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2nd Circuit Applied Taxi Cab Overtime Exemption to a Chauffeur Operator

In Munoz-Gonzalez v. D.L.C. Limousine Service, the Second Circuit Appeals Court recently held that a chauffeured transportation company fits the FLSA’s overtime “taxicab exemption” despite the company’s recurrent service contracts and its lack of several conventional taxicab features like a taxi meter or roof-mounted signage. The Court’s interpretation of the term “taxicab” prioritizes the public’s ability to engage the service at-will over many characteristics traditionally associated with taxis. 

D.L.C. Limousine Service, Inc. (“DLC”) operates in New York’s Westchester County.  Most of DLC’s fares originate at the county airport taxi stand.  DLC also receives fares from a central dispatch available to the public. A small fraction of its fares come from contracts with a local hotel and a corporate contract. DLC cars do not accept street hails or use a meter. DLC uses luxury cars and requires drivers to dress in a suit and tie.

The Court defined a “taxicab” as:

            1) chauffeured passenger vehicles 

            2) available for hire by the public, and  

            3) without a fixed schedule or route.

The Court held that DLC’s cars are taxicabs whose drivers are thus exempt from overtime payments under the FLSA. The court arrived at this holding because DLC’s cars are primarily engaged at-will by the public through dispatch or at the airport stand. The Court stated that DLC cars do not “lose their essence” as taxicabs simply because it does not use taximeters or accept street hails. Indeed, most towns in Westchester County prohibit traditional taxis from performing street hailing service.

The case has significant implications for limousine operators in the Second Circuit (New York, Connecticut, and Vermont). Provided that a limousine operator has similar characteristics as DLC, it may benefit from the taxicab exemption under the Fair Labor Standards Act. Also, the court’s reasoning suggests that TNCs, such as Uber or Lyft, may benefit from this new opinion as well. We note that this opinion is not consistent with the Department of Labor’s traditional position on the taxicab exemption or potentially with other federal circuits around the country. So operators should consult with their counsel to determine the applicability of the taxicab exemption in their jurisdiction and with respect to their own operations.

© 2019 Keller and Heckman LLP


About this Author

Manesh K. Rath, Keller Heckman, Occupational Safety lawyer, Associations Attorney

Manesh Rath is a trial and appellate attorney with experience in general commercial litigation, food litigation, wage and hour and class action litigation, occupational safety and health law, association law, accessibility, and labor law.

Mr. Rath has been the lead amicus counsel on several cases before the U.S. Supreme Court, including Staub v. Proctor Hospital and Vance v. Ball State University.

Mr. Rath is a co-author of three books in the fields of OSHA law, wage and hour law, and labor and...

Environmental Lawyer Keller Heckman Law Firm

John Gustafson practices primarily in the area of environmental law, where he counsels clients on regulatory compliance and enforcement matters under domestic and international legal regimes. Mr. Gustafson also assists clients with occupational health and safety standard law and on litigation matters.

Prior to joining Keller and Heckman, Mr. Gustafson clerked for The Honorable Judge Douglas R.M. Nazarian on the Maryland Court of Special Appeals. Before law school, he served as a public relations writer and media consultant, preparing and promoting press releases and reports on environmental issues and monitoring media coverage of EPA air regulation events on behalf of environmental non-profit clients.

In law school, Mr. Gustafson served as Co-President of the Maryland Environmental Law Society and as a Staff Editor of the Journal of Business and Technology Law.  For his writing on the topic of dormant Commerce Clause challenges to renewable energy portfolio standards, John was recognized as a Fedder Environmental Fellow and received a scholarship to present his research at the 2014 Annual Colloquium of the IUCN Academy of Environmental Law in Tarragona, Spain.