Appendix to Petition for Writ of Certiorari — Maneja v. Waialua Agricultural Co.

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Appendix to

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit,

tt fy

Nonsias |

( Pioy PP

(jr fii

In the Supreme Court

OF THE

United States

OctToBer Term, 1954

—_

No.

.

Crraco Manresa, et al.,

Petitioners,

VS. >

Watatva AGRICULTURAL CoMPANY, LIMITED,

Respondent.

cusih ig dtasiiaatieelinineiaddiannaaieaecaeainnitie -eiiibibe 4

Appendix to

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit.

Table uf Contents

Page

Opinion, United States District Court, Territory of Hawaii,

ee ee ae pak bys re OHA ES Ree Va 1

Opinion, United States Court of Appeals for the Ninth Cir-

ee a ee ge aie have gO ais Va we Tse vs 83

es FN ee io ood oo Fe TROT SKE CON TONGS 106

Opinion upon Petition tor Rehearing, June 24, 1954......... 107

OT NS BREE Ene = bi AN lastiagens Gannon en eeg hah eae ea 109

Civil No. 787

In the United States District Court

District of Honolulu, Temitory of Hawan

First Division

Waraua Aar. Co., Lirp. v. MANesA, et al.

May 3, 1951

OPINION

METZGER, Chief Judge.

Part I.

Siatement and Findings.

I.

Nature of Action, Controversy

Involved, and Jurisdiction.

This action arises under the Fair Labor Standards Act

of 1958, the Act of June 25, 1938, 52 Stat. 1060, 29 TLS.CLA,

§ 201 et seq. Plaintiff sought a declaratory judgment, and

the defendants filed a counter-claim under Section 16(b)

of the Act to recover unpaid overtime compensation for

work performed by them as employees of plaintiff, and to

recover liquidated damages, costs and attorneys’ fees.

Following an earlier trial herein, a decision and judg-

ment of this court, reported at 77 F.Supp. 480, and an

appeal to the United States Court of Appeals for the Ninth

Cireuit, this action was remanded to this court for further

proceedings by a judgment of the Court of Appeals ren-

dered November 10, 1949, reported at 178 F.2d 603,

Following the remand, all pleadings heretofore filed in

this action were amended by the parties, so as to drop

certain parties defendant from the litigation, to eliminate

the representative character of the case, and to limit the

action to the period from November 20, 1946, to and in-

cluding September 14, 1947.

Under the amended pleadings, the following issues arise

with respect to that period of time:

A. Were the defendants or any of them exempt from

the overtime provisions of the Act by virtue of Sections

3

I3(ajy(6), Tie), or 13(a)¢2), during all or any workweeks

falling within the aforementioned period !

B. Were certain of the defendants, while performing

work of repairing and maintaining plaintiff's dwelling

houses, and while furnishing related facilities and services

to the plaintiff’s eiplovees and others occupying such

dwelling houses, engaged in commerce or in the produe-

tion of goods for commerce, within the meaning of Section

3(j) of the Act?

C. What, if any, amounts are any of the defendants

entitled to recover from plaintiff pursuant to Sections 7(a)

and 16(b) of the Act?

These issues are raised by (a) the amended complaint

of plaintiff and defendants’ answer thereto; and (b) de-

fendants’ counterclaim, cross-claim, and cross-complaint

under Section 16(b) of the Act, and plaintiff’s reply and

answer thereto. In addition, defendants seek awards of

liquidated damages and recovery of costs and attorneys

fees, pursuant to Section 16(b). By its reply and answer,

plaintiff seeks to defeat the request for liquidated dam-

ages, as well as overtime wages due for the period prior

to May 14, 1947, by appealing to the good faith defenses

contained in Sections 9, 10 and 11 of the Portal-to-Portal

Act of 1947, Act of May 14, 1947, Publie Law 49, e. 952,

S0th Cong., Ist Sess., 61 Stat. S4, 20 UAS.CLA, §§ 251-262.

All issues have been presented and tried in a single trial.

The evidence consists of a lengthy stipulation to certain

faets, the testimony of plaintiff's office manager, the testi-

mony of 22 of the defendant employees of plaintiff, and

eertain exhibits received in evidence, to which reference

will be made later.

4

This case does not involve waiting time, clean-up time,

travel time, or any of the types of activity whose considera-

tion occasioned in part the passage ef the Portal-to-Portal

Act of 1947. Defendants have alleged, it is not disputed by

plaintiff, and it is found by the court, that the work per-

formed by defendants for plaintiff, for which recovery is

sought in the counter-claim, was the prmcipal werk per-

formed by them, was compensable both under an express

contract and under custom and practice within the establish-

ments and places where the defendants performed such

work, and was performed during portions of the days with

respect to which the same was so made compensable: that

all sueh work was in fact paid for by plaintiff, but the dis-

pute between the parties is whether the amounts so paid

were sufficient to discharge plaintiff’s obligations under

the Act for overtime compensation.

This court has jurisdiction of this action and of the

parties hereto pursuant to (a) Section 24 of the Judicial

Code as amended, 28 U.S.CLA. § 1827; (b) Section 274d

of the Judicial Code, 28 U.S.C.A. § 2201: and (¢) Section

16(b) of the Fair Labor Standards Act of 19338.

Parties and Period of Time Involved.

Plaintiff is a corporation organized under the laws of

the Territory of Hawaii on December 14, 1948. This action

was instituted on April 9, 1947, by a predecessor corpora-

tion to the plaintiff, bearing the same name. On December

14, 1948S, plaintiff acquired certain of the assets and busi-

ness, and assumed certain of the liabilities, of the prede-

cessor corporation, including all rights, interests and lia-

bilities in, or which might arise out of, this action. By

stipulation, plaintiff has been substituted as the party

5

plaintiff in this action for the rredecessor corporation.

All subsequent references to ‘plaintiff’’ refer either to

the predecessor corporation or to the new corporation

substituted herein, depending on whether the matters to

which they relate occurred prior or subsequent to Decem-

ber 14, 1948.

Defendants are 42 individuals who were employed by

plaintiff during the period from November 20, 1946, to

September 14, 1947, inclusive. Fach of them appears in

this proceeding on his separate behalf only, and in no way

as representative of any other persons or legal entities.

Unless otherwise specified, each performed his work on

the plantation.

Summary of Plamtrff’s Business.

Plaintiff operates a sugar plantation located in the Dis-

trict ef Waialua,*City and County of Honolulu, Island of

Oahu, Territory of Hawaii. In 1945, it was the third largest

producer of raw sugar in the Territory. At the present time

the plantation grows and produces sugar cane on 9,665

acres of land owned or leased by it. Substantially all of the

land now devoted to sugar cane production has been owned

or leased by the plantation and used by it for this purpose

since 1910.

As of approximately the commencement of the period

covered by this litigation, plaintiff had a total of 959 non-

supervisory employees.

Plaintiff’s business consists ef (a) growing, cultivating,

and harvesting sugar cane on the lands owned or leased

by it: (b) operating a system of railroad transportation

over Which harvested cane is hauled to plaintiffs mull: ¢e¢)

6

processing such cane into raw sugar and molasses at the

mill) (d) shipping such raw sugar to a refinery situated in

the continental United States, where such raw sugar is re-

fined and subsequently sold under the circumstances later

discussed herein; (e) shipping molasses in bulk to the con-

iinental United States; (f) operating a series of shops for

the purpose of maintaining, repairing and overhauling

plaintiff’s buildings, machinery, equipment, vehicles, and

rolling stock; (g) maintaining mill villages and housing in

which piaintiff’s emplovees and their families dwell.

Plaintiff processes no cane except that grown by itself

on its plantation. Neither does it directly engage in any

sugar refining operation. Hlowever, plaintiff and 30 other

companies engaged in the production of raw sugar in the

Territory, constitute the total membership of an associa-

tion called California & Hawaiian Sugar Refining Cor-

poration, Ltd. (C & T1), a California corporation. C&W

is qualified as a cooperative marketing association under

the federal Capper-Volstead Act, 7 U.S.CLA. §§ 291, 292,

and under the applicable laws of the State of California.

During the period involved in this litigation the members

of C & H, including plaintiff, were under contract to de-

liver, and did deliver, to C & TI, all of the raw sugar pro-

duced by them in the Territory, except for inconsequential

amounts sold for consumption as raw sugar in the Terri-

tory.

In this same period, C & Hi operated a sugar refinery at

Crockett, California. Under the mentioned contract, C & H

was entitled to process all raw sugar dedivered to it by its

members, and to sell the refined sugar resulting therefrom,

as well as to sell in the form of raw sugar any quantities

7

delivered by the members of C & TL Actually, C & FH proc-

essed into redned sugar more than 90° of the raw sugar

delivered to it by its members, selling the baleace as raw

sugar.

The proceeds received by C & H from its sale both of

refined sugar and of raw sugar, as well as any by-products

produced by it, were distributed in the following manner.

After first deducting the operating expenses of C & H, the

remainder was paid over to the members of C & H, imeclud-

ing plaintiff, partly in the form of dividends at 6° on the

shares of capital stock of C & H, al! of which were owned

by the aforementioned 31 Hawaii companies——** substan-

tially in the same proportion as the tonnage of raw sugar

which they ship to C & HI’ (Def. Ex. 2)—end the balance

was paid over to the same companies, in direct proportion

to the amounts of raw sugar delivered by them to C & H.

Plaintiff's Plantation Operations.

Sugar cane is highly perishable. To avoid serious losses

it is processed into sugar, syrup or molasses within a rela-

tively short time after being harvested—usually, as the

record shows, the practice of processing is between 4 and

16 hours. It ** ‘annot be stored more than 2 or 3 days with-

out spoiling’? (Def. Ex. 8B, p. 56).' It does not move into

interstate commerce in its natural state. Except for small

amounts which are used as seed cane, it is grown for the

purpose of producing sugar, syrup and molasses. It is these

'For this reason and beeause of the great weight and bulkiness of

cane as compared with raw sugar, it must be processed within a few

miles of where it is grown.

8

products, which result from the processing of cane, that

become articles of interstate commerce.

Substantially all of the cane-growing land of plantation,

its buildings and vard area, anc other lands owned or

leased by it, but unsuited for cane growing, including a

wooded area from which firewood is cut for use for fuel

by plantation employees living in the plantation villages,

forms a contiguous and compact area. All lands devoted

to the growing of cane are managed and operated by plain

tiff as an integrated farming unit and single enterprise

with identical cropping cultivation and harvesting prac-

tices, and with the same labor and equipment.

The growing and harvesting of cane, its processing in the

mill, and the shipping of raw sugar to the refiner, take place

continuously for a period of approximately 7-9 months.

Annually, the harvesting and processing of cane are wholly

suspended for the remaining 3-5 months, for the purpose

of completely reconditioning the mill and equipment, and

installing machinery and improvements.

Plaintiff’s buildings, including the mill where cane is

processed into raw sugar, and a number of buildings which

house repair shops for the maintenance of field, transpor-

tation and mill equipment, warehouses for plantation sup-

plies, and other buildings having functional relation to

the entire plantation operations, are centrally located in

the lowlands of the plantation in a compact area,

Plaintiff's cane field operations are highly mechanized.

Since 1910 there has been a gradual reduction in the num-

ber of man days required to produce a ton of raw sugar

en plaintiff's plantation. This reduction was brought about

9

through mechanization and the application of scientific

methods. To a large extent hand labor and the use of horse-

drawn equipment and vehicles have been eli.ninated, and

motorized equipment substituted in their stead.

The transportation system of plaintiff is also highly

mechanized, and this is likewise true of the processing op-

erations in the mill.

There is a high degree of coordination between field

operations, transportation, mill processing, shipping, and

all other aspects of plaintiff's activities. ‘*Operational prob-

lems on a sugar plantation are comparable to those of a

Detroit factory rather than to those of a large lowa farm.

The primary objective of the management is to maintain

‘belt-line production’ of sugar by so scheduling the various

field throughout the plantation for harvesting and trans-

port to the mill that full-scale raw-sugar production will

be continuous, 24 hours a day. To do this it is necessary to

maintain a fleet of large trucks, mechanical harvesting

equipment, a system of narrow-gage railways (or other

means of transporting cane to the mill), a laboratory for

scientific observation to determine the water and fertilizer

needs with an organized force of workers to implement

these findings, and large pumping stations and gravity syvs-

tems for controlling irrigation.”* (Def. Ex. 3B, p. 36.)

During the vear 1945, plaintiff’s direct operating ex-

penses amounted to one and three-quarter million dollars.

Of this sum, manufacturing costs approximated five hun-

dred thousand dollars, and an additional sum of approxi

mately two hundred thousand dollars was expended on

transportation, in major part for main line hauling of cane

10

into the mill. The reeord does not disclose the amount ex-

pended for operation of repair and service shops, or for

mainterance of emplovee housing and village facilities.

It appears that plaintiff's railroad system was valued at

more than three-quarters of a million dollars (Def. lex. 2.)

Activities Occurring From the Time Cane ticlds are

Prepared For Planting up to the Tin

of Harvesting.

In the preparation and plowing of its cane fields, a so-

‘called **stone boat’’ sled is used to clear the fields of stones,

rocks, and similar obstructions. Concrete irrigation flumes

and pipes are moved to their proper location. Sugar cane

es

seed is then planted. The fields are then ‘tratooned”*, this

being an operation performed after a cane field is harvested

to prepare it for the growing of another crop. In the culti

vation, herbiciaes and insecticides are applied, by means of

spraying equipment; in the fields, along irrigation ditches

and. flume areas, and along cane field roads. Weeds are re-

moved, fertilizer is applied to the fields, and water is sup-

plied by a net-work of irrigation ditches, canals, siphons,

conerete pipes, flumes, water storage reservoirs and pumps,

all of whieh plaintiff owns, operates and maintains. U1-

~timately the cane is harvested, loaded into cane cars on

nortable tracks in the fields, and then moved to the main

line railroad.

Throughout the plantation, plaintiff maintains a network

of field roads for the transportation of labor, field supplies

and equipment.

Intensive irrigation throughout the vear is required for

the acreage devoted to cane production. Trrigation fre

11

queney is guided by soil tnoistare saniples collected weekly

from each field. Approximately S7-US°) of the water re

ceived by plaintilt is utilized for irrigation of its came fields.

The degree to which water is used by plaintuff for irrigs

tion purposes is shown by a tabulation received in evidence.

In the vear 1940, for example, plamtiff appled S0.54s mil

lion gallons; this was a daily average of S4 million gallons

By way of comparison, the city of San Franctseo used 65

million gallons daily in the same vear (Def. kx. OBL p. 48.)

Plaintiff also uses substantial quantities of water to sup

ply its mill, te operate locometives used on plaintiff's rail

road, for the domestic water needs of plantation villages

and plaintiff’. empiovees living therein, for sale to small

farmers whose produce is consumed leeally. and for plain

tiff’s svstem of fire protection. the amount so consuted

averaged two million gallons daily.

Harvesting Operations.

To insure a balanced flow of cane te the mall harvesting

operations are coordinated with the needs ana capacity of

the mill, and the potential of its transportation svstety.

Fields ready for harvesting are first burned over, to in

crease efficiency in removing the cane and toe reduee trash

earried to the mill. In preparation for burning, tire brakes

are cut threugh the eane by a tractor bulldozer rake. This

tears cane stalks from the stools and pushes cane off te

the side.

After the eane is burned, the bulldozer rake opens up

lines for the laving of portable track. A portable track plow

or leveler follows through these lines te minke proper beads

for the trick. Portable track rail cars, loaded with sections

of track, are drawn into aie cane felds by tractors. Lifting

temehone hogst the track seetions from the loaded cars and

lav themoon the track oeds. Maopty cane cars are then hauled

frota the main dine of plaimtiff’s rattroad onto ao siding

thereat into the field for loading purposes, and are placed

Into pesition for loading. Cane is loaded on the ears by

machines, Which are cranes ‘equipped with a boom and a

fnoer-like grab: these pull or crab the cane loose from its

crowing position and load it directly into the ears. Plaintiff

owns Y such caneloading miachines. Full cars are hauled out

of the field to the main line for transportation to the mill.

A carload of cane averages slightiy less than 4 tons per car,

vross cane.

Cane preces along the portable track are later picked up

by a ground erew and thrown into cars drawn by tractors,

hull ears are dumped near the cane loading machines for

subsequent hitting inte came cars. Cane dropped in the fieids

is bulldezed inte piles, and these are later lifted by machine

inte the cars. Phis operation is referred to as ‘*brooming

eane’") Where the niin tine ratlroad passes adjacent to the

cane feld. harvested cane is loaded direetly into ears

spotted on the main dine tracks.

