see

also Rimini Street, Inc. v. Oracle USA, Inc., 586 U.S. 334, 346 (2019). Thus, the Supreme Court ultimately held that

“[r]edundancy in one portion of a statute is not a license to rewrite or eviscerate another portion of the statute contrary

to its text.” Barton, 590 U.S. at 239. So too here, Plaintiffs’ proposed interpretation would have this Court rewrite

NYLL § 190(3) to say something it does not. The Court may not do so, (alleged) surplusage notwithstanding. See

Lamie, 540 U.S. at 534–37; -se-e -al-so- -Ow-n-e-r--Op-e-ra-to-r -In-de-p.- D-r-iv-er-s A-s-s’-n -v.- U-n-ite-d- V-an- L-i-ne-s, LLC, 556 F.3d 690,

695 (8th Cir. 2009) (“[S]urplusage[ ] does not warrant rewriting the text of a statute whose meaning is plain and

produces no absurd results.”).

governs this dispute and concludes that the MTA and its subsidiaries qualify as exempt

governmental agencies, its analysis can end there. See Nat. Ass’n of Mfrs. v. Dep’t of Def., 583

U.S. 109, 127 (2018) (holding that where statutory text is “unambiguous, [the Court’s] inquiry

begins with the statutory text, and ends there as well”) (internal quotation marks omitted); see also

Columbia Mem. Hosp. v. Hinds, 38 N.Y.3d 253, 271 (2022) (holding courts “begin and end”

statutory interpretation analyses with statutory text because “‘the statutory text is the clearest

indicator of legislative intent’ and … a court ‘should construe unambiguous language to give effect

to its plain meaning”) (quoting Matter of DaimlerChrysler Corp. v. Spitzer, 7 N.Y.3d 653, 660

(2006))).

Even if the Court looked beyond the NYLL’s unambiguous statutory text, its statutory

history further supports the above textual conclusion. See United States v. Dai, 99 F.4th 136, 139

(2d Cir. 2024) (examining “statutory history” to solve statutory interpretation question under

federal law); see also Konkur v. Utica Academy of Science Charter School, 38 N.Y.3d 38, 42

(2022) (examining “statutory history” to solve statutory interpretation question under New York

law). The New York State legislature had multiple opportunities to write the limitation on the

scope of exempt governmental agencies Plaintiffs would have this Court impose. But it never did.

NYLL § 190(3)’s definition of “employer” and its exclusion of “governmental agenc[ies]”

therefrom was enacted in 1966, twenty-one years before the New York State legislature amended

NYLL § 191(1)(b) to include a mailing requirement and a reference to the MTA. Compare N.Y.

Lab. Law § 190(3), as added by L. 1966, ch. 548, § 2, with N.Y. Lab. Law § 191, as amended by

L. 1987, ch. 404, § 1. Between 1966 and 1987, the New York State legislature amended NYLL §

190 three times.8 Not once did it alter § 190(3)’s definition of “employer” or the scope of

8 See N.Y. Lab. Law § 190, as amended by L. 1972, ch. 328, § 1; see also N.Y. Lab. Law § 190, as amended

by L. 1976, ch. 288, § 1; N.Y. Lab. Law § 190, as amended by L. 1984, ch. 496, § 1.

“governmental agenc[ies]” exempt from the NYLL’s frequency of pay provisions. In 1987, the

New York State legislature mentioned MTA as explicitly exempt from NYLL § 191(1)(b)’s newly

imposed mailing requirements. See N.Y. Lab. Law § 191, as amended by L. 1987, ch. 404, § 1.

