Brief for Petitioners Ciraco Maneja et Al — Maneja v. Waialua Agricultural Co.

LIBRARY Fix.

SUPREME COURT. U.&

Iu the Supreme C

eichinmeasibiitens a

OF THE

Rnited States

October Term, 1954

Nos. 357 and 358

<

Crraco Manes et al.,

Petitioners,

Vs.

WataLua AGRICULTURAL Company,

LrMIrep,

Respondent.

Watacva AcricuLturaL Company, i

LrMITED,

Petitioner,

vs.

Crraco Manesa, et al.,

Respondents.

alesis J

* BRIEF FOR PETITIONERS,

CIRACO MANEJA, ET AL.

RicHarp GLApsTEIN,

NorRMAN LEonarp,

240 Montgomery Street, San Francisco 4, California,

Attorneys for Petitioners

Ciraco Mane ja, et al.

Ewine Srpsetrt,

240 Montgomery Street, San Francisco 4, California.

Of Counsel.

Subject Index

Page

EE area cau deine agen pe otek ance Mee 1

ee RE ie ee Pe ee ae eatery ee RUC wee 2

UC BI eben een Gs eu ck Bue ge 2

Pere Perey oe etre) Pam nee re 5

EE Sead ud cae + our g 4 hice Waxes DEK ERW ewe 4c caxa 7

ee Se I eos yiedade sou vavessec ikl cedeeeen 19

RE oars Oe rk Ce ee ee eee ee 23

I. The holding of the court below that none of petitioners

If.

IT.

IV.

VI.

was engaged in commerce or in the production of goods

for commerce is erroneouUS........... cece ce cee ceca

The agricultural exemption does not apply to (1) the

repair dnd maintenance men in the carpenter, plumb-

ing, electric, welding and other shops, and (2) those

employees who operate and mainiain the company’s

a GP Be WRT HMO. cos nici oe vce veencnseeues

The processing exemption does not apply to those em-

plovees (1) who operate or maintain the company’s

main line railroad, (2) who work in the various gen-

eral repair shops, (3) who generate steam and electric

power, and (4) who repair and maintain the mill in

Be SEE OIT TE Py Te ee SHY Py Pew nee ei rare

The village maintenance employees are engaged in the

‘‘nroduction of goods for commerce’ and, since they

are not otherwise exempt, were correctly held by the

District Court to be included within the coverage of

ee cue eae chaos ee CURSES ERNST E EV ERS

. When an employee in a given workweek performs some

work exempt under Sections 13(a)(6) or 7(¢) and

some not so, er otherwise, exempt, he should receive

the overtime benefits of the Act..................45.

There is a real controversy between the parties con-

cerning the applieability of the Aet to the employees

here involved. The cause is in nowise collusive and is

23

29

47

§1

71

8

a counterclaim under Section 16(b) of the Act to recover

for themselves and ‘‘others similarly situated’? unpaid

overtime compensation, liquidated damages, costs and

attorneys’ fees. By stipulation and order the original

trial was limited to the issues raised by the complaint

and answer, and the trial of the issues raised by the

counterclaim and the answer thereto was deferred. The

issues thus raised by the initial pleadings concerned the

scope of the agriculture exemption contained in Section

15(a)(6) of the Act and of the sugar processing exemp-

tion contained in Section 7(c).

After the tris! the District Court held that with certain

exceptions the overtime pay provisions of the Act applied

to the defendant employees. (77 F.Supp. 480.) The Court

of Appeals questioned the appropriateness of an action

in declaratory relief or of a representative or class suit:

held the findings were inadequate as to the precise activ-

ities of the individual emplovees and their connection

if any with interstate commerce and as to the exact hours

and workweeks involved; and remanded the cause for

further proceedings. (178 F.2d) 605.) The company’s

petition for writ of certiorari was demed by this Court.

(339 US. 920.)

In conformity with the deeisien of the Court of Ap-

pedals, the pleadings thereafter were ainended to eliminate

the representative or class action aspects of the case

and the union and its offieral were dismissed as parties

defendant. The niteber of ei dovee defendants actualts

involved was reduced te forty two nme the period 1?

controvers\ was specifically limited to the time between

ll SusJect InpEx

Page

ripe for complete determination by this court at this

SE 6 cRid as Lee UNSC RdEM es COUN KON EWES SRE Racha Ns6 75

A. There is a real controversy between the parties

concerning the liability of the employer to pay

overtime compensation pursuant to the provisiuns

of the Fair Labor Standards Act............... 76

B. The enue te mot COTIMIIUO. .. cc cccceedccevesvecere 78

(. The entire controversy is ripe for disposition by

re Lo ce Eee bas eee aan ere ee 81

| SPL OSE DLR L EAE D LR PDI SGP CRETE OF St EEE Wea 83

9

November 20, 1946 and September 14, 1947. On the

second trial the issues raised by the counterclaim, as

well as those raised by the complaint, were tried. The

employees thus sought specifie nmioney judgments for un-

paid compensation for work in excess of 40 hours per

week. The company sought to avoid the statutory pro-

visions for overtime pay, claiming that it was exempt

from these obligations by virtue of Sections 13(a)(6) and

7(c) of the Act.

The record made at the seeond trial consisted of the

testimony of twenty-two of the emiplovees involved, the

testimony of Waialua’s general manager, numerous ex-

hibits, and a comprehensive stipulation of undisputed

facts. This stipulation set forth in great detail the

various and varied operations of the company and the

tasks performed by each emplovee in connection there-

with, hour by hour, and week by week during the period

involved. The twenty-two employees testified concerning

the work performed by each of them individually and

personally in the vast enterprise conducted by the com

pany, and the general manager testified as to the depart

mentalized nature of the business and generally substan

tiated the stipulation. Thereafter the parties briefed and

argued their opposing interpretations of the statutory

provisions involved,

Detailed findings of fact were qnade by the District

Court with respect to all of the issues presented. CR. To0

U4: see OF hoSupyp. at JOEZIES.) As contrasted with ats

eriticism of the findings made at the first trial. the Court

of Appeals described the findings now before this Court

in this wav:

Table of Authorities Cited

Cases Pages

Abram vy. San Joaquin Cotton Oil Co., 49 F. Supp. 393

ee ie ee SUR eens ds ow ce bu ode owes 60

Addison v. Holly Hill Co., 322 U.S. 607........0..0..0..... 74

Aetna Casualty & Surety Co. v. Flowers, 330 U.S. 464..... 83

Aetna Life Insurance Co. v. Haworth, 300 U.S. 227........22,77

Aistate Construction Co, v. Durkin, 345 U.S. 13........... 25, 43

Anderson vy. Manhattan Lighterage Corp., 148 F.2d 971

ee ec Os GO, WA, BOB cc ccecneesvcchucseusc 72

Armour & Co. v. Wantock, 323 U.S. 126.................. 70

Bay Bridge Operating Co. v. Aaron, 334 U.S, 446......... 21, 73

Borden Co. v. Borella, 325 U.S. 679................ 21, 64, 65, 66

moter ©. Wee, Get OF. BBB. .c occ ccccccievcoccecces 79

Bowie v. Gonzalez, 117 F.2d 11 (CA 1)...... 20, 27, 42, 43, 46, 80

Bridges v. United States, 345 U.S. 904 and 345 U.S. 920... 82

Brooklyn Savings Bank v. O Neil, 524 U.S. 697........... 65

Calaf v. Gonzalez, 127 F.2d 934 (CA 1)...... 20, 27, 41, 42, 44, 54

Collins v. Kidd Dairy & Ice Co., 5 Cir., 132 F.2d 79....... 56

Consolidated Timber Co. v, Womack, 132 F.2d 101 (CA 9)

Pe Pe eee ee RRO nee ny es ae ae eee 21, 67, 69, 80

Cottmmg v. Goumert, 165 U8. FB. . ioc cc cccswtecccsess 7

Culver v. Bell & Loffland, Inc., 146 F.2d 26 (CA 9)....... 69

Davis v. Goodman Lumber Co., 133 F.2d 52 (CA 4)....... 21, 56

Dennis v. United States, 340 U.S. 863 and 341 U.S. 494.... 82

Dodge v. Woolsey, 18 How. 331................0 eee eeeee 78

Durkin v. Budd, 114 F.Supp. £55 (N.D. Fla.)............ 27

Farmers Reservoir & Irrigation Co. v. MeComb, 337 US.

DG caeueds Reveke Wks avwesn 19, 20, 22, 24, 26, 34, 36, 37, 78, 80

Ferguson v. Prophet Co., 6 W.H. Cas. 284 (S.D. Ind.)..... 69

Fleming v. Swift * Co., 41 F.Supp. 825 (N.D. ILL), aff'd

Se OS co cds Saves tiv abeeetheeees avn 20, 51, 73

Heaburg v. Independent Oil Mill Ine., 2 W.H. Cas. 655

Ce aes oleae wee de Cueva hee eee hake wees 60

Hanson v. Lagerstrom, 133 F.2d 120 (CA 8)..............21, 68

10

“The findings before us are now meticulous and

exact as to the hours and type of work performed

by each worker defendant durin’ each work week in

question.”’ (210 F.2d at 471.)

These findings contain, as te each employee in each of

the workweeks in controversy dering the period of time

covered by the litigation, a detailed deseription of the

work performed by the employee, the number of hours

worked by him, his regular hourly rate of pay, whether

he had received overtime compensation for hours of work

in excess of 40, whether he was exempt under either

Section 13(a)(6) or Seetion 7(¢), and the amount of

unpaid overtime compensation, if any, which the company

owed him.*

The ‘*meticulous and exact’’ findings of the District

Court show that:

Waialua operates a sugar plantation on the island

of Oahu in the Territory of Hawai, engaged in the grow

ing. cultivating, and harvesting of sugar cane; It operates

all at which it processes the sugar cane into raw sugar

and molasses, at which it bags the raw sugar, and from

which it loads and ships the raw sugar to the refinery

in the United States. From the mill it alse loads and

ships molasses in bulk to the United States,

Waialtue is the third largest producer of raw sugar

in Hawaii and in the vear prier to the suit) produced

over SOOO tons of raw sugar. At the time of trial

'Appended hereto are detauied exeerpts from the trial court's

firedings as to each employes

‘The Territor tse! predices between TO, waned Dee of the

world s sugar supply.

iv TABLi OF AUTHORITIES CITED

Pages

Jewell Ridge Coal Corp. v. Loeal 6167, 325 U.S. 161....... 77

Jordan v. Stark Bros. Nurseries & Orchids Co., 45 F.Supp.

ee a Ne nnebeakake seas 73

Kirschbaum v. Walling, 316 U.S. 517.....................

Pek eden otek sok aeat ieee 19, 21, 22, 23, 25, 30, 64, 66, 67, 79, 83

ee ae |0|U!!COeUU OS Oe ee ee &3

Lord v. Veazie, 8 How. 251. .......cccececccecceccceveres 22, 79

149 Madison Avenue Corp. vy. Asseta, 331 U.S. 199........ 79

Maisonet v. Central Coloso, Ine., 2 W.H. Cas. 753 (D.

EP ee a re Sa ek eb WS ERNE ORNATE NS WARE ONS 21,58

Mandeville Farms v. Sugar Co., 334 U.S. 219............. 78

Markham v. Cabell, 326 U.S. 404, 66 S.Ct. 198............ D6

Martino v. Michigan Window Cleaning Co., 327 U.S. 173...21, 6%

Maryland Casualty Co. v. Pacifie Coal & Oil Co., 312 U.S.

MeComb vy. Del Valle, 80 F.Supp. 945 (D. P.R.).......... 73

McComb v. Factory Stores Co., 81 F.Supp. 403 (N.D. Ohio) — 69

McComb v. Puerto Rico Tohaeco Marketing Co-Op Ass'n,

80 F.Supp. 953, (D. P.R.), aff'd 181 F.2d 697 (CA 1)... 73

Mulford v. Smith, 307 U.S. 38................4.. 19, 22, 24, 26, 78

NLRB v. Pittsburgh Steamship Co., 337 U.S. 656.......... 83

North Shore Corp. v. Barnett, 143 F.2d 172 (CA 5)....... 72

Northwest Airlines v. Jackson, 185 F.2d 74 (CA 8), cert.

es Se rs coco hee ce eeeenureh beets aaeeteveves 21, 56

Overnight Motor Transport Co. v. Missel, 316 U.S. 572..... 21, 71

Pepeckeo Sugar Co., 59 N.L.R.B. 1532........6-6 0.00000 46

Partmar v. Paramount Pictures Corp., 345 U.S. 963....... 82

Phillips v. Star Overall Co., 2 Cir., 149 F.2d 416.......... 56

Phillips Co. v. Walling, 324 U.S. 490............ 23, 36, 37, 84, 86

Powell v. United States Cartridge Co., 3389 U.S. 497....... 74, 85

Protective Committee v. Securities Exchange Commission,

ee SE OS Ie o Sas hd eos tee beeen eater eee’ 81

Puerto Rieo Tobaeco Marketing Corp. v. MeComb, 181 F.2d

Oe Ce BR ic co vce adeds ches dee beeeesteendeek ses 79

Railway Mail Association vy. Corsi, 326 U.S. 88. ........-.. 77

Roland Electrie Co. v. Walling, 326 U.S. 657..............

23, 25, 28, 56, 79, 85, 86

pPeaeeoeees beers eecuveecene eevee oae ence eevee oreoe ©

11

the company was producing sugar cane on 9.663 acres

of land, all owned by it. There were 1,144 persons in its

employ on September 1, 1946.

To transport the sugar cane from the fields to the plant

where it is manufactured into raw sugar, Waialua uses

its own modern railroad system consisting of 36 miles

of railroad track, 10 locomotives, ard 712 cane ears. A

complete roundhouse is maintained for servicing this

equipment. The investment in this railroad system

amounts to nearly $800,000, The inen emploved on this

railroad system are typical railroad employees engineers,

repairmen and section hands.

The manufacturing plant and mill is highly mecha-

nized, consisting of a cane cleaning plant, a cane crushing

room, a boiling room, and a bagging room. This plant

is located in a vard area separate and distinet fron

the growing fields. [It is an industrial tye plant with

efficient modern machinery adapted for the purpose of

converting sugar cane into raw sugar and piolasses. Dan

ing the approximately three months of each vear when

the plant is closed down for repairs te machinery, no

processing operations are conducted.

Waialua also maintains complete and physically sep

arate warehouses and shops for the repair and overhaul

of field equipment, mill equipment, and equipment used

in servicing Waialua Villagwe, the town maintained bs

respondent toe house its emplovees.° The shops include

At the time of trial, the village consisted of S20 houses, al!

owned by respondent together with busmess establishments meces

sary to serve the COMPANIES (%; the basis of @ eensu< whieh

was compieted dume J Tht. thy S20) houses om the plantation

TABLE OF AUTHORITIES CITED v

Pages

Rutherford Fvoed Corporation v. MeComb, 331 U.S. 722

Sa ue a wai hd ee haa eee eae dese _. .19, 22, 25, 26, 74, 84. 85

Santa Cruz Fruit Packing Co. v. N.L_R.B., 308 U.S. 453... 22. 7s

Shain v. Armour & Co., 50 F.Supp. 907 (WLD. Ky. 21.55. 73

Takenaka v. Waialua, D.C. Haw. No. 640. ye 5

Tennessee Coal ete. Co. v. Museoda Lodge, 321 US 590) | 22.77

United States v. Amevican Trucking Ass'n, 310 ULS. 334. Os

United States v. Ballard, $322 U.S. 78...... s3

United States v. Butler, 297 U.S. 1.0... ere ea

United States v. Darby, 312 U.S. 100.0)... _... 19, 23, 2h, 84

United States v. Wrightwood Dairy Co, 315 U.S. 110.0... 26, 7™

Vives v. Serralles, 145 F.2d 952 (CA 1)............... 20,42, 44

Wabash Radio Co. v. Walling, 162 F.2d 391 (CA 6)... 21. 57,78

Waialua Agricultural Co. v. United Sugar Workers, 114 F.

NE nt Gh o's nok ke bance eae eee ve wea ea

Walling v Bridgeman-Russe!] Co., 2 WH. Cas. 785 (TY

SGN. a0 vabieneah cothed £06 anessitehuseheenaen 21, 52.55, 73

Walling v. Connecticut Ce., 154 F.2d 55 -CA 2)0000. | 24,55

Walling v. DeSoto Creamery & Produce Co.. 51 Fo Supp.

et eS errr peer er ere ere ..21, 73

Walling v. Jacksonville Paper Co., 317 US) 564. 19, 25, 30,56. 75

Wailing v. Peacock Corp., 58 F.Supp. ss0 (ELD. Wis. 73

Walling v. Peoples Packing Cu, 10 Cir, 132 F.2d 256... nti

Warren-Bradshaw Drilling Co. v. Hall, 317 US. &s. _. 25, 72

Western Union Telegraph Co. y. MeComb, 165 F.2d 65 (CA

a ee, S, Se w so doe 2 sae nnee nde eased - 57

Wickard v. Filburn, 317 US T11.... ..... 89, 22, 24, 26, 78

Womack vy. Consolidated Tim. €o., 43 F.Supp. 624 (D.

OS cdvccbosesees sear te40iibs4s04sbleaee eee 67,80

Wvatt v. Holtville Alfalfa Mills, 106 F.Supp. 624 (SD).

ES og Oboe wek ads areca ake tews ee Beane ea eeee 27

Statutes

Agricultural Adjustment Aet, 52 Stat. 31, 7 USC 1281 2h

Agricultural Marketing Agreement Act of 1937, 50° Stat.

i ok re reer mene meer ere” 26

4

who is engaged in commerce or in the production

of goods for commerce—

(3) for a workweek longer than forty hours

unless such employee receives compensation for his

employment in excess of the hours above specified

at a rate not less than one and one-half times the

regular rate at which he is employed.

‘“(c) In the case of an employer engaged in the

first processing of milk, whey, skimmed milk, or

cream into dairy products, or in the ginning and

compressing of cotton, or in the processing of cot-

tonseed, or in the processing of sugar beets, sugar

beet molasses, sugarcane, or maple sap, into sugar

(but not refined sugar) or into syrup, the provisions

of subsection (a) shall not apply to his employees

in any place of employment where he is so engaged;

S13. Hxremptions.