Maw Line Transportation,

Prot the tite of its oreanization plaintif? has owned

and operated a narrow gave railroad svstem. This svstem

ix constructed, located and operated exclusively on the

piintation. Pt hauls ne cane or fremeht for anvone other than

the plantation. [tas used predoteinanth to haul sugar eane

Prom points Where cane cars have been concentrated to the

mall. Ttois aise used oto haunt pertable rails and other sup-

13

plies and equipment from the plantation’s warehouses and

shop yards to and from the fields, but most of this type ot

hauling is handled by the plantation trucks. The plantation

has a spur track approximate'y three thousand feet in

length running frei its mill and warehouses, and connect-

ing with the railroad line of the Oahu Railway & Lane

Company. This spur track was used by the plantation to

deliver box and tank cars loaded with sugar and molasses

to the O. RL & L. Company, and to receive incoming sup-

plies delivered to the plantation by the O. R.& LL. Company.

The O. Ro & L. Company discontinued its opecations at the

end of 1947. Since that time the outgoing and incoming

freight of the plaintiff has been handled by an independent-

lv owned and opersted tracking company,

The traintiff’s railroad network consists of 56 miles of

permanent main line track, hereinafter frequently referred

to as ‘plaintiff's main line railroad’’, and slightly more

than 9 niles of portable track.*

y ) x4

The plantation railroad equipment consists of six 2o-ton

steam locomotives, one L7-ton steam locomotive, one L2-ton

steam locomotive, one iZ-ton gasoline locomotive, and one

I4-ton diesel locomotive, 200 steel cane cars measuring ap-

proximately 11 feet by 6 feet by 5 feet, and 512 wooden cane

cars measuring approximately 10 feet by 6 feet by o feet,

Portable track laid in the fi do for harvesting anerats tis lacks

proper roadbed for thre hoeomatives The primary reason hor the

nse of the portable track for harvesting is that permanent track

ecibelyen Iie levted raat ae field beens use of Hiterleveres wihiie! weld

otherwise result in planting and cultivating operations. Daring the

sirort periods Wher § wh track mm the fields is im Use it is anit

tegral

ree thy from the fieleds ta the mill.

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pear of the ritii rea svsteth over whic! Cathie Cars mave ¢

14

Fo. the functioning of this railroad system, plaintiff

maintains a roundhouse, employs section men to maintain

the main line trackage, employs 10 crossing watchmen to

protect the public at government road crossings, employs

workers to spray the railroad rights-of-way with a herh-

cide, employs workers who together with field nen pick up

cane spilled along the railroad rights-of-way, and employs

personnel to operate the trains. Six to nine train crews,

with an average of seven, are required daily to handle cane

and incoming and outgoing freight. A train crew consists

of four men, including a locomotive engineer, a fireman, a

front brakeman and a rear brakeman. A cane train aver-

ages at least 60 cars, though this number sometimes goes

up to SO or even 90 ears.

Working in the roundhouse are a hostler and an engine

wiper, who wash the locomotives and steam boilers, oil and

grease the locomotives. fire and steam tne locomotives

preparatory to the day’s operations, and assist in minor

repairs to locomotives.

During the off-season, when cane is neither being har-

vested nor processed, the section men, supplemented by

approximately 12 brakemen and 5 firemen, are used in re-

pair and maintenance of main line trackage. Watchmen are

used for cleaning and weeding the rights-of-way. Usually

one locomotive engineer, two firemen, and three brakemen

are assigned to assist the electricians on mill work pri-

marily. One fireman and two brakemen are generally as-

signed to the welding shop te assist in off-season factory

repairs and installation of new equipment. Two more brake-

men are sometimes assigned to repair work in the botling

houre. One vard engine crew, consisting of an engineer and

15

several brakemen for the diesel locomotive, Is maintained

during the off-season. Locomotive engineers not otherwise

used assist in locomotive repairs.

Mill Operations

At its mill, plaintiff processes cane into raw sugar and

molasses. Raw sugar is there bagged for shipment to the

C & H refinery at Crockett, California. Molasses is either

loaded for shipment to the continental United States, or

stored temporarily in molasses tanks. Bagged sugar and

molasses were loaded into railroad box and tank ears of

the Oahu Railroad & Land Company, a carrier, which then

proceeded with the transportation of these commodities to

points of shipinent for the mainland.

The term ‘‘nuill’* means the building and equipment of

plaintiff used in the actual processing of sugar cane into

raw sugar. This includes a cane-cleaning plant and scales,

mill earrier, crushing plant, boiling house, fire-reom, power

plant, sugar warehouse, molasses tank, and all equipment

located therein.

Mill operations commence when loaded cane cars are de-

livered by locomotive on the plaintiff's main railroad, to

the mill vard and moved up to the mill. Here the cane is

weighed, unloaded, washed, and as much trash is removed

as is mechanically possible. These operations take place in

the cane-cleaning plant.

After being cleaned, the cane is moved by mill carrier to

the erushing plant, is there crushed, and the juices ex-

tracted. Sugar juices are then clarified and erystallized in

the boiling house. Phe chief produet, Which is raw sugar,

is then bagwved and shipped, or temporarily stored and later

16

shipped.* Molasses’ is pumped into a storage tank at the

mill, and later shipped.

The cane fiber which remains after the extraction of the

juice from the cane stalk is known as bagasse. It serves as

an economical source of fuel for the production of power.

Bagasse produced at this plantation has no marketable

value, but is burned in the fire-room, located in the mill,

and produces steam. This in turn is used to drive the mill

engines and cane processing equipment, to heat and evap-

orate sugar juice and crystallize the raw sugar, and to gen-

erate electric power at the mill’s power plant. Steam used

for the latter purpose, after passing through generating

machinery, is conveyed through lines for further use in

processing operations.

The power plant generates electric power. This, however,

supplies only about two-thirds of the power needed by

plaintiff, so it purchases one-third of the power used by it

from the Hawaiian Electrie Company, Ltd, an independ-

ently owned and operated public utility.

There are times when plaintiff’s power system generates

more power than it has need of. Because of an existing

tie-in between its power system and that of Hawaiian Elee-

tric Company, on rare occasions plaintiff feeds back power

into the system of Hawaiian Electric. Credit for such power

is given te plaintiff in the same inanner as though a sale

had oceurred.4

8The plaintiff's temporary storage of raw sugar is never mott-

vated by economie eonsiderations, but is due only to the limited

number of cars and limited storage space at the port wharves and

occasional interruptions in ship schedules

4Power is ret fed back to the Hawaitan Kleet rice Jhrve Ss for the pur

pase of selling power baat only heeause if Is a lec SSary, cohventent

and economical method of disposing of the excess power,

17

Power generated by plaintiff, as well as that purchased

by it, is distributed by transmission lines to all the various

operations on the plantation, and also to severa] non-plan-

tation users living in the plantation community. The total

amount of power used by non-plantation users is about one-

half of one per cent of all the power distributed by plaintiff.

None of it is used for or in connection with the production

of goods for commerce, or to operate any instrumentalities

of interstate commerce, or transmitted into interstate eom-

merece.

In the off-season, when the steam and electric power

equipment in the mill are overhauled, plaintiff generates

no electric power, purchasing all the power it needs from

the Hawaiian Electrie Company.

Weekend Shutdown in the Mill.

Production in the mill operations is keyed basically to a

6 day week with continuous and around-the-clock operations

divided into three S-hour shifts. The mill stops grinding

cane at 2 pau. Saturday and starts up at the same time on

Sunday. The cessation of grinding operations on Saturday

does not, however, result in the stopping of all mill opera-

tions, Ax shown later, in the deseriptions of work per-

formed by various defendants, the weekend shutdown

period does not extend for 24 hours in regard to the boiling

house, the fireroom, and the operations of the power plant.

The weekly shutdown for mill operations is necessary

to perform cleaning and minor repair work.

18

O ff-Season.

Although sugar cane can be and is grown the year round

in the Territory of Hawaii, efficiency of operations dictates

the closing down annually of sugar mills so that extensive

general repairs, reconditioning, ard installation of im-

provements can be had. That part of the year when the mill

is shut down for repairs is termed the **off-season’’. While

the off-season usually lasts 3-5 months, in the period cov-

ered by this litigation it extended only from December 22,

1946, to and including February 9, 1947.

During the off-season, plaintiff conducts no harvesting,

cane transportation, or cane processing operations. Field

operations continue.

Most of the off-season repair work in the mill is done by

employees who, during the grinding season, operate the mill

machinery. However, some of this repair work is done by

employees of the machine shop, welding shop, blacksmith

shop, carpenter shop, and electric shop.

Just as many man-days of work are performed during

each 24-hour period in the mill during the off-season as

during the grinding season.

Repair and Service Shops.

30th field and mill operations necessitate the equipping

and maintaining of complete service shops for prompt

ininor repairs and emergency work and major overhaul.

Plaintiff operates and maintains a number of repair and

service shops which are physically distinct from the mill,

housed in separate buildings, and located in an area ex

tending up to 300 feet from the mill building. These shops

19

employ upwards of 100 men, plus necessary foremen and

supervisors. These shops are: machine shop, welding shop,

blacksmith shop, tinsinith shop, caneloading machine repair

shop, tractor repair shop, garage, electric shop, carpenter

shop, paint shop, plumbing shop, and roundhouse.

1. Machine Shop.

The machine shop is staffed by S employees working un-

der supervision of a machine shop foreman. Practically all

ee

of plaintiff's inachining work, except heavy work required

by the mill, railroad and shops, is done in the machine shop.

The grinding of crankshafts for cars, trucks, tractors, and

eranes, the machining of emergency parts for such equip-

ment, and machine work on irvigation pumps are performed

in this shop. Major locomotive repairs are made by machine

shop personnel working with a heavy crane in the welding

shop.

Approximately 46° of all machine shop work is for the

mill, and 50% for other service departments, including re-

pairs to steam engine driven irrigation pumps. During the

off-season, mill work done by the machine shop aceounts

for from 8d‘ to 90% of the total man hours’ work per-

formed.

Work in the machine shop is fairly uniform throughout

the year, with peaks in cases of emergency mill repairs and

during the mill off-season. Locomotive overhaul is carried

out to a limited extend during the grinding season to re-

lieve machine shop off-season work. Steam engine driven

water pumps are scheduled for overhaul after the mill over

haul has heen completed and after grinding operations are

resumed.

20

A large portion of the work done by the machine shop

personnel is performed within the shop, utilizing shop tools.

These tools include lathes, hydraulic press, drill press,

planer, boring machine and crankshaft grinder, From time

to time machine shop personnel are called into the miil to

perform repairs, regrooving of mill rolls, and such other

work as cannet be expeditiously handled by mill workers.

2. Welding Shop.

This shop employs 5 men under supervision of a welding

shop foreman. Ahout 46% of its work is for the mill. In the

off-season, welding shop work for the mill represents ap-

proximately 90% or more of the total man-hours. Most of

the welding repairs to mill equipment are made in the shop,

although personnel are sometimes dispatched to the point

of breakdown.

Steel cane car repairs are made alongside the shop build-

ing by the shop personnel. Welding shop employees also

operate pipe rolls located in the pipe rolling shed. The pipe

which is rolled is generally irrigation pipe 18 inches in di-

ameter or larger. Welding of this pipe is performed by the

shop welders. In this work the welding shop employees are

assisted by employees from the blacksmith shop or cane-

loading machine repair shop.

Welding shop equipment consists of heavy pipe rolls,

several sets of acetylene and cutting outfits, acetylene gen-

erators, and both stationary and portable welding genera-

tors.

21

3. Blacksmith Shop.

This show employs 2 blacksmiths and 2 helpers under

supervision of the caneloading machine repair shop fore-

man. About two davs each week are spent by the black-

smiths and helpers on mill work, consisting principally of

constructing and reconditioning of cane carrier leveling and

preparation knives. Cane car repair work, such as straight-

ening of bars and channels, and repair of tractors and cane-

loaders, and field implement work, occupy the great per-

centage of the man-hours in the shop. The work of this shop

is uniform throughout the year. Equipment in this shop

includes 2 forges, an electrically operated hammer, and a

variety of small tools.

4. Tinsmith Shop.

This shop employs a tinsmith journeyman and 2 helpers.

Mill repair work here is negligible, although light sheet

steel work, including maintenance and repair of roof gut-

ters and down pipes, is performed by the shop personnel.

Repairs of auto, truck, tractor and caneloader radiators

are performed by the shop personnel.

The main work of this shop is the making and recondi-

tioning of tin irrigation scoops. These scoops are used in

quantity in the field for the PUrpose of deflecting water

from concrete irrigation times to field irrigation lines.

5. Caneloading Machine Repair Shop.

Twelve emplovees and a foreman work here. They per

form all major repairs and overhaul of caneloaders, grabs

and miscellaneous field equipment. Men from this shop are

occasionally called upon to assist in emergency mill repairs.

22

They also go into the field to repair caneloading machines

during the course of harvesting operations,

An important function of this shop is the construction of

auxiliary field equipment, such as sub-soilers used in plow-

ing, cane line reshapers used to maintain irrigation water

lines in the field, and portable track line leveler attachments

used in leveling the lines for laving portable tracks. Re-

pairs on such auxiliary field equipment are also made in

this shop, with assistance from persornel of the tractor

repair shop.

In the off-season, at least 8S of the 9 caneloading machines

are completely dismantled and reconditioned. The 9th ma-

chine is reconditioned after harvesting has been resumed.

In the off-season, 10 to 12 operators of canel6ading ma-

chines are brought in to supplement the regular employees

of this shop, and to assist in overhaul. Five cane grabs are

overhauled and reconditioned during the off-season, and all

other cane grabs are repaired. During the harvesting sea-

son, 3 new cane grabs are usually built.

Equipment in this sl op includes + portable welding gen-

erators, and 3 portable welding generators mounted on

trucks for field repairs. A hydraulic press, overhead crane,

motor-driven grinders and a variety of small tools complete

the shop equipment. Four welders in the shop take care of

welding repairs in the field, and repairs to, and building of,

new field equipment.

6. Tractor Repair Shop.

Seven emplovees normally work here, but in the off-

season this number is supplemented by 12 to 15 traetor

23

operators who are brought into the shop from the fields, to

assist in repairs. All tractors used in the harvesting field

are overhauled in this shop during the off-season. Tractors

used for towing cane line reshapers are also overhauled

during the off-season. Other tractors Which cannot be over-

hauled during the off-season are scheduled for overhaul

at a later date, This may mean that 6 or 7 out of a total of

48 tractors are left for operating season overhaul. Tractor

engines are overhauled at regular periods,

Employees of this shop are sometimes dispatched for re-

pair of tractors in the fields. They also assist in repair of

field implements in the caneloading inachine repair shop.

7. Garage.

Personnel employed here numbers 24. Primarily work of

the garage is to maintain and keep in repair plaintiff's 9S

motor vehicles, consisting of 1S passenger vehicles, 48 pick-

up trucks up to one ton, 27 heavy trucks from 1-1, to7 tons,

| motoreyele, 2 fire trucks, and 2 panel trucks. Sixty-four

of these vehicles are assignel to operations in the fields, 12

to the repair and service shops, 1 to the mill. 1 to the hos-

pital, 2 to the plaintiff's retail store, 7 for administration,

“are fire trucks, and 9 to the motor pool.

Overhaul of cars and trucks is scheduied throughout the

year, exeept that pick-up trucks used by the harvesting men

are overhauled during the off-season. Truck drivers are not

used to assist in truck or auto repairs, since there is gen.

erally a spare truck te drive when others are bemg re.

paired. AI such work is performed by the garage me-

chanies.

24

Shop equipment consists of 4 overhead cranes, a hoist,

valve grinding machine, brake drum lathe, boring machine,

tire tools, and a variety of special tools.

Complete servicing equipment is also maintained, to-

gether with necessary personnel. Seven full-time employees

and one part-time employee perform the lubricating and

washing of vehicles. Gne employee dispenses gas and oil at

the vard service station. Six persons are employed as help-

ers to garage mechanics when there is no serviec work.

Field service covers the daily lubrication of all equip-

ment and the replenishing of fuel tanks. Tr&ctors, cane-

loading machines, portable air compressor, diesel and gaso-

line locomotives, ard all field equipment are serviced daily

by a total of 6 men. Two completely equipped service trucks

manned by 2 men each service all field equipment, except

that in the harvesting fields. In the latter care, a two-wheel

trailer, tractor-drawn, is kept in each of the two harvesting

fields. Oil, gasoline, diesel oil, greases and water are car-

ried on the trailer together with power-operated grease

guns. On man assigned to each trailer services the cranes

and tractors in the harvesting fields. In this way service

work ean be done during lunch hour and slack periods with-

out serious interference with harvesting operations.

8. Electric Shop.

Fifteen employees work in this shop. Three of these are

mill electricians who divide their time between the mill and

the shop, working two weeks in the former, then one week

in the latter. The shop maintains electric pumps and trans-

mission lines and performs domestic wiring repairs, includ-

ing wiring of houses, and the building of new electrical ap-

29

pliances. Employees of this shop perform necessary work

on electrical machines located in the other shops.

In addition to mill repair work done by the employees

assigned as electricians to the mill, electric shop personnel

may assist them in case of major electrical repairs required.

