Appendix — Stoike v. First National Bank

33

APPENDIX

Opinion of Court of Appeals

(290 N. Y. 195)

Lewis, J. The plaintiff-respondent has thus far been

successful in the prosecution of a claim against his em-

ployer, the appellant bank, for overtime compensation

which he asserts is due him under the maximum hours

provision of the Fair Labor Standards Act. (52 Stat.

1060, ch. 676 [June 25, 1938]; U. 8, Code, tit. 29, § 201

et seq.)

The case comes to us on an agreed statement of facts

(Civ. Prac. Act, §546) from which it appears that the

plaintiff was employed by the defendant bank on Novem-

ber 29, 1937, as a night porter, his duties being to clean

portions of the defendant’s twenty-one story building at

No. 2 Wall Street in the City of New York. Of the twenty-

one stories the first four, two mezzanines and two base-

ments were occupied by the defendant as banking quarters,

the upper seventeen stories being rented to tenants. It

was incumbent upon the defendant’s building superintend-

ent to arrange each night for the cleaning of the entire

building from top floor to basement. To that end there

were employed eleven porters who cleaned first the de-

fendant’s banking quarters and then the upper floors

occupied by tenants. The plaintiff was in the appellant’s

employ from November 29, 1937 until he voluntarily left

on April 15, 1939. In the early period of his employment

—both before and after the effective date of the Fair

Labor Standards Act—the plaintiff did considerable work

in the defendant’s banking quarters, dusting and cleaning

tables, chairs and office furniture or scrubbing floors and

stairs. During the later period of his employment he spent

the greater portion of ‘his working hours cleaning public

corridors and washrooms on the upper floors.

The Fair Labor Standards Act is a comprehensive leg-

islative scheme designed by Congress to prevent the ship-

34

Appendix

ment in interstate commerce of commodities produced

in the United States under labor conditions which, as re.

spects wages and hours, fail to conform to standards set

up by the Act. It prescribes a 44-hour week. The plaintiff

received a weekly wage of $27, or an average of 564

cents an hour figured on the basis of a 48-hour week,

Subsequent to the effective date of the Act and during

fifteen out of twenty-five weeks after the Act became

effective, the plaintiff worked forty-eight hours a week,

He claims to be entitled to overtime compensation in

the amount of $50.63, plus a like amount as liquidated

damages and reasonable attorney’s fees and costs.

The defendant resists the demand asserting that upon

the agreed facts the Fair Labor Standards Act is inap-

plicable to the plaintiff’s claim and asks for its dismissal,

The plaintiff has been awarded judgment at the Appellate

Division (unanimous) in the amount claimed for overtime

compensation plus liquidated damages. The present

appeal is by leave of the Appellate Division, upon the ~

ground that a question of law is involved which merits

review by this court.

The Fair Labor Standards Act, (¢ 7, subd. a) provides

in part: ‘‘No employer shall, except as otherwise pro-

vided in this section, employ any of his employees who

is engaged in commerce or in the production of goods

for commerce—(1) for a work-week longer than forty-four

hours during the first year from the effective date of this

section, * * *, 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.’’

There seems to be no question that the federal statute

casts upon the plaintiff the burden of proving that in the

performance of work for which he was employed by the

defendant he was engaged in interstate commerce or it

35

Appendia

the production of goods for interstate commerce during

the period of asserted overtime employment. (Warren-

Bradshaw Drilling Co. v. Hall, 317 U. S. 88.)

In the argument before us counsel for the plaintiff

conceded that dusting and cleaning, as performed under

ordinary circumstances, do not constitute interstate com-

merce. But it is said that when, as in the present case,

the functions of dusting and cleaning are performed by

one as an employee of a bank, the business of which in

part is interstate commerce, the employee is engaged in

interstate commerce. The plaintiff’s argument is that his

labors served to facilitate work performed in the defend-

ant’s private banking quarters where commerce starts—

where specie and currency are shipped to points outside

the State, where credit is entered and where those other

services are rendered which are within that wide range of

transactions common to commercial banking.

The defendant, for the purpose of the argument only,

concedes that at least a part of the banking services per-

formed in its banking quarters constitutes interstate com-

merce. It contends, however, and the Appellate Division

has recognized that this ‘“‘* * * is not a case where the

employee was in anywise engaged in the production of

goods for commerce.’”’ (264 App. Div. 585, 586.) Accord-

ingly the defendant’s argument goes to the narrow ques-

tion whether the plaintiff, at the time of his overtime

employment, was ‘‘engaged in’’ interstate commerce

within the intended meaning of section 7 (subd. a) of the

Act.