‘*(a) The provisions of sections 6 and 7 shall not

apply with respect to... (6) any employee em-

ployed in agriculture; ...

“S16. Penalties; civil and criminal liability.

“(by Any employer who violates the provisions of

section 6 or section 7 shall be liable to the employee

or employees affected in the amount of their unpaid

minimum wages, or their unpaid overtime compensa-

tion, as the ease may be, and in an additional equal

amount as liquidated damages. Action to recover

such hiability as may be maintained in’ any court

of competent jurisdiction by any one or more em-

plovees for and in behalf of himself or themselves

and other employees similarly situated, or such em-

4)

ployee or employees may aesignate an agent or rep-

resentative to maintain such action for and in behalf

of all employees similarly situated. The Court. in

such action shall, in addition to any judgment

awarded to the plaintiff or plaintiffs. allow a rea-

sonable attorney’s fee to be paid by the defendant,

and costs of the action.’’

QUESTIONS PRESENTED.

Petitioner Ciraco Maneja and the forty-one other peti-

tioners are employees of Waialua Agricultural Company,

Limited, a corporation. Waialua is located in the Hawai-

ian Islands where it engages in the large scale production

of sugar cane. This it manufactures into raw sugar

which is then exported to the mainland. At Crockett,

California, the sugar is refined in a plant which Waialua

and thirty other Hawaiian sugar producing companies

own through the medium of a cooperative association.

Thereafter the Association markets the sugar and dis-

tributes the profits of the entire operation to the member

companies substantially in proportion to the amounts of

raw sugar each delivers to the cooperative,

Prior to the imstitution of this suit. there had heen

other litigation respecting the application of the Fan

Laber Standards Act to the company’s emplovees. The

earlier case Was settled by a stipulated judgment im faver

af the employees entered before trial (Take naka ov. Waid

lua ULC. Taw. No. 640).) “Phe comtroverss continued,

however, amd im 47 the companys, civeking the juris:

«hy

prParceeadinige Gruss

tion of the Distriet Court Svecsnius

6

under an Act of Congress regulating commerce (see 62

Stat. 931; 28 USC 1337), brought suit for a declaratory

judgment (see 62 Stat. 964, as amended by 65 Stat. 105;

28 USC 2201) to resolve and terminate the controversy.

The employees counterclaimed under Section 16(b) of the

Fair Labor Standards Act, seeking compensation for un-

paid overtime work claimed due them under the provisions

of the Act.

This case was tried twice, the first trial resulting

in a remand to the District Court. Upon the last trial,

the District Court entered judgment for the employees

on the counterclaim. On appeal, the Court of Appeals

reversed.

The employees petitioned for certiorari. The question

presented by the employees’ petition (No. 357) is whether

the Court of Appeals erred in reversing the judgment

rendered on the counterclaim. Broadly stated, it is

whether and to what extent the company is exempt from

the overtime pay provisions of the Fair Labor Standards

Act of 1938. Directiv embraced in this question is the

correctness of the holding ef the Court of Appeals that

none of the emplovees was engaged in commerce er in

the production of goods for commerce, and of its sub-

sidiary ruling that the agriculture exemption deprived

each employee of the statutory right to overtime com-

pensation, Also involved is the correctness of the Dis-

triet Court's ruling that the processing exemption applied

only to the place where and at the time during which

processing was actually taking place, and its ruling that

eniplovees who performed some exempt and some nor

7

exempt work in a given workweek were covered by the

Act for that week.’

Waialua also petitioned for certiorari. The questions

presented by Waialua’s petition (No. 558) are whether

the Court of Appeals erred in directing a dismissal

of the declaratory judgment suit on the ground that

the parties were in “‘apparent collusion’’, and wheth +

its judgment should be reversed ‘‘with directions to

review on the merits the issues of statutory construction

which were presented by the parties in the record and

were aetermined by the judgment of the District Court.’’®

STATEMENT.

The suit was begun in 1947 by the company for a judg-

ment declaring its obligations under the provisions of

the Act. The jurisdiction of the District Court) was

invoked because the question arose under a law relating

to commerce, to-wit, the Fair Labor Standards Act. The

original complaint named as defendants certain employees

of the company (among them petitioners Maneja, ef al.),

‘others similarly situated’’, the labor union which was

the collective bargaining representative of those em-

plovees, and one of its officials. The employees, includ.

ing petitioners Maneja, ef al. answered and also filed

2Beeause the Court ot Appeals disposed of the ease on other

grounds, it «lind net PSS TPN these latter two rulings of the

Pistriet ¢'ourt The emplevees having res rved the pomts om

their petition Cpr S4on 4) here urec that the Distriet (ourt's

rulings in these respects were correct

$Petition for writ of certiorari in Noo dos. pS

20

operation of a railroad system and a sugar mill—are not

agriculture (Bowie v. Gonzalez, 7 F.2d 11 {CA 1)), and

the mere fact of unitary ownership does not make them

so (Calaf v. Gonzalez, 127 F.2d 934 [CA 1]: Vives ¢.

Serralles, 145 Fi2d 552 [CA 1]}). The employees do, of

course, perform functions which may be ‘*necessary’’ to

agriculture. But like many activities without which agri-

cultural production would not be possible, those functions

are not themselves agriculture since they are separate

and independent productive operations, organized as such

by Waialna. (Farmers Reservoir & Irrigation Co, v. Me-

Comb, 337 U.S. 755.) The mechanies, railroaders and mill

workers require different skills and trainings from the

field workers, and employees who possess and utilize sucn

skills are not farm hands. The existence ef the process-

ing exemption in Section 7(c) of the Act clearly indicates

that mill work was not intended to be ineluded within

the agriculture exemption of Section 13(a)(6). (Bowie v.

Gonzalez, 117 F.2d 11 [CA 1].)

3. The carpenters. pluinbers, electricians, railroad men

and other employees here involved are not engaged in

processing. The processing exemption does not apply to

those employees or to the employees who repair the mill

during the off-season, or who generate steam and electric

power. These activities are not the processing of sugar.

Certainly, carpentry, welding or railroading are not the

processing of sugar and in any case do not occur at the

‘*place’’ where sugar is processed. (Administrator’s In-

terpretative Bulletin No. 14 [1941 W.H.Man. 320, 323-

324); Fleming v. Swift & Co., 41 F.Supp. 825 | N.D. TL),

aff'd 15) Pi2d 249 [CA 7].) Certainly the production

21

of power is not the processing of sugar (Shain +. Armour

& Co., 50 F.Supp. MOT [| WLP. Kye}: Walling o. Bridqeman-

Russell Co., 2 W.H. Cas. 785 | J). Minn.!). and the faet

that part of the power produced is used in connection

with the processing or with the agricultural! pursuits

of Waialua makes no difference (ef. Davis +. Goodman

Lumber Co., 133 F.2d 52 (CA 4): Walling +. Connecticut

Co., 154 F.2d 552 [CA 2]: Northwest Airlines v. Jack-

son, 180 F.2d 74 [CA 8], cert. den. 342 U.S. 812). The

work during the off-season, net being performed while

any processing is taking place, cannot in any sense be

regarded as precessing or even incidental thereto. If

represents a major overhaul, almost akin to new con-

struction, and is clearly not exempted from the operation

of the statute. (Maisonet v. Central Coloso, Inc., 2 WAH.

Cas. 753 [| D. P.R.].)

4. The employees engaged in servicing the company

village are engaged in the production of goods for com-

merce within the meaning of Section 3(j) of the Act, since

their work has such a close and immediate tie with the proe-

ess of production as to be an essential and necessary part of

it. (Nirschbaum v. Walling, 316 U.S. 517: Borden Co. +. Bor-

ella, 325 U.S. 679; Martino v. Michigan Window Cleaning

Co., 327 U.S. 175.) The unavailability of other housing,

the furnishing of accommodations in order to assure a

stable labor force, and the failure to operate the village

as a separate profit-making venture, all point to this

conclusion. (Consolidated Timber Co. +. Womack. 132

F.2d 101 [CA 9): Hanson +. Lagerstrom, 133 F.2d 120

ICA 8].)

24

The categorical assertion of the Court of Appeals that

ve 8 * agriculture is not commerce, interstate or for

elgn, nor does agriculture affect such commerce in the

constitutional sense’? (216 F.2d at 476) cannot be squared

with the decisions of this Court. The reliance of the Court

of Appeals (216 F.2d at 476, n. 32) upon United States

1. Butler, 297 U.S. 1, is vitiated by its own implied recog-

nition in the very same footnote that the later case of

Wi-hard +. Filburn, 317 U.S. 111, is to the contrary. Even

hefore the Wickard case, and despite the fact that the

Butler decision was urged upon it, this Court held in

Milford v. Smith, 307 U.S. 38, that marketing of tobacco

in excess of established quotas (and therefore its pro-

duction) could be controlled by Congress in the exercise

of its commerce power.

In Farmers Reservoir and Trrigation Co. v. McComb,

337 U.S. 755, this Court held that the field emplovees—

ditch riders, lake tenders, and maintenance men—of an

irrigation company providing water for farmers who

preduced agricultural commedities which later moved

across state lines were themselves engaged in th- pro-

duction of goods for commerce.

The holding of the Court of Appeals that petitioners

Maneja, et al., who are not farmhands, but are full time

locomotive engineers, flagimen, railroad maintenance work-

ers, mill workers, plumbers, carpenters, welders, electri-

cians, power plant operators, laboratory technicians, and

clerical workers, are not engaged in commerce or in the

production of goods for commerce is therefore clearly

erroneous. It is flatly eontrary to the reeord: is in

1

conflict with the clear lanwuawe of the statute.’ and flies

directly in the face of this Court's decisions.’

In the landmark cases involving this statute, this Court

wave the statutory definition of commerce a scope suffi-

ciently broad to enable the legislation to meet the evil

Which Congress seught to remedy. (United States yr.

Darby, 312 US. 100: Kirschbaum +. Walling, 316 US.

WT: Warren-Bradshaw Drilling Co, v. Hall, 317 U.S. 88;

Walling ¢. Jacksonville Paper Co., 317 US. 564; Roland

Flectric Co. +. Walling, 326 U.S. 657; Alstate Construction

Co rv. Durkin, 845 US. 13.) These rulings have been

applied in cases dealing with emplovees of meat processors

(Rutherford Food Corporation v. McComb, 331 U.S. 722),

and of cooperative irrigation companies furnishing water

Section 3(b) of tae Act defines commerce as ‘‘trade, com-

merce, transportation, tratismission, or communication among the

several states or from any state to any place outside thereof.’’

Section 3(c: reads:

‘**State’ means any State of the United States or the Dis-

trict of Columbia or any Territory or possession of the United

States.”’

Section 3(j) read, at the time herein involved:

‘Produced’ means produeed, manufactured, mined, han-

djed, or in any other manner worked on in any State; and

for the purpose of this chapter an employee shall be deemed

to have been engaged in the production of goods if such em-

ployee was employed in producing, manufacturing, mining,

handling, transporting, or in any other manner working on

such goods, or in any process or occupation neeessary to the

production thereof, in any State.”’

2That part of the holding of the Court of Appeals, affecting a

smal] minority of employees, that the village service workers were

not ‘‘engaged in commerce or in the produetion of goods for

commerce’’, is, petitioners concede, not direetly contrary to any

specifie decisions of this Court. The issue respecting these work.

ers is diseussed below at pp. 61-71.

12

a machine shop, a welding shop. a blacksmith shop, a tin-

smith shop, a shop for the repair of caneloading mia

chines, a tractor repair shop, a garage, an electric shop,

tearpenter shop, a paint shop, and a plumbing shop. The

Wien eniploved In these activities are qualified lnaehinists,

elders, electricians, painters, carpenters, ete. devoting

their full time to their crafts.

\.\ separate plant is also engaged solely in the produe-

tidn of concrete products used ino the fields, auill and

village.

Waialua’s business does not consist of just one opera:

tons at consists of a number of different operations. sx

reflected by its financial, accounting, cost and personnel

records, the company has long been divided into the

following separate departments, each performing special-

ized production functions ;

1. bield Department—having to do with the growing

of cane and delivering it to the railroad ears.

2. Factory Department—having to do with the man-

ufacture of eane Into raw suvar.

o. Service Department having to do with railroad

nnd truck transportation and the various repair shops.

4. Village Facilities Departinent having to do with

the upkeep and maintenance of Waialua Village.

rere oeeupied by 3573 persens. OF the 969 non-supervisory em.

plovees in Wanalua’s employ at the time of trial all but 16 lived

in the village All of the vv emplovees Who testified at the trial

liver? an) Wataly. Villave Two of them vs. re born there and heave

never lived ativ place else. The employseos paid for and reeeived

housing, housing maintenance, water, fuel, medieal care, reeren

tional facilities, and various maintenance services sueh a garbage

disposal and stlrect cleaning.

In addition there are a number of smaller departments

such as office, laboratory, agricultural control, ete,

The work of Waialua’s emplovees consists of the fol-

lowing:

I. Preparation of the soil for the planting of sugar

cane, planting the seed. cultivating and fertilizing the

soil, irrigating, harvesting the crop, loading the crop

into railroad cars and hauling them over portable tracks

to the main line tracks for transportation to the mill.

Since sugar cane is grown in Hawaii on a vear round

basis, the fields are always in various stages of produc.

tion or preparation, and the employees who work in the

fields move from area to area depending upon the prog-

ress of the agricultural program. Employees performing

such tasks only were held by the Distriet Court to be

excluded from the coverage of the Act as ‘tagricultural”’

workers, and none of them are involved in th’s proceeding.

2. Operation and upkeep of the railre i system, and

unloading the cars at Waialua’s proeessiug mill. For

example, petitioner Sera is a section hand on the. rail-

road. He repaired raitroad tracks of the main line rail-

road by replacing worn equipment such as rails, spikes

and ties; cleaned and lubricated switches on the main line

railroad: maintained rights-of-way of the main line rail-

road by weeding and cutting trees: graded and leveled

uneven sections of trackway on the main line railroad:

installed and removed field switches for connecting iain

line railroad to cane field portable track lines: assisted

in clearing train wrecks and repairing derailed locomo-

tives and cars; loaded railroad ties on freight cars in

lt

mill vard; directed traffic as a flagman at railroad cross-

ing of main line railroad. (R. 208-210.)% Petitioner

Holmberg is a locomotive engineer devoting his full tine

to this craft, except for a few hours spent in repairing

the railroad equipment. Petitioner Okouchi is flagman

at railroad crossings, and also does maintenance work

along the railroad right-of-way.

©». Working as mechanics, carpenters, welders, black-

smiths, tinsmiths, electricians, painters and plumbers

engaged in the maintenance of field, mill and village

installations and equipment. For example, petitioners

Claunan and Ezawa are mechanics engaged solely in

mechanical repair work. C!aunan’s work as a mechanic

consisted of repairing trucks and automobiles in_ the

garage; vecasionally repairing concrete products plant

equipment, mill equipment, air compressors, equipment

used in maintaining the domestic sewer and domestic

water supply system in the plantation village, and garage

equipment. (R. 220-223.) Petitioner Sunahara as a welder

attached to the welding shop repaired the following types

of equipment: stable equipment, cane cars, locomotives,

mill equipment, equipment for garage, equipment at bath-

house, rolling stock, machine used to plant cane seed,

service station equi -nent, fireroom equipment, hand truck,

warehouse building, machine shop equipment, irrigation

flume forms, laboratory equipment, herbicide station

equipment, stoneboat sled, tractors, electric transmission

lines, plows, dwellings, power plant equipment, electrical

Detailed descriptions of the work of all of the employee-peti-

tioners which was held by the Distriet Court to be covered under

the provisions of the Act aye set forth in the Appendix hereto.

15

supply system maintained at plantation village for serv:

icing dwellings, hosnital equipment. equipment used for

maintenance of plantation reads, equipment of plantation

irrigation system, fire protection equipment, portable

track, trucks, and he also made improvements for dwell-

ings of Waialua’s eniplovees. (R. 225-226.) Petitioner Ta-

naka as a machinist worked solely in the machine shop

machining parts for all type of field, transportation, mill

and village equipment maintained by respondent. Peti-

tioner Takata is a blacksmith working as such on all types

of equipment. Petitioner Sakai is a painter, Kashiwabara

a plumber, Mori a carpenter.

4. Operation of the machinery at the cane processing

mill where the cane is manufactured into raw sugar for

shipment to the mainland refinery, and the repair and

replacement of the will machinery during the annual

three months shutdown period. For example, petitioner

Oato operates one of the evaporator stations in the mill

and perforins mill repair work during the period the mill

is shut down.

®. Production of steam and electricity for use in the

processing mill, the fields, and Waialua Village. For

example, petitioner Robello started, operated and stopped

generating units; operated switchboard equipment; kept

a log of powerhouse operations; made repairs and adjust-

ments to all power plant equipment; supervised equip-

ment which showed the interchange of power between the

plantation and the Hawatan Electric power systems:

started, stopped, serviced and repaired air compressors:

cleaned and repaired power plant equipment. (R. 21s-

220.)

16

6. Working as chemists, clerks and laboratory tech.

niclans in connection with the horticultural and manufac

turing activities of the respondent. Petitioner Pacheco

is emploved in the laboratory preparing cane leaves for

chemical analysis under the supervision of a chief cheriist.

7. Working as carpenters, woodcutters, janitors, street

cleaners, road graders and other service personnel in

connection with the maintenance of the respondent's town.

Petitioner Yamada is attached to the carpenter shop and

repairs dwellings in the village. Petitioner Crisostomo

operates and repairs a grader used to maintain village

roads. Petitioner Fernandez is a village cleane: working

on the maintenance and upkeep of employees’ houses in

the village.

Petitioners Maneja, et al. constitute a cross-section of

Waialua’s employees engaged in all the foregoing activ-

ities with the exception of those engaged solely in the

work of the Field Department. Those employees are not

involved in this case.

