Petition for Writ of Certiorari — A. B. Kirschbaum Co. v. Fleming

Supreme Court brief1942

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| ms s INTHE 4.

“Supreme Court of the. United States .

A SF

OCTOBER TERM, 1941. No... 7

an. B. KIRSCHBAUM COMPANY, a Pennsylvania secboiaiitin.

Petitioner,

° a

i Weenies .

PHILIP B. FLEMING, Administrator of the Wage and Hour

Division, Unita States Department of Labor,

2 4% Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

_ STATES CIRCUIT COURT OF APPEALS FOR

"THE THIRD CIRCUIT.

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| See eee | ~ Wa. CLarKe Mason,

: eae | Sipney L. Krauss,

7 | i ons _ Freperick H. Kniaut, -

raed pale Attorneys for Petitioner.

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\MorGan, Lewis & Bockits,

2107 Fipeity-PRILADELPHIA ,

‘Trust Brien,

PHILADELPHIA, Pa,

Of Counsel. — *

| tes, Lane & S€oTt, Pars, PHILaperpaia.

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QUESTIONS PRESENTED... .

STATEMENT......... ih 8 0 wa aS Geom <P

SpactricaTion or Errors to se Uncen.

Riasons ror Granrine fib Warr... ...

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APPENDIX... 23... Be Weare Od Pee eR Te Rag Ol? iA Pistiicc: vae

Text of the Fair Labor Standards Act-= a5 te Poe Tee "25

( — in a reene’ v. aie Building Corn, ©. C. A. 2nd; December 30, 5 ;

Re 6 Sa ee ee CS a a ek Se ce Le ee aut go

Oplilon 4 in Cecil, ef al: v. Gradison, eal. CH App. Ohio,.1 st Dist., Nov. 17,

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1° Opinion in Robinson v. Massac husetts Mutual Life Insuranc e Go., Supreme

Ct. Tenn., Nov. 29, rO4l. eT Eee

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als 3 CITATIONS. 3

Cases: gee .

Baggett‘. Rites Fischer Pac king Co.| 37 F. Supp. 670:............. 46"

Cecil, et al, v. Gradison, et al, Ct. App.\ Ohio, Ist Dist., Nov. 17,1941. .13, 16, -

18, 22

t htwatch Service, Inc., 38°F. Supp.

Farr v. ag Detective Ageney and N

RE ARE Bae eet Ar Ss eR ae eos ee 16

Fleming é A. B. Kirse hbaum Cp., C. C. A. 2nd, Dee.17, 1 1941 ee .. -, 18, 21

Fleming v. Arsenal Building Corporation, D. CoS. DeN. Y., 38-F. Supp. at

Pe rey vii retiree ee ;

Fleming v. Arsenal Building Corporation, C. C. A. 2nd, Dee. 30, 1941. .6, 7, .

: 8,9, 17, 18, 21

“ Gerdert ». vertified Poultry and Egg Oe 38 F. Supp. 964...... ert 9 16

Hall r. Warren Bradshaw Drilling Co., 40°F. Supp. 272-............... 1

we Jewel Tea Cr. Williams, eee SN, eben bn id

Killingbéck and Riddoch v. Garment C is HE Capital, Inc:, 20 N. Y. Supp.

(2nd) 521, 259 App, Div. 691... 20.02. ee 12, 16

Pade ee dita “PAGE

Merry fields et al, v. F. M, Hoyt Shoe Corp., gf al, 41 F. Supp. 794.. .11, 16, 21 >

Pederson v. J. F. Fitzgerald Cc ‘onstruc tion Ceo., O., 202 me : App: Div. oe ——

Robi — ¢

Nov. 29, 1941. Pt Raa ae eae oie: M4, 16, 22.

Sanahine iden te: v. ‘Olde: 34 F.Supp. 274.. 5 Series paca dee ee

U.S. 0 F. W. Darby Lumber Co., 312 U8. 100.00

STATUTES; . ors

; Fair labee Standards Act of June 2 25, 1938,.¢, 676, 52 Stat. 1060 (29.