But the legislature’s reference to the MTA in 1987 did nothing to narrow the scope of exempt

“governmental agenc[ies]” under NYLL § 190(3). Indeed, since NYLL § 191(1)(b)’s 1987

amendment, the New York State legislature amended NYLL § 190 five more times.9 In each

instance, the legislature never amended—in any way—the scope of “governmental agenc[ies]”

exempt from the NYLL’s frequency of pay provisions.10 Accordingly, the NYLL’s statutory

history shows that the New York State legislature did not alter NYLL § 190(3)’s “governmental

agency” exemption by implication through the language NYLL § 191(1)(b). To hold otherwise

would alter 58 years of established New York law without so much as a whisper from the state’s

lawmakers.

Even if the NYLL’s statutory text or statutory history were ambiguous, which they aren’t,

the statute’s legislative history confirms that the MTA (together with its subsidiaries) was and is

an exempt “governmental agency” under the NYLL. See Spadaro v. U.S. Customs & Border Prot.,

978 F.3d 34, 46 (2d Cir. 2020) (citation omitted) (“When interpreting a statute, [courts] begin with

the plain language of the statute, giving the statutory terms their ordinary or natural meaning....

When that meaning is not clear, [courts] make use of a variety of interpretive tools, including

canons, statutory structure, and legislative history.”); -se-e -al-so- -A-no-n-y-m-o-u-s -v-. M--o-li-k, 32 N.Y.3d

30, 37 (2018) (“Where the [statutory] language is ambiguous … courts may resort to legislative

9 See N.Y. Lab. Law § 190, as amended by L. 1992, ch. 165, § 1; -se-e -al-so- -N-.Y-. -La-b-. L-a-w- §- 1-9-0, as amended

by L. 2002, ch. 281, § 1, eff. Aug. 6, 2002; N.Y. Lab. Law § 190, as amended by L. 2007, ch. 304, § 1, eff. Jan. 14,

2008; N.Y. Lab. Law § 190, as amended by L. 2023, ch. 433, § 1, eff. Mar. 13, 2024.

10 In 2002, the New York State legislature amended the NYLL § 190(3)’s definition of “employer” to include

“limited liability company.” N.Y. Lab. Law § 190(3), as amended by L. 2002, ch. 281, § 1, eff. Aug. 6, 2002.

history.”) (cleaned up)).

During the legislative proceedings leading up to the voting on (and ultimate passage of)

NYLL § 191(1)(b)’s 1987 amendment, various state agencies submitted letters setting forth their

respective positions on the proposed amendment. Those letters confirm that the MTA was not to

be included—for the first time—in the definition of “employer” under Article 6. For example, in

a letter dated July 3, 1987, the New York Department of Labor (“NYSDOL”) indicated that it did

not object to the inclusion of the language at NYLL § 191(1)(b), which exempted the MTA from

the mailing requirements of other railroad corporations. See Bill Jacket, L.1987, ch. 404, § 1, at

16. Crucially, the letter stated: “It should be noted that the Department [of Labor] has traditionally

taken the position that [employees of the MTA] are employees of a governmental agency and are

not, therefore, subject to the requirements of section 191 of the [NYLL].”11 Id.; see also Defs.’

Ex. A, ECF No. 54-1 (“NYSDOL 1987 Letter”). Further bolstering the legislative understanding

that the MTA was never intended to be covered by the NYLL’s frequency of pay provisions, the

Governor’s Office of Employee Relations wrote a letter expressing no objection to the NYLL §

191 amendment in 1987 because “[i]t is apparent that this bill will have no impact upon public

sector employees employed in New York State ….” Id. at 17; see also Defs.’ Ex. C, ECF No. 54-

3 (“GOER Memo”). It is clear from this letter that the Governor’s Office of Employee Relations

(“GOER”) did not believe that the legislature intended to expand the definition of “employer” to

include the MTA through this amendment. If it had, it is hard to imagine how such a sea change

11 Likewise, in 1993, the NYSDOL issued a letter to the Vice President of Labor Relations for the LIRR

confirming that subsidiaries of the MTA are governmental agencies excluded from NYLL § 193 based on the

definition of employer contained in NYLL § 190(3). (See Defs.’ Ex. A, ECF No. 69-1 (“NYSDOL 1993 Letter”).)

