Garcia v. San Antonio Metropolitan Transit Authority

Facts

San Antonio's local mass transit was first run by a private company. In 1959 the city bought it and replaced it with a public system. In 1978 the city transferred the system to the San Antonio Metropolitan Transit Authority (SAMTA), a public authority organized on a countywide basis. SAMTA became the major provider of transportation in the San Antonio area. It relied on federal money under the Urban Mass Transportation Act of 1964, and federal subsidies and local sales taxes accounted for about 75 percent of its operating expenses. Congress first extended the Fair Labor Standards Act (FLSA), which sets minimum wages and overtime pay, to some state and local government employees in 1966, including those of public hospitals, schools and state-regulated mass-transit carriers. In 1974 it reached virtually all state and local government employees. The city's transit system complied with the overtime rules until 1976, when National League of Cities v. Usery held that the FLSA could not constitutionally be applied to the "traditional governmental functions" of state and local governments. Four months later the system told its employees that the decision relieved it of its overtime duties. In September 1979 the Labor Department's Wage and Hour Administration said SAMTA was not constitutionally immune from the FLSA. SAMTA then sued, and Garcia and other SAMTA employees sued SAMTA for overtime pay.

Issues

1. Is a rule of state immunity from federal Commerce Clause regulation that turns on whether a state function is "traditional" or "integral" workable and consistent with principles of federalism?
2. Does applying the FLSA's minimum-wage and overtime requirements to a publicly owned local mass-transit system exceed Congress's power under the Commerce Clause?

Holding

National League of Cities is overruled. Nothing in the FLSA's minimum-wage and overtime requirements, as applied to SAMTA, is destructive of state sovereignty or violates any constitutional provision, so Congress contravened no affirmative limit on its Commerce Clause power by covering SAMTA's employees. The Court did not decide what affirmative limits the constitutional structure might impose.