U. 8. C. A., Sec. 201, et seq.). . ig era ze Heh a ie ey

$6 Bn ie See Stns Cpe et AAD ssdtke cust a Se

See. 13(a) (2).. ens hoa) Pay ast

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Siglla ial Code, Sec. 240(a), as amended by the Act of February 13, 1925,

c. $29, 43 Wat. 936............ ee Ree REET TED tein

OTHER Sources: . -

83 Congressional Record, 75th Cong. 3rd Sess. oi se : ,

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ae | IN. THE.

" Supreme Court of. ine United States :

October TeRM, 1941. ET eae eie (

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ue eee:

oA. B. Kirschbaum Compan y, a Pennsylvania corporation,

2 aii ‘ “* : o - ay

- | Petitioner,

Divi ision, United States Department of Labor.

PETITION. FOR WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT. airs hisee a

J FOR THE THIRD CIRCUIT.

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To THE HoNoRABLE, THE C HIEF JUSTICE AND THE ASSOCIATE

JUSTICES OF THE SUPREME ‘Courr OF THE UNITED STATES :

| ‘Your Petitioner,. A. B. Kirschbaum Company, a Penn

_. sylvania éorporation, respectfully prays this Court for the

issuance of a writ of certiorari to the Circuit Court of

Appeals for the Third Circuit, fo review a final judgment

of that Court entered on December 17; 1941, affirming a.

.¢jtidgment of the District Court. of the United States for

the Eastern. District of. Pennsylvania by pris on oa :

: 28, 1941.

¥ ,

Philip B. Fleming; ddadalitvater of the Wage’ and. Hour °

“Respondent. :

“OPINIONS BELOW. es

_ ° The opinion, fot the District Court (R., pp. 175- 180), is

. reported \in 38 F. Supp. 204. The opinion of the. Circuit

-Court of Appeals (R., Pp. 21323), has not yet bec n

reported. |

BASLE a ol)

JURISDICTION.

The judgment of: the Circuit: Court of miele. which: get

Petitioner seeks to have reviewed, was filed Deceinber 17,

1941 (R.,-p. 213). ©.’ >, .

The jurisdiction of this Court is invoked under Section ~

240. (a) of -the Judicial Code, as amended by. the Act of

February 13, 1925, ¢. _— 43 Stat. 936. °

et seq., is printed in v the Appendix, infra, pages 25.45,

QUESTIONS PRESENTED.

The questions are:

1. Whether the Act extends to employ ees of an employ er

‘ whe is’ neither engaged in interstate commerce nor.in the

production. of goods for such commerce? —

- Ee SE

.W hether the building. service employees of the owner *

a a loft building w hosé only. business is the rental, opera-

tion, and maintenance of such building, are. engaged in

interstate commerce or in the production of goods therefor

within the meaning of the Act merely because some ‘of |

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the kuin jn such building are nis in the produe-

_tion of goods for. interstate. commerce? ‘

ise W héther the elevator operators of the owner + of such © :

a loft building are directly engaged in interstate com-

‘merce?

. 4. Whether such building service employees are , exempt

from the wage and hour provisions of the Act by Section

13\ (a)(2) thereof, which exempts employees of service

"establishments the greater part of whose servicing is in

—ntrastate’ commerce? © ™

d. Whether the Act would cmktaveis the Tenth Amend-

ment to the Constitution of thé United States if: held to

be applicable to. such employees? ~ 2

“STATEMENT. Essie

The Petitioner, A. B. Kirschbaum Company, owns a six-

story loft building in Philadelphia (Rk, pp. 3,175). Its

sole activity is to operate the building as -a “ree

leasing space therein to any person desiring. it (R.,

166). Although certain ofits tenants are engaged in the Ties

‘production of goods for. interstate. commerce, Petitioner

does no manufacturing whatsoever (R:, p. 21), and has

- no intérest in the manufacturing or ‘other activities of.

any of its tenants (R., pp. 166-167, 175). In fact the

Petitioner has no business or source of revenue other than

that which i is connected with its ownership and leasing of :

its building (R., p. 176).