About half of the work in this shop is for the mill. During

the off-season, about 70° of the work is for the mull.

9. Carpenter Shop.

Twenty-five carpenters and two supervisors comprise this

shop’s personnel. They perforin all carpenter work on the

plantation, which includes construction of mill scaffoldings,

construction and maintenance of railroad trestles and

woceden gates for flumes, and construction and maintenance

of cane cars. In addition, they perform necessary mainten-

ance work on the plantation buildings and houses. They

also install and maintain steel and concrete pipe lines and

siphons. Miscellaneous construction, such as construction

of tool lockers, scrapers and strainers, is performed in this

shop. Field work, including work on the flumes, railroad

trestles, siphons and pipe lines, accounts for about 25%

of the work of the emplovees. Mill scaffoldings and mill

building repairs, construction of tool lockers, scrapers and

strainers, account for another 10°. Maintenance and repair

of plaintiff's buildings and housing account for another

450. The remaining 20° of the work consists of construe.

tion and repair of cane cars. The work is uniform through-

out the vear, with little change between grinding season

and off-season. During the off-season, additional men aver

aging from 10 to Ta may be brought in from the fields to

assist in cane care overhauling and general carpentry work,

26

10. Paint Shop.

Here are employed 5 painters and a supervisor, They

perform all painting work on plaintiff's buildings, includ.

ing housing, and they also occasionally paint siphons and

railroad trestles. As a general rule, they do not paint for

the mill, this work being done by mill employees. Most of

the time of the paint shop crew is devoted to painting cf

plantation buildings and housing throughout the vear. Dur-

ing the off-season, an average of two additional employees

brought in from the fields may assist in the work ef this

shop.

11. Plumbing Shop.

Six plumbers and one supervisor work here. They per-

form all plumbing work ©”: the plantation, including the

construction and maintenance of sewer and water systems

and plumbing for buildings and housing. Approximately

10% of the time is devoted to mill plumbing work, lo% to

field work and the remainder to buildings and housing.

Assignments vary little throughout the vear. During the

off-season, an average of two field employees may be as-

signed to the plumbing shop as helpers.

12. Roundhouse.

Reference to the roundhouse has already been made. It

regularly employs two men in the shop, who perform the

servieing, cleaning and firing of plaintiff’s locomotives,

Additional employees are oceasionally assigned to this shop

to assist in minor locomotive repairs.

27

Lahoratory.

In a separate building, plaintiff operates a laboratory.

Various chemical tests are made by the laboratory person

nel in the course of all field and mull operations. This work

is performed under the supervision of a chief chemist with

the as¥istance of 13 chemists, testers and samplers. By pet

forming careful analysis of various kinds relative to the

cane and materials in the course of crowing, cultivating

and harvesting of cane, and the extraction of the sugar

juices, all operations are controlled pursuant to sebentitic

methods.

Determinations of the cane fibre in each field, or variety

of cane, are made during each shift. Figures obtained are

used in calculating bagasse weights, field distribution and

extraction percentages.

Cane leat analysis Is made fron sihiples of cane i i

brought in each day and analy zed for green weight muxture,

total sugars, nitrogen, potash and phosphate.

Daily tests are made for a variety of other purposes.

Tests are made toe determine the amount of field trash in

harvesting brought to the nuoll Continuous samples are

taken from the feed roiler of the first mall each hour, and

also at each change of harvesting, and records of ratios of

cane to available sugar are obtaimed. Extracted juices are

sampled to determine the sugar obtained from cane by the

milling process. Extracted juices are used to ealeulate the

weight of bagasse. Every three hours samples from elar

fied juice are taken, to reveal the relative amount of solids

heing removed by the lime and heat treatment of juices.

Purity of svrup is checked. Samples of bagasse are taken

every two hours, and ash determinations are also made

28

twiee daily, to determine the influence of different fields on

the fireroor:. Mixtures of sugar ang snolasses are tested to

determine the amount of sugar josi ir the tidter cake.

Tests are also made of the mill boiler water, locomotive

boiler water, steam pump boiler water, and pump water

Pump: Water from electric putraps and well water are sai

pled onee each month. Wash water from the leaning plant

and condenser water are also analyzed each shift.

Concrete Produ fs Plant.

Ina separate building, plaintiff operates it own concrete

products plant. Six men ordimarily staff it. although the

number varies from 4 te 10. Work is usuatiy oerformed on

a single shift basis, but occasionally two sh ‘ts are main-

tained.

This jfant is engaged primarily ino predvucing concrete

irrigation, thames and water supply pipe. [> also makes

hloeks, footines, sidewalk slabs and various otner ineidental

conerete products required by the plantation. Crushed rock

used in the manufacturing process is purchased loeally, but

from SOS to 90% of all cement used is obtained from the

continental United States. The work consists of setting up

fons. mixing and veuring conerete, removing the previons

day's products and arranging them in storage. Cement used

is siored in cars which are set on the siding near the plant,

or the cement is stored in the cement shed as part of the

inventory of general supplics warehortng. In the latter

case, unleading of cement is done by the warehouse per-

sonnel, Various activities requiring the flumes, pipe and

other products receive them direct fram the storage are:

where the products are stored,

29

The operations do not have any off-season. During the

off-season, however, additional personnel may be brought

in from the fields. In 1946, the plant produced approxi

nately 46,000 conerete pieces, including flume sections, pipe

and other products.

Storage of Supply x,

Materials and supplies purchased for plantation opera

tons are warehoused or stored in several separate build-

ings located in the plantation buildings and vard area.

Value of supplies on hand averages $500,000, The total

value of goods procared during a vear, including stock and

special order materials, averages over $1,000,000,

Most of the materials received were shipped to the plan-

tation from Honolulu on the O. R. & L. Purchases mav be

either local or by order and direct shipmeat from con-

tinental United States. Freight received is placed in the

proper warehouses by the warehousing personnel. [n almost

all cases railroad sidings permitted placement of the O. R.

& L. cars next to the warehouse receiving the materials.

The warehousing personnel is not responsible for, nor does

it engage in, delivering materials to the various operations

or shops.

The principal buildings in which the supplies and ma-

terials of the plantation are stored are the general supplies

warehouse and the heavy supplies warehonse, Thev house

electrical goods, building hardware, paints, window screen-

Ing, tractor and caneloading repair parts, copper tubing,

pipe stock, metal shapes stock, galvanized sheeting, steel

sheets and many other items,

20

The oil storage warehouse contains lubrieants and a linn

ited amount of paint.

Gasoline, fuel oil, diesel oil and kerosene were discharged

directly frem the O. R. & L. tank car. into storage tanks.

Most of the automotive parts and tractor, caneloading

and miscellaneous parts are stored in the garage.

Cement is stored in a separate warehouse. Lime is stored

in the mill in the ime room after being unloaded by ware

housemen.

lumber is stored in the open lumber yard adjoining the

general supplies warehouse. Herbicides are also stored

there.

Fertilizers are usually trucked directly from railroad

ears to the field as needed; but if temporary storage is re-

quired, they are placed in the sugar warehouse.

The warehousing operations are handled as one unit un-

der a warehouse superintendent with 13 employees. Five

clerks perform the bookkeeping and handle accounts. The

remainder of the warehouse personnel is employed in the

unloading and storing of stocks and materials, keeping

stock record cards and taking inventory.

Main Administration Off fee.

The main adininistration offiee is located about 1500 feet

from plaintiff’s buildings and yard area. The manager,

assistant manager, and staff assistants have their offices

here, Employees include the cashier, bookkeeper, head time-

keeper, 6 assistant timekeepers, 8 clerks, 9 stenographers

and typists—a total of 22 employees working under the

office manager and his assistant. Four timekeepers keep

~~ =a “aE De ee w

31

the time of the field emplovees: 2 keep the time of the shop,

store, mill, hospital and village maintenance eniplovees,

These offices are where payroll records are maintained, and

salaries and services paid.

Also housed in this building are the offices of the civil

engineer, one assistant surveyor, 2 junior survevors, and 2

rodmen, who work alternately in the field and in the office.

There is also a draftsman emploved in this office. The agri-

eculturist and industrial relations sections are also located

in the same building.

Stables.

The plantation has one main stable near the plantation

buildings and yard area. It uses 38 horses and mules.

Horses are used by the harvesting overseer to ride in the

fields. Pack mules are used upon occasion to pack seed, fer-

tilizer, broken concrete flumes and other things in and out

of the cane fields. The plantation has several feeding sta-

tions for horses and mules where they are kept temporarily

while work is being performed in a partienlar area. Three

employees are assigned to the work of the stables.

Firewood.

PJatatiff maintains a splitting station in the mill yard,

This is equipped with saw and splitting machinery gen-

erated by electric power. Firewood, cut by plaintiff’s em-

plovees at various places on the plantation, is brought to

the station to be sawed and split into pieces of appropriate

sizes. The uses of such firewood are: sale of firewood to

employees and pensioners, for cooking and heating pur-

poses; for heating water at the village bathhouses: and for

starting small boilers and heating walls within the furnaces

Sg SS —_ —— = ~———

32

and pumps used to supply water for irrigating cane fields

and for domestic and other uses in plantation villages.

Macadamia Nut Trees.

Macadamia nut groves are operated by plaintiff in an

area approximating 121 acres. Such area is not suitable

for sugar cane. During the period covered by this litigation,

the trees had not vet reached maturity and no nuts were

harvested. A nursery for cultivation of young macadamia

trees is maintained on the plantation.

Plantation Villages.

At the time plaintiff was originally organized, there was

no established community housing, or other facilities, in or

near the area which plaintiff proposed to devote to the pro-

duction and processing of cane. To establish a stable labor

supply and house it at places convenient to plaintiff’s pur-

pose, plaintiff undertook to create a community, and to

supply housing and other necessary services and facilities

for its employees. Plaintiff constructed houses, developed

services, and built up and established various facilities to

serve the needs of permanent living, in plantation villages,

of its required number of employees and their families.

This was done over a period of vears, resulting in the de-

velopment of Waialua village and several small villages.

Waialua village has all the physical and visual charac-

teristics of an established community and is similar to a

typical small town of a farming community center. The

area is crisscrossed with government roads and roads con-

structed and maintained by plaintiff. The community offers

the usual services and typical commercial establishments to

be found in any small town. There is a company store, or

retail store, with two branches: an automotive service sta-

a = OE EE a EEE — ee | — + — mee —- - oa - ——

33

tion; and a hospital. These are owned and operated by

plaintiff for plantation employees and their families and

non-plantation persons. Plaintiff also built in this area two

gymnasiums, one clubhouse, one athletic field, one beach.

house, one swimming pool, and two tennis courts, which are

available to an athletic association, membership of which

is composed both of plaintiff's emplovees and others in the

community.

Additional services and establishments located in’ the

community, Which are independently operated, include ten

general stores, two restaurants, two fish markets, one candy

store, one hardware store, one clothing store, four barber

shops, one beauty shop, one photographie stuaio, two auto-

motive service stations, two motion picture theaters, and

one bank. *‘It must be remembered that the whole planta-

tion area, including the town, is owned by the plantation

company, and although there are frequently many shops,

such as drug stores, tailor shops, shoemaker shops and the

like, that are privately operated, they rent their sites from

the plantation and can remain only as long as the planta-

tion permits them to do so. Anyone on any part of the plan-

tation is a trespasser unless he has the permission of the

management to be there. * * *’’ (Def. Ex. 3A, p. 71.)

Also located in the village are a post office, public library,

five churches, one intermediate school, one high school, and

one day-care center operated by the territorial school sys-

tem.

For many years, plaintiff's employees occupied plain-

fiff’s dwellings pursuant to a system of perquisites. Under

this system, emplovees received housing, housing mainte.

nance, water, firewood and kerosene fuel, eleetricity, medi-

eal care, recreational facilities and various maintenance

S/S - Swe Se oe

34

services, including garbage disposal and street cleaning, as

a part of their regular compensation as employees of plain.

tiff. This system was abolished by an agreement dated No

vember 19, 1946, between plaintiff and the International

Longshoremen’s and Warehousemen’s Union No. 145-¢,

which acted as collective bargaining representative for most

of plaintiff's non-supervisory employees. As part of the

change thus inaugurated, the value of the perquisites pre-

viously allowed to employees was converted, at scheduled

rates, into cash wages to be paid by plaintiff by way of

wage increase, and thenceforth the employees commenced

to pay cash, at scheduled rates, as non-employees do, for

the continued furnishing by plaintiff of the aforementioned

facilities and services, except that no charge, either to em-

ployees or others, was designated for garbage collection,

sewage disposal, fire protection, maintenance and cleaning

of village roads and similar village services, which con-

tinued to be provided by plaintiff. Neither was any charge

designated for continued use of parks, playgrounds, plain-

tiff’s clubhouse and gymnasium and recreational facilities

generally.

An undisclosed number of plaintiff’s dwelling houses are

not equipped with tub or shower facilities. For the inhabi-

tants thereof, plaintiff maintains bathhouses. From No-

vember 20, 1946, when perquisites were termineted, until

April 30, 1947, no charge was inade for use of the bath-

house, except as this was included in the rent paid by

employees for the dwelli..g houses. Commencing May 1,

1947, and throughout the balance of the period covered by

this litigation, plaintiff instituted a system of charges for

use of the bathhouses: 50¢ per family per month, and 25¢

per month in the case of a single man without dependents.

a

35

At the present time, the dwelling houses owned by plain

tif number S20, all located on the plantation, Most of ther

surround the buildings and vard area located near the mill.

These houses, together with the business establishments of

the community, constitute the village of Waialaa. There

are 335 houses which are scattered over the plantation, but

these too are located in elusters and form small villawes.

No employee covered by the existing collective bargain-

ing agreement, including each emplovee defendant herein,

is required as a condition of eauployment to live on the plan-

tation or in plantation houses or to use any service or fa-

cility that the plantation may be in a position to render its

employees. The relationship that exists between the plan-

tation and its employees who live in plantation houses is

that of landlord and tenant. However, of the total number

of 959 non-supervisory employees of plaintiff, only 16 live

off the plantation in houses not supplied or owned by

plaintiff. The remaining employees and pensioners, together

with their families, an aggregate of 2952 persons, all inhabit

dwellings owned by plaintiff and generally located in Waia-

lua village, or one of the other plantation villages owned

by plaintiff. Plaintiff also rents to non-emplovees, totaling

421, dwellings not occupied by emplovees of plaintiff. Some

of these persons work off the plantation altogether; others

are persons who own, operate or are employed in the inde-

pendently controlled businesses located in plaintiff’s plan-

tation villages.

The relationship between an individual's emplovment

with plaintiff, and his occupation of a company-owned

house, is shown, as testified to by 22 of the defendants, in

the following tabulation:

Defendant

Claunan

Crisostomo

Cumlat

Faria

Fujiwara

Hayashi

Holmberg

Izawa

Kobota

Koshiwabara

Lorenzo

Maneja

Mori

Oato

Pacheco

Reyher

Robello (S)

Sunihara

Takata

Tanaka

Watanabe

Yamada

36

How long employed

by plaintiff

20 vears

26 years

Over 10 vears

+0 vears

Over 15 vears

23 years

22 years

23 years

26 vears

14 years

23 years

16 vears

14 years

714 years

25 years

28 vears

20 vears

20 vears

11 years

17 vears

24 years

How long has lived in

house owned by plaintiff

20 years

26 years

20 vears

44 vears; bought own

home in June, 1950

Lives with her family,

which has oceupied com-

pany-owned house for

over 30 vears

25 vears

(Not testified t »)

36 years

23 years

26 years

14 years

23 years

34 years

30 years

27 years

29 years

45 vears

26 vears

39 years

All his life; was born in

company-owned house

) years

All his life; was born in

company-owned house;

father was employee of

plaintiff.

37

Plaintiff has established a fire protection system at the

village of Waialua, and as part of that system operates

two fire trucks. It also maintains tire hydrants in and about

th. village, the mill, various buildings in the vard area, and

at various other locations.

There is a cemetery, located on plaintiff's property, for

its employees and their families.

Prior to the abolition of the perquisite system, employees

of plaintiff performed the work of maintaining and keeping

in proper repair the dwelling houses owned by plaintiff,

and the village area, and in supplying the usual services

necessary to the operations of a community. This has con-

tinued without change. Under the mentioned collective bar-

gaining agreement, plaintiff expressly undertakes to pro-

vide dwelling maintenance and repairs, and village serv-

ices: and in this connection, not ‘‘to make housing a profit-

making venture, as such.’’

Organization of Plaintiff's Plantation.

At all times involved herein, plaintiff has been a member

of the Hawaiian Sugar Planters’ Association (HSPA),

an organization of Hawaiian sugar-producing plantations.