After making these detailed findings of fact (R. 190-

304), the trial court drew its conclusions of law in sub-

stance as follows (R. 304-807) :

1. That the court has jurisdiction over the cause of

action and the parties.

2. That each of the employees was, while engaged in

any of the foregoing activities, engaged in commerce or

in the production of goods for commerce, as deiined by

Sections 3(b) and 3(}) of the Aet. (See 97 F.Supp. at

218-219.)

7

4. That those of the emplovees whe were engaged

directly or indirectly, in planting, irrigating, or preparing

the soil for planting, or in harvesting, or in hauling the

sugar cane from the fields to the corporation’s main line

railroad tracks, were exempt from the provisions of the

Act because thes were engaged in ‘‘agrieulture** within

the meaning of Section 15 aj(6) of the Act. (See 97 F.

Supp. at 219-220.) For this reason the claims of a num-

ber of employees to overtime compensation were denied.

Those employees did not appeal to the Court of Ap-

peals. The judgment as to them became final and they

are not involved in this proceeding.

4. That those of the employees while, and to the extent

that, they were engaged in the refining process at and

in the mill, were subject to the processing exemption of

Section 7(c) of the Act. (See 97 F.Supp. at 222-223.) For

this reason, an additional number of emplovees were

denied overtime compensation during workweeks in which

they were so engaged... These employees did not appeal

to the Court of Appeals; however, Waialua did, urging

that the basis of exemption should have also been Section

13(a)(6).°

5. That those employees performing the other types

of work heretofore described were entitled to receive over-

time compensation in accordance with the provisions of

the Act. (See 97 F.Supp. at 218 ff.)

However, the trial court refused to adopt Waialua’s contention

that the agriculture exemption applied to these employees.

9The question of which is the appropriate exemption is there-

fore still in the ease as to eight petitioners: Hernandez, Dumlao,

Kondo, Cumlat, Lazo, Kubo, Hamamoto, and Oato.

18

6. In those instances where an employee, in a partic-

ular workweek, performed some exempt and some non-

exempt work, the court held that he was entitlh-d to the

benefits of the Act for such workweck. (See 97 F.Supp. at

232.)

A money judgment was entered in favor of those em-

piovees held entitled to overtime compensation in amounts

ranging from $30.94 to $174.12, plus equivalent amounts

as liquidated damages under 16(b) of the Act. The total

judgment was $6,729.02. Attorneys’ fees in the sum of

$2,500 were also assessed.

Thus the District Court’s judgment disposed of all

claims and issues raised in the company’s suit for declar-

atory judgment and in the employees’ counterclaim under

Section 16(b) of the Act.

Waialua appealed.

The Court of Appeals reversed because of a claimed

‘error in approach’’. (216 F.2d at 468.) It ordered

Waialua’s complaint dismissed and remanded the counter-

claim to the District Court ‘‘for proceedings in accord-

ance with this opinion.’’ (216 F.2d at 478.) While in its

opinion on rehearing the Court of Appeals said that it

had ‘theld that the entire cause wus tainted by apparent

eollusion’’,'° it refused to dismiss the counterclaim and

said that the employees ‘‘may take further proceedings

as suggested in the latest opinion of the court’’. (216 F.

~The court’s conclusion in this respect appears to be based

upon the facts that (1) the parties did not contest ‘‘commerce

coverage’ in this ease, and (2) the parties stipulated as to the

facts respecting the compatiy’s operations and the work performed

by the employees.

19

2d at 479.) In that opinion the Court of Appeals said

(a) that none of the emplovees was entitled to the benefits

of the Act decause none of them was engaged in com-

merce or in tie production of goods for commerce, and

(b) that all of the employees were excluded under the

agriculture exemption of Section 13(a)(6). (216 F.2d at

468-478. )

SUMMARY OF ARGUMENT.

1. The growing of raw sugar, its transportation to the

mill, its manufacture there into raw sugar, its shipment

to the United States for refining at the cooperative, and

its distribution and sale throughout the nation is the

production of goods for interstate commerce within the

meaning of Section 3 of the Act. (Mulford v. Smith, 307

U.S. 38; United States v. Darby, 212 U.S. 100; Wickard

v. Fidburn, 317 U.S. 111; Rutherford Food Corp. v. Mc-

Comb, 351 U.S. 722: Farmers Reservoir & Irrigation Co.

v. McComb, 337 U.S. 755.)

2. The employees engaged in the repair and mainte-

nance activitres—those engaged in the carpenter shop, the

plumbing shop, the electrical shop, the welding shop—are

not engaged in agriculture within the meaning of the

13(a)(6) exemption. Neither are the employees engaged

in the operation of Waialua’s railroad system and those

engaged in the operation of its mill. The test is what

the employee actually does, not how the employer's bus?-

ness may be characterized. (Airschbaum v. Walling, 316

U.S. 517; Walling v. Jacksonville Paper Co., 317 U.S.

564.) The activities of the employees bere involved—the

22

» An emplovee is entitled to be paid at the statu-

tory overtime rate for all work performed by him in any

workweek in which any non-exempt work is) performed.

The unit of measurement under the statute is the * woerk-

week’. (Overnight Motor Transport Co. vo Missel, 316

US. 572: Sham v. Armour & Co.. 50 F.Supp. 967 [W.D.

Ry.1; Walling v. DeSoto Creamery & Produce Co, 51

h.Supp. 938 a Minn.!: ef. Bay Ridae Operating Co.

Aaron, 334 U.S. 446: Wabash Radio Co, v. Wailing, 162

F.2d 391 [CA of

6. The ease presents a real and substantial contro-

versy between the parties respecting Wailaua’s liahil-

itv to pay overtime compensation at the statutory rate to

the employees here involvec. This controversy may he

resolved either by a suit fer declaratory relief (28 USC

2201) (Aetna Life Insurance Co. v. Haworth, 300 TS

2°97: Tennessee Coal etc. Co. v. Muscoda Lodge, 321 U.S.

590), or by a suit under Section 16(b) of the Act. The

suit is not rendered collusive because the parties agreed

that Waialua was engaged in interstate commerce and

stipulated to the undisputed facts respecting the opera-

tions on its ‘‘plantation’’ in Hawaii. (Lord v. Veazie, 8

How. 251.) There can be no question of commerce cover-

age here. (Santa Cruz Fruit Packing Co. v. NLRB, 303

U.S. 453: Milford v. Smith, 307 U.S. 38; Wickard v, Fil-

burn, 317 U.S. 111: Farmers Reservoir & Trrigation Co.

ve. McComb, (837 U.S. 775), and certainly stipulations re-

specting facts do not render collusive, suits involving

important questions of statutory construction. (Lord v.

Veazie, 8 How. 251: Kirschbaum v. Walling, 316 U.S. 517;

Ruth rford Food Corp. re. MeComb, 331 U.S. 722.) Com-

23

ete findings of fact having been made by the District

Court (90 FoSupp. 198: 216 Fild 466, 471). and th Court

of Appeals having reversed because it disagreed, not on

the facts, but on the law (216 F.2d 466), the entire con-

troversy is ready for decision by this Court and. the

questions of statutory construction here presented should

be finally determined now.

7. The Fair Labor Standards Act is an expression of

important and significant national policy the ain of which

is to increase the living standards of American men and

women by excluding from interstate commerce goods pro-

duced at standards below those prescribed by the statute.

(United States v. Darby, 312 U.S. 100: Hirschbaum v.

Walling, 316 U.S. 517; Roland Electric Co. v. Walling, 326

U.S. 657.) For that reason the statute is te he interpreted

in favor of broad coverage and all exemptions are to he

narrowly construed. (Phillips Co. v. Walling, 324 U.S.

490.)

ARGUMENT.

I.

THE HOLDING OF THE COURT BELOW THAT NONE OF PETI-

TIONERS WAS ENGAGED IN COMMERCE OR IN THE PRO-

DUCTION OF GOODS FOR COMMERCE IS ERRONEOUS.

Notwithstanding the undisputed evidence that the end

prodect of the work of petitioners, namely, raw sugar,

was all shipped from Hawaii to the mainlond, the Court

of Appeals, reversing the findings of the District Court,

held that none of the petitioners was engaged in com-

merce or in the production of goods for commerce,

26

to farmers. (Farmers Reservoir d& Irrigation Co. +. VM.

Comb, 337 U.S. 7355.)"

This Court, ir dealing with the analogous Agricultural

Adjustment Act, 52 Stat. 51, 7 US€ 12S, ef seq..’* has

held that the emplovees of growers of tobacco and wheat

are engaged in interstate commerce, (Mulford vo. Smith,

207 US. 38: Wickard v. Filburn, 317 USS. VL) Similarly,

in dealing with the Agricultural Marketing Agrecsent Act

of 1937, 50 Stat. 246, 7 USC 601, ef seq., this Court has

held employees of milk processors to be engaged in inter-

state commerce. (United States v. Wrightwood Pairy Co.,

315 U.S. 110.)

8The court below appears to doubt. the soundness of this

Court’s decision in the Farmers Reservoir case, supra.

“Tt is true that the majority [of the Supreme Court in the

Farmers Reservoir ease} unfortunately accepted the aequies-

cence of the parties as establishing the constitutional and

jurisdictional factor that the employees of a local irrigation

company were engaged in a ‘process or occupation necessary

for the production of goods for commerce.’ Thereby the

long-standing principle of decision that a constitutional and

jurisdictional issue will not be debated or considered unless

actively raised by the parties was abandoned. Nor can we

aecept as an explanation that rationalization leads to quaint

results.”’ (216 F.2d at 476-477.)

Whatever this last sentence may mean, it is clear that the court

below was in error in suggesting that this Court abandoned a

‘principle of decision”’ in the Farmers Reservoir case. (See infra,

pp. 78-81. And even if it thought it were not in error on

the point, it should not have undertaken in effect to reverse this

Court’s decision.

1°The Fair Labor Standards Act . . . is part of the social

legislation of the 3930's of the same general character as the

National Labor Relations Act . . . and the Social Security Act

Decisions that define the coverage of the employver-emplovee

relationship under the Labor and Social Security Acts are per

suasive in the cousideration of a similar coverage under the Fair

Labor Standards Act.’ (itutherford Food Corporation vo Me-

Comb, 331 U.S. 722, 723.)

27

In Bowie +. Gonzales, IVT F.2d 11 (CA 1), it was held

that emplovees of emplovers who grow sugar cane in

Puerto Rico. who operate mills ino whieh the cane is

ground, and whe deliver the ground cane for transporta-

tion to points ontside of Puerto Rico, are engaged in in

terstate commerce. In fact, the cougt there said that the

proposition that such workers are engaged Ino commerce

‘‘is too clear for argument’’. (117 F.2d at 15.)

The same court in a later case had **no difficulty in

holding that insofar as the employees are engaged in the

transportation of sugar cane from the farm... ana are

engaged in the repair and maintenance of transportation

facilities. they are covered by the Act’. (Calaf v. Gon

scaler, 127 F.2d 034, 986 [CA 11.) Nor have Distriet Courts

had anv difficulty in finding the Act applicable to em.

plovees of emplovers engaged in such activities as the de

hydrating of alfalfa (Wyatt v. Hoitvile Alfalfa Mills, 106

F.Supp. 624 [S.D. Cal.}) and the curing and packing

of tobacco. (Durkin +. Budd, 14) F.Supp. 865 0 | ND.

Fla. |.)

In Interpretative Bulletin No. 1 issued shortly after

the Act was passed in 1938, the Administrator considered

the general coverage of the statute (1944, WLH. Man. p.

16) and, after reciting the congressional declaration of

policy." said:

i* Tn the preliminary deelaration of policy in Seetion 2, Con-

vress recited that it sought to remedy certain evils, namely, ‘labor

conditions detrimental to the maintenance of the minimum stand.

ard of living necessary for health, efficieney, and general wellbeing

of workers.” which Congress found *(1) causes commerce and the

channels and instrumentalities of commerce to be used to perpet

nate such Jabor conditions among the workers of the severa!

States: (2) burdens commerce and the free flow of goods in com

28

From this declared potey of Congyess, it is evi

dent that, apart from certain specific exemptions

enumerated later in the statute, Congress intended

the widest possible application of its regulatory power

over imteestate commerce: and the Administrator, in

Interpreiine the statute for the purpose of perform

ing his administrative duties, should properly lean

toward a broad interpretation of the hey words, ‘en-

gaged In commerce or in the production of goods for

commerce.” (1944 W.H. Man. at 17.)

As we have seen, this Court in the ceases which sub-

sequently came to it ry the administrator's inter-

pretation of the seooe \of the commerce provisions of the

Act"

These interpretations of the administiater--to which

we will alse refer in subsequent portions of this brief —

are, while not controlling, entitled to the greatest of

weight. United States +. American Trucking Ass'n, 310

Us. 554: Roland Electrie Co. +. Walling, 326 ULS. 657,

O76.

meree, (3) constitutes an unfair method of competition in com

meree; °4) leads to labor disputes burdening and obstrueting

commerce and the free flew of goods in commerce: and 5) inter

teres with the orderly and fair marketing of goods im com

meree. *- 1°44 WoL Man. at 17.)

Supra, p. 20.

29

Il.

THE AGRICULTURE EXEMPTION DOES NOT APPLY TO (1) THE

REPAIR AND MAINTENANCE MEN IN THE CARPENTER,

PLUMBING, ELECTRIC, WELDING AND OTHER SHOPS, AND

(2) THOSE EMPLOYEES WHO OPERATE AND MAINTAIN

THE COMPANY'S MILL OR ITS RAILROAD SYSTEM.

The Court of Appeals excluded the emplovees here in-

volved from the benefits of the Act, on the theory that

they were ‘temployed in agriculture’’; vet the record is

clear that those emploved were, infer alia. carpenters,

plumbers, welders, electricians, locomotive engineers

and repairmen, section hands, operators of various types

of heavy machinery, loaders, clerks, and the like—most

of whom never, in the weeks for which they were awarded

overtime pay by the District Court, performed farm

labor.’ The basis of the reasoning of the Court of Ap-

peals appears to be that Waialua is a ‘‘farmer’” and

that therefore, irrespective of anything else, its emplovees

should be denied their rights under the statute.

jut Waialua is not a ‘*farmer’’. Waialua operates a

variety of establishments on its plantation in Hawaii.

While it operates a farm, it also operates a factory (mill),

a railroad, repair and maintenance shops, and a company

Village. oJust because som. of its emplovees are engaged

in farming does not mean thac those not so engaged—the

carpenters, or the welders, or the electricians, or the rail-

road workers -should be denied the benefits of the over-

time provisions of the Aet.

i Thase who did sometimes work as farm hands were denied

overtime compensation for those workweeks in which they were

exelusively so emploved.,

We discuss the ‘‘eommingled’” workweek at pp. 71-75, infra,

30

The exemption upon which the company relies, relates

to “‘any employee employed in agriculture’’ (Section

13fa]{6]) and the test of its applicability is the character

of the given employee’s work, not what some other em-

ployee may be doing or how the employer’s business may

be characterized. Nirschbaum v. Walling, 316 U.S. 517;

Walling v. Jacksonville Paper Co., JAZ US. 564. The Act

was very carefully drawn to specify those situations in

which the exemption is dependent upon the type of em-

ployer in,olved [Sections 13(a)(4), 13(a)(9), 15(b)(2)],

and those in which, as here, it is dependent upon the

duties of the employee [Sections 13(a)(1), 18(a)(5), 18

(a)(5), 13(a)(6) and 13(a)(10)]. Here as to each one of

ihe forty employees involved, it must be separately de-

termined whether he or she is ‘‘emploved in agriculture’’.

The District Court, for reasons already indicated, held

that as to the workweeks involved in this proceeding, these

employees were not so employed.'* It is submitted that

the District Court was correct and that its Judgment minst

be affirmed.

Agriculture is defined in Section 3(f) of the Act as in-

cluding:

‘+. farming in all its branches and among other

things . . . the cultivation and tillage of the soil,

the production, cultivation, growing, and har-

vesting of anv agricultural or horticultural ecommodi-

ties . . . and any practices . . . performed by a

ISThe Appendix contains a detailed listing abstraeted from the

findings of the Distriet Court which shows the kind of work, em-

ployee by employee, whieh that court held to be non-exempt. It

seems perfectly obvious that persons engaged in the type of work

there deseribed are not ‘‘emploved in agriculture”.

31

farmer or on a farm as an incident to or in conjune-

tion with such farming operations, including the prep-

aration for market, delivery <o storage or to market,

or to carriers for transportation to market.”’

The District Court held that the exemption of Section

'3(a)(6) was applicable to employees engaged in all activ-

ities beginning with the preparation of the land for plant-

ing and ending after the harvested cane had been hauled

to the mainline railroad. Included in the activities so

held exempt from the overtime provisions of the Act were

not only the actual planting, cultivating and harvesting

of the crop, but also such activities as using tractors to

clear the fields for planting: weeding; plowing; using

tractors to clear irrigation ditches; using tractors to make

heds for portable railroad tracks; burning cane in prep-

aration for harvesting: operating caneloading machines

to cut and load cane into eane cars; operating tractors to

haul cane cars to and from the mainline railroad; picking

up seattered cane in fields; bulldozing cane into piles:

making minor repairs to field equipment; and operating

the irrigation system.

Conversely, the Distriet Court held that the exemp-

tion contained in Section 13(a)(6) did not apply to

employees engaged in any activities which oceurred sub-

sequent to the receipt at the mainline railroad of the cars

loaded with cane. Specifically, the District Court held

that the agriculture exemption did not apply to emplovees

who engaged in the operation of the mainline railroad,

eg. the locomotive engineer, the locomotive repair man,

the section hand, the crossing watchman: or in the op-

eration of the processing mill, e.g., the cane cleaner, the

32

crushing plant operator, the evaporator operator, the

centrifugal machine operator, or the boiling house em.

ployee: or in the bagging and warehousing of sugar, ec.

the bagger and loader, the warehouse clerk: or in the

operation of the utility plant, e.g., the boiler fireman, the

power plant operator: or in the performance of main-

tenance and repair work, e.g., the automobile mechanie,

the welder, the machinist, the tractor mechanic, the cane-

loading machine repair man, the blacksmith, the painter,

the concrete products operator, the plumber, the car-

penter; or in the performance of such miscellaneous oceu-

pations as clerk-stenographer, truck driver, road grader,

laboratory technician, and utility clerk.