The NYSDOL issued similar opinion letters, which came to the same conclusion, in 1983 and 1995. (See Defs.’ Ex.

B, ECF No. 54-2 (“NYSDOL 1983 Memo and 1995 Letter”) (both holding that Metro-North was exempt from Article

6 of the NYLL).) Although these NYSDOL opinion letters are not legislative history, the Court considers such post-

enactment interpretations to be persuasive authority.

in the law would “have no impact upon public sector employees employed in New York State.”

Bill Jacket, L.1987, ch. 404, § 1, at 17. Consistent with GOER’s view that there would be no

impact on public sector employers, the MTA submitted a letter advising that it had “no objections

to this legislation.” Id. at 11; see also Defs.’ Ex. D, ECF No. 54-4 (“MTA Memo”). Again,

consistent with GOER’s view, the Division of Budget found that the amendment had “no

appreciable effect on State finances or programs.” Id. at 14; see also ECF No. 53 at 4.

For the above reasons, the Court adopts the R&R’s recommendation to dismiss Plaintiffs’

NYLL frequency of pay claim because the MTA (together with its subsidiaries) is a “government

agency” and does not qualify as an “employer” under NYLL § 190(3).

B. Defendants’ Third Objection: Railroad Worker Plaintiffs’ FLSA Claims

The R&R also recommends the Court grant Defendants’ motion to dismiss the Railroad

Worker Plaintiffs’ FLSA claims.12 (See R&R at 22–28, ECF No. 67.) The R&R first concludes

that the MTA is a rail carrier exempt from the FLSA’s maximum hour provisions under Farley v.

Metro North Commuter Railroad, 690 F. Supp. 268, 269 (S.D.N.Y. 1988), aff’d, 865 F.2d 33 (2d

Cir. 1989). (See id. at 22.) The R&R then concludes that the statutory amendments enacted after

Farley do not impact this conclusion. (See id.)

Plaintiffs loft three objections in response. First, they argue that Farley does not apply

because it applies statutory text that has been amended by the ICCTA—which, as explained below,

abolished the Interstate Commerce Commission (“ICC”), and transferred some of its duties to the

12 As mentioned, Plaintiffs’ FLSA claims include: (First Cause of Action) Fair Labor Standards Act: Late

Payment––Brought by all Plaintiffs on behalf of the FLSA Kronos Collective, (First Am. Compl. ¶¶ 91–102, ECF No.

24); and (Third Cause of Action) Fair Labor Standards Act: Overtime Rate––Brought on behalf of Plaintiffs Greene,

Armor, Saugar, and Brennan (“Railroad Worker Plaintiffs”) on behalf of the FLSA Shift Differential Collective, (id.

at ¶¶ 111–122). Here, Defendants move to dismiss the entirety of Plaintiffs’ third cause of action under the FLSA.

Defendants do not, however, move to dismiss the first cause of action as to all Plaintiffs. (R&R at 22, n.10, ECF No.

67.) Defendants only move to dismiss the FLSA late payment claims brought by the “Railroad Worker Plaintiffs.”

(Id.)

Surface Transportation Board (“STB”). (See Pls.’ Obj. at 11, ECF No. 68.) Second, Plaintiffs

argue that, under the current version of the FLSA, the MTA is not subject to the STB’s jurisdiction

and is therefore not an exempt rail carrier under 29 U.S.C. § 213(b)(2). (See id. at 13.) Finally,

and in the alternative, Plaintiffs argue that whether the STB has jurisdiction over the MTA is a

factual question that the Court cannot resolve at the motion to dismiss stage. (See id. at 14.)

For the below reasons, the Court respectfully overrules the R&R’s recommendation to

grant Defendants’ motion to dismiss the Railroad Worker Plaintiffs’ FLSA claims.

