Dennis v. Watco Companies, Inc., 631 F.3d 1303

This case concerns whether a corporate parent of railroad subsidiaries can be liable for overtime under the FLSA based on joint-employer status.
Plaintiffs Dennis and Hill allege Watco directly influences rail carriers SKOR and SLWC and seeks overtime relief for track workers.
The district court held the Rail Carrier Exemption precludes FLSA overtime claims because SKOR and SLWC are rail carriers.
Plaintiffs conceded they do not seek overtime from the rail carriers themselves, but argued Watco’s involvement makes it a joint employer.
The court must determine whether the exemption applies to Watco as a noncarrier parent.
The court ultimately affirms dismissal, holding plaintiffs fail to state a plausible FLSA overtime claim under the exemption.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Rail Carrier Exemption bars FLSA overtime claims	Watco is a joint employer thus liable	Watco is not liable due to exemption for rail carriers	Yes, exemption bars claim
Whether plaintiffs stated a plausible overtime claim despite joint-employer arguments	Watco joint employment creates liability	Exemption negates overtime claims regardless of joint-employer status	No, claim not plausible; district court proper

Keele v. Union Pac. R.R. Co., 78 F.Supp. 678 (S.D. Cal. 1948) (Rail carrier exemption interpreted narrowly; exact text governs)
Walling v. Rockton & Rion R.R., 54 F.Supp. 342 (W.D.S.C. 1944) (Exemption avoids duplication of regulatory authority over railroad workers)
Wabash Radio Corp. v. Walling, 162 F.2d 391 (6th Cir. 1947) (Radio employees may be treated as railroad employees for exemption purposes)
Ackerman v. Coca-Cola Enters., 179 F.3d 1260 (10th Cir. 1999) (Exemptions to the FLSA are narrowly construed; burden on employer)
Clements v. Serco, Inc., 530 F.3d 1224 (10th Cir. 2008) (Narrow construction of FLSA exemptions; employer bears burden)