The view of the District Court was concurred in by the

Secretary of Labor who is charged with the duties and

responsibilities of administering the Act.!®

The Court of Appeals, however, was of the view not

onlv that ‘‘agriculture . . . is not commerce’’, but also

that even if it were, all of the emplovees of Waialua were

exempt from the overtime pay provisions of the Act by

virtue of Section 13(a)(6). In other words, the Court of

Appeals was of the view that all of the employees engaged

in the operation and maintenance of Waialua’s sugar mill,

repair shops, railroad facilities and village comnmunity

were engaged in agriculture.

This position has been consistently taken by the Administrator

since 1941 when a written ruling on the subject was promulgated.

“It would seem from the Court's decision | Bowie v, Gonzalez,

117 F.2d 11 (CAI)| that the exemption for aerienltura!

employees provided by the Wage and Hour law does not

apply to sugar mill emplovees, even if the only cane ground

in such a mill is eane grown by the sugar mill owner in his

field.’ (1944-45 W_ LH Man. 564, note.)

33

Since the ultimate, and indeed the sole, object of

Waialua’s operation is the production of sugar and mo-

lasses, and since these commodities are manufactured at

the mill, it may be more forcefully argued that the op-

eration of the mill is the dominant element and that the

growing of the sugar cane is only subordinate or inct-

dental. Therefore it follows that Waialua is not a

»??

‘‘farmer’’ at all but is a manufacturer and none of its

emblovees are engaged in agriculture. This view is re-

inforeed when it is realized that in reality the ultimate

objective of all of Waialua’s activities is the refining of

the raw sugar at the cooperatively owned refinery in Cal-

ifornia and its subsequent sale from that place. However,

we need not rely on this argument, forceful as it is, since

it is enough to assert that in order to accomplish its ulti-

mate objective of producing sugar and molasses, Waialua

engages in many separate and distinct enterprises ap-

propriate to that end. These enterprises include manufac-

turing, repair and maintenance, and transportation, in

addition to farming. It is only with the emplovees en-

gaged in the former enterprises that we are here con-

cerned. The fact that Waialua has placed all these sep-

arate economic functions under one ownership cannot con-

ceal the essential non-agriculture character of its manu-

facturing, maintenance and transportation activities, nor

submerge the fact that it operates a hybrid type of busi-

ness in which it functions not only as a farmer but also

as a manufacturer, a general repair and maintenance con-

tractor, a railroader, and an operator of a substantial com-

pany Village.

That Waialua does function in this way is manifest

from the reeord. Its acreage includes in addition to a

34

farm, a manufacturing plant, repair shops, transportation

facilities and a company village. These non-agricultural

operations are conducted so as to *tassume the character

of a distinct business enterprise of an industrial nature”’.

(97 F.Supp. at 22.) They are conducted in buildings sep-

arate, and in an area distinct, from the growing fields and

they account for a substantial portion of Waialua’s oper-

ating charges. The actual separation of functions is dem-

onstrated in a variety of ways. The areas allotted to

farming are distinct from those allotted to processing or

maintenance or railroading. Organizationally the fune-

tions are separated: the farming operations are per-

formed through a Field Department headed by a Field

Superintendent; the processing, railroading and repair op-

erations are performed through a Factory and Shop De-

partment headed by a Factory Superintendent. Waialua

segregates its operating charges into cultivating, irri-

gating, harvesting, general field expense, transportation,

and manufacturing items. The mill and railroad are oper-

ated by separate work forces which do no work in the

field.°

This analysis of Waialua’s operations is not only sup-

ported by the record, but parallels this Court’s holding in

Farmers Reservoir and Irrigation Co. v. McComb, 337

U.S. 755. In that case, which clearly supports the view

20The fact that some field workers occasionally work in the mill

is of no significance since the issue with respect to each employee

here involved revolves about the type of work that emplovee per-

formed in a given workweek. When a field worker temporzrily

hecomes a mill hand, he is entitled to the benefits of the overtime

pay provisions of the statute. And vice versa, should a mill hand

work exclusively as a field laborer, he would derive none of those

benefits.

39

of the District Court and the Secretary of Labor, this

Court held that the employees of a mutual irrigation com-

pany owned by farmers, and which distributed water to

their individual farms, were not exempt under Section

13(a) (6).

In reaching its conclusion this Court analyzed the ex-

emption as follows:

‘First, there is the primary meaning. Agriculture

includes farming in all its branches. Certain spe-

cifie practices such as cultivation and tillage of the

soil... are listed as being included in this primary

meaning. Second, there is the broader meaning.

Agriculture is defined to include things other than

farming . .. It includes any practices, whether or

not themselves farming practices, which are per-

formed either by a farmer or on a farm incidentally

to or in conjunction with ‘such’ farming operations.’’

(337 U.S. at 762-763.)

Clearly, Waialua’s processing emplovees who are en-

gaged in manufacturing, its transportation emplovees

who run its railroad, its maintenance employees—carpen-

ters, p'umbers, welders, and electricians—are not engaged

in farming within the primary meaning of the Section

15(a)(6) exemption. One would have to ignore the un-

denied facts to hold that such persons are excluded from

the benefits of a statute the exemption from which deals

with the cultivation, growing and harvesting of agricul-

tural products.*!

“'The argument, tiade by Waialua below, that because the rail-

roading or processing exemptions were ‘‘necessary’’ to the agri.

culture operation (an assumption which is questionable at best).

the former are a “‘part’” of agriculture has been rejected by this

36

Nor do those emplovees come within the so-called

‘broader meaning’’ because neither of the conditions

therein is here satisfied. That is to sav, Waialua do s not

perform its manufacturing, railroading, repair and village

maintenance operations in its capacity as a farmer or on

its farm, nor are such operations performed as an in-

cident to or in conjunction with its farming operations.

or the fact of the matter is that the milling and _ rail-

roading and related activities are not performed on the

farm, but in areas clearly set aside for those purposes.

Nor are they performed by a ‘‘farmer’’ in the accepted

sense of the word; rather they are performed by an

employer who, while he engages in farming on the one

hand, engages in large seale manufacturing and _rail-

roading operations on the other.

An apt analogy would appear to be that of an employer

who manufactured cotton goods in a factory located on

a farm which the same employer owned and on which

cotton was grown. If Waialua’s argument is sound, then

the employees in the factory who process the raw cotton

into cloth would be exempt because the operation was per-

formed by a ‘tfarmer’’, on its ‘‘farm’’, or at least because

it was ‘‘ineidental’’ to farming. Certainly there is noth-

ing in the Act to countenance such a result.

Court. <A substantially similar argument was made in the F'arm-

ers Reservoir case and the court said of it that it was based upon

a ‘‘miseonstruetion’’ of Section 3(j) of the Act.

™ the conelusion that werk is necessary to agricultural

production does not require us to say it ts agricultural pro-,

duction .. . The question here is whether the occupation of

the field employees of the company ean itself be termed agri-

culture The answer to that question is not) predetermined

by the facet that the oecupation .— . . has a necessary connec:

tion with agricultural production.” (337 U.S. at 759-760;

italies by the Court.)

37

Another analogy is suggested by those chain store cor-

porations which operate on both a wholesale and a retail

level. Since the Act provides (Section 13/47/21) an ex-

emption for employees of retail, but not wholesale, estab-

lishments, problems have arisen respecting the emplovees

in the central offices and warehouses of sucii corporations.

In Prillips v. Walling, 324 U.S. 490, 495, fer example,

this Court recognized that ‘tin a realistie sense’? most

such organizations are ‘‘institutions ... of a hvbrid_ re-

tail-wholesale nature. They possess the essential char-

acteristics of both the retailer and the wholesaler’’. Since

it found that the emplovees in the central offices and

warehouses served the economic function of the whole.

saler, rather than the retailer, it denied the exemption.

Just as the central office and warehouse employees of

a chain store may not be deprived of the benefits of the

Act merely because their services: are for the ultimate

benefit of the *‘exempt’’ retail outlet, so Waialua’s em-

ployees in its separate repair and service shops, its

garage, its manufacturing, railroading, and village main-

tenance activities cannot be excluded from the coverage

of the statute simply because the services of those activ-

ities are restricted to the products of its farm.

2 Le bend

In Farmers Reservoir & Irrigation Co. +. MeComb. 337

U.S. 755, this Court recognized that the solution to the

question here posed turned largely upon an analysis of

the manner in which the emplover organized itself to pro-

duce the varied tasks which were necessary to accomplish

the ultimate end.

“Whether a particular type of activity is agricultural

depends in large measure, upon the way in which that

38

activity is organized in a particular societv. The

determination cannot be made in the abstract. In less

advanced societies the agricultural function includes

many types of activity which, in others, are not agri-

eultural. The fashioning of tools, the provision of

fertilizer, the processing of the product, to mention

only a few examples, are functions which, in some

societies, are performed on the farm by farmers as

part of their normal agricultural routine. Economic

progress, however, is chractevized by a progressive

division of labor and separation of function. Tools

are made by a tool manufacturer, who specializes in

that kind of work and supplies them to the farmer.

The compost heap is replaced by factory produced

fertilizers. Power is derived from electricity and gas-

oline rather than supplied by the farmer’s mules.

Wheat is ground at the mill. Jn this way functions

which are necessary to the total economic process

of supplying an agricultural product, become in the

process of economic development and specialization,

separate and independent productive functions op-

erated in conjunction with the agricultural function

but no longer a part of it. Thus, the question as to

whether a particular type of activity is agricultural

is not determined by the necessity of the activity to

agriculture nor by the physical similarity of the activ-

ity to that done by farmers in other situations. The

question is whether the activity in the particular case

is carried on as part of the agricultural function or

is separately organized as an independent productive

activity. The farmhand who cares for the farmer's

mules or prepares his fertilizer is engaged in agri-

eulture. But the maintenance man in a power plant

and the packer in a fertilizer factory are not em-

ployed im agriculture, econ at ther activity is neces

sary to farmers and replaces work previously done

39

hy the farmers. The production of power and the

manufacture of fertilizer are independent productive

functions, not agriculture.”’ (337 U.S. at 761.)

Since Waialua does not perform these non-agricultural

operations as a farmer, and since they are not performed

on a farm but rather on a separate and distinct non-

agricultural portion of the plantation, the exemption does

apply. Further, it does not apply since the operations in

question are not conducted as an ‘‘incident to’’ or in

“conjunction with’’ the farming operations.

This last requirement—of ‘‘incidence’’ or ‘‘conjune-

tion’’—is not satisfied inerely because the processing, rail-

roading and maintenance activities necessarily occur sub-

sequent to the growing and harvesting of the sugar cane.

In the nature of things, processing is performed sub-

sequent te harvesting, and if Waialua’s argument is sus-

tained, then the line between agriculture and manufacture

will be obliterated, and in the illustration earlier given

it may well be that the agriculture exemption would ap-

ply to the -manufacturer of cloth from cotton on the

ground that such manufacture is Incident to or in con-

junction with a farming operation. Other sections of the

Act show a congressional design to treat separately many

types of operations which are incident to or in conjune-

tion with farming only in the sense that they are per-

formed upon agricultural commodities subsequent to har-

vesting.**

22For example, Seetion T8(a)(10)) reads: ‘'The previsions

of Sections 6 and 7 shall not apply with respeet to . . . any

individual emploved within the area of production (as defined

by the Administrator), engaged in handling, packing, storing,

4()

Furthermore, Waialua’s transportation and manufac-

turing activities cannot properly be regarded as being

performed in conjunction wih or incident to its farming

operations. They occur separately from an? subsequent

to the farnung operations. Their substan‘ial as distin-

guished from their incidental importance in relation to

the farming operation is demonstrated by the fact that

the direct operating charges attributable to the manu-

facturing and transportation alone represent approxi-

mately forty per cent of all other charges including

those for agriculture. The manufacturing and transporta-

tion activities require organization, equipment and_ skills

quite unrelated to farming. A separate work force is

employed for the manufacturing operation: it does no

work in the fields: it is paid on a different basis from

that used for the work force in the fields. In the trans-

portation operation, Waialua employs not farm hands

nor mill hands, but skilled railroad operators, whose

function it is to handle locomotives and moving ears, not

agricultural products, and to maintain railroad beds,

tracks, roundhouses, ete., all of which is quite unrelated

to farming. Since neither the milling function nor the

transportation function is performed in conjunction with

or incident to the farming function, it follows that the

repair and maintenance of the equipment used in the

mills and on the railroad eannot come within the ex-

emption of Section 15(a)(6).

ginning, compressing, pasteurizing, drying, preparing in their raw

or natural state, or eanning of agricultural or horticultural com-

modities for market, or in mahing cheese or butter or other dairy

products; .. .”’

See also Section 7(¢), supra, p. 4.

41

On this phase of the case Waialua argues that because

all its varied functions are performed by a single owner,

the agriculture exemption applies throughout. But as the

Court of Appeals for the First Cireuit said in Calaf v.

Gonzalez, 127 F.2d 934, 938 (CA 1):

“What we have in the case before us is a mill en-

gaged in the processing of sugar cane and also en-

gaged in the transportation of that sugar cane from

farms to mill. There seems to be no rational basis

for saying that simply because the ownership of the

mill and the farms is in the same hands thaf, there-

fore, those emplovees who are engaged in an ae-

tivity which is separate and distinct from agriculture

are exempt from the provisions of the Aet.’’

The Calaf case, squarely in point here, involved precisely

the same kind of hybrid operation in Puerto Rico, and

arguinents sinilar to those advanced by Waialua here

were, with goo! reason, rejected there.

Waialua argues that every farmer is a ‘‘shipper’’ in

the sense that he transports his products from field to

storage or to a processor or to market, and that every

farmer is a ‘‘tmanufacturer”’ to the extent that he cans or

otherwise processes his produce (Brief in Opposition in

No. 357, pp. 15-14), and that therefore these activities

should not deprive it of the agriculture exemption. But

Waialua fails to recognize that farmers generally do not

have the elaborate indus-rial and railroad facilities found

upon Waialua’s plantation nor do farmers generally per-

form their carrying and processing functions through sep-

arate departments which employ large numbers of spe

cially skilled craftsmen who do no farming. To apply

the agriculture exemption to Watalua’s manufacturing

42

and railroading activities would be to apply to Hawai

a different rule from that which the courts have for many

vears applied to the sugar producing area of Puerto

Rico. Bowie v. Gonzalez, WT F.2d 11 (CA 1); Calaf +.

Gonzalez, 127 F.2d 934 (CA 1): Vives v. Serralles, 145

F.2d 552 (CA 1).

In Bowie v. Gonzalez, which was the first case present

ing the question of the application of the Section

13(a)(6) exemption to the employees of an employer who

grew sugar cane and processed it inte raw sugar, the court

held that the exemption did not apply to the processing

operation. While it is true that in that case a portion

of the cane which was processed was grown by growers

other than the processor, that difference from the case

at bar is relevant only to one of the bases upon which

the court ruled. The other two express bases for the

eourt’s ruling are clearly applicable here.

The court, referred to the legislative history of See.

tion 13(a)(6), and concluded that the purpose of the ex-

emption was

‘* . . to make certain that independent contractors

such as threshers of wheat, who travel around from

farm to farm to assist the farmers in what is recog-

nized as a purely agricultural task, should be included

within the definition of agricultural exemption

See 81 Cong. Ree. 7876, T888"". (117 F.2d at 18.)

Such a basis for holding that the processing of the cane

into raw sugar came within the agriculture exemption was

not present in the Bowte case, nor is it present here.

Secondly, the Court of Appeals recognized that the

reason for the creation of the exemption did not apply

to the employees engaged in the processing operation.

43

Furthermore, it) would seem that the emplovee-

involved in this ease would not fall within the reason

for the exemption which was accorded to agricultura!

emplovees. The Act was drawn not to unetude the

latter because agricultural labor was not subject to

the usual evils of sweatshop conditions of long hours

indoors at low rates. Also anv attempt to regulate

agricultural wages would present a difficult) problem

since a substantial part of the agricultural worker’-

income must of necessity be for board and reom. The

employees in the instant case are typical factor)

workers or laborers engaged in maintaiming industria!

facilities. The exemption of agricultural labor from

the operation ef the Aet is not admissible as an ar

guiment to exempt labor in an industry from its oper

ation’’. (17 F.2d at 1s.)

This reasoning is also applicable here.

After the Bowre decision tin Administrator moditied

a prior opinion which he had issued respecting the appli

cation of the l5(a) exemption to sugar mill emplovees.

“It would seem from the court’s decision that the

exemption for agricultural employees provided

the Wage and Hour Law does not apply fo suvar

mill emplovees, even if the only cane ground in such

aomill is cane grown by the sugar mell owner on his

own fields.”* (1944-1945 W. Hh. Man. 564, note.)*"

The Administrator has adhered to this view consistently

since 141.) In 140 the Congress provided (65 Stat. 910,

990) that all past orders, regulations and interpretations

of the Administrator were to remain in effect. Alstate

Construction Co v. Durkin, 345 US. WS. 17.

The propriety of the Administrator's medifieation of an earlier

view in the light of further experience and judicial deeision is

recognized in Alstate Construction Co. v. Durkin, 345 US. 13. 16

44

In Calaf v. Gonzalez, 127 Ftd 954 (CA 1), the court

was concerned with the application of the agriculture ex

emption to employees working in the railroad: faeiities

which were used to trankport the cane to the sugar mall,

In that ease, as already stated, the mull, the railroad and

some of the farms on which the eane was grown were all

owned jointly by the defendants and, a= already noted,

despite such common ownership, the exemption was de

ried. Furthermore, although the railroad transported

eane grown on farts owned not only by the employer

but by one independent farmer, the court crpressly re

fused to base its decision on that narrow ground.