The association publishes a manual, portions of which were

received in evidence as Defendants’ Exhibit 2. Major enter-

prises of the association, as set forth in this manual, are

quoted in a publication of the United Stites Department of

Labor, entitled ** The Economy of Hawai in 19477", Bulletin

No. 926, prepared and transmitted to the Congress of the

United States pursuant to a requirement contained in the

Organie Law of the Territory of Hawaii, 1900, as amended

38

April 8, 1904, 55 Stat. 164, 20 UUS.CLA. § 7. A copy of the

publication was received in evidence as Defendants” exhibit

3B. An earlier report of the Department of Labor, also

rendered pursuant to the provisions of the Orgamic Law ot

the Territory, was published under the title, ** Labor in the

Territory of Hawaii— 19397", Bulletin No. 687, House Doeu-

ment S48, 76th Cong., 3rd Sess. A copy of this report was

received in evidence as Defendants’ Exhibit 3A.

As described in the manual issued by HSDPA, its fune-

tions are these:

“The Hawaiian Sugar Planters’ Association is an or-

ganization of plantations and individuals united for the

purpose of cooperative improvement of the island sugar

industry as a whole * * * The association’s major enter-

prises are divided into the following departments: Experi-

ment station, bureau of labor and statistics, labor saving

devices committee, boiler inspection committee, public rela-

tions committee, labor relations committee, legislative ecom-

mittee.

“The association acts as a clearinghouse for all activi-

ties of the industry, making possible the freest and quick-

est interchange of information among the plantation execu-

tives. It maintains an office in Washington, D. C., which

handles all relations of the Hawaiian sugar industry with

(iovernment departments and the Congress.’ (Def. Ex. 3B,

pp. 34-35.)

This statement of the functions of HSPA is supple-

mented as follows: ‘*The plantations are organized in an

association which has planned for the Hawalian sugar In-

dustries as a whole and which has developed the whole

framework of economic relations necessary to their exist-

a eee eae

52

dental to farming and therefore not exempt under Section

13(a)(6). Calaf v. Gonzalez, supra, 127 F.2d at pages 936-

937. In Vives v. Serralles, supra, the agricultural exemp-

tion was held to end at the point of concentration of har-

vested cane, and this point was fixed as of the time when

cane loaded into cars was moved from portable track onto

the main line permanent tracks; at this point the dividing

line was fixed between activities exempt under Section

13(a)(6), and activities not so exempt.

This seems a useful, logical and necessary point of cleay-

age. It is also in accord with plaintiff's Jong-established

practice, in the maintenance of its records, of separating

field activities from transportation at the point where cane

cars are placed on the main line railroad.

The sole object of plaintiff’s operation is the production

of sugar and molasses; and as these are manufactured in

its mill, it might well be argued that operation of the mull

is the dominant element, and that the growing of the raw

material, sugar cane, is the subordinate or incidental ele-

ment. It serves no purpose to resolve such an argument,

for it is clear that plaintiff engages in many separate enter-

prises which, taken together, constitute a hybrid type of

business, see Phillips, Inc. v. Walling, 324 U.S. 490, at page

495, 65 S.Ct. SOT, SO Lied. 1095,

Hauling cane on the tain line ratiroad is not a part of

harvesting operations, since the gathering of the crop is

completed on the fields on which if is crown prior to trans

portation: and such transportation constitutes neither a

storing of such ereps, nor transportation either to storage

or market. Transpertation, as plaintiff engages im it, is a

necessary preliminary to the operation of plaintiff's proe

39

ence on an industry-wide basis, including shipping, the

purchase of fertilizer, equipment and other supplies, the

development of mainland refineries and markets, the

supervision of management labor policies, the mainienance

of research laboratories and the formulation of commen

programs of action for combating plant diseases, insect

pests, and soil problems. (Def. Bx. SB, p. 33.)

A further aspect of plaintiff's organization is found in

its relationship to Castle & Cooke, Ltd., an agency or factor

with which it is connected (Def. Ex. 2). Concerning the

relationship that exists between plantation and factor, the

HSPA manual declares as follows: ** While each of the 36

plantations in the Hawaiian Islands is a corporate entity,

all their affairs, except the actual operation of sugar grow-

ing, are centralized in what are known as factors, general

agents offering a multitude of seivices to their elients.

There are five principal factors: Alexander & Baldwin,

Ltd., American Factors, Ltd., C. Brewer Co., Ltd., Castle &

Cooke, Ltd., T. H. Davies & Co., Ltd.”? (Def. Ex. 3B, p. 35.)

The functions of the factors are summarized as follows in

the HSPA manual:

**Financial.— All fiscal matters of the plantations are

handled bv specialists in the offices of the factors.

Moneys are received and disbursed, tax statements pre-

pared, water and land rents paid or received, surpluses

invested, or deficits advanced.

‘Expertmental.- Engineers and other teehnicians

are constantly seeking ways to improve the output of

the various client plantations.

“Shipping. All the multitudinous detail of shipping

huge quantities of sugar by water to the mainland is

in the hands of the factors,

Ne a

a8)

essing business in its mill, where the cane undergoes a sub-

stantial change in order to create raw sugar, from which

state it is later further transformed into refined sugar, the

main product which is sold.

Portable track is laid on the fields where cane is grown;

but the permanent main line transportation is not located

on the farm in the same sense. True, it is located on the

planiation property, but the word **plantation’’ refers sim-

ply to the geographical area of nearly ten thousand acres

on Which plaintiff conducts all its operations. Obviously

cane is not grown on the right-of-way occupied by the

fifty-six miles of permanent main line railroad track.

Land is set aside exclusively for railroad purpose.

The point where the main line track is joined by the port-

able track is the point at which harvested cane is concen-

trated for transportation, and at this point the agricultural

exemption activity ceases and the railroad operation eom-

mences,

the court finds that employees who are emploved in o:

on the roadbed, track, structures, ears and locomotives of

plaintiff’s main line railroad svstem, eluding roundhouse

and rolling stock, repair and building shops, and flagmen,

watchmen and dispatchers, are not exempt from the over

time provisions of the Aet.

Mill.

(6) Plaintiff contends that employees whose work is per

formed in the mill are exempt under both Seetion P8cay (6)

and s(e). Mill activities commence immediately after the

produce has been delivered into plaintiff's storage vard

and brought alongside unloading platforms, Processing ive

40

‘Merchandising. Through their mainland buyers,

the factors provide a steady flow of needed merchan-

dise to plantation stores and to the plantations them

selves. Because of the size of their operation, every-

thing a plantation and its personnel need is provided

at a minimiun cost.”’ (Def. Ex. 2.)

The significance of the factor system is stated as follows:

“The long-run result of the agency system was thus to de-

prive the plantations of their independence and to transfer

control to the factors, a control which has been further

unified by the co-ordination of policies and planning in the

central oftices of the Hawaiian Sugar Planters’ Associa-

tion.’’ (Def. Ex. 3B, p. 35.)

These developments, as well as many other aspects of

plaintiff ’s operations, would seem to be unique to the Terri-

tory of Hawaii.

‘(In the sugar-producing areas of Louisiana, Puerto

Rico, and Philippines, and the sugar beet States, a

farming system had been established before the devel-

opment of the sugar industry. As the farmers in those

areas already owned the land, sugar production grew

along the lines of the established farming syster.

‘The Hawaiian sugar industry, on the contrary, be-

gan on land which was undeveloped. * * * The land

tenure system in Hawaii is different from that in any

other part of the United States. It is a complex out-

growth of the feudal system which existed before an-

nexation, under native Hawaiian rovalty.’” (Def. Ex.

3B, pp. 32-33.)

The typical Hawaiian sugar plantation has been described

as a ‘small world in itself (Def. Ex. 3A, p. 70), whose

* * *

Structural organization and functioning is not unlike

SF Sa, aie ¥ ow °°. wwe - hl SU - =

41

that of an army, with its clear cut lines of authority and

its careful program for attaining given objectives” (Def,

Ix. 3A, p. 14).

In immediate charge of plaintiff's plantation is its

plantation manager, who is shown in a chart appearing

under the designation ‘Plantation Organizations ’’ in the

published manual of HSPA (Def. Ex. 2). to have over-all

control of all plaintiff’s operations on the plantation, in-

cluding conduct of plaintiff's villages. The designation of

the manager, and the authority exercised by him, have been

described as follows:

“The manager of the plantation is appointed by the

controlling *factor” or agency. He has wide authority

over the plantation and the mill and exercises a con-

siderable influence over all community activities. * *

‘The plantation manager was the chief official and

central authority on all aspects of plantation life. In

addition to his technical knowledge regarding sugar pro-

duction, he had final responsibility in the direction and

operation of sewerage and water systems, of the fire-

protection systems, police force, the railroads, and per-

formed many of the functions that-a mayor would

perforin. He even sat as an informal judge on cases

involving minor disturbances and petty larcenies.”’

(Def. Ex. 3B, pp. 36, 39.)

Departmentalization of Plaintiff's Operations.

Plaintiff maintains an elaborate system of keeping de-

tailed records of all its costs and expenditures. All pumps,

locomotives, t. .cks, tractors, machines and implements of

tnachinery are given identification numbers, and a reeord

is made of the hours of work performed in their mainte-

nance, repair, and utilization. For each employee a daily

-_—— __ 3 ET -- = *s ” - ewe! Se eS eae

42

timesheet is kept showing in detail what his work consisted

of, and to which operation or piece of equipment it per-

tained. This information is transferred to a weekly tine

record, which also carries data concerning the employee's

rates of pay for the jobs performed by him and his total

compensation for the week. By use of a further series of

numbers, plaintiff records whether a given piece of work

represents a capital improvement or a running expense

charge.

It appears from the testimony of plaintiff’s office mana-

ger (Tr. 43-53) that its practice for nearly 20 years has

been to keep separately identifiable sets of employee rec-

ords for its several departments. The main departments

were described by him as follows:

1. Service Department, which includes the railroad

and truck operations, and the various shops: ** * * *

such as the track shop (section repair shop), the P & H

shop (caneloading machine repair), the welding shop,

machine shop, paint shop, electric shop * * *.”’

2. Factory Department, which covers employees of

the mill, commencing with ‘‘the employee who, when

the can car comes alongside the mill, weighs it and par-

ticipates in the job of releasing the cane from the car

into the container, the conveyor,’’ and ends with the

loading of sugar into freight cars or the warehouse

adjacent to the mill.

3. Warehouse Department.

4. Field Department, which embraces *' preparing

for plowing, planting, ratooning, cultivating, irrigat-

ing, fertilizing, * * * up to the time that the cane was

put on the main line of the plantation to take to the

mill * * * in other words, where the permanent trans-

portation line took over.”

43

® Village Facilities Departinent, covering pant

ers, plumbers, carpenters, and others who repaired,

maintaimed, and servieed piaimtiff’s villages, and the

dwellings located therein and occupied by plaiitiff’-

employees.

In addition to these main departments, there are a

number of others, also separately maintained. These were

identified as the office department, laboratory, email eng

neering, hospital, truck departinent, and agricultural con

trol and research.

The foregoing lengthy statement of the extent, nature,

and methods of operation of this large agrieuitural mmdu-

trial enterprise is culled from testimony and largely from

a detailing written stiplation between the parties of 771

pages, to which is attached a printed contract between the

company and TLWU Local 145, Urat 7, together with nn

merous maps, charts, and tabulations, all of which is a mate

rial part of this trial.

This corporate enterprise Was orcanized over a half con

tury ago and has shown continuing expansion and devel

opment. With the exception of a few vears, it has been quite

profitable to its agents and shareholders.

Part IT

Commerce Corverdade.

(1) The activities of plaintiff described above constitute

the operation of an industry which is engayed in commerce

and in the production of goods for commerce. Ineluded in

these activities are a number of separate and distinet en

terprises appropriate to the production of sugar and me.

lasses under the many and unique cireumstances out of

44 \

which plaintiffs operations have developed and taken form.

In the conduet of these enterprises, plaintif? has assumed

variety of funetions including those of farmer, carrier,

thanufacturer, shipper, and operator of village, communt-

ties. Plaimtiff is, and the court nds it to be, subject to the

provisions of the Mair Labor Standards Act.

Coverage under the Act for emplovees, so as to entitle

them toe the benetit of minimum wage proteetion, and pay-

tnent of overtime for hours of work im excess of 40° per

workweek, depends on whether they themselves are engaged

in commerce, or in the production of goods for Po i eany

Section Gia) and 70a) of the Act. Whether an employee is

tobe held covered as one engaged in the production of goods

for Commerce depends on Whether he was emploved either

(a) in producing, manufacturing, mining, handling, trans-

porting, or in any other manner working on such goods;

or (b) in any process or occupation necessary to the \pro-

duction thereof, Section 3¢)) of the Aet. By Congressional

amendment in 1949, the words ‘tclosely related’ have been

rnserted in the aforementioned section before the word

process’, and the words ‘directly essential” have ae

substituted for the word ‘necessary’; but this ainendment

Was not made retroactive, and has no application to the

issues of this case.

Plamtiff dees not dispute that its employees, with the

exception of a single group, are engaged in commerce or in

the production of goods for commerce, within the meaning

of the Aet. Phe exception referred to relates to the work

of cortain emplovees who perform the work of repairing

and maintaining plaintiff's dwelling houses, and furnish-

ing related community facilities and services to these who

EET ICE RE OS A

45

occupy such houses, these being in the main emplovees of

plaintiff. As to such maintenance and repair emplovee..

the contention of plaintiff is that, while so engaged, they

are not In any process or occupation necessary to the pro-

duction of goods for commerce, Determination of this aspee

of the ease is deferred to a subsequent place in these find-

ings. It is appropriate to find at this point, and it is found

by the court, that all activities of the defendants other than

those concerning which the issue of coverage under Section

3(j) is raised, are and have been within the coverage of

the law, such emplovees being either engaged in commerce

or in the production of goods for commerce.

Recovery under the Act has two aspects. An employee

is excluded if his activities are such that he is engaged

neither in commerce, nor in producing geods for commerce

(or engaged in an occupation necessary to production). On

the other hand, an employee may be covered by the Act be-

cause he is engaged in the production of goods for com-

merce or in an occupation necessary to such production,

but may not be entitled to the overtime protection of the

Act because of the applicability of one or another of the

exemption provisions. én this case, plainttif relies on the

following exemption provisions: Section 13(a)(6) (agri-

cultural activity), Section 7(c) (sugar processing), See-

tion 13(a)(2) (retail or service establishment) and. in one

instance, Section 13(aj)(1) (administrative or supervisorial

ctivity).

The record shows that in numerous weeks various de-

fendants worked for hours bevond 48, and in all such in

stances, hours of work beyond 48 were compensated at

overtime rates; this includes emplovees engaged in agri-

a Re. RR ee

46

eultural activities. Overtime was also paid for hours in

excess of 8 per day, for work on certain designated holidays,

and when an employee was called to work on his scheduled

day off. Since 1943, office and warehouse employees have

received ovectime for hours excess of 40 per week; and

during the off-season, overtime has been paid for hours in

excess of 40 per week to mill and shop employees.

The recovery of overtime pay sought in this action by

defendants is limited to hours in excess of 40 per week, up

to and including 48.

Agricultural Activities.

(2) Plaintiff contends that all of its employees are em-

ployed in agriculture, as the term ‘‘agriculture’’ is defined

in the Act, and are therefore exempt from the entire opera-

tions of the Act, pursuant to Section 13(a)(6) thereof. The

definition of ‘‘agriculture’’ contained in Section 38(f) is

sufficiently broad to cover every operation of preparing the

soil, cultivation, growing of the sugar cane, harvesting, and

any practice performed by a farmer or on a farm either as

an incident to or in conjunction with such farming opera-

tions. including preparation and delivery to market where

this is done by farmers. An employee is therefore exempt

from the protection of the Act by virtue of Section 13(a) (6)

if, onlv if, his work falls within the specific language of

Setion 3(f). Such, too, has been the interpretation expressed

by the Administrator of the Act (Interpretative Bulletin

No. 14).

(3) Under this definition, activities exempt from apph

eation of the Act with reference to the growing of sugar

47

eane at plaintiff's plantation, include the preparation of

suitable seedbed in the cane fields; planting; ratooning;

cultivating; spraying of fields with insecticides and herbi-

cides; elimination of competing weed growth; clearing of

stones; spreading of irrigation water and operation of irri-

gation controls; laving, moving, or removal of field irriga-

tion flume; patroling of irrigation ditch lines; cleaning and

weeding of irrigation reservoirs, drainage ditches and tun-

nels; fertilizing and other activities to improve the physi-

eal condition of the soil; fire protection: activities designed

to guarantee or improve the growth of the crop; grading

if eane fields; filling of holes, guilches and ditches in fields;

and harvesting operations performed to remove the crop

from its growing position in the fields. These constitute

farming operations, together with those activities of an

incidental and conjoint nature, such as the picking up and

reloading of cane stalks which have fallen from cars, the

laying and shifting of sectional tracks in the fields, and the

loading and maving of cane cars placed upon movable tracks

and assembling the harvested crop at centralized points

on the main line railroad, to commence transportation to

the mill. Employees engaged in such operations, 07 in activi-

ties incidental or in conjunction with them, are eliminated

from the protection of the Act while engaged in such prae-

tices.