In support of its position we are told by the defendant

that, even upon the assumption that its banking business

is interstate commerce, the plaintiff has failed upon the

record before us to show that the character of his work

of cleaning and dusting bore such a relation to the defend-

ant’s banking activities as to justify a finding that plain-

—

36

Appendia

tiff’s activities themselves constituted interstate commerce.

In other words the defendant, as the employer, does not

stress the nature of its business. Rather does it place

emphasis upon the character of work done by the plaintiff

as its employee—thus conforming with the rule that

‘«* * * the provisions of the Act expressly make its appli-

cation dependent upon the character of the employees’

activities.’? (Kirschbaum Co. v. Walling, 316 U. S. 517,

524.)

In reaching a decision favorable to the plaintiff the

Appellate Division recognized the fact that Congress had

defined certain words and phrases as used in the Act. The

statute provides (§ 3, subd. [j]) that ‘‘For the purposes

of this Act an employee shall be deemed to have been

engaged in the production of goods if such employee was

employed in producing, manufacturing, mining, handling,

transporting, or in any other manner working on such

goods, or in any process or occupation necessary to the

production thereof, in any State.’? (Emphasis supplied.)

But the definition of ‘‘commerce’’ (4 3, subd. [b] ), as that

word is used in the Act, is not so broad in scope: ‘‘ ‘Com-

merce’ means trade, commerce, transportation, transmis-

sion, or communication among the several States or from

any State to any place outside thereof.’’ The Appellate

Division determined that there is no substantial distinction

between the two categories of employment described by

those statutory definitions and ruled that Congress did

not intend to differentiate between the two types of em

ployment thus defined. In other words, in construing sec-

tion 7 (subd. a) of the Act, the Appellate Division seems

to have combined the two definitions, quoted above, by

transposing the word ‘‘necessary’’ from its context in

the definition of ‘‘production of goods’ to the definition

of ‘‘commerce.’’ It has thus produced a resulting com-

posite definition which it has adopted as the basis for its

ruling that employees who are engaged in activities

37

Appendix

“necessary’’—not to the ‘‘production of goods’’ but—to

“mterstate commerce,’”’ are entitled to the benefit of the

Act. But the statute does not expressly so state. To the

contrary, by defining words and phrases used in the Act,

Congress made clear its intention to distinguish between

employees engaged in interstate commerce and those en-

gaged in the production of goods for interstate commerce,

We may not disregard the definitive laneuage thus

employed; nor may we by judicial construction vive effect

- to an assumed congressional intent. When by definition

Congress differentiated between “ecommerce”? and ‘*pro-

duction of goods for commerce,’’ we may not assume it

was wholly without purpose. (Cudahy Packing Co. v.

Holland, 315 U. S. 357, 366.) ‘When in order to protect

interstate commerce Congress has regulated activities

which in isolation are merely local, it has normally con-

veyed its purpose explicitly.’’ (Federal Trade Comm. v.

Bunte Brothers, Inc., 312 U. S. 349, 351.) Furthermore,

the legislative history of the enactment of the Fair Labor

Standards Act indicates an effort by Congress to restrict

the scope of the Act rather than to extend the limits of

its field of operation. (See Kirschbaum v. Walling, supra,

pp. 522, 523.)

| We think that in framing section 7 (subd. a) of the

Act, Congress intended definitely to distinguish between

the scope of those categories of employees which it de-

scribed as being ‘‘engaged in commerce”? and those en-

gaged ‘‘in the production of goods for commerce.’? The

phrase ‘‘in commerce”? was not intended to include within

its scope that wide field of activities which remotely affect

interstate commerce. Whenever Congress, acting under

the commerce clause, has wanted to embrace that broader

field it has definitely expressed that purpose. Among

many examples of such explicit phrasing is found section

10 (subd. a) of the National Labor Relations Act (49 Stat.