.In operating the building, it employs a staff_of building

“service employees consisting of. three elevator operators, .

two watchmen, three firemen, one engineer, a carpenter

and a earpenter’s helper, and a porter or-eleaner {R., -p.

175), who are the a yees involved in. the present ease.

-The Petitioner through its aforesaid employees, heats».

_ the building, keeps. it in repair, furnishes steam and direct. i,

electrie current to. those of its. tenants who desire it,

works on or touckes

-goods produced by any of the tenants. The goods trans- |

- cleans those portions of the building — not leased,

and provides aieans of ingress and egress

“their: employees and property being shipped sto and by

thei. None of the foregoing empleyees produces, manu-

or its ‘teirants,

factures,* handles,’ processef, or. in any other. manner

‘the purpose of production any

ported in the elevators operated by certain of said em-

.ployees are always in the custody ‘of the representatives

of the. tenants, or their. employees, or of employees of

‘persons whom the -tenants have engaged to. transport

the goods, or of: the employees of carriers from whom |

“% y- are-receiving gogds (R., pp. 37, 47, 56, 57, 83, 85,

, 100, 109, 110, 113, 17, ‘121, = 135, 138, 149, -

159, 163). - . Baers

The Respondent, ‘contending that all of” ‘the foregoing

building service employees. of the Petifioner, are ‘covered

by the Act, filed its complaint on March, 14, 1940,_and .

thereafter on April 19,°1940, filed its amended complarmt

(R., pp. 3-7}. alleging that the Petitioner had violated

the Act in thaf it had not paid its employees the. minimum

wages provided for: in Section 6, aml had worked them

‘in exeess of the hours prov vided i Section 7 without the

payment. of overtime as therein prov ided, and prayed for

“an injutiction restraining future violations. Tlte basis

_ of the*Respondent’s contention ‘was that since the. Prti-

tioner’s: employees ‘were engaged in the servicing’ and.

niaintenance of a building, space in which was rented to

persons engaged i in the production of goods for interstate

commerce, such employees were themselves sengaged in

the production -of goods: for -irfterstate commerce and |

thus covered by. the Act in’ view of the provisions of

Seetion (3) (j) which provides that an employee shall

be deemed -to have — in.the production of godds°

‘for interstate comzierce if he: was employed. ‘‘in any

process” oF -oceupation necessary to the — production -

thereof.’?- fn addition the Respondent asserted that the

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Petitioner’s s elevator operators. were also directly engaged

_ in interstate commerce.

. On April: 26, 1940, the ° Petitioner “filed its Answer ;

‘wherein it admitted that it did not conform to the. ‘require-

ments of Sections 6 and 7 of the Act with respect to certain

-of its-aforesaid employees ‘(Answér, pars. Vfl, VII, R.,

p. 12), but asserted inter alia, first, that its employees

did not come within the provisions of the Act; second,

that in any event they were spécifically exempt under . —

‘the provisions pf Section 13 thereof; and third, that the

- Aet could not constitutionally be ¢ applied. to them (R.,

pp. 13, 14).

_ After trial, the District Court; in an opinion iw Kirk-

- patritk,..J., filed . April 2, 1941, granted ‘judgment for the

Respondent {R., pp. 175-180), which judgment, ¥ was entered :

on April 28, 1941 (R., pp. 180-182).

On the same.day the. Petitioner filed its notice of cas

to the Cireuit Court of Appeals ‘for the Third Circuit,

‘together with bond for costs sur appeal. At the same

time the District Court, on -motion of the Petitioner, _

entered its order suspending — the | inca pending

ra “satsenelignnesinatanetl

‘After argument on appeal, the Circuit. Court, in-.an

opinion filed - Deceniber 17, 1941, affirmed the judgment —

of thie District Court (R., Pp. 213- 23).

"SPECIFICATION OF ERRORS: TO: BE URGED.