In aeeordance with these findings, the work of defendants

which falls into one or another of the categories speetfied

above, is exempt from operation of the Act, up to and in

eluding the point at which the erop is harvested. That point,

which terminates the agricultural aspect of plaintiff's opera-

tions, occurs with the concentration of cars loaded with

eane, upon tho main tine railroad operated by plaintiff,

48

for transport, through intermediate processing, to the sugar

refinery.

Transportation.

Plaintiff contends that the operation of its main line rail-

road, and the work performed by its locomotive engineers,

firemen, brakemen, and other employees connected with its

railroad transportation system, are exempt both under the

agricultural exemption of Section 13(a)(6) and the sugar

processing exemption of Section 7(c). The latter section

exempts employees engaged in the processing of sugar cane

into sugar (but not refined sugar), but only when they are

employed in a place of employment where the employer is

engaged in the act of processing cane. The Administrator

has interpreted this section to exempt employees who direct-

ly engage in processing activities, or who perform opera-

tions so closely associated thereto that they cannot be segre-

gated for practical purposes, and whose work is also con-

trolled by the irregular movement of commodities to the

establishment; provided that such work is performed in

the place where the processing actually occurs (Interpreta-

tive Bulletin No. 14). Congressional debates show that the

purpose of the section was to relieve processors of seasonal

agricultural commodities from the hour: provisions of the

Act so as to enable them more easily to conduct their opera-

tions during the peak seasons (Interpretative Bulletin

No. 14).

(4) Neither Section 13(a)(6) nor 7(c) applies to the

activities of plaintiff’s railroad employees. The train crews

are not engaged in any act of producing sugar cane, or in

any act incidental to or conjoint with the production of

sugar cane: nor in processing cane into sugar at the mill,

49

where the processing occurs. It is immaterial that they are

employed by the same company which employs the farm-

hands and processing crews, since the determination of

coverage must turn on the work of the employee.

‘The mere fact that in this case the owners of the

farms are also the owners of the mill and the trans-

portation facilities does not make transportation an

incident to farming.

* * * * * > =

‘There seems no national basis for saving that sim-

ply because the ownership of the mill and the farms

is In the same hands that, therefore, those employees

who are engaged in an activity which is separate and

distinct from agriculture are exempt from the provi-

sions of the Act.’’ Calaf v. Gonzalez, 1 Cir., 127 F.2d

934, 937, 938.

In determining whether an employee is exempt from the

Fair Labor Standards Act either under Section 7(c) or

Section 13(a)(6), the sole criterion is the character of the

work performed by the employee, as disclosed by the ree-

ord Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct.

332, ST Led. 460; A. B. Kirschbaum Co. v. Walling, 316

CUS. 517, 62 S.Ct. T1116, S60 Ld. 1658; Walling v. Snyder

Min. Co., D.C. 66 FuSupp. 725. Section 7(¢) does not em-

brace activities which, though related and necessary to mill

operations, are hot performed conjointly with processing at

the establishment where processing takes place.

Railroad operation is a svstematie business ealling for

the emplovinent of skilled, experienced men, trained to

quick, keen perception (not farts hands or mill hands) for

handling locomotives und toving ears (not the goods in

transit}, and for the maintenanee of roadbed. track and

30

structures, and roundhouse care and servicing of locomo-

tives—all specialized technical work. Railroading is not

farming or processing, nor intended hy the Act to be a part

of either. Here, the transportation operations are very sub-

stantial, occurring over many miles of trackage, and haul-

ing hundreds of thousands of tons each year; and the in-

vestment in the railroad system, amounting to nearly a

million dollars, is quite considerable. It is notorious that

in years past some sugar plantations in Hawaii hired a

common carrier utility company, whether from economy

or lack of capital, to install a railroad system, to perform

the work of hauling cane from fields to mill yards.

If Congress had said that raw sugar production should

be given an exemption from the operation of the Act, ¢

different situation would be presented. That Congress saw

fit not to do this, is in itself significant. The parts of the

Act here dealt with exempt agricultural or farming activi-

ties on the one hand, and processing on the other. The ex-

emptions are separate and different, one of them applying

both to minimum wages and overtime hours, and the other

applying only to overtime hours. The transportation system

of plaintiff is such that it constitutes a separate activity,

so distinct in its nature that it is not reached by either of

the exemptions.

Evidence given by plaintiff's office manager establishes

that the employees of the railroad system are not attached

to the Field Department or the Factory (Mill) Department,

but instead are carried on the payroll records of the Service

Department. Plaintiff has not treated the raiiroad em.

plovees as within the exemption ot Seetion T8ia) (6), fer

during off-season these eniplovees have paid paid overtime

after 40 hours of work. Subsequent findings on the activi.

ol

ties performed by the railroad employees disclose that they

are not ordinary farm hands, and do not perform agricul.

tural activities. The railroad system is Operated as a vear-

round pursuit; the element of seasonality does not enter

into sugar production in the Territory of Hawaii. **Con-

tinuity of employment in the production of Hawaiian sugar

is comparable to employment in manufacturing operations

that have minor seasonal fluctuations rather than to typical

mainlard agricultural operations. The equitable climate of

Hawali makes possible the continuous growth of sugar and

it is technically possible te carry on every type of opera-

tion every day in the vear’’ (Def. Ex. 3B, p. 64).

(5) The operation of the railroad, as disclosed by this

record, is not a practice performed ‘‘in conjunction with”’

farming operations. The activities of the railroad crew, and

of those employed in activities relating to maintenance, up-

keep and operation of the main line railroad system, occur

subsequently to and inc spendently of the farming activities,

albeit coordinated thereto, On its records of operating costs,

plaintiff distinguishes between harves‘ing and main line

transportation,

Nor is the operation of the main line railroad **inei-

dental’’ to the farming activities. The Administrator of the

Act regards transportation as more closely linked to proe-

essing oper.waons. This has been his view since 1943 ( Ad-

se

monistrater’s Release G-522). This view finds support in

severnt decisions of the United States Court of Appeals

for the First Ciremt dealing with the Puerto Rieo sugar

hedustry, Bowie v. Gonzalez, LI Fitd tl: Calaf v. Gonzalez,

27 Fivd 954: Vives v. Serralles, 145 Fi2d S52. In those

eases it is held that the tramsportation of cane is not inei

o4

gins with the weighing, unloading and cleaning of the cane,

and continues through crushing, juice treatments, crystalliz-

ing, and the bagging of the product and its removal from

bagging and sewing machines, and its deposit in an adja-

cent warehouse, bins, tanks, or directly into cars or trucks

for shipment. With these several operations through the

factory, the processing is begun and finished in the place

where the processor is so engaged, that 1s to say, the entire

operating plant devoted to processing usage; whether within

the mill itself or in the open vard, and whether the work

there performed is mechanical or manual.

Such activities are not exempt under Section 13(a)(6).

The mill operations are so conducted as to assume the char-

acter of a distinct business enterprise of an industrial na-

ture: hence the mere fact that the processor is also engaged

in producing a farm crop, and is processing only commodi-

ties grown by him, does not bring all of his operations

within the Act’s definition of *tagriculture’’. The process-

ing of sugar cane is surely no less an industrial operation

chan the stemming and fermenting of leaf tobacco; these

activities were held to be non-agricultural beeause they

ehanged the form and nature of the erop. MeComb v. Puerto

Rico Tobacco Marketing Wooperative Ass'n, D.C. S90) F.

Supp. 955, affirmed 1 Cir. ISt Pe2d oo,

The mill operation is net a subordinate part of farming:

it constitutes a large operation that follows the pattern of

the industry in the Territory of Tawar, A separate work

force is emploved for the processing operation in the mal;

it does ne work in the fields: iis paid im accordance with

aqsealeooft hourly rates which are different and distinet from

the svstem: used, parth> at contract rates and partly at

5)

hourly rates, to pay farm labor. On its payroll records, and

in the keeping of its accounts for purposes of making in-

come tax returns, plaintiff segregates mill employees from

those engaged in held activities. During off-season, plain-

tiff pays overtime after 40 hours to employees of the mill,

but not until after 48 hours to employees engaged in the

farm work,

The Court of Appeals for this circuit has warned against

erlarging the term ‘‘agricultural laborer’* beyond the usual

idea that it suggests. Enlargement beyond common usage

would produce only confusion. The test laid down is whether

the product has been subjected to industrial activity. In-

dustrial activity commonly means the treatment or proc-

essing of raw products in factories, North Whittier Heights

anes Ass’nv. NLRB, 9 Cir., 109 I.2d 76, certiorari denied

DLO US. 632, 6O S.Ct. 1075, 84 Led. 1402, rehearing denied

OL U.S, , Ol S.Ct. 54, 85 L.ked. 472. This decision, al-

though Sines the agricultural exemption of a differ-

ent act. has been widely followed in its basic reasoning,

and has recently been reaffirmed in Miller v. Burger, 9 Cir.

lol Fi2d 992,

The determination of this court is supported by the views

recently expressed both by the Solicitor of Labor and the

Administrator of the Wawe-Hour Division ¢2 CCH 14.068.

14,071). Since I941, the Administrator has taken the post

tion that the exemption for agricultural emplovees ‘does

not apply to sugar cull emplovees, even if the only can

ground in stich a mill is cane grown by the sugar mill owner

in his own fields" (Administrator Release RODSGS. pal

lished in 1942 ed. WHE Manual, p. 408). Pt is also the eur

rent view of the Board which administers the Nationa!

56

Labor Relations Act, which by Congressional direction con-

tains the same definition of ‘‘agriculture’’ that is to be

found in the Fair Labor Standards Act. In Re Imperial

Garden Growers, 26 LRRM 1682; 91 NLRB No. 167. See

also Vives, Bowie, and Calaf cases, supra.

(7) it is clear, however, that the activities under dis-

eussion are covered by the sugar processing exemption.

Accordingly, the work of employees which takes place in

the mill, in connection with the operation of processing

machinery and activities closely and intimately connected

therewith, are exempt under Section 7(¢).

(8) Several activities, while occurring in the mill, are

not exempt because they de not constitute a part of the

processing operations. Activities performed on bagasse, a

by-product which is used for fuel, are not exempt because

such activities do not constitute the processing of eane to

obtain sugar or syrup, nor is it processed to obtain bagass”.

The exemption is limited to the processing of cane into

sugar or into syrup. This finding coincides with the long

established view of the Administrator (Interpretative Bul-

letin No. 14).

(9) Where an employee's activities are connected with

generation of electricity, some cof which ts used in the mall,

but also in many other operations, including the lighting

of employees’ hoses, adininistrative offiees, repair and

service shops, and the sale of surplus amounts fo a public

utility conjpany, the excinption does not apply because of

the commingling of exempt with non-exempt activities in

the same workweek. The matter of commimeting os later

diseussed in greater detail in these findings.

oF

Weekend Shutdown.

At the earlier trial, the defendants contended and the

court held, that the activities in and about the mill during

weekend shutdown, whieh consists of cleaning and miner

repairs, Were not exempt under Section Tic), for the reason

that they occur at a time when no processing is taking place.

In consequence, an employee who perfortied 40 hours of

exempt Work in connection With processing operations, and

additional hours of work during the weekend ~hutdown,

Was held to be non-exempt for the entire week,

Upon additional evidence and a new record in this re.

trial, and reconsideration of this issue.ait weuled pyar that

the Weekend activities in the mill should mot be held to defeat

the eXeCHIpT LON provided by Section F600). White the sbaat-

down period consists of 24 consecutive hours, processing

Operations are not completely suspended during that inter-

val. The crystallization processes of sugar remaining in the

Inachines continue. Nes ehaplovees in the firerootn, berber

room, and power house remain engaged in their regular

activities. Though it is itipossible to cireumscrthe with ex

actness the period during whieh no processing of sugar. in

the literal sense. takes place, it weld seen: that such period

comes to but a few hours, less perhaps than a full working

shift, and partaking partly of the end of one shift and

partly oft the early Deortion ot thie Thee?

(10) Rinpiovees whe engage in the weekend cleaning

and repair activities, work solely within the mill, and upon

the very processing machinery whieh they operate during

the remaimder of the week. These emplovees alse do the

se kind of work while the mall is an operation, as an in-

etdeomtal activity conmeeted with processime dn such eir

as

curustances, and in light of the exemption which Congitess

intended should be enjoved under Section T(c}, the nan

processing aetivities in the mall daring weekend shutdown

would “Up ypear to be too incidental nied subordinate a factor

to defeat exemption.

Accordingly, the court finds upon this record: that thie

activities performed during weekend shutdown in the mill

are not such as .o defeat exemption, if it is otherwise

applicable.

Off Season,

‘The annual shutdown of the mill during the so-called oft-

season is a period when there is a total cessation of proc:

essing operations, Machinery and equipment located in the

taill are completely overhauled, major repairs are made,

and new machinery is installed. Generally the mill is shut

down fora period of between 3 and 5 months. According

to the evidence, plaintiff's off-season lasted 5 months in

1415 50, months in 1425 315 months in io: 4 months

in 1944: 3%. months in 1945. In 1946. rt ran from December

te February & a period of 7 weeks: this was an ususually

short off-season, and doubtless relates to the oecurrence of

a strike lastine from September lte November 19, 1946.

During the off season, mill eHIpLovees envare exclusively

in majer cleaning and repair work, im overall preparation

for the subsequent reopening of the mili, Additional men

are brought in from other departments to partierpate in

the overbaul which oeeurs inand about the mill, its machin.

ery and equrprnient, ied orp hoy ees are brought ‘nto the

repair and service shops, to supplement the regular erews,

heenuse of the inerensed load of work. These trots mot aals

estnbbish the iestantial nature of the off-season operation

ov

In preserving and enhancing capital investment, but alse

account for the maintenance by plaintuf of a stable labor

supply throughout the vear, daring which the number of

man-hours of work performed does not vars, regardless of

season.

Not a particle of sugar Is processed in the off sertson,.

(11) Ttas plain, and the court finds, that the work which

takes place in the nill during off-season is not exempt under

Section 0c). This holding produces ne inconsistency with

the finding in regard to weekend shutdown, tnasmueh as

the two differ vastly in purpose, nature, scale, and duration.

It has lone been the Administrator's view that the exemp-

tions provided by Beetion Fle) do not apply during any

dead season or off-season, when processing activities are

suspended entire, Yor a substantial and prolonged period

of time (Adiministrator’s Release R-TSo2: Jan. 25, 1943).

This view has been uniformly upheld by the courts. Such

was the ruling in the Sugar industry in! erto Rico in the

chase of Maisonnet Y. Central Colosse, brie. 2 Wil (as. 7:

and the decision lias been the same im reference to the cot-

ton seed processing industry. Heburg vo Independent Til

Mill, Ine. 5 WHE Repts. 77 OW OD Pemno: Abram vo San

Joaquin Cotton Ol Co. DLCs. DCal., 49 FL Supp. 395.

It is also worthy of note that plaintiff has paid, for a

numberof vears, and throughout the period covered by this

action, overtime for hours of work im excess of 40. to all

lt OVetadsor POSE the LSPA Plans tation News st tend ‘Est

ty the anrount of taoney beige spent oon E947 and PO4s for

yporarve nel new ealipment on silgar pela lartios miahy .

vf 5 SPO rid etre “itiyvs maw be ever ivher ” ” Tet

Go

till hands, emplovees of the repair and service shops, and

others who participate in the off-season work in and about

the mull.

RR par and Ny rece Shops.

Plaintiff claims that the employees of its repair shops

are exempt both as agricultural employees and under the

sugar processing exemption.

(12) The agricultural exemption of Section 13(a)(6) is

inapplicable. Machine shop men, welders, electricians, paint-

ers, carpenters, and cthers employed in the repair shop

departinent, perform no work of an agricultural nature, or

at atime or place conjoint with or incidental to the farm-

ing process, or ona ‘*farm*’ in the sense in which that term

ix used in the statute. Plaintiff itself has always regarded

these emplovees as a unit separate from the field employees.

In the structure of plaintiff's business, agricultural work-

ers comprise the Field Department; employees of the re-

pair shops comprise the Service Department. Workers in

these respective categories are carried on separate and dis-

tinct pay-rolls. For cost accounting and income tax return

purposes, plaintiff makes the same distinetion in its ree-

ords between these departments. As subsequent findings

show, plamtiff has never treated repair shop employees as

falling under the agvicultural exemption, inasmuch as, duy-

ine off-season, repair shop emplovees have been paid over-

time for hours of work in exeess of 40 per week; this, of

course, is a payinent net required to be made to employees

engaged in agricultural work, whether it be off-season or

erinding senson,

(12) Neither is Seetion 76¢) applicable to exempt these

employees. Their worl is net that of engaging In process-

61

ing, or im any part of processing, nor is their work so inte-

vrated with processing as to be a portion thereof, incapable

of segregation. Plaintiff has not treated the repair shop

employees as part of its mill operations. Payvrolls and cost

accounting records for income tax purposes show the em-

plovees of repair shops separately from the mill hands, The

activities of repair shop employees relate not alone to the

mill, but to all aspects of plantation operations, including

the field, village facilities, administration building, ete.

