In Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S. Ct. 1005 (1985), the Supreme Court held that Congress had power under the Commerce Clause to apply the Fair Labor Standards Act to a municipal transit authority. The case is important because it overruled a previous landmark decision and clarified that the FLSA’s federal minimum wage and overtime provisions can lawfully apply to state and local government employees.
The Tenth Amendment to the United States Constitution states:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
This amendment is often referred to as the “states rights” amendment. It expresses the principle of federalism, in which the federal government only has the powers given to it by the Constitution. All other powers not prohibited to the states by the Constitution are reserved to the states, or the people.
The Fair Labor Standards Act is the federal law requiring covered employers to pay minimum wages and overtime compensation to certain categories of employees.
In National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465 (1976), the Supreme Court considered the FLSA in light of the Tenth Amendment. In that case, the Court ruled that the Constitution’s Commerce Clause did not empower Congress to enforce the FLSA’s minimum-wage and overtime provisions against the states “in areas of traditional governmental functions.” Id., at 852. Although National League of Cities provided some examples of “traditional governmental functions,” it did not offer a general explanation of how a “traditional” function should be distinguished from a “nontraditional” one. After that case, until Garcia, federal and state courts struggled with the task of identifying a traditional function for purposes of state immunity under the Commerce Clause. 105 S. Ct. at 1007.
San Antonio Metropolitan Transit Authority (SAMTA) was a public mass-transit authority operating in the metropolitan area around San Antonio, Texas. It received federal financial assistance under the Urban Mass Transportation Act of 1964.
In 1979, the Department of Labor’s Wage and Hour Administration issued an opinion that SAMTA’s operations were not immune from the minimum-wage and overtime requirements under National League of Cities v. Usery. As noted above, that case held that the Commerce Clause did not empower Congress to enforce such requirements against the States “in areas of traditional governmental functions.” Id., at 852.
SAMTA then filed an action in federal District Court, seeking declaratory judgment that it was entitled to Tenth Amendment immunity from the FLSA’s minimum wage and overtime pay provisions. The District Court entered judgment for SAMTA, holding that municipal ownership and operation of a mass-transit system was a “traditional governmental function” and therefore, under National League of Cities, was exempt from the requirements of the FLSA.
The Court’s Decision
The Garcia Court reversed. It held that in affording SAMTA employees the protection of the FLSA’s wage and hour provisions, Congress “contravened no affirmative limit on its power under the Commerce Clause.” 105 S. Ct. at 1010-21.
First, the Court noted that the attempt to define the boundaries of state regulatory immunity in terms of “traditional governmental functions” was not only unworkable but was also inconsistent with established principles of federalism. In fact, the Court noted, the “traditional governmental functions” test was inconsistent with the same federalism principles on which National League of Cities purported to rest. Therefore, the Garcia Court announced that it was overruling National League of Cities. 105 S. Ct. at 1010-16.
Second, the Court concluded that there was nothing in the FLSA’s overtime and minimum-wage requirements, as applied to SAMTA, that was “destructive of state sovereignty or violative of any constitutional provision.” 105 S. Ct. at 1019. The Court observed that the States’ continued role in the federal system was primarily guaranteed not by any externally imposed limits on the commerce power, but by the structure of the federal government. In these cases, the Court said, the political process effectively protected that role. 105 S. Ct. at 1016-20. The Court therefore held that the transit authority was not immune from the FLSA’s minimum wage and overtime requirements. Id.
In sum, Garcia held that Congress had power under the Commerce Clause to apply the FLSA to a municipal transit authority. The case is important because it overruled National League of Cities and clarified that the FLSA’s federal minimum wage and overtime provisions can lawfully apply to state and local government employees. The case stands for the principle that states and local governments are generally not immune from the FLSA’s minimum wage and overtime requirements because those requirements are not destructive of state sovereignty and do not violate any constitutional provision.
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