1. Relevant Statutory Provisions and Caselaw

The issues presented here involve the confluence of several federal statutory schemes.

a. FLSA Rail Carrier Exemption.

The FLSA, 29 U.S.C. §§ 201–219, generally requires payment of overtime after forty hours

of work per week. 29 U.S.C. § 207(a)(1). At the time the Second Circuit decided Farley v. Metro

North Commuter Railroad, 865 F.2d 33 (2d Cir. 1989), Section 13(b)(2) of the FLSA exempted

“an employer engaged in the operation of a common carrier by rail and subject to the provisions

of part 1 of the Interstate Commerce Act.” 29 U.S.C. § 213(b)(2) (1982) (emphasis added). This

statutory language, however, has been amended over time. Today, the FLSA’s rail carrier

exemption applies to “any employee of an employer engaged in the operation of a rail carrier

subject to part A of subtitle IV of Title 49,” or in other words, the ICC Termination Act of 1995

(“ICCTA”). 29 U.S.C. § 213(b)(2) (2018) (emphasis added).

It is well-settled that “an employer bears the burden of proving that its employees fall

within an exempted category of the [FLSA].” Martin v. Malcolm Pirnie, Inc., 949 F.2d 611, 614

(2d Cir. 1991); -se-e -al-so- -C-or-n-in-g- G-l-as-s- W-o-r-ks- v-.- B-r-en-n-a-n, 417 U.S. 188, 196–97 (1974).

To understand the Court’s below conclusion to overrule the R&R’s recommendation to

dismiss the Railroad Worker Plaintiffs’ FLSA claims, it is necessary to explain how the FLSA’s

rail carrier exemption relates to the different railroad regulations in existence pre-and-post-Farley.

b. Statutory Landscape Pre-Farley.

Congress has exercised regulatory authority over rail transportation for over 137 years. In

1887, Congress passed the Interstate Commerce Act (“ICA”) and created an executive branch

body—the Interstate Commerce Commission (“ICC”)—for two main purposes: (i) to supervise,

investigate, and regulate interstate carriers; and (ii) to determine whether any unjust discrimination

exists against interstate commerce. See, e.g., U.S. v. Chicago Heights Trucking Co., 310 U.S. 344

(1940). Over the years, the ICC’s mandate broadened to cover several forms of interstate

transportation including—as relevant here—interstate railroads.

In 1937, no federal legislation protected industrial and agricultural workers from

exploitation, so Congress enacted the FLSA to establish a minimum wage for employees engaged

in interstate commerce. See Farley, 690 F. Supp. at 270. In Section 7 of the FLSA, Congress

provided for a maximum work week of 40 hours and guaranteed time and one half for all work

done more than 40 hours. See id. The two-fold purpose of this overtime requirement was to “place

financial pressure on employers to hire more workers and to compensate employees for the burden

of working overtime.” Id. (citing Donovan v. Brown, 666 F.2d 148, 152 (5th Cir. 1982)).

In drafting the FLSA, however, Congress recognized that certain employees did not need

the protection. Accordingly, Section 13 of the FLSA exempted certain employers from the

requirements of Section 7, including in § 13(b)(2), “an employer engaged in the operation of a

common carrier by rail and subject to the provisions of part 1 of the Interstate Commerce Act.”

29 U.S.C. § 213(b)(2) (1982). These exemptions were designed to keep the FLSA from interfering

in industries already subject to federal regulations:

“[I]t was the policy of the committee, in cases where regulation of hours

and wages are given to other government agencies, to write the bill in such

a way as not to conflict with such regulation ... It was taken with reference

to railroad workers insofar as they were governed by the Hours of Service

Act ... [I]t is my belief that it would certainly be unwise to have the hours

of service regulated by two governmental agencies. I am further of the

opinion that the Interstate Commerce Commission, since it has the power

and has exercised it, should be the agency to be entrusted with this duty.”

