determining that two corporations were functionally one entity and thus a single establishment where the only distinction between them was "their separate corporate existences" and "all the implications thereof, i.e., separate records and taxes," but they were commonly owned and controlled, shared the same officers, used the same premises, and hired the same employees
How later courts described this case
- determining that two corporations were functionally one entity and thus a single establishment where the only distinction between them was "their separate corporate existences" and "all the implications thereof, i.e., separate records and taxes," but they were commonly owned and controlled, shared the same officers, used the same premises, and hired the same employees
- determining whether at least 75% of sales or services are retail “requires analysis of specific sales and services”
- In Grimes, the Court considered also the size of the employer’s business for the purpose of “drawing the line.”
Written by the judges who cited it.
The opinion
GRIFFIN B. BELL, Circuit Judge
(concurring in part and dissenting in part).
Although I concur in the result reached in this matter, I do wish to express my dissent from that portion of the opinion which holds that the District Court erred in failing to treat the two corporations and their business activities as constituting one establishment for the purpose of computing sales and services for resale under the Retail and Service Establishment Exemption from the Act. § 13(a) (2); 29 U.S.C.A. § 213 (a) (2).
The corporations were separate entities, maintaining separate books and records. They performed different business functions. One, the appellant corporation, was engaged in over-the-counter short term automobile rentals, while the other was engaged in the long term leasing of vehicles through outside salesmen, and this included fleet leasing to interstate carriers.
Appellant had two places of business, One was its rental office out of which the leasing corporation also operated. It was the only place of business of the leasing corporation, but appellant also operated a repair garage at a different location. Its customers included the leasing corporation as well as the general public. The employees of appellant were subject to working at both locations and two of the four employees involved in this suit did, in fact, work at both locations. Sales made and services rendered by appellant to the leasing corporation were from both locations,
It is true that the corporations had the same stockholders and the same top management but this is an insufficient reason to disregard the corporate entities to the end of treating them as one establishment within the meaning of the Act. The facts do not demonstrate a single physical establishment. Cf. Mitchell v. Gammill, 5 Cir., 1957, 245 F.2d 207 . Moreover, there was an absence of functional unity. Cf. Mitchell v. T. F. Taylor Fertilizer, Inc., 5 Cir., 1956, 233 F.2d 284 . But even the contrary would not necessarily justify the disregarding of corporate entities. The usual factual situation giving rise to an assertion of the “single establishment” doctrine is where there is one employer. See for example Mitchell v. Bekins Van & Storage Co., 1957, 352 U.S. 1027 , 77 S.Ct. 593 , 1 L. Ed.2d 589 ; A. H. Phillips, Inc. v. Walling, 1945, 324 U.S. 490 , 65 S.Ct. 807 , 89 L.Ed. 1095 .
The argument that the inter-corporate transactions involving gas, tires, repairs and vehicles should not be considered as sales for resale likewise is without merit, Our attention is called to a regulation promulgated by the Secretary which provides that transfers of goods from one retail or service establishment to another under the same ownership will not be considered as sales for resale. 29 C.F.R., § 779.330 . We construe ownership as used therein to be ownership by one legal entity, and not ownership through the medium of different corporate entities by common stockholders. To hold otherwise would be again to disregard the corporate entity.
Under the posture of this case appellant simply failed to sustain the claim of an exemption based on the premise of a *449 single establishment. In short, the charges to the leasing company for gas, tires, repairs and vehicles were sales for resale and defeated the exemption. I would affirm on this ground without reaching the fleet transactions although I do concur in that portion of the opinion.