“We place our decision, however, on the broader

sround that the transportation of sugar cane is ine

dent to milling rather than to farming and therefore

ix not exempt under the Act’. (127 Fitd at 956-400.)

Certainly, if the agrien!fire exemption is net applicable

to transportation workers because transportation is an

incident to milling rather than to farming, it must follow

that the exemption is inapplicable to the mill employees

themselves.

9

The reasoning of these two cases which refused to apply

the agriculture exemption to the operation of a niain tine

railroad and to the manufacture of raw sugar, was fol

lowed in Vines oc. Serralles, 145 Fitd S02 CCA 1), where

one owner operated ail the farm lands, the transportation

facilities. and the mill. In this ease the court reaffirmed

the principle of the Calaf decision that transportation is

an ineident te euilling rather than te farming, but held

that such transportation did net begin until the came Wis

deposited at storage points alongside the miainiine rail

45

oad. In other words, so much of the transportation

s occurred on the portable tracks was in effect held to

e partoof the harvesting. But once the cane was placed

1a position where it could be loaded on eane ears and

auled by locomotives over permanent railroad tracks,

he court held that the agriculture exemption was no

meer appltieable. In the case of Waialua, the *tconeen-

ration point’’ is exactly the same, that is, the point

here the cars loaded with raw sugar are deposited along-

ide the main line railroad for transportation te the manu-

aeturing plant. And the reasons which led the Court

f Appeals for the First Circuit to fix this dividing line

t the place at which the portable tracks met the perma-

ent tracks are equally applicable to the case at bar. It

pels reasonable and proper to choose this point as the

lace Where the agricultural activity, including the har-

esting, ends. From here on out the product of the soil

handled not by farina employees but by technicians and

peclalists, railroad men and mill hands. These emplov-

es should net be deprived of the benefits of the Act be-

vuse they are transperting and processing a product of

ne soil any more than any other railroad employee or

wdustrial worker is deprived of the benefits of the Act

ecause, upon tracing it back, some connection can be

mind hetween the product which he is transporting or on

hich he is working, and its original natural state in

rriculture.

Thus the National Labor Relations Board has held that

ew tagriculture’*’ cxemption contained in the National

abor Relations Aer (49 Stat. 446, 29 USC [1940 Ed. !

Moet seg.) does not apply to emplovees of Hawaiian

agar producers engaged in transportation, milling, repair

46

id clerical work on the plantations. (Pepeoehkco Sugar Co.,

YN.L.R.B. 1552.)74 Similarly, the District Court for the

erritory of Hawaii held as recently as July of 1955 that

le transportation and iilling employees of Waialua

self were not agricultural laborers within the meaning

’ the Labor Management Relations Act of 1947 (61

tat. 163, 29 USC 141, et seq.) (Watalua Agricultural Co.

United Sugar Workers, 114 F.Supp. 248.)

Finally, it is perfectly obvious that processing (and

‘ansportation incident to it) is not agriculture, since in

Act itself there are separate and distinct exemptions

paling with these two subject matters. If the 15(a)(6)

xemption did indeed include the processing of agricul-

iral products, there would have been no need or occa-

on to include the 7(¢) exemption in the Act.

“The most convincing argument that the processing

of sugar cane into sugar was not included within the

term ‘agriculture’ is found in the provisions of Sec-

tion 7(¢c). All the sections relating to exemptions are

in pari materia and must be construed together to

form a consistent whole, if possible. Section 7(¢) ex-

empts from the hours provisions of the Act the proc-

essing of sugar cane into sugar. If such processing

24° Althongh the term ‘agricultural laborer’ is not defined in

1e Aet, its meaning is not obscure. The guidepost is the ordi-

ary meaning of the phrase, that stemming from common usage

nd common understanding. The term ‘agricaltural laborer,’ as

mmmonly understood, refers to a person employed on a farm in

1e cultivation of the soil, including the harvesting of erups and

1 rearing and management of livestock. Only confusion results

‘om an extension of the meaning of the phrase ‘agricultural la-

rer’ beyond its customary sense. TY the Companies’ argument

ere accepted, some anomalous conclusions would result; e.g., loco-

otive engineers, conductors, brakemen, clgine oilers, machinists,

elders, bricklavers, service station attendants, toolroom attend.

nts. and stoekroom elerks ereploved by the Companies would per

ree beeome agricultural laborers.’ (59 NLRB at 1537.

TH

rer

aral

fere

hou

tion

47

is included within the term ‘agriculture’ it would be

entirely exempt from the Act and the specific inclu-

sion of such processing in the exemptive provision

of Section 7(c) would be unnecessary. But the con-

struction of thy word ‘production’ in Section 3(f) to

mean agricultural production is entirely consistent

with Section 7(¢), which provides specific exemptions

for certain detailed processing of agricultural coin-

modities.”” (Bowie v. Gonzalez, 117 F.2d at 17.)25

II.

= PROCESSING EXEMPTION DOES NCT APPLY TO THOSE

EMPLOYEES (1) WHO OPERATE OR MAINTAIN THE COM-

PANY’S MAIN LINE RAILROAD, (2) WHO WORK IN THE

VARIOUS GENERAL REPAIR SHOPS, (3) WHO GENERATE

STEAM AND ELECTRIC POWER, AND (4) WHO REPAIR AND

MAINTAIN THE MILL IN THE OFF SEASON.

ection 7(¢) provides that:

‘In the case of an emplover engaged ... in the proe-

essing of sugar cane... into sugar (but not refined

sugar)... [the overtime provisions of the Act] shall

not apply to his employees in any place of employ-

ment where he is so engaged.’’

he District Court held this exemption to be applicable

anployees who operated the processing machinery in

mill and performed activities closely connected there-

1: the District Court alse held this exemption to be

Not only did Congress recognize the two exemptions as sep-

sand distinet, but for reasons of poliev it treated them dif-

thy. The 13.a)(6) exemption applies to both the maximum

sand minimum wage provisions of the Act; the 7(¢) exemp-

applies only to the hours (overtime) provisions.

48

applicable to the employees who repaired and maintained

the mill and the mill machinery during the weekend shut-

down. Specifically, the processing exemption was held

to apply only to employees who performed the following

tasks: weighing incoming cane cars at the mill, operating

machinery for moving loaded cars into and empty cars

out of the mill, coupling and uncoupling cars at the mill,

collecting car tickets, regulating the flow of cane through

the crushing mills, operating the machinery which boiled

and crystallized sugar, operating the machinery which

bagged sugar, loading such bagged sugar into hox-

cars or storing it in warehouses, and cleaning and mak-

ing minor repairs to boiling house equipment. The Sec-

retary of Labor supported this view of the District Court.

Waialua argued in the Court of Appeals that this ex-

emption should also have been applied to employees who

operated the main line railroad which transported the

sugar cane into the mill, to employees who repaired and

maintained the railroad facilities, to employees who re-

paired and maintained the mill equipment during the off-

season when no processing was taking place, and to em-

ployvees who generated electricity and power for general

use on the plantation.

The Court of Appeals said the arguments of the em-

plovees and of the Secretary of Labor on this phase of

the ease were ‘trendered immaterial’’ by its decision, (216

Fd at 478. n. 45.) Presumably this was because it had

already held that ‘acriculture is not commerce’? (supra,

pp. 28-28) and that in any case the (a) (6) exemption re-

moved all of Waialua’s employees from the coverage ot

the Aet. (Supra, np. 29-47.)

49

The District Court’s ruling on this phase of the case

Was sO clearly correct that its decision should be affirmed

without more by this Court.?*

On its face, Section 7(¢) applies (1) only if the em-

ployer is engaged in a described operation (here the proc-

essing of sugar cane), and (2) only to those employees

who work in the place of employment where the emplover

is so engaged. Both tests must be met before the ex-

emption applies.

Obvious it is that the exemption is not co-extensive

with all of the activities engaged in by the employer who

happens also to be engaged in the processing of sugar

‘ane, Otherwise, if an emplever engaged in one exempt

and many non-exempt activities, al! of his employees

would lose the benefits of the overtime provisions of the

statute. That is not the case. To fail within the exemp-

tion the employees must, at the very minimum, be them-

selves engaged in the exempted operation. In other

words, if an employer processed sugar but also engaged

in railroading er general maintenance work (as Waialua

does here), only those of its employees who had to do with

the processing operations as distinguished from the main-

tenance or the railroading, would meet the first test. of

the section.

*8In its Brief in Opposition in No. 357 (p. 12), Waialua argues

that the decision of the Court of Appeals, even though erroneous

on other grounds, may be sustained by the ‘exemption of sugar

cane processing in Seetion 7(e)."" | Anticipating that sueh a con-

tention might be made, the employees in their petition for cert!

orari in No. 357 (pp. 354, n. 3) noted the bases upon which they

contend that the deeision of the Distriet Court was eorreet and

should be affirmed here.

00

But that is not all. Even such employees must, in

order to be deprived of the benefits of the Aet, perform

their work in the place where their emplover is engaged

in the exempt activity. If they perform it in some other

place, they do not fall within the language of the statute

even though their activities at such other place may, in

a generally broad sense, be said to be incidental or even

necessary to such processing.

In August of 1939 the Administrator issued his Inter-

pretative Bulletin No. 14 (1941 W. H. Man. 314-328) in

which he considered the exemptions established by Section

7(c) of the Act. In this connection the Administrator

pointed out that the section grants

‘... a complete exemption from the hour provisions

to emplovees ‘in any place of employment’ where his

employer is engaged ... in the processing of ...

sugar cane... into sugar (but not refined sugar) or

into svrup.’’ (1941 W. H. Man. at 320.)

He further pointed out that the purpose and legislative

history of the exemption clearly indicate that unless the

einplovee is employed in the actual ‘*department’’ where

the processing operation is physically carried on, he is

not exempt.

‘*The determination as to whether all the employees

of the emplover who are working in the establish-

ment are included in the exemption or whether the

exemption applies to only such employees as perform

the operations described in the section must be made

in the light of the legislative history of Seetion 7(c).

The Congressional debates show that the TELE Teese ot

this Section was to relieve processors of seasonal

agricultural commodities from the hour provisions of

OL

the Aet so as to enable them more easily toe conduct

their operations during peak seasons. It is our opin-

ion, therefore, that only the employees who perform

the operations described in Section 7(¢) or who per-

form operations that are so closely associated thereto

that they cannot be segregated for practical pur-

poses, and whose work is also controlled by the

irregular movement of commodities into the estab-

lishment, are covered by the exemption. For exam-

ple, in the ordinary case, none of the employees in

a department separate from the department in which

the exempt operations are performed will be exempt.

Thus, employees working in the meat-curing or sau-

sage-making departments of a meat packing house

will not be within the exemption.”’ (1941 W. H.

Man. at 325-324.)

In a case dealing with the Section 7(¢) exemption re-

lating to employees engaged in the handling, slaughtering

or dressing of poultry or livestock, the court adopted

similar reasoning and limited the exemption to those

employees only who functioned within the ‘tdepartment”’

directly engaged in processing. Fleming v. Swift & Co..

41 F.Supp. 825 (N.D. IIL), affirmed 131 F.2d 249 (CA 7).

‘Sec. 7(c) of the Act does not exempt industries from

the overtime provisions of the Act, but only the spe-

cific processes therein mentioned.

“The term ‘place of employvment* as used in see.

7(c) of the Fair Labor Standards Act means those

portions of the plant devoted by the emplover to the

handling, slaughtering, or dressing of livestock as

those terms are construed herein. In addition to the

emplovees specified in conclusion of law No. 6, any

eniplovoee whose employment during any workweek

is wholly within the place of employment, as herein

D2

defined, and who during that workweek is working

exclusively in an occupation which is a necessary part

of the handling, slaughtering or dressing of livestock,

also comes within the exemption of see. T(¢) of the

Act.””) (41 F.Supp. at 831.)

In Walling v. Bridgeman-Russell Co., 2 W. HH. Cas. 785

(D. Minn.), the court was concerned with the application

of the 7(c) exemption to an employer engaged in the

processing of milk and cream. It said:

“Section 7(¢) does not exempt industries from the

overtime provisions of the Act, but only the specific

processes therein mentioned.

‘The term ‘place of employvment* as used in Section

7(c) of the Act means those portions of an establish-

ment devoted by the employer to ‘first processing’

operations. The section 7(¢) exemption is applicable

to any employees who perform exclusively the oper-

ations described in this Section, and any emplovees

who, though not engaged in ‘first processing’ opera-

tions, are engaged exclusively in occupations which

are a necessary part thereof and perform such duties

in those portions of the premises devoted by the e1-

plover to ‘first processing’ operations.”” (2 W. H.

Cas. at 790.)

The Distriet Court was obviously correct in holding that

employees here involved who were engaged in general

maintenance and repair or in the operation of the rail-

ee

ro:.' system were not employed at the ** place of employ-

ment’? where the processing occurred. The carpenters,

plumbers, welders and electricians work in shops separate

from the mill. The train crews, section hands and wateli-

men all work along the 56 miles long main dine track:

DO

the railroad repair men work in the roundhouse, not the

mill, For the same reasons Section 7(¢) does not exempt

employees who generate power, or work at village mainte-

nance, None of the employees here mentioned engage

in processing or any part of it, nor is their work so

integrated with it as to be incapable of segregation.

Waialua itself did not treat the repair shop em-

ployees as part of its mill operations. Payrolls and cost

accounting records for tax purposes show the em-

ployees of the repair shop separately grouped from

the mill hands. The repair shop employees were not

occupationally attached to the mill. The headquarters

out of which they worked was in each case a separate

structure where they performed the major portion of

their work, to which they reported each day, and at which

they received supervision and instruction. These build-

ings were located at various distances from the mill.

When occasion required the employees to be elsewhere

than in the repair shops, they performed their services

for every operation on the plantation and not for the mill

exclusively. Generally, most of them did not perform

any work inside the mill except during the off-season

when processing was entirely suspended to permit major

repairs, overhauling, and the installation of new machin-

ery. The repair shop employees were under separate

foremen and supervisors from the mill hands. There

Was no interchange, save possibly during the off-season,

of personnel, equipment or materials between the mill

and the repair shops. The repair shops constituted self-

sufficient units not operated as an incident to any other

operation but rather as one of the separate enterprises

o4

jointly conducted by Waialua. If the employees of an

independent machine repair shop performed the repair

activities here under discussion, they would not be exempt

from the provisions of the Act.*:

Apart from the foregoing there are several employees

who, while working in the mill, are not themselves en-

gaged in processing sugar cane. One of them, for exam.

ple, operates the electric generator in the powerhouse

which supplies electric power for ‘‘operations throughout

the plantation’’ (R. 218), including of course the covered

and non-exempt railroad, roundhouse and office. Another

operates the machinery in the fireroom which produces

the steam used to power the electric generator and in the

mill. Even if such employees are regarded as being

employed ‘*in’’ the place where their employer is engaged

in processing sugar cane (because such processing takes

place in other rooms in the same building), the District

‘ourt was correct in holding the 7(¢) exemption inappli-

eable to them. This is so because their duties also in-

cluded the production and distribution of power for

activities not exempted by any provision of the statute.

Where exemptions are provided for ‘tany employee”

of designated types of employers, it has been held that

if the employer engages in both exempt and non-exempt

activities, his employees whose duties relate to the non-

exempt, as well as to the exempt, phase of the business

are not deprived of the benefits of the Act. Otherwise,

27The fact that the work was done by employees of Waialua

the single owner of the various enterprises affords to basis for

applying the exemption. Cf. Calaf vt. Gronztlez, 127 F 2d 934

(CAl).

35)

as already pointed out, an employer could engage in many

assorted businesses and claim exemptions for all of his

employees simply because one of the enterprises fell

within the language of Section 7(«).

Thus it has been specifically held that employees en-

gaged in the production of steam and electric power are

not within the 7(¢) exemption. In Walling v. Bridgeman-

Russell Co., 2 W.H. Cas. 785 (D. Minn.), the court held

that this exemption did not apply to employees who,

although they worked *‘in’’ the same place of employment

as others whose activities were exempt, generated steam

and power used exclusively for operating equipment and

heating and lighting the building where both exempt and

non-exempt activities were carried on. Similarly, Shain

v. Armour & Co., 90 F.Supp. 907 (W.D. Ky.), also involved

the application of the 7(¢c) exemption to employees ‘‘en-

gaged in producing steam, heat and power”’ for exclusive

use in the same building in which exempt and non-exempt

processes occurred. The court held the exemption was

inapplicable because ‘‘Section 7(c) of the Act does not

exempt industries as a whole from the overtime provi-

sions of the Act, but only those specifie processes therein

mentioned’*. (50 F.Supp. at 911.)

The same principle has been applied to the so-called

“employer”’ exemptions provided in other portions of the

Act. For example, Walling v. Connecticut Co., 154 F.2d

ool (CA 2), involved emplovees engaged in the produe-

tion of electric power for use by their employer, a local

trolley carrier. Since Seetion 13(a)(9) exempts ‘any

emplovee** of such an emptover, the contention was made

D6

that none of the emplovees were entitled to the benefits

of the Act. The court said:

‘Literally, that contention is correct. But it would

mean that, no matter in what business, however ex-

traneous to its functioning as a ‘local trolley carrier,’

defendant engaged, those employed in that extraneous

business would be exempt. The policy of the Aet,

disclosed in its history, precludes the acceptance of

such a literal construction.’*2" (154 F.2d at 542.)

So, here, the use of part of the power for the operation

of the non-exempt railroad and the other non-exempt

activities makes the processing exemption inapplicable to

the employees here involved.

Another example of the refusal to apply the literal

terms of an exemption because to do so would produce

a result not fairly within the Act’s purpose, is found

in Northwest Airlines v. Jackson, 18d F.2d 74 (CA 8),

cert. den. 342 U.S. SIZ.) There the exemption in Section

13(b)(3) for *tany employee of a carrier by air’’ was

held not to apply to employees of such a carrier whose

duties related not to such carriage but to other aspects

of the employer’s business. Similarly, in Davis v. Good-

man Lumber Co., 133 F.2d 52 (CA 4), the exemption in

Section 13(a)(2) for ‘‘any employee employed in any

retail or service establishment’’ was held inapplicable

28Markham v. Cabell [326 U.S. 404], 66 S.Ct. 193; A. TL.