449-457; U. S. Code, tit. 29, §§ 152 [7], 159 [ec], 160 [a])

38

Appendix

where power was given to the National Labor Relations

Board ‘‘to prevent any person from engaging in any un-

fair labor practice * * * affecting commerce.’’ (Emphasis

supplied.) In that connection the Supreme Court of the

United States in two recent cases—Walling v. Jacksonville

Paper Co., 317 U. 8. 564 and Higgins v. Carr Brothers Co,,

317 U. S. 572 (decided January 18, 1943)—has pointed

out that while Congress saw fit in the National Labor Re.

lations Act (supra), to extend federal control to activities

“affecting commerce,’’ it chose to confine the application

of the Fair Labor Standards Act within narrower limits,

It was that restriction to which the same court had pre-

viously referred when, in considering the Fair Labor

Standards Act, it said—‘The history of the legislation

leaves no doubt that Congress chose not to enter areas

which it might have oceupied.’? (Kirschbaum Co. v. Wall-

ing, supra, pp. 522, 523.) ‘‘The question of the Act's

coverage depends on the special facts pertaining to the

particular business.’’ (Walling v. Jacksonville Paper Co,

supra, p. 572.)

In our endeavor to interpret the phrase ‘fengaged in

commerce’’ we adopt and apply to our present problem

the ‘‘practical test’? suggested in Overstreet v. North

Shore Corp., 317 U.S. ...... (decided Feb. 1, 1943)—Was

the plaintiff’s work of dusting and cleaning the defend-

ant’s banking quarters so closely related to interstate

commerce as to be ‘‘in practice and in legal contemplation

a part of it.’’ See also Pedersen v. Delaware, L. & W.

R. R. Co., 229 U. S. 146, 151; Shanks v. Delaware, L. & W.

R. R. Co., 239 U. 8. 556, 560.) By the application of that

test we think that one of those ‘‘areas’’ which Congress

chose not to occupy when it fixed the scope of section 7

(subd. a) was employment such as the plaintiff’s. It is

our conclusion that the cleaning operations which plaintiff

was required to perform in defendant’s banking quarters

were not so closely related to the many banking services

a Tes ee eka Dc ate nie Ramee tan The ent ete See ee ee ae Her P eters er perma aay

39

Appendia

performed there that we can say as a matter of law that

plaintiff’s cleaning was a part of such banking services

and therefore that he was ““engaged in’’ interstate com-

merce. The plaintiff’s work of cleaning and dusting the

quarters in which the functions of banking are performed,

although it may contribute remotely to the comfort and

convenience of those whose services are vital to its busi-

ness, is not a step in the process of banking. Indeed,

as we consider the activities of those who conduct the vital

functions by which the business of the defendant bank is

accomplished, the essential characteristies of that portion

of its banking service which is interstate commerce are lost

before we reach the position held by the plaintiff. If,

under the guise of construing section 7 (subd. a), we ex-

tend its application beyond those employees who are

“engaged in’’ interstate commerce and include that vast

number of employees whose work, like that of the plaintiff,

only remotely affects commerce, we would extend the

operation of the Act beyond its intended scope.

We are not unmindful that in Kirschbaum v. Walling

(supra), the provisions of section 7 (subd. a), with respect

to ‘the production of goods for commerce,’’ have—be-

cause of the liberal definition of the phrase ‘‘production of

goods’’ (§ 3 [j] )—been given a broad construction. But

that case, as we view it, is not controlling here where the

plaintiff does not claim we are dealing with a problem

involving ‘‘the production of goods for commerce.”’

The judgment of the Appellate Division should be re-

versed and judgment directed in favor of the defendant

on the submitted controversy, with costs in this court.

Leumay, Ch. J., Fincu, Rippry, Conway and Desmonp,

JJ., concur; Lovenran, J., dissents and votes to affirm on

the opinion of the Appellate Division,

Judgment accordingly.

PURER NI Mey Sao rR RE IS BRAC IP TS

Guthe Supreme Court of the United States

OcToBeR TERM, 1943

No. 170

ARTHUR H. STorKk, PETITIONER

v.

First NATIONAL Bank OF THE Crry or N EW YORK

Nos. 322-324

ATTILLIO SEMERIA, ET AL., PETITIONERS

v.

THEODORE ROSENBERG, ET AL.

ON PETITIONS FOR WRITS OF CERTIORARI TO THE SU-

PREME COURT OF THE STATE OF NEW YORK AND TO

THE UNITED STATES CIRCUIT COURT OF APPEALS FOR

THE NINTH CIRCUIT

MEMORANDUM FOR THE ADMINISTRATOR OF THE WAGE

AND HOUR DIVISION, UNITED STATES DEPARTMENT OF

LABOR, AS AMICUS CURIAE

These are actions by employees to recover com-

pensation under the Fair Labor Standards Act

of 1938. The courts below held that employees

553501—43 (1)

2

performing janitorial work in iarge national

banks engaged in interstate commerce were not

employed in activities subject to the provisions of

the Act.’ The banks involved in the two actions

are the First National Bank of the City of New

York, with resources of $750,000,000, the

American Trust Co., with resources of $350,000,-

000, the Wells Fargo & Union Trust Co., with

resources of $340,000,000, and the Anglo Cali-

fornia National Bank of San Francisco, with

resources of $230,000,000 (Moody’s Manual of

Investment Banks (1941), p. a72). The banks

all carried on extensive commercial intercourse

with cities throughout the United States and in

nations all over the world.