81 Cong. Rec. 7875 (daily ed. July 30, 1937) (Statement of Sen. Black).

At the time of the FLSA’s enactment, there had been no federal regulation specifically

regulating the wages of railroad employees. See Farley, 690 F. Supp. at 270. But Congress had

addressed railroad labor matters in a series of acts since 1887, which, along with the development

of labor unions, protected the rights and interests of railroad employees. See id. at n.4 (collecting

federal statutes already regulating railroads). As a result, Congress saw no need to keep protecting

these railroad employees by “including them within the purview of the FLSA.” Id.

When the FLSA’s rail carrier exemption was drafted in 1937, all interstate railroads were

subject to the ICA. See id. at 271. But at that time, Congress could not have foreseen the great

increase in state railroad regulation and the railroads’ subsequent loss of competitiveness that

would occur over the next few decades.13 See id. Seeking a comprehensive remedy for “an

outmoded regulatory system” and “inadequate financial resources to improve and modernize rail

facilities,” S. Rep. No. 499 at 1, reprinted in 1976 U.S. Code Cong. & Admin. News at 15,

Congress began purposeful deregulation by passing the Railroad Revitalization and Regulatory

Reform Act of 1976 (“4-R Act”). Farley, 865 F.2d at 35. But the railroad reinvigoration process

was slow. See id. So, in 1980, Congress enacted the Staggers Rail Act, which has been

13 In the decade after 1967, “the growing capital shortfall in the American railroad industry culminated with a

rash of bankruptcies.” Farley, 865 F.2d at 35. By late 1975, when Congress first addressed the situation, “eight major

carriers in the Northeast and Midwest were in financial ruin.” Id. (citing S. Rep. No. 499, 94th Cong., 2d Sess. 3

(1975), reprinted in 1976 U.S. Code Cong. & Admin. News 14, 17).

characterized as “the sharpest shift in federal regulatory law covering rail transportation since the

Interstate Commerce Act of 1887.” Id. at 35–36 (quoting T. Keeler, RAILROADS, FREIGHT, AND

PUBLIC POLICY 102 (1983)); see also H.R. Conf. Rep. No. 1430, 96th Cong., 2d Sess. 79, reprinted

in 1980 U.S. Code Cong. & Admin. News 4110, 4110–11. Through the Staggers Rail Act of 1980,

Congress permitted deregulation to revitalize “the financial stability of the national rail system.”

Id. at 34 (quoting H.R. Conf. Rep. No. 96-1430, 96th Cong. 2d Sess. 80, reprinted in 1980 U.S.

Code Cong. & Admin. News 3978, 4110–111).

The Staggers Rail Act allowed the ICC to exempt railroads from certain ICA regulations

so long as they were “not necessary to carry out the [national] transportation policy.” 49 U.S.C. §

10505(a)(1) (1982). The purpose of these § 10505 exemptions was, as mentioned, “to facilitate

competition by substituting market-based decisions for superfluous regulatory structures.” Farley,

865 F.2d at 36 (citing Note, Fine-Tuning Deregulation: The Interstate Commerce Commission’s

Use of its General Rail-Exemption Power, 53 GEO. WASH. L. REV. 827 (1985)). An exemption

under § 10505, however, did not leave a rail carrier entirely free from the provisions of the ICA.

See Farley, 690 F. Supp. at 271. Exempted rail carriers remained subject to ICC review to ensure

that the exempted carriers complied with ICA policy. See id. For example, under § 10505(d), the

ICC could revoke an exemption when it found that application of a provision of the subtitle was

“necessary to carry out the transportation policy of section 10101(a).”14

14 The legislative history of the Staggers Rail Act notes that “[t]he scope of regulatory authority over railroads

by the commission continues to be all inclusive.” H.R. Rep. No. 96–1035, 96th Cong., 2d Sess. 86, reprinted in 1980

U.S. Code Cong. & Admin. News 3978, 4030. And this idea was bolstered in Consolidated Rail Corporation—

Declaratory Order–Exemption, 1 I.C.C. Rep. 895 (Feb. 27, 1986) (order 40045), in which the ICC decided that an

exemption issued pursuant to § 10505 did not extinguish the ICC’s jurisdiction:

“The revocation power is one of the central features of section 10505. It ensures the

usefulness of the exemption process as a means of testing and determining the appropriate

bounds of regulation in a changing transportation environment without the need for

continual congressional attention. Congress envisioned exemptions as an experimental

process.”

c. The Farley Decision.