Phillips, Inc. v. Walling, 324 U.S. 490, 493, 497, 65 S.Ct. S807,

157 A.L.R. S76; Walling v. Jacksonville Paper Co. 517 US. 564,

571, 63 S.Ct. 352, 87 L.Ed. 460; Roland Eleetrical Co. v. Wailing,

66 S.Ct. 413; Phillips vo Star Overall Co, 2 Cir, 149 F.2d 416,

420; Collins vo Kidd Dairy & Tee Co. 5 Cin, 132 F.2d 79, 86;

Davis v. Goodman Lumber Co, 4 Cir. 133 F.2d 52, 54; Walling

vy. Peoples Packing Co.. 10 Cir, 182 F.2d 256. [Court's foot

note. |

ov

to employees working in the manufacturing end of: the

employer's retail establishment.

o . the employees engaged in the manufacturing

business of the Goodiman Company were entitled to

the protection of the statutory standards, although

by far the greater part ef the corporation’s business

consisted of a retail establishment chiefly engaged

in intrastate commerce, Whose employees were exempt

from the wage and hour provisions of the Act. The

propriety of applying the Act to a separate and

distinct department of an employer’s business while

recognizing that another part is exempt from the

statute, has been recognized in similar situations.

Fleming v. Hawkeye Pearl Button Co., 8 Cir, 113 F.

Yd 52; Fleming v. American Stores Co., D.C.E.D. Pa.,

42 F. Supp. 511.7" (135 F.2d at 54.)

To the same effect are Wabash Radio Corp. v. Walling,

162 F.2d 391 (CA 6), and Western Union Telegraph Co.

». McComb. 165 F.2d 65 (CA 6), cert. den. 333 U.S. S62.

Tn addition, generation of steam and power are not the

processing of sugar cane no matter how ‘‘necessary’” they

may be to that processing, any more than maintenance

railroading or milling are agriculture because they are

‘necessary’? to it. (See supra, p. 2d, n. 21.)

Neither does the work performed upon the ‘bagasse’

(the byproduct of the sugar cane used for fuel) come

within the processing exemption. The Administrator

recognized this fact in his 1939 Interpretative Bulletin

already referred to.

“Operations performed on bagasse, such as removing

sume from the sugar mill, baling and compressing,

are not included in the exemption, since such opera-

58

tions do not constitute the ‘processing of * * * sugar-

cane’ and further such operations do not result im

sugar and syrup. The exemption, it should be noted,

is limited to the processing of sugarcane ‘in(o sugar

** * or into svrup’.”’ (1941 WLLL Man, at 621.)

Finally, Waialua argued below that the processing

exemption applies even during the so-catled *toff-scason”’

when new machinery is installed and extensive repairs

are made to the mill equipment. During this three or

four month period of time, no raw sugar whatsoever is

produced, nor is any cane harvested, transported or

processed.

The District Court’s ruling that the exemption does not

apply to this period of time 1s consistent with the legis-

lative purpose of the Act and is in aceord with the

decided cases. For not only must the employee who

is to be excluded from the benefits of the Act be employed

‘in the place’? where the processing occurs, but for the

exemption to apply the employer must be engaged in the

processing operation at the time the exemption is claimed.

Section 7(c) commences by limiting its application to

the ‘‘case of an employer engaged in... processing...”

Clearly, when the employer’s mill is shut down for main-

tenance and repairs to old machinery and for the installa-

tion of new machinery for a three month period of time,

the employer is not at that time engaged in processing.

+

In Maisonet v. Central Coloso, Ine., 2 W.H. Cas. 753

(D. P.R.), the court had before it the very contention

here advanced by Waialua. In Puerto Rico, as in Hawath,

5

59

there is a substantial period of each year during which

the sugar mills are closed down for repairs and no raw

sugar ix processed, The emplovers nonetheless contended

there, as Waialua does here, that the Tic) exemption

apphed during such ‘off or ‘dead’? season. In reject

ing this contention the court said:

“The primary purpose of the exemption in question

is to permit the employment of persons in seasonal

industries, particularly where perishable commodities

such as sugar cane are concerned, without the hard

ship of paying overtime. ‘Sugar cane is highly per

ishable and must be ground vers soon after it is eut’

(Bowie v. Gonzalez, 117 Fitd 11, 14 [1 WH Cases 99,

100]). But this situation does not obtain during the

dead season, There is me similar reason why em

ployees should work more than 40 hours in ‘con

struction and repair work and preparation of the

mill for the coming grinding season (zafra).’

«€ e o « oe *

‘The administrator, whe has filed a brief as amicus

curiae, cited Fleming v. Hawkeve Pearl Button Co..

113 Feld 52, 57 | 1 WHE Cases S81, 85) (CLCLAL Sth

Cir.) as authority for his contention that * processing

should be limited to these activities which have te do

with the conversion of sugar cane into raw sugar

and those operations which are so related thereto that

they should be considered to have been included.” The

Administrator’s position seems well taken. In addi

tion to the fact that emplovees working during the

dead season do not come within the purpose of the

exemption, it would seem, under the rule of) strict

construction of exemptions, that durime the time

these employees work in repair and maintenance,

60

their enployer is not ‘engaged in. the processing of

sugar cane into sugar.’ 7" (2 WH Cases at 745-756.)2"

The Distriet Court in the ease at bar correct] recog:

nized (97 F.Supp. at 208) that the ‘tof season” In a pe

ried devoted to repair and maintenanee work on a Vast

seale, designed to safeguard Waialua ‘s capital inves nent

as well as to insure the uninterrupted functioning « ° the

mili during the harvest season. It is clear fro its

language that the exemption is premised upon the fae

that processing Opera’ ions are heimng condueted, Vhen

they are the exemption applies : but when, as here, they

are not, then the exemption is not applicable. lr the

circumstances of the ease oo bar the exemption ap olies

oniy during such time as the emplover is engaged in

processing. When the mill is shat down, the exemmtion

does not apply.

Congressional purpose, as expressed in the et. plainly

refutes the contention that activities which may be meses.

sary to processing, as distinguished from processing actiy

itles per xe, should likewise be held exempt. Elsewhere

in ta. Act, Congress demonstrated that, where it desired

to cover both a particnlar activity and some other Activity

necessary thereto, appropriate language was emiploved,

Vhus, Section 30j)) grants coverage to eniplovees whe

produce woods for COLIE TCE, and also to eriplovees Whose

wetivities are “necessary” to the production of woods for

"To the same effect, see Meahurg v. Inde pendent Oi Mill Ine.

2 WH Cas. 655 (W1) Tenn. and Abram + Nan doaquin

Cotton Od Co. 49 #F Supp 305 oS 0 Calo. Although both of

these cases involved the ‘dormant season’ in. the processing oof

eattonseed, the principle is the same

61

commerce, (See pp. 65-05, imfra.) But in granting

the sugar processing exemption to employers, Congress

confined ite ta the time during which, and the place where,

the PPOCESStNd Ope rations per se were taking place. It

would do violence to statutory purpose and language to

exempt each and every emplovee, regardless of the nature

of his work or the locale of its performance, merely

hecause certain of his emplover’s other employees were

sometimes engaged in processing. On such a theory, the

provisions of this remedial Act could be construed away

into virtual ineffectiveness.

IV.

THE VILLAGE MAINTENANCE EMPLOYEES ARE ENGAGED IN

THE ‘‘PRODUCTION OF GOODS FOR COMMERCE’’ AND,

SINCE THEY ARE NOT OTHERWISE EXEMPT, WERE COR-

RECTLY HELD BY THE DISTRICT COURT TO BE INCLUDED

WITHIN THE COVERAGE OF THE ACT.

Some of the employees here involved spent a consider.

able portion of their time repairing and painting company

houses, cleaning the plantation village, constructing and

repairing plumbing installations in the company houses,

and constructing and repairing the water and sewage

systems servicing such houses. They alse engaged in

trimming shade trees located around the plantation

houses, cutting firewood for use as fuel in the plantation

houses, and painting the company gymnasiums and club-

house.

The Distriet Court held that such emplovees were

ploy

engaged in the production of goods for commerce and,

62

since they fell within none of the exemptive provisions

of the Act, were entitled to compensation at the statutory

overtime rate for hours worked in excess of 40 in each

workweek. The Court of Appeals held that these activ-

ities were ‘‘purely local in nature’? and a ‘convenient

adjunct to farming’’ (216 F.2d at 473), and therefore

exempt frem the coverage of the Act. It is submitted

that the District Court was correct and that its judgment

should be affirmed.

The record reveals that it was necessary for Waialua

to furnish housing and community services to its pro-

duction emp!oyvees. The village is located upon Waialua’s

private lands and in isolation and insulation from the

rest of the Territory. No other housing in adequate

quantity, except that provided by Waialua, is available

to the employees. Waialua had originally constructed

these houses and established the village for the purpose

of supplying necessary dwellings for a stable labor pool

which it desired to be in close proximity to its opera-

tions. Obviously, what is once constructed must be main-

tained if the origina! purpose is not to be defeated. Thus,

maintenance of village facilities and dwelling repairs are

carried on by Waialua as an integral part of its opera-

tions, not as a matter of kindliness or convenience to its

employees, more than 98 per cent of whom live in com-

pany houses.*°

Many of the emplovees who performed work in connec-

tion with village facilities were also part of Waialua’s

“Rental to outsiders is negligible and it is generally confined

to tradespeople who operate commercial establishments in- the

village.

65

production work force, being attached to the various

repair shops which service production machinery and

equipment and also administration and office buildings.

Housing and community services originally -epresented

part of the wage payment made to the employees in the

form of perquisites. Abolition of this perquisite system

in 1946 did not nullify either the original purpose of the

housing, or the continued effectuation of that purpose.

Indeed, at the very time the perquisite system was ended,

Waialua expressly undertook a collective bargaining obli-

gation to continue to furnish repairs and maintenance of

housing and village conmnunity services (Def’s. Ex. B),

and expressed its intention of not making housing a profit-

making venture.

Under such circumstances it is submitted that the main-

tenance and upkeep of the village facilities is the pro-

duction of goods for interstate commerce. Section 3(j)

of the Act read, at the time in suit, as follows:

‘**Produced’ means produced, manufactured, mined,

handled, or in any other manner worked on in any

State; and for the purposes of this Act an employee

shall be deemed to have been engaged in the produc-

tior «f goods if such employee was employed in

producing, manufacturing, mining, handling, trans-

porting, or im any other manner working on such

goods, or m any process or occupation necessary to

the production thereof, in any State.’

31 Effective January 25, 1990, Congress amended Section 3())

to read as follows:

‘Produced’ means produced, manufactured, mined, handled.

or in any other manner worked on in any State; and for the

purposes of this et an emplovee shall be deemed to have

been engaged in the production of goods if sueh employee

was employed in producing, manufacturing, mining, handling,

64

In Airschbaum v. Walling, 316 U.S. S17, this Court

considered whether employees who operated and main-

tained a building, in which space was rented to persons

who produced goods for interstate commerce, came within

the provisions of the Act. Relying principally upon the

above italicized provisions of Section 3(j), this Court

held such employees to be covered despite the contention

that the maintenance of a building was ‘purely local in

nature’. (316 U.S. at 524.)

‘‘But the provisions of the Act expressly make its

application dependent upon the character of the em-

ployees’ activities. And, in any event, to the extent

that his employees are ‘engaged in commerce or in

the production of goods for commerce,’ the emplover

is himself so engaged. Nor can we find in the Act.

as do the petitioners, any requirement that employees

must themselves participate in the physical processes

of the making of the goods before they can be re-

garded as engaged in their production. Such a con-

struction erases the final clause of Section 3(j) which

includes employees engaged ‘in any process or oecu-

pation necessary to the production’ and thereby does

not limit the scope of the ‘Statute to the preceding

transport in, , or in any stile manner woking on such goods,

or in any closely related process or oceupation directly essen-

tial to the production thereof, in any State.”’ [June 25,

1938, ¢. 676, $3(j), 52 Stat. 1961, October 26, 1949, e¢. 736,

§3, 63 Stat. 911.)

By the amendment the phrase ‘closely related’’ was inserted be-

fore the words ‘‘process or oecupation’’, and the words ‘‘directly

essertial’’ were substituted for the word *‘necessary"’

Ne are not concerned here with this amendment because all! of

the work here involved was performed prior to its effective date.

However, it is clear that the purpose of the amendment was more

narrowly to confine the ieaning of the word ‘* produce’? and

undoubtedly was a Congressional reaction to this Court's decisions

in Kirschbaum v. Walling, 316 U.S. O17, and Borden Co. vo Bo

rella, 325 U.S. 679, infra.

65

clause which deals with employees ‘in any other

manner working on such goods’...

... In our judgment, the work of the employees

in these cases had such a close and immediate tie

to the processes of production for commerce, and was

therefore so much an essential part of it, that the

employees are to be regarded as engaged in an

occupation ‘necessary to the production of goods for

commerce’...

‘The suggestion that the Act, if applied to these

employees, goes beyond the bounds of the commerce

power is without merit.”* (316 U.S. at 524-526.)

In Borden Co. v. Borella, 325 U.S. 679, this Court held

that employees engaged in activities relating to the main-

tenance and operation of a building which was used

substantially as the headquarters of a corporation en-

gaged in interstate commerce, and in which the executive

offices of the corporation were housed, were covered by

the Act. In determining whether employees were ‘‘en-

gaged ... in the production of goods for commerce,”’ the

court said:

‘As to the latter category of employees it is unnec-

essary that they directly participate in the actual

process of producing goods inasmuch as Section 3(j)

.. provides that ‘for the purpose of this Aet an

etiployee shall be deemed to have been engaged in

the production of goods if such employee was em-

ployed... in any process or occupation necessary

*2In the subsequent case of Brooklyn Savings Bank v. O'Neil,

324 US. 697, it was not even questioned that a night watehman

employed in a building, a substantial portion of whieh was de-

voted to the production of goods for commerce, was entitled to

overtime compensation under the provisions of the Aet (324 U.S.

at 699-700).

66

to the production thereof, in any State.’ "' (325 U.S.

at 682.)

The court noted that the only distinction between

Borella and the earlier Kirschbaum case was

‘*... that here the employees work in a building where

production of goods is administered, managed and

controlled rather than carried on physically. We

hold, however, that this distinction is without eco-

nomic or statutory significance and that it cannot

form the basis for concluding that the respondent

employees are engaged in occupations unnecessary

to the production of goods for commerce’’. (325 U.S.

at 682-683.)

The court recognized that in an economic sense produec-

tion includes all activities directed to creating or increas-

ing goods and commodities, and is not limited to the

physical labor involved in changing the form or the util-

ity of a tangible article. Thus the administration, man-

agement and control of the physical processes is also a

part of the productive process, and therefore a service

such as building maintenance which is necessary to such

administration, management and control, is also part of

the production. It follows that employees engaged in such

maintenance are engaged in an occupation necessary to

production and thereby qualify for benefits under the Act.

‘*Petitioner’s industrial organization is such that the

opera ion and maintenance ¢° a central office building

is essential to the economy, efficieney and continuity of

production.”* (325 U.S. at 684.)%

33In the subsequent ease of Schulte . Gang, 328 U.S. 108. it

Was not even questioned that buils ~vall maintenance employees in

au building the oceupants of which produced goods for interstate

67

So here, too, Waialua’s organization is such that. the

operation and maintenance of the village facilities are es-

sential to the economy, efficiency and continuity of its rail-

roading and manufacturing operations.

Indeed, the court below had previously so construed the

statute, relying upon this Court’s decision in Kirschbaum

r. Walling, supra. In Consolidated Timber Co. v. Womack,

182 F.2d 101 (CA 9), there was involved the status of

employees working in two cook houses maintained and op-

erated by a company engaged in the production of goods

for interstate commerce. One of these cook houses was

held by the trial court* to be ‘tan adjunct to the produc-

tion of goods and the employees therein are assisting in

that process’? (Womack v. Consolidated Timber Co., 43

F.Supp. 625 at 632-683 [D. Ore.|), while the other was

held exempt as a retail or service establishment under

Section 13(a)(2) of the Act. The former holding was

affirmed and the latter reversed, the Court. of Appeals

holding that the employees of both cook houses were

covered by the Act.

‘Here the cook house was a ‘necessary’ part of the

Company’s production of goods for commerce. Tt was

not operating with the intent or purpose of showing

a profit to the owners from the sale of food or service.

hut to render a very necessary assistance to the busi-

ness of the Company, which was the production of

logs in interstate commerce. The cook house was not

commerce, were covered by the Act (328 U.S. at 117, 118). See

also Martino v. Michigan Window Cleaning Co., 327 US. 173

‘employees of employer engaged in window cleaning at plants

producing goods for interstate commeree).

“Judge Fee, who wrote the opinion of the Court of Appeais in

the instant case.

68

a separate or independent establishment; it was

actually a part of the Company's facilities-—a link in

the chain—whereby it accomplished the purpose of

its existence. Neither cook house was in 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 cook house was intended to serve; the loggers.

The principal activity of the cook house definitely was

not to furnish service to the consuming public, as

such, but was to serve the employees of the Com-

pany.’’ (132 F.2d at 107.)

This opinion of the court below was subsequently fol-

lowed in Hanson v. Lagerstrom, 133 F.2d 120 (CA 8).

There, as here, the employer argued that the maintenance

of the cook house was not ‘‘indispensable’’ to its opera-

tion since other tacilities were available. But the court

said:

“The proximity of hotels at Little Falls and Big

Falls, Minnesota, the presence of a highway run-

ning past the camp within 150 feet, and other roads

kept open the vear around, with many men owning

ears of their own, are cited as indicating the non-

essential character of the cook house. It is also said

that the cost of production is the same whether the

camp method is used or farmers and shackers are

hired. But these suggestions are aside from the ques-

tion. The fact that defendant might have emploved

other methods, thus avoiding the necessity of main-

taining a cook house, is not important. We are here

‘confronted with a condition and not a theory’. We

must here confine our consideration to what was actu

ally done and not to what might have been done.

