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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA04386408_0124%3A02

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix to Petition for Writ of Certiorari
- **Published:** January 1, 1955
- **Citation:** 349 U.S. 254

## Text

LIBRARY
SUPREME COURT, U.&

In the Supreme Court

toh Pdtd

United States

Y ‘e Vika Tapso W
hori Onoren T. i Hn formxerge A.
CION, Rogtr Crisonrowe. Dy pk Tho weer 4h:
rst KE Spa, Tantur Onorem: Penreo Preow
Bernane Hersaspez. Dowco Gren |
“ERE Whoxpo, Tercrom Koeo Mascaro. Sree
UME, Arion Lavoe, Goons Hasaaora De
Nie1O CARKIT, Spraviine Roperco. Taste Tas

BaRxey Fariv, Foaao Suxvasns. Hirosvsne 7
KATA, Anerep Rievirer, Masante Evawa. Pawn
(LAUNAN, Antone Ropes co, Yosunmar Yawapy. Ep
WIN Mort, Genco Tox .una, Jimo Sagkar VM
GARETT Fropwars. Loos Pacupeco, Yuwie Tei
sen Yack Cnes Ler, Emo Sanacrenn Yoo
PieNanprz, and Tosiie Kost wipers.

PALA Maree rey ' 11
Bes,
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.

;
if
’
}
i!

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

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA04386408_0124%3A02. Public record. Not legal advice.