Repair shop employees are not occupationally attached

to the mill. The headquarters out of which they work is in

each instance a separate structure, in which they generally

perform the major portion of their work, to which they

regularly report each day, and in which they receive super-

vision and instruction. These structures are located at vary-

ing distances, up to 300 feet, from the mill. When occasion

requires them to be elsewhere than in their shops, they

perform services for every operation on the plantation, not

the mill exclusively. Most of them do not generally perform

work inside the mill building, except during off-season, when

processing is suspended. They are under separate foremen

and supervisors. There is not interchange shown, during

the yrinding season, of personnel, equipment, or materials

between the mil! and the repair shops.

It ix lain that the repair shops constitute, and they are

found to be, self-sufficient units, operated not as an ineident

toany other operation exclusively or dominantly, but rather

as an intecral part of the overall combination of separate

enterprises jomntly condueted by plaintiff. If the emplovees

of anondependent machine repair shop performed the re-

padi activities under discussion, they would not be exempt

from the overtime provisions of the Act. The fact that such

62

work was done by emplovees of plaintiff, under the eireum-

stances here presented, affords no stronger basis for apply-

ing the exemption.

This determination coincides with the view expressed hy

the Administrator, both in his official releases (Interpreta-

tive Bulletin No. 14) and in the position asserted in a brief

filed by him in this case with the Court of Appeals. Judicial

authority treating of the same issue likewise supports this

finding. In Walling v. Bridgeman-Russell Co., 2 WH Cas.

785 (District), Judge Bell held that the term ** place of em-

ployment’? as used in Section 7(¢) means those portions of

the establishment devoted by the emplover to the actual

processing operations, hence the exemption does not apply

to employees who perform their duties at places not de-

voted to processing operations. He held the exemption in-

applicable to electricians, carpenters, tinsnmuths, firemen,

engineers, garage employees who washed and greased

trucks, watchmen, janitors warehousemen, and laboratory

technicians, although the degree of separateness and spe-

cialization in that case does not appear toe approach the

situation in the instant case.

In Walling v. DeSoto Creamery & Produce Co., D.C Minn.,

o1 F.Supp. 988 at page 943, emplovees who worked at grad-

ing, packing and loading poultry, in a room adjacent to the

one where slaughtering and dressing operations cecurred,

were held not emploved in a place of emplovinent where

the exempt processing activity was performed: this was

the holding despite the fact that the activities held non-

exempt were performed on the processed product. Ino the

ease at bar, the emplovees under discussion do no handle

eane, sugar, svrup, or inoelasses: their activities are con-

fined to working on machinery, equipment, and structures.

63

The crucial point is that Section 7(¢) does not exempt

entire industries from the overtime provisions of he Aet,

hut only the speeitie processes therein mentioned. Thus,

while the activities of employees engaged in’ handling,

slaughtering and dressing operations in a meat packing

plant were held exempt, employees in other departments,

such as those engaged in meat-cering and sausage-making,

were held outside the scope of the exemption provided in

Section 7(c). Fleming v. Swift & Co., D.C., 41 F.Supp. 825,

affirmed 7 Cir., 131 2d 249. To the same effect, see Colbeck

v. Dairyland Creamery Co., 70 S.D. 285, 17 N.W.2d 262.

See also Shain v. Armour & Co., D.C. 50 FuSupp. 907; and

MeComb v. Del Valle, SO F.Supp. 94.

Mill Village Maintenance.

Plaintiff contends that its employees who perform repair

and maintenance work on company dwellings oceupied by

plaintiff's cmployees, and who supply village services and

facilities to the employees living in the plantation villages

where these houses are located, are excluded from coverage

under the Act upon the ground that they do not work in

any process or oecupation necessary to the production of

goods for commerce, Alternately, if this contention Is over-

ruled, plaintiif invokes the exemptions of Section 15 (a) (6)

and Mta)yc2).

The question of coverage is plainly one that must be de-

cided upon the facts peculiar to each case. The Administra-

tor has expressty deft the question of coverage open, evi

dently recognizing that decision might well vary with the

viven situation, No court dectsion has been found that passes

squarely on facts stiatar te these here present,

64

Work of a repair and service nature has frequently been

held covered by the Aet as a type of activity necessary to

the production of goods for commerce. A Tew decisions of

this kind may be noted: Repair of boats used in interstate

commerce Walling v. PF. S. Lowe & Son Boatways, 5 WH

Cas. 937: mechanical work for an independent machine cor:

poration whose chief business consisted in servicing the

tools and equipment of a company engaged in mining and

shipping of coal in interstate commerce Princeton Mining

Co. v. Veach, 5 WH Cas. 734; painting, repairing, and re-

constructing trucks which were brought to the emplover’s

plant and by customers who owned them, and which were

used in the interstate transportation of goods, Walling v.

Siurm & Sons, 6 WH Cas. 131; maintenance men, inechanics,

and mechanies’ helpers who worked at garages on trucks

leased by their employer to customers making substantial

used of the trucks in interstate commerce, Skidmore v.

Casale. Inc., 6 WH Cas. 33. Also to the point are Claudio v.

Sobrinos De Portilla, Inc... 5 WH Cas. 484, holding the Act

applicable to employees of a corporation operating a fac-

tory and machine shop, the greater part of whose business

was the repair and servicing of industrial concerns pro-

ducing sugar for commerce; and Agosto v. Rocafert, 5 WH

Cas. 176, holding the Act applicable te a mechanic engaged

in repairing and overhauling trucks operated by an em-

plover ina trucking business used chiefly to transport cargo

from concerns producing sugar, to be shipped in commerce.

Maintenance workers, watchmen, and similar employ-

ments have also been held covered. These cmployments were

held covered in VMeComb "4 Russell ('o., 7 Lab. (as. ah,

TSis by the United States Court of Appeals for the Fourth

Circuit in Slover v. Mathes, 10 Fi2d 25s; by the United

6

States Court of Appeals for the Seventh Cireuit in Enge-

bretsen vo KB. J. Albrechi Co., 150 F.2d 602: and by the Su-

prenie Couwit in Walton v. Southern Package Corp., o20

U.S. 340, 64 S01. B20, 88 Led. 298, and in A. B. Wirseh-

baum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed.

1638.

These decisions are readily distinguishable from the situ-

ation at hand, in that the employees involved therein per-

formed work or services in, upon or directly relating to the

very buildings, equipment, or instrumentalities which were

used in the production of goods for commerce. The ease

here presented is one step removed, in that the repair and

maintenance work is performed in and upon, and the serv-

ive is rendered for, the dwelling houses inhabited by plain-

tiff’s production employees.

A series of cases, which have come to be known as the

eookhouse or cafeteria cases, deal with an analogous situa-

tion. In Consolidated Timber Co. v. Womack, 152 F.2d 101,

the United States Court of Appeals for this circuit held the

Act applicable to a baker employed in one of two cookhouses

operated by a corporation engaged in logging and lumber-

ing. It was held that the cookhouse was a necessary part

of the company’s production of goods for conunerce, oper-

ated not with the intent or purpose of showing a profit to

the owners from the sale of food or service, but rather to

render a necessary assistance to the company ‘s business,

whieh was that of producing logs in interstate commerce ;

“The cookhouse Was nota separate or independent estab-

lishment: it was actually a part of the Company's facilities

adink in the chain whereby it operated its business and

a imenans whereby it accomplished the purpose of its exist-

66

ence, Neither cookhouse was ip competition with any private

restaurant for there is no evidence of an effort to secure

the patronage of the general public; the service was sold

at cost to those whom the cookhouse was intended to serve:

the loggers. The principal activity of the cookhouse deti-

nitely was not to furnish service to the consuming public,

as such, but was to serve the employees of the Company.”

132 F.2d at page 107. The job of the cookhouse employee

was held to assist the activities of the loggers by keeping

their board close to their place of work, thus rendering it

easier for the corporation to maintain a proper organiza-

tion of its loggers, and forwarding their work by furnish-

ine the food whereby the men were given the streng*h to

pursue their labors.

Many cases are in accord with this decision. The United

States Court of Appeals for the Eighth Circuit, in Hanson

yv. Lagerstrom, 133 F.2d 120, followed our cireuit, holding

the Aet applicable to one who assisted in preparing and

serving meals, and maintaining a kitchen operated to bene-

4t employees of a concern engaged in handling pulpwood,

which was then converted into products sold in interstate

commerce, A federal district court in Indiana held the Act

applicable to a night manager employed by the owner of

a cafeteria located ina war plant, to serve employees work-

ing in the plant who manufactured war materials shipped

in interstate commerce: the cafeteria, though independently

owned, was held an integral part of the organization of the

manufacturer, and a necessary part of the facilities used

by the monufacturer, Ferguson v. Prophet Co. 6 WH Cas.

IS4. A federal district judge in) Massachusetts similarty

applied the Aet to employees working in their employer's

comunissary, Which was located in a railroad station and

67

served as a kitchen and storeroom for the employer's re-

tail stands and train service department in the same sta.

tion, and for the emplover’s retail stands in railroad sta-

tions in other cities, Walling vo Armstrong Co., D.C., 68

I.Supp. S70. Employees in a canteen and cafeteria oper-

ated, on premises of Republic Steel Corporation, by an

independent restaurant concern were held covered in Me-

Comb v. Factory Stores Co., D.C., 81 F.Supp. 405; coverage

of the . et was there decided in favor of cooks, assistants,

counter girls, dishwashers, and porters. The Supreme Court

of Michigan held the Act applicable to emplovecs engaged

in preparing food at plant cafeterias owned and operated

ov a large industrial corporation which sells food solely

to plant workers during their lunch and rest periods, Basik

vy. General Motors Corp., 311 Mich. 705, 19 N.W.2d 142,

159 A.LAR. 966,

The foregoing decisions turn on the finding that the work

performed by such service employees is itself a part of an

over-all integrated effort for the production of goods for

commerce, Supplying such services, and maintaining such

supply, constitute activities covered by the Act, where they

have a close and immediate tie with the process of produe-

tion for commerce. Although each case depends on its own

facts, the decisive elements are suggested by our Court of

Appeals in Womack’s case, supra, 132 F.2d at page 107:

“Was not the greater number of diners at the cookhouses

engaged in the production of goods for commerce? Were not

the eookhouses an integral part of an organization devoted

th the production of woods for comumerce? Doves it net follow,

reasonably and logically, that the greater part of the serv-

ices rendered Hy\ the cookhouses was in interstate commerce,

rather than intrastate ?”?

os

Three decisions reaching a contrary result are easily dis-

tinguishable, and are based upon reasoning Which supports

the principle of Womack. Kuhn vy. Canteen Food Service,

Inc., D.C., 77 F.Supp. 585, dealt with a restaurant operated,

not by an employer engaged in the production « © goods for

ecommerce, but by an independent concern; and it was not

operated as a part of facilities devoted to production of

goods for commerce. Judge LaBuy accepts the principle

laid down in Womack’s case, saying, 77 F.Supp. at page

591: ‘‘The court is convinced that in cases where the pro-

duction of goods is in an isolated spot where board cannot

he readily obtained by employees, thet (sic) it would be

necessary for the company to furnish board to its emplov-

ees, and in such cases fhe furnishing of the board would be

a necessary part of the production of the goods.”’

Again, in Bayer y. Courtemanche, D.C., 76 F.Supp. 198,

196, a similar ease was presented. Judge Smith there said:

+ * * * there has been no showing that the time for

lunch was too short for the production workers to eat

outside, nor that restaurants were not available nearby,

nor that the service in them was inadequate for the

workers In the area, nor, indeed, that any great pro-

portion of the production emplovees of the plant ay alled

themselves of the cafeteria at meal times.

Had any of these clements been shown by the platn-

tiff. it might be that his work could be considered neces-

ee ae

Judge Yankwich also found against coverage in Tipton v.

Bearl Sprott Co. DLC. 95 F.Supp. 496, where a restaurant,

not operated by Columbia Steel Company but by an inde-

pendent contractor, was maintained at most as a conven:

ience for employees at Columbia Steel, ata location in a

69

city where numerous other restaurants were immediately

avallable to Colunibia’s production workers. In a well-

reasoned opinion, the court reviews the cases and bases its

decision upon the fact that the cafeteria was operated in-

dependently of the company producing goods for commerce,

was not located in any isolated area, was not sown to be

patronized by any substantial number of the steel com-

pany’s emplovees, and represented only a convenience to

such employees rather than a necessity; furthermore, that

the steel company did not control the hours, wages er con-

ditions of work of ihe cafeteria employees, and such cafe-

teria Was In no way a part of Columbia’s effort to produce

steel.

In the ease at bar, existing conditions are such that it leas

been necessary for plaintiff to furnish housing and com-

munity services to its production employees. The plaintiff's

villages are located both in isolation and insulation from

the rest of the Territory; these villages are located upon

plaintiff's Jands, and are many miles from any city. No

other housing in adequate quantity, except that provided

by plaintiff, is shown to be available to plaintiff ’s employees.

Historically, plaintiff constructed these houses and estab-

lished these villages for the purpose of supplying necessary

dwellings for a stable labor pool which plaintiff desired to

be in close proximity to its operations.

Maintenance e* village facilities and dwelling repairs

were carmied on by plaintiff as a part of © s over-all pro-

duction operations, not as a matter of mere convenience

for its emplovees. Many of the employees of plaintiff who

work on dwellings, and in connection with village facilities,

are ao part of plaintiff’. production operations, being at

} }

70

tached to various of the repair shops, such as the carpenter,

plumbing and paint shops, which perform activities for the

mill, in regard to production machinery and equipment,

and for administration and office buildings. Housing and

community services represented part of the wage payment

made to plaintifi’s employees in the form of perquisites.

Abolition of the perquisite system in 1946 did not nullify

either the original purpose of the housing, or the continued

effectuation of that purpese. Indeed, plaintiff expressly

undertook 2 contractual obligation with the union repre-

senting most of the defendants, to continue to furnish re-

pairs and maintenance of housing, and village community

services. At the same time, plaintiff expressed its intention

not to make housing a profit-making venture as such.

More than 98% of plaintiff’s employees inhabit its houses,

and rental! to outsiders is negligible; and among the latter

are various individuals to whom plaintiff also rents space

to operate commercial establishments needed in the villages.

Doubtless the present availability of housing for rental to

outsiders is related to the continuing mechanization of

plaintiff’s operations which naturally decreases the number

of employees needed. The fact that the present relationship

between plaintiff and its emplev°es in regard to housing

appears to be one of landlord-tenant, does not conceal the

underlving realities. It is the duty of the court to look

through the form to the substance. The 1946 conversion of

housing and facilities into cash values, merely meant that

these amounts were added to the exiplovee’s paycheck, but

he paid back the same amount to the company as rental.

Hence the form changed, but the substance remained un-

changed.

ret

Upon the foregoing facts, there can be ne question that

the operation and conduct of village facilities and housing

are historically and presently an integral part of plaintiff’s

production effort. The only relevant court decisions pass-

ing upon repair work to homes occupied by emplovees of

a concern engaged ia interstate commerce, deal with city

homes occupied by employees under genuine lease or sale

arrangements. One such case is the decision of the federal

district court for the Western District of South Carolina

in Morris v. Beaumont Mfg. Co., 84 F.Supp. 909, 910. The

Act was there held inapplicable to carpenters and painters

engaged in the construction, maintenance and repair of resi-

dences rented by a textile manufecturing concern to its em-

ployees. The company owned an average of 280 dwellings,

occupied by an average of 488 emplovees. The total average

number of employees of the company was 1107. Oceupancy

of company-owned residences was optional with employees,

and on the average more than half of them lived in homes

owned by themselves or rented from parties other than the

employer. Ali the residences owned by the company were

in the city of Spartanburg, located on city streets, and in-

terspersed with other dwellings not owned by the employer.

The company’s manufacturing plant was enclosed by a sub-

stantial fence within which all of its manufacturing activi-

ties were carried on: none of the houses were contained

Within the fenced area. The key to Judge Timmerman’s

decision is seemingly his finding that **The defendant does

net mamta a mill village in the sense that term is com-

monly used.”’

A similar decision is that of the District Court for the

Western District of Virginia, in Coomer v. Durham, 93

hSupp. 926, 929. The enplover was a contractor who eon-

72

structed and sold houses to the eniplovees of a COME ATES

engaged in the production of coal for interstate commerce,

The coal company had at one of its operations O47 em

plovees, of which number 412 lived in houses not owned by

or rented from it, 9 lived in a village in houses purchased

from the coal company, 42 Uved in houses purchased by

them in an entirely different village, and only 16 lived in

company-owned houses. At all of its operations, the com-

pany had a total of 5251 employees, of which number 1334

lived in houses rented from it, 217 lived in neuses purchased

from the company, and 1700 lived in their own individual

houses which had never been owned by the company. The

villages in which the employees lived were not isolated com-

munities; they were located on state highways tinked with

the federal highway system, and near to other communities.