* * * ? * a *

69

*“*. .. the cook house was intended primarily for the

benefit of defendant's logging employees and to in-

crease his production operations. It is certainly not

a typical retail establishment. It was owned by the

defendant and operated by him in connection with

his logging operations. When these operations cease

the cook house with its accompanying service will

disappear.’’ (133 F.2d at 122-123.)3

The foregoing cases turn upon the fact that the work

performed by the service employees is in itself part of the

over-all effort for the production of goods for commerce.

Supplying such service constitutes an activity covered

by the Act where it has a close and immediate tie with the

process of production. Although each case depends

upon its own facts, the decisive elements were suggested

in Consolidated Timber Co. v. Womack, supra:

‘*Was not the greater number of diners of the cook

houses engaged in the production of goods for com-

merce? Were not the cook houses an integral part

of an organization devoted to the production of goods

for commerce? Does it not follow, reasonably and

logically, that the greater part of the service ren-

dered by the cook houses was in interstate commerce

rather than in intrastate?’’ (132 F.9d at 107.)

As the court below recognized in another case, the term

‘*produced”’ is broadly defined in the Act (Culver v. Bell

& Loffland, Inc., 146 F.2d 29, 32 [CA 91) and this Court

35To the same general effect are the following Distriet Court

decisions: Ferguson v. Prophet Co., 6 W.H.Cas. 284 (S.D. Ind.)

(employees engaged in preparing food at a plant cafeteria) :

McComb v. Factory Stores Co., 81 F.Supp. 402 (N.D. Ohio)

(employees of company operating canteen on premises of Republic

Steel Corporation).

70

has said that the word ‘‘necessary’’, here employed in the

Act, should not be applied in a manner that would give it

an unwarranted rigidity; it is a word ‘*to be harmonized

with its context’’. (Armour & Co. v. Wantock, 323 U.S.

126, 129-130.) The issue in the Wantock case was whether

a firefighting service was sufficiently related to the oper-

ation of a soap factory as to entitle the service employees

coverage under the Act. This Court said:

se

. no hard and fast rule may be transposed from

one industry to another to say what is necessary in

‘the production of goods’. What is practically neces-

sary to it will depend on its environment and_posi-

tion... What is required is a practical judgment

as to whether the particular employer actually oper-

ates the work as part of an integrated effort for

the production of goods.’’ (323 U.S. at 130.)

The ‘* practical judgment’’ of the District Court that the

company’s maintenance of Waialua Village in the case at

bar was part of its effort for the production of goods

which were shipped in interstate commerce was clearly

correct and should be affirmed.

Waialua also contended below that if these village

maintenance employees are held to be engaged in the

production of goods for commerce, then they are auto-

matically exempt either under the 13(a)(6) or the 7(c)

exemption. This, of course, is not correct*® and it is quite

clear that under the authorities heretofore cited in our

discussion of these two exemptions, these village main-

tenance employees can by no stretch of the imagination

%6See n. 21, supra.

71

be held to be engaged in cither agriculture or the proc-

essing of sugar cane.

V.

WHEN AN EMPLOYEE IN A GIVEN WORKWEEK PERFORMS

SOME WORK EXEMPT UNDER SECTIONS 13(a)(6) OR 7(c)

AND SOME NOT SO, OR OTHERWISE, EXEMPT, HE SHOULD

RECEIVE THE OVERTIME BENEFITS OF THE ACT.

Some of the employees here performed, during parts

of some of the workweeks involved, work which was ex-

empt from the provisions of the Act as being either agri-

cultural or processing, and during other parts of the same

workweek performed work which was not exempt. The

District Court held that when, in a g’ven workweek, an

emplovee was so employed, he was entitled to the bene-

fits of the Act.*7 The Secretary of Labor supported this

view of the District Court. The Court of Appeals said

es

that this issue was ‘‘immaterial’’ because of its decision.

(See supra, pp. 47-49, and n. 26.)

The views of the District Court are sustained, as it

said, by ‘‘an imposing array of decisions’’. (97 F.Supp.

at 232.)

In Overniaht Motor Transport Co. v. Missel, 316 U.S.

072, this Court had before it the application of the over-

time provisions of the Act to an employee ‘‘ working ir-

regular hours for a fixed weekly wage’’. (316 U.S. at

37The District Court found: ‘‘As a general rule, the engage-

ment by defendants [the emplovees| in non-exempt activities, in

those workweeks where this is found to be the faet. was sub-

stantial; and even in those instances where such engagement was

smail in amount, it was regular and recurring.”’ (97 F.Supp. at

232.)

72

973.) In determining what was the correct formula to be

used in fixing the employvee’s hourly rate of pay for pur-

poses of computing his overtime compensation, the court

determined that the workweek of the employee was the

unit to be utilized.

‘*Neither the wage, the hour nor the overtime provi-

sions of $§6 and 7 on their passage spoke specifically

of any other method of paving wages except by

hourly rate. But we have no doubt that pay by the

week, to be reduced by some method of computation

to hourly rates, was also covered by the act. It is

likewise abundantly clear from the words of $7 that

the unit of time under that section within which to

distinguish regular from overtime is the week. ‘No

emplover shall... employ any of his employees...

(1) for a workweek longer than forty-four hours

-.. , (316 US. at 579.)**

Since the provisions of Sections 15(a)(6) and 7(c¢)

make no reference to a unit of time, it is reasonable to

suppose that that unit is the one established in Sections

6 and 7(a) and that the ‘‘workweek’’ is the unit to be

applied to the exempting sections as well as to the other

sections of the Act. Indeed by referring back, as_ the

exempting provisions do, to the more general sections,

it is clear that the time unit specified in the general sec-

tions are incorporated into the exempting sections.

This appears to be the view of every court that has

passed upon the section. North Shore Corp, v. Barnett,

143 F.2d 172, 175 (CA 5): Anderson v. Manhattan Light-

erage Corp., 14S F.2d 971 (CA 2), cert. den. 326 US. 722:

38This view was followed in Warren-Bradshaw Drilling Co. v.

Hall, 317 U.S. 88, 93.

73

Fleming v. Swift & Co., 41 F.Supp. 825, 8382 (N.D. TL),

aff’d. 131 F.2d 249 (CA 7): Jordan v. Stark Bros. Nurs-

erties & Orchids Co., 45 F.Supp. 769 (W.D. Ark.) 2" Shain

v. Armour & Co., 0 F.Supp. 907 (W.D.Ky.) 2° Walling

v. DeSoto Creamery & Produce Co., 51 F.Supp. 938 (D.

Minn.) ;#! Walling v. Peacock Corp., 58 k.Supp. SSO, S83

(E.D. Wis.); McComb v. Puerto Rico Tobacco Marketing

Co-Op Ass’n., 80 F.Supp. 953, 957 (D. P.R.), aff’d. 181

F.2d 697 (CA 1); UcComb v. Del Valle, 80 k.Supp. 945

(D. P.R.); Walling v. Bridgeman-Russell Co., 2. WH.

Cas. 785, 790 (D. Minn.); ef. Walling v. Jacksonville

Paper Co., 317 U.S. 564, 571-572; Bay Ridge Operating

Co. v. Aaron, 334 U.S. 446; Wabash Radio Corp. v. Wal-

ling, 162 F.2d 391, 393 (CA 6).

And this was the view adopted by the Administrator at

the outset :

‘*Questions have been presented as to whether an em-

ployee who devotes part of his time to an activity

described in this section and part of his time to a

non-exempt operation is entitled to the benefit of the

exemption. It is our opinion that in such ease, the

employee is not entitled to the exemption. Of course,

if the employee is engaged in certain workweeks in

only the exempt operation, he is entitled to the ex-

emption during such workweeks.’’ (1941 W.H. Man.

at 328.)

30° defendant is able for the minimum wage and overtime

compensation for the weeks in which plaintiffs spent any of their

~ at such {non-exem; | labor 2.27" (46 F.Supp. at 771-772.)

“The workweek appears to be the aecepted unit of measure-

ment with respect to the services of each employee.”’ (50 F.Supp.

at 911.)

ts Engaging in both exempt and non-exempt operations in the

same workweek renders the employee non-exempt for the entire

week.”’ (51 F.Supp. at 943.)

74

Indeed, no other view is tenable. It would be an utter

emasculation of the statute to fractionalize an employee's

time any further and would pose administrative problems

which would be impossible of solution.

The particularity with which the exemptions provided

for in Sections 13(a)(6) and 7(c) is stated indicates an

intention not to broaden any further the exemptions thus

granted. Such an extension of the exemptions beyond

their clearly stated scope would contravene the principle

well established under this Act that ‘*Such specificity in

stating exemptions strengthens the implication that em-

ployees not thus exempted . .. remain within the Act.’’

Powell v. United States Cartridge Co., 339 U.S. “97, 517.

See also Addison v. Holly Hill Co., 322 US. 607,

617: ‘*Exemptions made in such deiail preclude their

enlargement by implication.’’ In refusing to ‘“‘extend an

exemption to other than those plainly and unmistakabiy

within its terms and spirit’? (Phillips Co. v. Walling, 324

U.S. 490, 493), the courts have uniformly refused to inter-

pret exemptions in such a manner as to exempt activities

which Congress obviously did not intend to exclude from

the scope of the Act.

Furthermore, since ‘‘any exemption from this humani-

tarian and remedial legislation must ... be narrowly con-

strued ...’’ (Phillips v. Walling, 324 U.S. 490, 493), the

exemption cannot be granted simply because an employee

engages in some exempt work if he also engages in other

work which Congress clearly intended to subject to the

statutory standards. Any other interpretation would

open the door wide to evasion of the Act's purpose to

eliminate sub-standard labor conditions. It would result

75

in absorbing into the exemptions parts of ondustries and

activities plainly covered by the Act, simply because the

same employees or their employers happened to ongage

in several kinds of activities, some exempt and others non-

exempt.

VI.

THERE IS A REAL CONTROVERSY BETWEEN THE PARTIES

CONCERNING THE APPLICABILITY OF THE ACT TO THE

EMPLOYEES HERE INVOLVED. THE CAUSE IS IN NO WISE

COLLUSIVE AND IS RIPE FOR COMPLETE DETERMINATION

BY THIS COURT AT THIS TIME.

Waialua construes the decision helow as holding only

that the action shoud be dismissed as collusive. However,

the Court of Appeals specifically refused to dismiss the

employees’ counterciaim which it certainiy would have

done, had that been the extent of its holding. On the con.

trary, it ordered further proceedings on the counterclain:

in accordance with its opinion. In its opinion it gave

a full exposition of its views on the questions relating to

commerce coverage and the agriculture exemption. In.

deed, its order plainly rests upon its view that the cor

pany’s whole enterprise is outside the scope of the Aet

because ‘‘agriculture is not conmerce, interstate or for-

eign, nor does agriculture affect such commerce in a

constitutional sense’? (216 F.2d at 476), and that in any

event the agriculture exemption applied to all of Wala

lua’s employees.

Thus, there is no point in remanding the case to the

Cowmt of Appeals, as is suggested by Waialua, since that

court has already expressed itself fully on the merits.

76

Nor is there any point in sending the ease back to the

Distriet Court to enter judgment in aecordanee with the

Views on the merits expressed by the Court of Appeals

since, as we have seen, those views are erroneous. To

refer the case back to the lower court again would serve

no PRIPPose execent to prolomye this litigation. This Cause

has heen tried twice now, and on the last trial the District

Court Made “meticulous and exact’’ findings of fact.

There is no question but what the evidence supports

these findings, and the only matters left for determination

are questions of statutory construction upon which the

Court of Appeals has clearly and unequivocally expressed

itself and has expressed itself in a manner which is eon-

trary to the decisions of this Court and of other Co rts

of Appeals.

A. There is a real controversy between the parties concerning

the liability of the employer to pay overtime compensation

pursuant to the provisions of the Fair Labor Standards Act.

Although the employees will obtain all the relief to

Which thes are entitled if the Distriet Court's judgment

on ther eounterelain is affirmed here, they nonetheless

are of the view that the Court of Appeals erred in order-

ing distissar of Watalita’s complaint for declaratory

relief,

hor that complaint, like the counterelaim, does present

an actual and bupertant controversy bet scen the parties

concerning Wailalua’s liability to pay te the emplovees

here involved overtime compensation under the previ

steons of the Net. The controversy existed for many vears

before the suit was filed, and it exists today. Clearly,

under sueh circumstances, the District Court had juris-

77

diction to render a declaratory judgment (28 U.S.C.

2201), and it was error jor the Court of Appeals to re-

verse the District Court for an alleged abuse of discre-

tion in entertaining the suit. Aetna Life Insurance Co.

v. Haworth, 300 U.S, 227: Maryland Casualty Co. v. Pa-

cife Coal & Ou Co., 312 U.S. 270; Railway Mail Asso-

ciation v. Corsi, 326 U.S. 88. Declaratory relief proceed-

ings have been frequently utilized in cases involving the

interpretation and application of the Fair Labor Stand-

ards Act (Tennessee Coal ete. Co. v. Muscoda Local, 321

U.S. 590; Jewell Ridge Coal Corp. v. Local 6167, 325 U.S.

161), and, so far as is known, this is the first time any

court has suggested that this procedure is inapplicable

to a controversy such as this.

However that may be, this Court need not reach the

question since it can determine the merits of the con-

troversy between the parties here by its review of the

order of the Court of Appeals reversing the District

Court’s judgment on the counterclaim rendered in favor

of the employees.”

"The Court of Appeals’ treatment of this aspee of the case is

contusing. In its main opinion it recognized that under Section

'6(b) of the Act. ‘Seach of these employees had an adequate rem.

edy by action at law if any thought he was aggrieved."’ (216 F.

2d at 475.) Tt was precisely this remedy which the employees

sought to utilize by filing their counterelaim,

Hiowever, in its of vion on rehearing, it “‘construes what is

called the ecross-compiaint as a petition also for declaratory re-

lief" (216 F.2d at 479) This it obvieusly was not. It was

a complamt for meney to which the employees were entitled as

overtime compensation, liquidated damayes and attorneys’ fees, al!

as provided for in Section 160b) of the Net

Despite the eourt’s ‘“eonstruetion of the cCross-compilaint

urerelaim | as a petition for declaratory rehef, that pleading

was “left undismissed.

If the counterelaim were ino fact a petition for deelarator

relief, and if such a petition could not properly be eptertained,

78

B. The case is not collusive.

In its original opinion the Court of Appeals adverted

to the agreement on commerce coverage and to the **Stip-

ulation’? (R. 27), and suggested that because of thcse

circumstances Waialua’s petition had to be dismissed. In

its Gpinion on rehearing, the Court of Appeals stated

directly that ‘*the entire cause was tainted by apparent

collusion between the parties in an attempt to obtain

an advisory opinion on constitutional questions’’. (216

F.2d at 479.) In this the court was in error.

The commerce agreement was entered into (1) since it

is undisputed that the raw sugar produced by Waialua

was shipped from Hawaii to the mainland and there re-

fined and sold, and (2) since this Court has consistently

held that the commerce power reaches the production of

agricultural commodities destined for interstate shipment.

Santa Cruz Fruit Packing Co. v. N.LR.B., 303 U.S. 453;

Milford v. Smith, 307 U.S. 38; United States v. Wright-

wood Dairy Co., 315 U.S. 10; Wickard v. Filburn, 317

U.S. 111; Mandeville Farms v. Sugar Co., 334 U.S. 219:

Farmers Reservoir & Irrigation Co. v. McComb, 337 U.S.

(Oe.

Such an agreement did not render the suit collusive.

(ef. Cotiing v. Goddard, 183 U.S. 79.) Still co be tried

then the Court of Appeals should have dismissed it also. The

facet that it did nat. demonstrates that irrespective of the court's

“eonstruetion, " it recognized that in fact the counterelaim was

an oaetion at law to recover overtime compensation, liquidated

damages, ond atterneys’ fees.

T} siggestion that the offieers of the

tit-: the

were as no foree im th

eorporation agreed with the stockholders as te the unconstitution

‘ the statute, and that therefore the suit is ia eollusive

nt

one. That was the condition i: Dodge vo Weolsey, 18 How, 331,

79

out were the issues of statutory construction about whieh

the parties were in sharp disagreement.

It was not suggested by the Court of Appeals that the

stipulation as to facts does not truly reflect the facets

about Waialua’s operations and the parts plaved therein

by the employees here. Such a stipulation does not ren-

der a suit collusive, but on the contrary it is looked upon

with favor since it expedites litigation and permits a

court to get quickly to the heart of the issues between the

parties.‘

Stipulations as to facts in cases arising under the Fair

Labor Standards Act have long been received as appro-

priate (Roland Electric C». v. Walling, 326 U.S. 657, 661-

662; Boutell v. Walling, 327 U.S. 463, 465. 468; Ruther-

ford Food Corp. v. McComb, 331 U.S. 722. 725; Puerto

Rico Tobacco Marketing Corp. v. McComb. 18} F.2d 697,

698 [CA 1]), and ‘‘concessions”’ respecting commerce

coverage (Kirschbaum +. Walling, 316 U.S. 517, O19; 149

Madison Avenue Corp. ve Asseta, BBL US. 199, 201;

and it only emphasizes the faet that the officers were refusing

to protect the interests of the stockholders, not wantonly, it is

true, but from prudential reasons.’’ (1&3 U.S. at 113)

“Chief Justice Taney said many Vears ago:

“*.. . It sometimes happens that for the purpose of obtaining

a decision of the controversy, with! out ineurring needless

expense and trouble they [the parties! agree to eonduet the

suit in an amicable manner, that is to say, that they will not

embarrass each other with unnecessary forms or technica!

ities, and will mutually admit facts whieh they know to he

true, and without requiring proof, and will bring the protnit

in dispute before the court for decision, without subjecting

each other to unnecessery expense or delay . 2. Sueh ami

eable actions, so far from being objects of census: are always

approved and encouraged. beenuse they faeilitare wreatiyv the

administration of justice between the parties’ | Lerd

ted, s blow yy Reo

80

Farmers Reservoir & Irrigation Co. v. McComb, 337 U.S.