It was against this regulatory backdrop that the Second Circuit decided Farley v. Metro

North Commuter Railroad, 865 F.2d 33 (2d Cir. 1989). In that case, Metro-North Commuter

Railroad employees sought to recover unpaid overtime compensation allegedly owed to them

under the FLSA. See Farley, 865 F.2d at 34. At that time, the FLSA had exempted from coverage

“any employee of an employer engaged in the operation of a common carrier by rail and subject

to the provisions of part I of the Interstate Commerce Act.” 29 U.S.C. § 213(b)(2) (1982)

(emphasis added). By 1989, Part I of the old ICA had been subsumed under Subtitle IV of the

revised ICA, and the appellee (Metro–North) received a § 10505 exemption from ICA regulations

in November 1982. See Farley, 865 F.2d at 34. So the question presented to the Court was whether

the ICC exemption from Subtitle IV of the ICA received by Metro–North rendered it no longer

“subject to the provisions . . . of the [ICA]” as stated in Section 13(b)(2). See id. at 35.

Appellants argued that Section 13 is unambiguous: upon receiving the ICA § 10505

exemption, Metro-North no longer fell within the purview of § 13(b)(2) of the FLSA (the rail

carrier exemption) and thus became obligated to comply with the Act’s maximum hour

requirements. See id. Put another way, Appellants argued that “subject to the provisions … of the

[ICA]” meant subject to all its provisions. See id. (“[A] railroad is either ‘subject to the provisions

... of the [ICA]’ or it is not. If it is, then FLSA overtime provisions do not apply. If it is not, then

they do.”).

Metro-North countered that despite the administrative exemption granted by the ICC,

Metro–North remained “subject to the provisions … of the [ICA]” and therefore remained

exempted from the FLSA under § 13(b)(2). See id. Specifically, Metro-North contended that

Id. at 899; see also Farley, 690 F. Supp. at 271.

“subject to the provisions … of the [ICA]” meant subject to some of its provisions. Id.

Judge Kaufman did not believe it was evident—from the face of the statute—whether the

phrase “subject to the provisions ... of the [ICA]” referred to some or all of the ICA. Id. Because

the statute’s language did not unambiguously support either parties’ position, Judge Kaufman

investigated the legislative history of the FLSA § 13(b)(2) exemption and the ICA § 10505

exemption. See id.

As for Section 13 of the FLSA, Judge Kaufman noted that the exemptions were designed

to keep the FLSA from interfering in industries already subject to federal regulations. See id. at

36. Moreover, Judge Kaufman acknowledged that the 75th Congress could not have foreseen the

rise in state railroad regulation, the railroads’ subsequent loss of competitiveness, and the

corresponding need for deregulation. See id. at 35. As a result, Judge Kaufman concluded that

the Appellants’ reading of § 13(b)(2) was contrary to Congress’s intent:

“[The 4-R Act and the Staggers Act] seek to deregulate the railroad industry.

The Fair Labor Standards Act, however, governs the wages and hours of

employees in interstate commerce except, among others, those in the

railroad industry. The legislative history of the section 13 exemption

indicates that Congress intended to preserve this distinction. To hold

otherwise would alter 100 years of established Congressional policy

without so much as a whisper from the nation’s law-makers. It is

inconceivable that a statute designed to deregulate must be read to re-

regulate a distressed industry in this fashion.”

