Labor & Employment Law Daily Wrap Up, WAGE-HOUR—EXEMPTIONS—E.D.N.Y.: Employees of commuter rail services exempt from FLSA overtime protections, (Jan 23, 2026)

By Ronald Miller, J.D.

The FLSA exempts rail carriers subject to the STB from its overtime provisions.

Employees of commuter rail services were exempt from the protections of the FLSA, ruled a federal district court in New York. The FLSA exempts rail carriers subject to the Surface Transportation Board (STB) from its overtime provisions. The parties did not dispute that the relevant definition of a “rail carrier” was contained in the Interstate Commerce Commission Termination Act (ICCTA). That definition included some of the operations of both New York rail entities involved in this dispute. Accordingly, the employer was granted a motion for partial summary judgment as to the question of whether plaintiffs were employees of protected by the FLSA. The employees fell within the exemption as employees engaged in the operation of a rail carrier (Greene v. Metropolitan Transportation Authority, No. 22-CV-3300-SBJ-ST (E.D.N.Y. Jan. 22, 2026)).

On June 3, 2022, three employees initiated this action seeking to bring collective action claims under the FLSA and class action claims under the New York Labor Law (NYLL). The amended complaint alleged “underpayments and late payments of wages” by the employer, some linked to a payroll service outage, and some stemming from a general failure to properly calculate overtime rates.

Rail carrier exemption. The FLSA regulates maximum working hours and overtime pay but exempts rail carrier employees from coverage. “Part A of subtitle IV of Title 49” refers to the Interstate Commerce Commission Termination Act of 1995 (ICCTA), which established the Surface Transportation Board (STB). FLSA liability as to the rail worker plaintiffs turned on two questions: (1) whether “the STB ha[s] jurisdiction, in some fashion, over the employers under the ICCTA,” and 2) “if the STB currently has jurisdiction over Defendants in some fashion, is that jurisdiction sufficient to render Defendants ‘subject to [the ICCTA]’ and therefore exempt from the FLSA’s maximum hour requirements under 29 U.S.C. § 213(b)(2).”

Unfortunately, the parties’ summary judgment briefs were not framed around these two questions, and they failed to explain what, if any, additional discovery was completed. Nonetheless, there was sufficient record evidence to warrant granting of the employers’ motion.

The named plaintiffs were employed by the Long Island Railroad (LIRR), and Metro-North Railroad (MNR). MNR operates a commuter rail service pursuant to the passenger service rights it acquired. The parties dispute the degree to which MNR retains and exercises control over all rail operations on its tracks, including freight service operated by Conrail.

LIRR owns rail lines used for freight and passenger rail service pursuant to a transfer from New York & Atlantic Railway (NYAR). NYAR has exclusive rights to freight rail service on LIRR lines, but LIRR retains authority over maintenance and operating rules, as well as some dispatching services.

To resolve the issue of whether the FLSA applies to these workers or not, the court must determine whether they fall within an exemption. Put simply, the FLSA exempts rail carriers subject to the STB from its overtime provisions. Federal law specifically defines what a rail carrier is, as well as the bounds of the STB’s jurisdiction. Applying those precepts together, both MNR and LIRR fall within the exemption, and thus the rail workers cannot assert FLSA claims.

Status as rail carriers. The plaintiffs offered novel arguments as to whether the MNR and LIRR were rail carriers. Plaintiffs first contended that the LIRR and MNR are not employers “engaged in the operation of a rail carrier,” which, if true, would preclude them from taking advantage of the rail carrier exemption under the FLSA. However, the court determined that both operators were rail carriers.

Rail carrier defined. “[R]ail carrier” is not defined in the FLSA. The parties do not dispute that the relevant definition is contained in the ICCTA: “a person providing common carrier railroad transportation for compensation, but does not include street, suburban, or interurban electric railways not operated as part of the general system of rail transportation.” It is undisputed that “MNR operates passenger commuter rail service,” and LIRR owns rail lines used for freight and passenger commuter rail service.

To complement the statutory definition, the ICC developed a two-part test to determine whether an entity is a rail carrier, which has since been applied by courts in this District. That test is simply: “First, does the entity conduct rail operations? Second, does the entity hold out that service to the public?” Because there is no dispute that both conduct rail operations and both LIRR and MNR provide transportation to the public, both entities fall within the ICC’s application of the statutory definition.

STB jurisdiction over defendants under the ICCTA. Next, the court addressed the issue of the STB’s jurisdiction over MNR and LIRR. The STB generally has jurisdiction over “transportation by rail carrier that is... only by railroad.” The employer contends that because the STB has granted various regulatory exemptions to MNR and LIRR, those railroads are subject to STB jurisdiction. That is significant, since the STB can only grant exemptions to “a rail carrier providing transportation subject to the jurisdiction of the Board.”

The plaintiffs contend that 49 U.S.C. § 10501(b)(2) creates an independent grant of STB authority over actions by non-rail carriers—and if the STB has exercised its jurisdiction under that provision, the employer is not a rail carrier. But the Second Circuit rejected such an interpretation in New York & Atlantic Railway Co. v. Surface Transportation Board, 635 F.3d 66, 68 (2d Cir. 2011). Both the courts and the STB has consistently found that to fall within the STB’s exclusive jurisdiction, the facility or activity must satisfy both the ‘transportation’ and ‘rail carrier’ statutory requirements.” Thus, the employer has presented sufficient agency case authority to prove that MNR and LIRR are subject to the STB’s jurisdiction, which qualifies them for the exemption from FLSA’s overtime provisions.

Whether STB jurisdiction is sufficient for FLSA exemption. The final question was whether the power the STB exercised over MNR and LIRR was so limited that it disqualified them from the FLSA exemption. “[T]he plain language of 29 U.S.C. § 213(b)(2) appears to indicate that the FLSA rail carrier exemption applies if any aspect of a defendant’s operation of a rail carrier is subject to STB’s jurisdiction under the ICCTA.” Here, the court agreed with that conclusion. Under 29 U.S.C. § 213(b)(2), the employer only has to be “engaged in the operation of a rail carrier subject to [the ICCTA].” There is no threshold requirement for how much of the rail carrier’s operations have to be governed by the STB.

Accordingly, the court concluded that since at least some of MNR and LIRR’s operations are subject to STB jurisdiction, they are exempt from the FLSA’s overtime provision.

The case is No. 22-CV-3300-SBJ-ST.

Judge: Bulsara, S.

Attorneys: Rebecca Leigh Pattiz (Outten & Golden) for Jamie Greene, Lamell Armor, Fabian Saugar, John Brennan, and Arthur Bennett. Brian Bodansky (Jackson Lewis) for 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.

Companies: Metropolitan Transportation Authority; Long Island Railroad; Metro-North Railroad; Staten Island Railway; MTA Construction and Development; MTA Regional Bus Operations; MTA Bridges and Tunnels; New York City Transit Authority

Cases: WageHour Exemptions Overtime ClassActions Procedure NewYorkNews