(99, 708), and ‘tagreements’’ respecting the scope of the

agriculture exemption (Bowie v. Gonzalez, 117 F.2d 11.

17 [CA 1]) have been accepted without question? |

Although the parties agreed upon the obvious fact

that the production of the raw sugar was the production

of goods for interstate commerce,*® and further stipulated

to the facts concerning Waialua’s operations and the em-

ployees’ role therein, they differed sharply respecting the

applicability to those facts of the agriculture and proc-

essing exemption; and they differed respecting liability

to pay overtime compensation in a workweek in which an

employee did some exempt and some non-exempt work.

These differences, which went to the heart of the case,

were sharply contested in the pleadings, arguments and

briefs in both courts below. An examination of the peti-

tion for certiorari in No. 357 and the response thereto

demonstrates that those differences exist today, and it

When the author of the opinion below sat as a District Judes

he remarked in a ease tried before him under this statute:

‘The pre-trial order was drafted jointly by the attorneys

for the respective parties and is here set out in full as an

excellent example of such an order. The agreed facts are

concisely stated and the issues are clear cut for decision, and

decuments necessary for the determination were marked and

listed therein. Such an outstanding consolidated pleading

requires special commendation of the draughtsmen."’ ( Wo-

peidda i; ' Consolidate d Tinihe r (o., 433 i Supp HD. 66 “07

1). Ore.|.)

See also the opinion of the Court of Appeals in the same case

stating, without any suggestion of criticism, that “‘the facts were

stipulated to prior to trial’’. (Conselidated Timber Co. v. Wo

rumeh, 132 F 2d 11, 14 (CA 9).

Despite thie veneral ngreetieh!t as toe commerce coverage, the

parties differed as to whether or not the emplovees in and around

Waialua Village were engaged ii the production of goods for

commerce.

81

is to resolve the conflict between the parties on those is-

sues that the employees sought and obtained review in

this Court. Thus it is seen that the suit is not tainted

with collusion.

Solely because the parties have sought to eliminate

from the suit all issues about which they reasonably

could have no controversy and have sought to expedite

and facilitate the judicial process by stipulating as to

those facts about which there could be no dispute, they

ought not to be criticized. But in any case, thev have

presented a factual record to the courts below and to this

Court upon which a determination of their conflicting

positions, respecting the construction of the statute and

its application to the facts at hand, can be readily made.

C. The entire controversy is ripe for disposition by this Court.

In its Brief in Opposition in No. 357, Waialua argued

that the employee's petition improperly presented ques-

tions which were not passed upon by the Court of Ap-

peals and urged this Court to limit the writ to ‘the issue

of ‘ease or controversy’ underlying the judgment below,

so that review by this Court on the respective petitions

of the parties (in Nos. 357 and 358) may eventuate in a

directive to the Court of Appeals to resolve the contro.

versy between the parties on the merits.°"

Despite this Court's unquestioned power te linnat the

issues it will consider on review (Protectice Committe:

r. Securtites Favchange Commission, S46 US. 810: Part

; Brie? in Ch paosit lon, No Bi. } oy? " iti

82

mar v. Paramount Pictures Corp., 345 U.S. 963; Bridges

v. United States, 345 U.S. 904, and 345 U.S. 920: Dennis

v. United States, 340 U.S. 863, and 341 U.S. 494, 495-496,

O18), this Court refused to impose any such limitation

in its order granting certiorari in these cases (348 U.S

870). On the contrary, in consolidating the cases, and

particularly in inviting the Solicitor General to present

the views of the Secretary of Labor, this Court made it

clear that it considered the merits of the controversy to

be before it. It is unlikely that the Secretary’s views

would have been invited had this Court conceived that it

was not going to decide those questions of statutory con-

struction here presented which have such an important

bearing upon the administration of the Fair Labor Stand-

ards Act.

Perhaps we need say no more on this point, but we

are constrained to observe, in conclusion of it, that an

examination of the opinion of the Court of Appeals

quickly dispels the notion that that court did not pass

upon the merits of the cause, Its repeated references to

the statutory provisions involved and its citation of eases

dealing with the scope of the agriculture exemption dem-

onstrate that it considered and decided the important

questions of statutory construction that are presented by

Phe emiploveres in threat peetitnen for the writ im Ne. aoe,

The oral argument and the briefs in the Court of Ap-

peals, both those submitted by the parties and that sub

mitted by the Seeretary of Labor amtcus curiae, dealt

fully and extensively with those questions. The factual

record was full and complete and the Court ot Appeals

expressed its views on these questions. Finally, the briefs

83

already filed here—and those we expect vet to be filed—

will also deal exhaustively with these questions."

CONCLUSION.

As in other cases arising under this Act, where an

employer seeks to have the line drawn differently than

the Administrator has done, the determination must in

the last analysis depend ‘tupon the larger considerations

of national poliey’’ which govern judicial construction.

(Kirschbaum v. Walling, 316 U.S. 517, 523.)

This Court has noted that:

“The Fair Labor Standards Act wes designed ‘to

extend the frontiers of social progress’ by ‘securing

*SFor all these reasons, the cases referred to by Waialua (Brief

in Opposition, No. 357, pp. 8-10) are elearly not in point. For

example:

United States v. Ballard, 322 US. 78, 8s:

“The Cirenuit Court of Appeals did not reach those questions

... | Those) questions were not fully presented to this court

either in the briefs er oral argument. In view of these cir

cumstances we deem it more appropriate to remand the cause

to the Cireuit Court of Appeals so that it may pass upon the

questions reserved |. . Tf any questions of importanee sur

vive and are pr sznted here, we will then have the benefit o7

the views of the Cireuit Court of Appeals.”

Actna Casualtu & Surety Cov. Flowers, 330 tS. 464. 465

“Rut those COST IONS were not reteset ibpeean hy that Court

lof Appeals’ nor adequately presented here”

Land +. Dallar, 8380 US. 731, 739-

“The questions have net been briefed or areued Mereover

the present record may not present all the faets mecessn

for disposition of the motions”

NLRB i Piltshurgh Scamship eo.. 337 1S toh Hel

The anrlienhilits tied rorowathiign oc theurt a! oither ar bath of

ss ' a . ’

these sta ctes apparent!y were not dealt with by the Court

af Appes a whieh neither discussed Thre xt ‘tap tas hor elted

eases coneerning them

84

to all our able bodied men and women a fair day’s

pay for a fair day’s work.’ Message of the Presi-

dent to Congress, May 24, 1994.7" (Phillips Co. v.

Walling, 824 U.S. 490, 493.)

and that

“The Fair Labor Standards Act... is a part of

the social legislation of the 1930’s of the same general

character as the National Labor Relations Act...

and the Social Security Act ...7" (Rutherford Food

Corp. v. McComb, 331 U.S. 722, 725.)

Turning from these general observations to the specific

method conceived by Congress to achieve its objectives,

this Court has declared that it was the intent of the legis-

lation

* . . to exelude froin interstate commerce goods

produced for the commerce and to prevent. their

production for interstate commerce under conditions

detrimental to the maintenance of the minimum

standards of living necessary for health and general

well-being: and to prevent the use of interstate com-

merce as the means of competition in the distribution

of goods so produced, and as the means of spreading

and perpetuating such substandard labor conditions

among the workers of the several states.” (United

States v. Darby, 312 ULS. 100, 109-1100

“The motive and purpose of the present regulation are plainiy

to make effeetive the Congressional conception of public polies

that interstete commerce should not be made the instrument of

ompenition ims the distribution of goods produced under sul

standard laber conditions, which eompetition is injurious te the

ecommeree and other states from and to whieh the commerce

Hesyee * i noteed Nate +s ? Daria. 312 { = ii lho j

‘The Fair Labor Standaras Aet was passed by Congress t

$i}

lessen, so Tar as seemed then pract euble, the distribution im eom

meres of “innds H roduced neler stil normal labor conditions An

85

As this Court has said, the purpose of the Congress

was not merely to regulate interstate commmerce as

such, but also ‘‘to eliminate, as rapidly as practicable,

substandard labor conditions throughout the nation. It

sought to raise living standards without substantially

curtailing employment or earning power.’’ (Powell +.

United States Cartridge Co., 339 U.S. 497, 510.)

Upon these premises, this Court has solved a multitude

of problems that have arisen under the Act. Thus, in

Roland Electric Co. v. Walling, 326 U.S. 657, the Court,

recognizing that the Act sought to eliminate substandard

labor conditions throughout the country, said:

‘This purpose will fail of realization unless the Act

has sufficiently broad coverage to eliminate in large

Ineasure from interstate commerce the competitive

advantage accruing from savings in costs based upon

substandard labor conditions. Otherwise the Aet will

be ineffective and will penalize those who practice

fair labor standards as against those who do not.”

(326 TLS. at GO-TO.)

For this reason, and not merely because of the existence

of any mechanical rule of statutory construction, as the

Court of Appeals seemed to thinks’ this Court has eon-

fined the exemptions to their narrowest possible scope

consistent with the language of the statute.

effort te eliminate low wages and jong heurs was the merhod

chosen to tree commerce from the interference arising from pre

duetion of cools dnider conditions that were detrimental! to thre

health and well-being of workers Tt was sought to accomplish

this purpose by tle minimum pay and meximum howrs provisions

i (deuthe rford Rood Corp ' Viton: . ed i & 422. real

“916 Fd at 475

86

“To fail to cover in this Act the multitude of em-

plovees who are engaged in establishments like that

of the petitioner and which supply the materials and

services currently needed for the maintenance of pro-

ductive machinery used by those who produce goods

for interstate commerce would take the heart out of

this Act. Savings resulting from substandard labor

conditions would be reflected directly into competitive

costs. This would weaken the governmental jmecha-

nisin for sustaining the minimum standard of living

necessary for the health, efficiency and general well-

being of workers referred to as the purpose of the

Act.’’ (Roland Electric Co. v. Walling, 326 U.S, 657,

668.)°!

From the time it was first enacted up to the very

moment that this brief is being written,®* the strength-

ening of the Act has been favored as important national

policy. D»ring the administration of three different

Presidencs and in the platform and program of both

Imayor parties, the broadening of the coverage of the Act

has constantly been urged.

The Court of Appeals, manifestiv disagreeing with the

public poliey on which the Act rests o* gave it a construe.

a Any exemption from such humanitarian and remed?:" legis.

lation mast therefore be narrowly eonstrued, giving due reward te

the plain meaning of the statutery language and the intent of

fongress To extend an exemption to other than those plaimly

and unmistakably within its terms and spirit is to abuse the inter

pretative process and to frustrate the announced will of the peo

ple (Phillips +. Walling, 324 0S. 490, 495

*28ee the State of the Union Message, delivered by President

Kisenhower to the domt Session of the s4th Congress, January

6. 1955. New York Times, January 7. 1995. pp. TO, 11

“YON twee oe@eHSIOnS the Court of Apppeais eatled the Aet °‘dras

tie’ (218 F 2a at 468) 475 0 and on another oecasion it referred

& Machinery set up inder it as “‘tederal bureaucratic con

tree 216 bk 2d at tis

87

tion which defeats that purpose, takes the heart out. of

the Act, and would give to Hawaiian sugar producers

an unfair advantage over their competitors from the

mainland, Puerto Rico, and elsewhere.

The District Court, on the other hand. after making

‘meticulous and exact findings’’, applied the Act to the

employees here in a manner thoroughly consistent with

this Court’s decisions.

For the foregoing reasons, the Judgment of the Court

of Appeals should be reversed and the judgment of the

District Court should be affirmed.

Dated, San Francisco, California,

January, 1955.

Respectfully submitted,

Ricnarp Giapstein,

NorMAN LEONARD,

Attorneys for Petitioners

Crraco Mane ja, et al.

k.winG SipBerr,

Of Counsel,

(Appendix Follows. )

Appendix

When each of the e:nplovees here involved performed

the following types of work, the District Court held that

he or she was entitled to overtime compensation:

Ciraco Maneja (R. 191-193):

As a mechanic and machinist working in the tractor

repair shop, he made repairs and performed general

overhauling work on tractors, tractor parts and vari-

ous other machines and implements. He also re-

paired cane cars in the mill yard.

Cornelio Asuncion (R. 193-135):

Repaired portable track in repair station and fields,

repaired tractors, hauled cane cars, worked on pile-up

of cane cars in locomotive wreck, dislodged rails.

Tsuruo Hayashi (R. 196-197):

Repaired caneloading mac ues and parts, cleaned

eaneloading machine repai shop. .

Koichi Okouchi (R. 198-201):

Repaired track in section repair station, tractors at

tractor repair shop, portable pump used for drain-

age and irrigation ditches, tractor auxiliary imple-

ments at shop, portable track at section repair shop.

Leveled track lines; laid, or removed to storage at

mill yard, temporary main line railroad; dislodged

for removal to storage rails placed on plantation bv

U.S. Army as lessee of part of premises during the

war.

il

Tadao Watanabe (R. 201-204):

Repaired tractors at shop, tractor auxiliary imple-

ments at shop, grader at shop, caneloading machines

at shop, tractor repair shop equipment.

Peter Holmberg (R. 205-206) :

As a locomotive engineer, he hauled cane ears and

portable track rail cars; he operated locomotive to

switch broken cane cars to repair station in mill

yard; he repaired locomotives and main line of plan-

tation railroad.

Barney Faria (R. 206-208) :

Repaired ivcomotives in roundhouse, parts for erush-

ing plant in machine shop, plumbing shov tools and

implements in machine shop; made parts for new

cane seed planting machine in machine shop.

Hatsusuke Sera (R. 208-210):

As a section hand on mainline railroad, he repaired

railroad tracks of mainline railroad by replacing

worn equipment such as rails, spikes and _ ties;

cleaned and lubricated switches on mainline railroad;

maintained rights-of-way of mainline reilroad by

w. ding and cutting trees; graded and leveled un-

even sections of trackway on mainline railroad; in-

stalled and removed field switches for connecting

mainline railroad to cane field portable track lines;

assisted in clearing train wrecks and repairing de-

railed locomotives and cars; loaded railroad ties on

freight cars in null vard; directed traffic as flagmar

at railroad crossing of mainline railroad: otherwise

repaired and maintained mainline railroad.

Takumi Okouchi (R. 210-212):

As a flagman and railroad maintenance worker, he

weeded along mainline railroad; laid temporary

mainline railroad on plantation roadway adjoining

a harvesting field; directed traffic at intersections of

public highways and mainline railroad in connection

with crossing of public highways by plantation loco-

motives and trains; cleared debris and fallen cane

from intersections and coliected same into piles at

roadside; scraped and removed dirt accumulated

on intersections; did maintenance work on rights-of-

way of railroad, such as weeding and cutting trees.

Also he repaired cane processing equipment in mill

Masatki Oato (R. 212-215):

Performed variety of electrical repair work in elee-

tric shop, hospital, on transmission lines,in dwellings

located in plantation village and occupied by Waia-

lua’s employees, in power plant, at main administra-

tion office, at tractor repair shop, on mill equipment,

in mill yard, service station, fire room equipment, on

electric supply system, at chureh off plantation, at

herbicide station in mill yard, on pumps, on electric

shop equipment, at Waialua Lions Club off planta-

tion, on irrigation booster pump, at clubhouse and at

church in plantation village, at independent retail

store in plantation village. He also worked as aux-

iliary tender in power house and as power plant op-

erator in power plant. He also cleaned electric shop,

repaired machine shop equipment, installed pump at

mill and installed mill equipment.

Dionicio Carrit (R. 216-218):

Handled and shoveled bagasse; regulated flow of ba-

gasse to furnaces; operated fuel oil pumps and

burner: started and stopped fireroom machinery;

watched boiler water levels; cleaned and made re-

pairs to fireroom equipment during weekend shut-

down.

Seraphine Robello (R. 218-220).

Started, operated and stopped generating units; oper-

ated switchboard equipment; kept a log of power

house operations; made repairs and adjustments to

all power plant equipment: supervised equipment

which showed the interchange of power between the

plantation and the Hawaiian Electric power systems 5

started, stopped, serviced and repaired air compres-

sors; cleaned and repaired power plant equipment.

Damaso Claunan (R. 220-223):

As a mechanic, he repaired trucks and automobiles

in garage; occasionally repaired concrete products

plant equipment, mill equipment, air compressors,

equipment used in maintaining domestic sewer and

domestic water supply system in plantation village,

garage equipment.

Fumio Sunahara (R. 223-226):

As a welder, he repaired the following types of

equipment: stable equipment, cane cars, locomotives.

mill equipment, equipment for garage, equipment at

bathhouse, rolling stock, machine used to plant cane

seed, service station equipment, fireroom equipment,

hand truck, warehouse building, machine shop equip-

ment, irrigation flume forms, laboratory equipment,

herbicide station equipinent, stoneboat sled, tractors,

electric transmissior lines, plows, dwellings, power

plant equipment, electrical supjly system maintained

at plantation village for servicing dwellings, hospital

equipment, equipment used for maintenance of plan-

tation roads, equipment of plantation irrigation sys-

tem, fire protection equipment, portable track, trucks;

he also made improvements for dwellings of Waia-

lua’s employees.

Toshio Tanaka (R. 227-231):

As a machinist, he machined parts for mill equip-

ment, caneloading machines, trucks, tractors, tractor

auxiliary implements, pump equipment, irrigation

equipment, hospital equipment, locomotives, mill

pump equipment, fireroom equipment, electric shop

equipment, welding shop equipment, roundhouse

equipment, concrete mixer, portable track, power

plant equipment, garage equipment, tractor repair

shop equipment, fire protection equipment, herbicide

hand spraying equipment, cane cars, laboratory

equipment, automobiles used in cane field supervision,

equipment for parks and playgrounds; equipment

used to survey plantation cane fields. He also im-

proved dwellings in plantation village.

Masaru Ezawa (R. 231-235):

As a mechanic in the tractor repair shop, he re-

paired tractors, tractor auxiliary implements, con-

crete mixer, grader, haul cane e

This text is long and has been trimmed here. Open the source document for the complete record.