It was found that the coal company, from the start of con-

struction, ‘* planned to sell nearly all these houses and did

seli virtually all of them just as soon as they were com-

pleted.”’ Such sales, it was pointed out, were accomplished

by a conveyance in fee simple by deed to the purchasers

without restriction as to subsequent lease or resale: and

subsequently to the original purchase, some of the pur-

chasers had either rented or sold their houses to persons

in no way connected with the coal company. Judge Barks-

dale found that it was not Necessary, during the period of

tune covered by the case before him, for the coal company

to provide housing for its emplovees. The contractor's em-

piovees were therefore held net covered by the Aet.

In Wilson v. Reconstruction Finance Corp... 5 Cir. 148

2d 64, 565, certiorari dented S31 ELS. STOL67 SlCr 1199, 9]

Led. 1850, the Net was held inapplicable to emplovees act-

ing as firemen at a housing project, and to others who sup-

73

plied water service to the mhabitants thereot, the mibiabit

ants being production en. lovers of two corporations er

gaged in interstate commerce, Llowever, the firemen and

Water plant Operators were eri plo vers of an independent

contractor not so engaved in interst®te commerce. The court

there said, °° The independence of the enoplover of the plain

tiffs and the emplovers of the housing oecupants imsulates

the plaintiffs from the status of producers of woods for

commerce,”

The last three decisions, while holding agains! covertee,

present a rationale which, when applied to the facts of the

Instant case, support a different comelusion. In origin and

history, Waialua village was and remains a sill village.

‘

company-owned and company-controlled, im every sense of

that term. The same ts true of the staller villages on plain

tiff’s plantation where its emploveos cecupy company-owned

dwellings. All these villares, and all of the buildimus, houses,

and other facilities existing therein, were created by plain

tiff for the purpose of providing heusing and conmnunits

services for a stable supply of labor. These villawes are de

eated within the plantation area, and Waialua, the largest

of them, was established in close proximity te the mill. Not

only does plaintiff own the homes, but also the other services

and buildings necessary to community life. the hospital.

gymnasium, parks, playground, clubhouse. The opportunity

to occupy or use any portion of these communities, their

facilities and the dwelling houses therein, has always rested

exclusively with plaintiff. Ingress and egress are subject

to plaintiff's control.

While plaintiff *s employers are not reauired under the

collective bargaining agreement to live in company-owned

74

houses, there is no evidence that they have any real choice

over the matter. The pessibility of purchasing homes of

their own seems to be a remote and rare occurrence; the

unique system of semi-feudal land tenure plays a role. Onl)

to an inconsequential extent is it possible for employees

te rent, at suitable locations near to their places of work,

houses owned by anyone other than plaint ff bt cannot be

assuined to be accidental that, of YoU non-supervisory per-

sons employed by the company, in the period to whieh this

cuit relates, only 16 lived in houses other than those owned

hy plaintiff.

The work done by plaintiff's employees in maintaining

and keeping in proper condition thy housing occupied by

its production workers, is neither trivial nor insignificant

tu plaintiff's business of producing sugar, [t represents &

taterial contribution te plaintiff's production of sugar.

Without the performance of such repair and maintenance

work, plaintiff's housing and village facilities would fall

into disrepair. Its employees would be unable to continue

to eceupy them, and there would be marked interference

and damage to the continuation of production of goods for

commerce. The close relationship between the maintenance

of the mill villages and the production of cane and manu-

facture of sugar, is exemplified by the fact that mill village

riaintenance employees, such as carpenters, painters, and

plumbers, perform their work indiscriminately beth on the

buildings and facilities used by plaintiff to conduct its pro-

duction operations, and on the dwelling houses, Oecupation

by plaintiff's production employees of its housing Is to be

considered in connection with the fact that plaintiff hauls

many of its emplovees from their homes in the mill villages

to and from their job sites. In the operation of its business,

plaintiff has departmentalized its activities; the plumbing

shop and paint shop have personnel comprising intact

croups Who perforin necessary work both on plaintiff's pro

duction buildings and its housing. In the case of carpenters,

all are attached to the carpenter snop, without -egregation

between village carpenters and industrial carpenters, ex-

cept as to timekeeping.

It is in the light of these facts that decision must be

made of the question presented. That question is whether

the work of mill village repair and Inaintenance is “neces.

sary’’ to the production of goods \for commerce. Judge

Healy has pointed out that the term *t produced** is broadly

defined in the Act. Culver v. Bell & Loffland, Ine., 9 Cir..

146 Bid 29, 52. The Supreme Court has said that the word

‘necessary’, as emploved in the Fair Labor Standards

Act, should not be applied in a manner that would give it

an unwarranted rigidity; it is a word **to be harmonized

with its context’’, Armour & Co. v. Wantock, 323 U.S. 126,

IS0-151, 65 S.Ct. 165, 167, SO Liked. 118. The issue there

decided was whether a firefighting service was sufhiciently

necessary to the operation ¢f a soap factory, to entitle such

service employees to coverage under the Act. The Supreme

Court said:

“ ** * no hard and fast rule may be transposed from

one industry to another to say what is necessary in ‘the

production of goods.” What is practically necessary to

it will depend on its environment and position * * *,

What is required is a practical judgment as to whether

the particular emplover actually operates the work as

part of an integrated effort for the production of zoods.

@ * * 2 * « ®

A court would not readily assume that a corpora-

tion’s management was spending -tockholders’ Money

76

on a mere hobby or an extravagance. The companys

dues not prove or assert that this fire protection is so

unrelated te its business of production that it does not

for income-tax purposes deduct the wages of these em

ployees from gross income as Sordinary and necessary

expenses.” ”

(No claim is advanced by plaintiff that its expend!tures

for wages to its employees and for other purposes in the

maintenance and repair of dwellings and village facilities,

are not included in its income tax returns as part of its

expe.ises of operation, 26 U.S.C.A. Int. Rev.Code, § 25a) (1),

“More is necessary to a successful enterprise than

that it be physically able to produce goods for com-

merce, It also aims to produce them at a price at which it

ean maintain its competitive place, and an occupation is not

to be excluded from the Act merely because it contributes

to economy or to continuity of production rather than to

volume of production.’’ Armour & Co. v. Wantock, supra.

(14) Accordingly, the work performed by carpenters,

painters, plumbers, and others was covered, because they

contributed to ‘*The maintenance of a safe, habitable build-

ing’’, A. B. Kirschbaum v. Walling, 316 U.S. 517, 524, 62

S.Ct. 1116, 1120, 86 L.Ed. 1638, which was, in turn neces-

sary to house, maintain, and keep in desired proximity to

plaintifi’s operations, employees whose work involved them

directly in the production of goods for commerce.

Whether since the amendment in 1949 of Section 3()),

such employees are covered for future work, is not here

presented. The sole question for determination deals with

the period between November, 1946, and September, 1947,

which antedates the recent amendments. Hence, decision

- —— ww was i i ee. el _ =.

~

_

here is confined to the Act as it read at the time of the

activities over which the suit has been brought and no in-

timation is intended as to the effeet, if any, of the 1940

amendments of Section 30 )), particularly since the factual

pieture may have undergone change since 1940.

(15) It remains to determine whether the exemptions

of Section 13(a)(6) or 7(c¢) are applicable. For the reasons

heretofore given in respect of employees in the repair shops,

neither exemption applies.

Commingled Work.

There are numerous instances shown of the performance

by a particular defendant, within a single workweek, of

some activities which are exempt under either Section 7(c)

or 13(a)(6), and other activities which are non-exempt. As

a general rule, the engagement by defendants in non-exempt

activities, in those workweeks where this is found to be the

fact, was substantial; and even in those instances where

such engagement was small in amount, it was regular and

recurring.

As construed by the Supreme Court, the statute makes

each workweek the standard to be considered in determining

the applicability of overtime provisions. Overnight Motor

Transportation Co. v. Missel, 316 U.S. 572, 579, 62 S.Ct.

1216, 86 1,,d. 1682. It would be contrary to the Congres-

sional intent to grant the exemption for a workweek in

which the employee performed some activities which Con-

gress intended to be non-exempt. The Administrator has

long held the view that, where exempt and non-exempt a--

tivities are commingled in a single workweek, the entire

week in non-exempt (Interpretative Bulletin No. 14).

a ne i es i ee ee Ee ee

This view has been uniformly sustained in an iuposing

array of decisions. Fleming v. Swift & Co. D.C.y TIL,

41 F.Supp. 825, affirmed 7 Cir, 131 F.2d 249; Walling v.

DeSoto Creamery & Produce Co. D-C.Minn., OL F.Supp.

O38: Shain v. Armour & Co., D.C.W.D.RYy., 50 FeSupp. 907;

Walling v. Peacock Corporation, D.CLE.D. Wis. 58 FL Supp.

S80: Weeks v. Postal Tel, 1 WHE Cas. 1177: MeComb v.

Puerto Rico Tobacco Marketing Cooperative Ass‘n.,

D.CP.R. 80 F.Supp. 953, affirmed 1 Cir, IS F.2d 697; An-

derson v. Manhattan Lighterage Corporation, 2 Cir., 145

F.2d 971, certiorari denied 326 U.S. 722, 66 S.Ct. 27, 90

L.Ed. 428; Jordan v. Stark Bros. Nurseries & Orchards

Co., D.C.W.D.Ark., 45 F.Supp. 769; Walling v. Bridgeman-

Russell Co., 2 WH Cas. 785 (D.C.Minn.); Wabash Radio

Corp. v. Walling, 6 Cir., 162 F.2d 391; MeComb v. Del Valle,

D.C.P.R., 80 F.Supp. 945; Svkes v. Lochmann, 156 Kan.

293, 132 P.2d 620; Gaskin v. Clell Coleman & Sons. 5 WH

Repts. 581 (Ky.CC, Mercer Co., 1942); Loeb v. Ideal Pack-

ing Co., 7 WH Repts. 397 (Wise.CC, Mill Co., 1944).

(16) In the case at bar, there are a few scattered in-

stances where a defendant was assigned to perform exempt

activities for virtually the entire week, but also performed

a non-exempt activity for a small portion of time, some-

times as little as an hour or less. It is in aecord with judi-

cial authority to stand on the plain meaning of the statute,

and to hold the exemption inapplicable, no matter how little

time was devoted in the particular workweek to non-exempt

work. Departure from the statute would create rather than

obviate practical problems, including the problem of where

and at what point to draw the line. The instances where

such a small amount of non-exempt work was performed in

a week which otherwise would be exempt, are few and seat-

79

tered. They do not present a consistent or recurring pat

tern, and it is not claimed by plaintiff that it cannot easily

avoid such situations by assigning the Non-eXempt aetivits

to some other worker who normally performs that Type of

work as a regular part of his duties.

Accordingly, where in any given work-week a defendant

engaged in activities some of which were hop-cXemipt, none

of the exemptions pleaded by plaintiff applies to such work-

weeks despite the fact that nearly all activities performed

therein were exempt.

Retail Exemption.

»

Plaintiff urges that Section 13(a) (2) is applicable to

some of its employees. This section exempts any employee

engaged in a retail or service establishment the greater part

of whose selling or servicing is in intrastate commerce.

Upon the record of this case, it does not appear that any

of the defendants fall within that provision: hence it is

found that Section 13(a) (2) was inapplicable to all of the

defendants.

Liquidated Damages.

In subsequent findings, determination is made that cer-

tain of the defendants are entitied to recover stated

amounts as overtime compensation due and owing tc them.

Defendants seek liquidated damages in amounts equal to

the unpaid overtime compensation found due to them.

The Act provides that any emplover found liable for un-

paid overtime wages, shall also be liable ‘in an additional

equal amount as liquidated damages’’ Section 16(b). In

1947, Congress passed the Portal-to-Portal Act, which con-

80

tains provisions under which liability for liquidated dar

ages, as well as unpaid overtime wages up to May 14, 1947,

may be affeetea. Under Section 9 of that Act, no emplover

shall be subject to any liability, either for overtime wages

or liquidated damages, if he pleads and proves that his

failure to pay overtime was in good faith, im confortmity

with and in reliance on any adiministrative regulation,

order, ruling, approval, or interpretation of any ageney

cf the United States, or any administrative practice or on-

forcement policy of any such agency with respect to the

class of employers to which he belonged: but this is express-

ly limited to claims based on an employer's failure to pay

overtime prior to the date of enactiment of the Portal-to-

Portal Act, which was May 14, 1947.

Under Section 10, a second special defense is provided,

which is more narrowly drawn with respect to the number

or type of agencies of the United States on whose conduct

an employer places reliance. Under this sectior, no em-

plover subject to the Act shall be subject to lability for

overtime compensation or liquidated damages, based on the

emplover’s conduct on or after May 14, 1947, if he pleads

and proves that his conduct was in good faith, in con-

formity with and in reliance on any written administrative

regulation, order, ruling, approval, or interpretation, or

any administrative practice or enforcement policy of the

Administrator of the Wage and Hour Division of the De-

partment of Labor.

A final special defense is created by Section 11, which

gives the court discretion to award no liquidated damages,

or award anv amount thereof not to exceed the amount

<pecified in Seetion 16(0b) of the Act, if the employer shows

to the satisfaction of the court that his act or omission giv-

EOP a ee ae PL Ey a a EL EE ET a oe

81

ing rise to the action was in good faith. and that he had

reasonable grounds for believing that it did not constitute

a Violation of the Act.

(14) Plaintiff, by its pleadings, raised all three of these

special defenses. However, these defenses were abandoned

at the trial; no evidence was offered by plaintiff in support

of these defenses, and nothing was ** proved’ or shown to

the satisfaction of the court’ to support these pleas. In the

absence of evidence to bring into operation any of the men-

tioned special defenses, there is no basis on whieh to deny

full liquidated damages to those defendants who are en-

titled to recover, inasmuch as such is the requirement of

Section 16(b) of the Act.

Costs and Attorney's Fees.

The defendants pray for costs and attorney's fees. The

Act provides that the court *‘shall, in addition to anv judg-

* * * allow a reasonable attorney's fee to

ment awarded

be paid * * * and costs of ‘the action’’. Section 16(b).

(18) The amount of attorney’s fee awarded should bear

proper relationship to the facts of the ease, and should be

reasonable in light of the quantum of service rendered, the

difficulties presented by the problem and issues involved,

and the extent of recovery achieved.

The court will award an attorney's fee which takes into

account the foregoing factors as they relate to the facts of

this case, the occurrence of two trials and one appeal, and

the total reeovery for all defendants, which, including

liquidated damages, amounts to $6,729.02,

Costs of the suit will also be ordered paid to the defend

ants who prevail in this action,

83

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Waialua Agricultural Company, Limited, |

Appellant, | No. 13,114

vs. OPINION

‘: ; May 5, 1954

Ciraco Maneja, et al.,

Appellees,

Appeal from the United States District Court

for the District of Hawaii

Before HEALY, BONE, and FEE. Circuit Judges

JAMES ALGER FEF, Circuit Judge:

This case must be reversed for error in approach.

Waialua initiated the procedure by petition for declara-

tory judgment. The trial court, misled by the nature of

.

the cause and the attitudes of the parties, decided the

wrong issue.

The status of Waialua was tried out. It was contended

by Waialua that it was engaged in agriculture, and

therefore all of its employees were exempt from applica-

tion of the statute. The trial court, in its first declaration,

which was reversed for lack of findings, and in its present

declaration and judgment, took the converse position. It

has held that Waialua, through corporate affiliations, inter.

locking directories and factor relationships, was a manu-

8+

facturer of refined sugar on the mainland, and there en

gaged In interstate and foreign commerce!

By agreement of all parties and the Department of

Labor, the Court finds that all employees of Waialua ex

cept one group? “tare engaged in commerce or in the pro-

duction of goods for commerce.’ Therefore, i was con

cluded that every employee of Waialua on Cahu, Terri.

tory of Hawaii, was subject to the drastic provisions of

the act for each work week in which he did not spend

every employed hour in an activity such as planting, irri-

gating, cultivating, ratooning or cutting and loading cane.*

In pursuit of the fallacy so induced, the Court refused to

describe each emplovee who harvested the crop by re.

ducing cane to raw sugar and molasses, an operation es-

sential to its preservation, as an agricultural worker.‘

Thus the trial court did not give effect to the language

of the statute which excludes from its operation anyone

IThe trial court found that Waialua does not ‘*directly engage

in any sugar refining operation.”” 97 F.Supp. 198, 205.

2This group is composed of employees who perform the work of

repairing and maintaining dwelling houses in the mill village.

These employees the Court found, independently of agreement,

were employed in the production of goods for commerce. 97 F.Supp.

198, 226-232.