In Kirschbaum Co. v. Walling, 316 U. 8. 517,

this Court held that employees performing the

same type of work as did petitioners in buildings

in which there is production for commerce are

subject to the Fair Labor Standards Act. Inas-

much as the banks involved in these cases prepare

various types of commercial paper sent in inter-

state commerce, they can be said to be engaged in

1In the Semeria case both courts below found that the

banks were engaged in interstate commerce (45 F. Supp.

128, 131-134; 6 Wage Hour Rept. 859, 860. Cf. National

Labor Relations Board v. Bank of America, 180 F. (2d) 624

(C. C. A. 9), certiorari denied, 318 U. S. 791, 792). In the

Stoike case it was conceded by the bank, for purposes of the

case, that it was engaged in interstate commerce (48 N. E.

(2d) 482, 484). j

AGNES NE THAD GH TILE MRD Ge ACR ATEN INCOR INNER SE EE SE a

3

the production of goods for commerce within the

meaning of the statutory definitions. See See-

tions 3 (i) and (j). But even apart from this, if

we assume only that they are engaged in inter-

state commerce, it is anomalous to hold that

janitorial employees in buildings the occupants

of which are not in interstate commerce but only

producing for it are subject to the Act, while

employees in buildings the occupants of which

are actually in interstate commerce are not. We

do not think that such an unusual intention can

be attributed to Congress.

The majority opinions’ below in these cases

are contrary to the views consistently expressed

by the Administrator of the Wage and Hour

Division” and, if sustained, will exclude from the

coverage of the Act many thousands of mainte-

nance employees in bank and office buildings. At

the present time, cases involving the same issues

are pending in the Second, Seventh, Eighth, and

*In both cases the trial courts held for petitioners and

were reversed by divided appellate tribunals.

*See 5 Wage Hour Rept. 813. In both of the instant cases

the Administrator filed briefs amicus curiae in the courts

below. He has instituted injunction actions in similar cases

presently pending in the District of Minnesota (Walling v.

Conklin-Zonne-Loomis Co., and Walling v. First National

Bank of St. Paul), in the Eastern District of Virginia (Wall-

ing v. United Owners Realty Corp.), and in the Middle Dis-

trict of Tennessee (Walling v. Third National Bank of Nash-

ville), and thousands of dollars in restitution have been paid

to maintenance employees in buildings similar to those in-

volved here.

4

Tenth Cireuits,* and there are fifty-five such

cases pending in New York, thirty-five of them

in the Federal courts. The pendency in State

and lower Federal courts of numerous actions

involving similar situations indicates the need for

settlement of the issue by this Court.

For these reasons, we think that the question

presented is sufficiently important to warrant the

granting of the writ.

Respectful, ‘ubmitted.

CHarLes Fany,

Solicitor General.

Dovceias B. Maces, Solicitor,

United States Department of Labor.

OctToBER 1943.

‘ Rucker v. First National Bank of Miami, Oklahoma

(C. C. A. 10); Lofther v. First National Bank of Chicago

(C. C. A. 7); Convey Vv. First National Bank of Omaha

(C. C. A. 8); Callus v. Ten East 40th Street (C. C. A. 2).

See also Tate v. Empire Building Corp., 185 F. (2d) 748

(C. C. A. 6), petition for writ of certiorari now pending,

No. 297, involving maintenance employees in an office build-

ing; Johnson v. Dallas Downtown Development Co., 182 F.

(2d) 287 (C.C. A. 5), certiorari denied, 318 U. S. 790, holding

that maintenance employees in an office building are not en-

gaged in commerce; and Burton v. Zimmerman, 131 F. (2d)

377 (C. C. A. 4), which appears to be in conflict with the in-

stant cases in that the court there in a per curiam opinion

denied a motion to dismiss a complaint filed by @ mainte-

nance employee in a bank building on the ground that such

an employee may be able to show that he is engaged in com-

merce in much the same manner that the employees in the

Kirschbaum case (Kirschbaum Co. v. Walling, 316 U. S. 517)

showed they were engaged in production for commerce.

U. S. GOVERNMEN PRINTING OFFICE: 1943