Id. at 36. At bottom, Judge Kaufman agreed with the district court’s conclusion that “[t]he

language of 13(b)(2) was not meant to subject deregulated railroads to other statutory provisions,

but to encompass the scope of the ICC’s jurisdiction without entering into the complications of

defining that scope.” Id. at 34.

As for the 49 U.S.C. § 10505 exemption, Appellants claimed that application of the FLSA

to railroads exempted under § 10505 adhered to the language and purpose of such exemptions.

See id. at 36. Judge Kaufman disagreed, concluding that Appellants’ interpretation would indeed

undermine the exemption’s terms. See id. at 36–37. Given the experimental nature of the § 10505

exemption scheme and the fact that the ICC could partially or completely revoke Metro–North’s

exemption at any time it found it necessary to carry out railway policy, see 49 U.S.C. § 10505(d),

Judge Kaufman found it difficult to believe that Congress intended the exemptions to place carriers

under a different set of federal regulations like the FLSA.15 See id. So at bottom, Judge Kaufman

concluded that the purpose of the § 10505 exemption was to free railroads from regulations, not

subject them to different regulations that did not previously apply. See id.

Judge Kaufman therefore held that, despite its § 10505 exemption, Metro-North remained

“subject to the provisions … of the [ICA]” as stated in Section 13(b)(2) of the FLSA. See id.

Accordingly, he concluded Metro-North was exempt from the requirements of FLSA § 7. See id.

d. Statutory Landscape Post-Farley.

Since Farley was decided, the relevant law has changed meaningfully. As mentioned

above, in 1980, Congress began the substantial economic deregulation of the surface transportation

industry and, as a result, the downsizing of the ICC. On December 29, 1995––about six years after

the Second Circuit decided Farley––Congress passed the ICC Termination Act of 1995

(“ICCTA”). Pub. L. No. 104-88, 109 Stat. 803 (Dec. 29, 1995). Effective January 1, 1996, the

ICCTA abolished the ICC and created a new Surface Transportation Board (“STB”) to regulate,

among other things, rail transportation in the United States. See id. (codified generally at 49 U.S.C.

15 Specifically, Judge Kaufman stated: “Regardless of the breadth of the Metro-North exemption, the ICC

retains jurisdiction over the railroad because the exemption is revocable at any time if such action is required to carry

out the 15 enumerated national rail policy goals. 49 U.S.C. § 10505(d) (1982). As set forth in the Staggers Act, this

policy includes ‘encourage[ment of] fair wages and safe and suitable working conditions.’ Id. § 10101a(12). Thus,

in addition to the other numerous pieces of legislation governing labor relations in the railroad industry, see, e.g.,

Railway Labor Act, 45 U.S.C. § 151 et seq. (1982); Hours of Service Act, 45 U.S.C. § 61 et seq. (1982), the ICC is

empowered to cancel the ICA exemption if it adversely impinges upon Metro-North employees. See H.R. Cong. Rep.

No. 1430, 96th Cong., 2d Sess. 105, reprinted in 1980 U.S. Code Cong. & Admin. News 4110, 4137.” Farley, 865

F.2d at 36–37.

§§ 10101–16106); see also 49 U.S.C. § 10501(a)(1). The purpose of the ICCTA was to “build[]

on the deregulatory policies that … promoted growth and stability in the surface transportation

sector.” H.R. Rep. No. 104–311, at 93 (1995), reprinted in 1995 U.S.C.C.A.N. 793, 805. As for

rail transportation, the ICCTA sought to implement a “[f]ederal scheme of minimal regulation for

this intrinsically interstate form of transportation,” and to retain only regulations “that are

necessary to maintain a ‘safety net’ or ‘backstop’ of remedies to address problems of rates, access

to facilities, and industry restructuring.” Id. at 93, 96, reprinted in 1995 U.S.C.C.A.N. at 805, 808;