3These activities are particularized by the trial eourt at 97 F.

Supp. 198, 219, paragraph [3].

4The trial court, disregarding an express direction of this Court,

allowed the processing exemption, which is beside the point. The

activity was excluded by the terms of the Aet. In its previous

opinion, 178 F.2d 603, this Court stated: ‘Not only was it the

desire to exempt processing as a part of the harvesting done by a

farmer or on a farm, but also processing done by a third party.

These provisions are not alternative or mutually exelusive, and

should be liberally construed for the reasons given by this Court in

MeComh v. Hunt Foods, Ine. 9 Cir, 167 Fi2d 905, 9080 (page

609). The processing exemption, 20 TUS CLA. § 20756). is directed

primarily toward that ** processing done by a third party.” See also

Walling v. Peacoek Corporation, 5S BF oStpp. SSO, 883. Redlands

Foothill Groves v. Jacobs, 50 FusSupp. 995, 1006,

eee ee

“employed in agriculture’ and defines ‘tagrieulture’’ to

include ‘‘farming in all its branches and gmone other

things * * * the cultivation and tillage of the soit, datry.

ing, the production, cultivation, growing and harvesting

* >

of any agricultural and horticultural commodities

* * .

and any practices performed by a farmer or ona

farm as an incident to or in conjunction with such farm.

ing operations, including preparation for market, delivery

to storage or to market or to carriers for transportation

to market.*”

After a remand upon a previous appeal,” on motion of

Waialua, the International Union was eliminated and its

Secretary, Jack Hall, stricken from the defendants. The

representative character of the original proceediag was

also abandoned. The individual workers, most of whom

were retainers and dependents of Waialua although union

members, were permitted to file a so-called cross-com-

plaint, praying for relief in sums of money, and this time

several of these individual emplovees gave testimony as

to the kind of work each did. None of these devices.

adopted to meet criticism of this Court, changed the

fundamental character of the proceeding. The individual

employee cross-complainants still seem ‘*pawns in. this

battle of the demi-gods."* Waialua seems to act. to pre-

929 US.CLA. § 213(a) (6). °* ® * the raising and harvesting of

Suvar were Spee fhe ally viven consider; ation hy Ciuaeress on aecount

of the immense importance to the economy of this country as a

Whole’ Waialua Agricultural Company, Limited. v. Maneja, 4

(ir. 178 F.2d 608, 60S, paragraph [6-8].

629 US.C.A. § 203(f).

‘Waialua Agricultural Company, Limited vo Maneja, 9 Cir. 17s

2d 603, eert. den., 339 US. 920,

86

serve relations with the Union and a federal burean, as

a policy. Practically all facts are agreed and, as above

noted, constitutional and jurisdictional conclusions as to

coverage were accepted. Thereby, emphasis was placed

upon the wrong problems.” This conjugation by consent

removes the cause from the class of ‘‘eases and contro-

versies’’ and is an abuse of declaratory judgment) pro-

cedure. The only bitterly partisan litigant is an executive

bureau not named in the record as a party. Notwithstand-

ing a plain warning of this Court upon the last appeal

that such evidence was impertinent to the whole question

as to whether the individual employee was an ‘‘agricul-

tural worker,’’ the parties introduced at this trial and the

Court adopted as a basis for decision two treatises. These

were entitled, respectively, ‘‘Labor in the Territory of

Hawaii, 1939’? and *‘The Economy of Hawaii in 1947,’!

studies made under the supervision of a department of the

government, which, as noted above, took an active part

not only in the trial court, but on both appeals.

Thus a false issue was created. Instead of concern with

the question of who was employed in agriculture, the at-

tention of the Court was deflected to a consideration of

8&The suggestion of the trial court in one opinion that the exela-

sion of agriculture would free farmers from the “oppressive ehild

labor’’ provisions of the Act need not be too much regarded. Such

a preblem does not exist. And we have eome a long way from

sound thinking in America if it be suggested thet a farm boy

should not work on a farm. Of course, the bureaucrats could take

much better care of him.

*James H. Shoemaker, U.S. Bureau of Labor Statisties. United

States Government Printing Office, 1940,

MBulletin No. 926, United States Department of Labor, United

States Government Printing Office, 1948.

87

membership of Waialua in a non-protit sugar refining and

marketing cooperative called “‘Califtornia & Hawaiian

Sugar Relining Corporation, Ltd.) of California, ‘vhich

Was engaged in the manufacturing business of retining

raw sugar, marketing the product, and transporting the

refined sugar to the consumers.'' But all the activities of

the latter were carried on upon the mainland. Ne ove of

its employees is here involved. None of the workers of

Waialua was employed by the cooperative.

1A similar comention was made by the Administrater of the

Wage and Hour Division, as a bitterly partisan litigant under the

guise of amicus curiae in Miller Hatcheries, Inc. v. Bover, & Cir.,

131 F.2d 283, 285, where Judge Johnsen, in an illuminating opin-

ion, held that employees of a commercial hatchery were exciuded

because ‘‘emploved in agrieulture.”" There the Administrator con-

tended ‘‘that the hatching of baby chicks by a commercial hatchery

is an industrialized and highly specialized avetivity which does not

itself have any direct connection with ‘farming operations’; that

the economic function of such an urban establishment is completely

disassociated from the avricultural activities,’ that ‘‘thus trans-

posed from a farm to a commercial establishment it ceases to be a

technical tarming activity’’ and that ‘‘the attributes of farm labor

which justify its exe!usion * * * ought not to be regarded”’ as ex-

tending to a commercial operation.

This compares with the contentions of the Administrater here :

“To accomplish its purpose of producing raw sugar, appellant

plainly engages in many separate and distinet enterprises appro-

priate to that end, including manufacturing and transportation, as

well as farming. This integration of business operations neither

conceals the essential non-agricultural character of appellant's

manufacturing fanetions por submerges the faet that appellant, in

operating a hybrid type of business, has assumed the funetions of

a manufacturer and a railroad company, as well as those of a

farmer. * * * Just as the chain store cannot obtain the retail ex-

emption for its central office and warehouse merely because the

services of those units are restrieted to exempt retail outlets, se

here, appellant cannot achieve exemption for its separate manu

facturing funetion and its railroad activities simply because it

utilizes them only for the produets of its farm.”’

88

Tf the pertinent question of emplesment in farming had

been considered instead, then the language of the statute

defining such emplovees would have been given effect.’

The decisions of this Court bear out the breadth of the

exclusion of agricultural workers. Dofflemver v. Na-

tional Labor Relations Board, 9 Cir., 206 F.2d S15 (Judge

Healy) shows that technical distinctions should net be

used to circumscribe the words ‘*farmer’’ and **farm ” as

used in the Act. The necessity for immediate processing

of a farm product is of great force in enphasizing the

scope of the agricultural exclusion, according to Judge

Bone, writing for the majority in McComb v. Hunt Foods,

9 Cir., 167 F.2d 905, where the interpretations of three

different district courts in widely separated agricultural

areas of the mainland are followed. There the Court said:

‘**The policy of protection to the growers of ** perish-

able and seasona: fresh fruits’’ is of as much force

as that of the protection of general industrial workers.

The objective of a uniform rule for hours and wages

in manufacturing should not be allowed to prevail

over the paramount necessity of garnering and pre-

serving fruits and grains when Congress equally

recognized both in the Act. The hypertechnical rea-

soning concerning ‘‘exceptions’’ and ‘‘exemptions”’

12—n an interesting ease parallel to this in another food suppiy-

ing industry, the Court of Appeals of the Third Cireuit held, in an

able opinion by Judge Maris, that all employees necessary to carry-

ing on a fishery and fish processing activities were ““exempt by the

plain language of Section 13(a) (5) of the Jet.” MeComb v. Con

solidated Fisheries Co., 3 Cir., 174 F.2d 74, 78. It should be marked

with red on the margin of this ease that the Administrator was

there contending that all emplevees of a farmer, including those

engaged in first processing. were excluded by the language, but

that the exemption to fish processors was much narrower

89

has no place tere. A) direct expression of non

applicability, constitutes meither.’

This ts but another way of saving that i the busi

hess operations clanoed te be exempt are found te

fall within the exempt clas-ilieation, the statute is, as

to them, a ‘remedial’ statute. We agree with th

lower court that no formalistic charneterization should

be permitted im dealing with ans of these clauses

since the plain intention of the statute should be car

ried out.”" (page (6),

The trial court was thus in error in requiring Waialua

to prove bevond peradventure the affirmative of the prope

sition that each worker was emploved in agriculture and

in activities by a farmer ond on a farm. By an anwar

ranted|ly strict construe va. Waialua was required te

establish exemptions bevond a res-onable dowbt. as theugh

it were negativing a jurisdictional previse in an indict

ment.

Upon the former appeal, to which reference hi heen

made, the Court questioned the aptness of the declarators

proceeding, but remanded because the findings were net

sufficient to suppert any judgment. The findings before

Us are now meticulous and exact as te the hours and tyym

of work performed by each worker defendant during each

werk week in question, However, the trink court) fathed

to find many vital facts which the record, as we view 1,

bears out, and made many findings which are clearly erro

neous. For these reasons alone, the cause must be re

versed.

A vital finding contains the iupleation that sugar cane

ean be stored in Licawaatl thie Cao | four divs without ~poonl

90

ing.'* In fact, a delay of three or four hours is apparently

deleterious, and for best results the cane, after cutting,

should move continuously from field to crushing mill.'!

The Court concludes that no worker at the crushing mill

is emploved in agriculture but is exempt only insofar as

he assists in first processing. If necessity for immediate

treatment for preservation had been found, the Court

would have been impelled to find an employee at the mill

was engaged in “‘harvesting’’ an agricultural product.

Te Court found transportation of cane from fields to

cars was farming, but carrying of cane on cars drawn by

a locomotive from loading points to the mill was ‘*rail-

roading’’ and transportation in) commerce. Again, the

railroad and its crew performed no other kinds of trans-

portation, and therefore what each did was ‘*harvesting.”’

The complete operation was vitally necessary to put the

crop into a form in which it would not spoil and, as **raw

sugar,’’ could be transported to the mainland for manu-

facturing. Any activity of any emplovee which assisted in

this operatton, whether furnishing power to the null or

hauling cane from ‘ield to mill, fell within the express

word ‘‘harvesting’’ used in the enactment. Sach a finding

was net made Those -chich were made were erroneous.

Even if it could have been concluded that these activi-

ties were not “‘harvesting,’” they were nevertheless car-

1397 F Supp. 19s, 205.

4° Sugar cane is highly perishable * ® * and starts to deteriorate

immediately after harvesting Te avoid serious losses it moist be

proeessed into sugar, svrup oor molasses within a few hours after

it nas been burned or severed from the ground." Stipulation of

Fact, Part I, § 4.

91

ried on by a ‘tfarmer.’') Furthertiore, such activities

were performed ‘ton a farm.’* On either of these in-

dependent grounds, workers so emploved were excluded

by the enactment.

But the Court failed to find chat Waialua was a

farmer.'® The record and stipulations show coaclusively

that all activities of Waialua upon the island of Oahu

were concerned with growing, cultivating and harvesting

sugar cane, It should have been found that Waialua was

a farmer, and all workers performing functions for it on

the plantation were employees of a farmer. It should

have been found that transportation of cane to che mill

and the crushing and drying of the raw sugar therefrom

Were activities performed by a farmer as ineidents to and

in conjunction with farming operations, including harvest-

ing, preparation for marxet and delivery to storage. Find-

ings of fact which have contrary implications are clearly

erroneous,

The trial court also found neither railroad nor crush-

Ing mill were “ton a fart.’ The admissions, maps and

MEmplovees of a farmer’? who work in or out of a store, trans-

porting, packing and seUing plants in conneetion with a wholesale

and retail outlet loeated in a citv four miles from: the ‘‘ farm’? are

held to be emploved in agriculture. Walling v. Rocklin, S Cir, 132

Pld 3. The raw products were at most being prepared for

market im eonnection with the business of produeing them.”

(page 6).

The trial court held, contrary to the stipulations and evidenee.

that Waialua ‘assumed a variety of funetions, ineludinge those of

farmer, carmes, manufacturer, shipper, and operator of village

communities" O87 FoStunp. TOs, 27s.

The trial eonrt annarenthy confines the meaning of the word

farm’’ te the fields upon which cane is actually grown, for it is

pomtediy said ii the opinion, Obviously eane is not grown on

the right-of wav oeenpied by the ttvesix miles of permanent main

line railroad track.’” 97 FoSupp. 198, 2220 Cane probably does

net grow on roads where ox teams hauled cane,

fe

92

other exhibits indicate all the activities of employees of

Waialua were carried on within the boundaries of a single

parcel of land described as a **plantation.”’

The railroad and the mill’* were located upon a plot of

ground and appurtenances all of which were in exclusive

possession of Waialua. Practically all the area was also

in its ‘‘ownership,’"” although some acreage was leased

and one field was connected with the main body by a right

of way for moving its agricultural equipment, supplies and

sugar cane. By far the greater percentage of the ground

in the area was devoted to raising and harvesting of sugar

cane in a year round process as an integrated operation.

This situation dictates that the locus in quo be found to

be a ‘‘farm.’’?°

If then the particular activity of an employee was

neither ‘cultivation and tillage of the soil’ or ‘‘the

roduction, growing and harvesting’’ of this crop, he was

’ rad 5 ]

18The trial court’s opinion states that the mill was on the planta-

tion. 97 F.Supp. 19s, 204.

19}iseussion of the peculiar land system of Hawaii is not neces:

sary.

20National Labor Relations Board v. John W. Campbell, Ine., 9

Cir.. 159 F2d 184, 187: **The argument that Respondent has 1,000

acres planted in tomatoes and grows, packs and markets many ear-

loads in a season and, because of the very nature and size of its

operation, should be held to be engaged in an industrial enterprise

as distinguished from the pastoral pursuits of a farmer, will not do.

The exemption was not restricted to the forty-acres-and-a-mule

farmer. It is not measured by the magnitude of his planting nor in

the prolifieaey of his harvest. In Larson v. Ives Dairy Co, 5 Cir,

154 F.2d 70], 702, we said: ‘Here, however, there is but a single

enterprise, and that a dairy farm, * * * The size of the farm, of

course, does not matter--it is still a dairy farm.” Here, also, the

growing, harvesting, packing and selling are all a part of a single

enterprise.’

93

engaged in a practice performed ‘*by a farmer or on a

farm’’ under the conditions set up in the statute?!

Misled by the apparent wholehearted agreement as to

the constitutional and jurisdictional conclusion regarding

preparation of goods for commerce, the trial court: in-

ferred that a worker engaged in any operation or practice

which was considered not farming by the strictest celassifi-

cation was covered by the enactment. We emphasize that,

if it had been fceund that reduction of cane to raw sugar

or molasses almost immediately after cutting is an Impera-

tive necessity, the palpable falsity of such sequela would

have been patent. The integrated operation required mak-

ing of repairs on the crushing mill while shut down for

three months for that purpose, the repair and overhaul of

the various machines used in eultivating, eutting and haul-

ing, and the furnishing of power for the mill, including the

hauling and burning of bagasse** in the furnace thereof.

In order to show how obviously it was on the wrong

path, it may be observed the trial court concladcd em-

21°*(ongress, as well as this Court, has recognized that the pack-

ing and preparing of agricultural products for the market is a

necessary incident to any agricultural operation, for no farmer, de-

pendent upon that which he produces to sustain his operations,

could long exist if he could not market that which he produces, and

so long as the operation of washing, packing, and preparing for

market by the employees of a farmer is on that only which he has

produced on his farm, it is a necessary incident to farming and ts

agricultural labor. The wheat farmer must thresh his wheat, the

cane grower must cut his cane and make its juice into syrup: the

cotton grower must gin and bale his cotton; the citrus grower must

piek and pack his oranges: and the tomate grower must do likewise.

So long as these undertakings are in the preparation and packing

by him for market of that which he has grown on his farm, the

labor neeessary thereto is agricultiival labor.” National Labor Re-

lations Board v. John W. Campbell, Ine. 4 Cir, 199 Fold Ps4. 187

‘emphasis added).

22The end residue of the cane after abstraction of the juices.

94

ployees assisting in repairs and maintenance of houses,

the operation of services and facilities of villages on the

plantation, where seme of these agricultural workers lived,

including the street sweeper and those who picked up

wood for cook fires, were engaged in the preparation of

goods for commerce. In this conclusion, which even the

Department of Labor does not attempt to defend in its

current argument, the trial court betrays emotional aver-

sion for the semi-feudal relationships which still exist in

a dependency where the perquisite system abolished by

Waialua under pressure still exists*®. The fact that some

of the retainers have lived in these houses of the overlord

for life or for more than forty-five vears** is not good rea-

son to apply the Fair Labor Standards Act, even if this

Court also disapproves of the cendition.

The furnishing of housing and facilities for a purely

agricultural community is local in its nature.*?® Perversion

of concept

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