The Cifenit Court | of Appeals for the ‘Third, Cireuit

erred— 5X

(t) In holding that the’ Act covers employees of an

Si employer who is’ neither engaged in interstate commerce

nor in the. production of goods for. such commerce.

(2) In holding that the bifftding service @nployees of

the. Petitioner are engaged © in the: production of goods

- for interstate commerce within. the meaning of the Act.

eo .

Pe employees of service establishments thie greater part of

a :

5» ©

* (3) In holding that the elevator operators in. the loft

building o the Petitioner are. dfrectly engaged - in inter- ©

_ state commerce... ©

. <4) In holdirfg that the building” service employees of |

the: Petitioner, are ‘not exémpt from the wage and hour ~

provisions of the Act by Section 13 (a)(2) which’ exempts

whose serpici ‘ing is in intrastate commerce. eh

(5) In holding that the Act, when applied to the’ build.

ing service employees éf the: Petitioner, does net violate

the Tenth Amendment. to the Constitution of. the United -—

States.

(6) In holding, that. the building service employees ‘of

the Petitioner are covered by the Act and in affirming

the judgment of-the District Court enjoining | the. Peti- Sy,

tioner from violations, of the Act. ka ce

REASONS FOR GRANTING THE WRIT:

The discretionary power of this Court to grant the

writ requested, is. invoked because the. Cireuit Court of

Appeals for the Third Cireuit: 0s ee

~ * Has, dée ided important questions ‘of federal law

whieh have not been, but should be, settled by, this |

Court. ove

Il. Has, in its interpretation of important provi- 7

sions of the Act, gone beyond the decision of the ..

. Cincuit Court.of Appeals for the Segond — in a

° case involving. similar. facts.’ ;

I. Has decided ‘important questions of federal

law in conflict with ‘applicable. decisions of state and

lower federai courts.

1 Philip B. Fleming vy. Arsenal. Building Carpeieniin, et al., decided By the

‘United States Circuit Court of Appeals for the Second Circuit oni December.

HW, 1941, not yet reported. The decision however is printed in full in the

Appendix. to this Petition, pp. 46-53, infra. m ;

ORIN eee PAYS aanay. ae eying. ORG HI 8 a

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. The case of Fleming * v. Airstnal Building “Corporation,

et al, supra, decided by the Circuit Court of Appeals for

the Second Circuit, involved (on facts substantially the

same as those herein), the same legal questions as are | -

involved: in the present case and that Court likewise

entered judgment sustaining the ;Act as applicable. ‘How- |

-ever, after referring to the wide conflict: of opinion among

- appellate coutts by stating that “*So far the score is four

to one against the view we take,’? the Second Circuit in

the coneluding sentence of its. opinion stated: “Obviously.

~ _ the question will not be set at rest until: the Supreme

~ Court makes an authoritative ‘ruling.”’

That the ‘existing uncertainty with respect to an

important .and far reaching Act of Congress should be: °

set at rest is not only desirable but essential to the proper

administration of the Act and as a guide -to those seeking

to comply, with. its provisions:— . =

The only decision of this Court i inv olving the geniéral cov:

erage -of the Act is that of U nited States v. F. W. Dar by

Lumber Campany, 312 U. S. 100, 85 L. Kd. p. 66 (1941).

—in-that-case this Court held the Aet ‘constitutional when

applied to an employe er, engaged in the manufacture and

shipment of egods i in interstate commerce, with respect to

Lasker ‘ees who’ work on or produce the goods °

“which he So ships or expects to ship across state lines.

’ This Court did not attempt to define the precise limits of

what. particular. acts constitute ‘‘production for com-

merce,’’ nor did it of course pass upon those additional

questions raised in the present case which were not in-

. . volved in the Darby ease as, for example:

(a) Whether the Act applies to employees . of ‘an

‘employer; such as-the Petitioner, who is neither

engaged in interstate commeree nor in the ‘preduction CS

of goods therefor; f

(b). Whether the plirase ‘‘any process or occupation .

| necessary to. the production” of goods as Used in © :

“Section 3 (j) of the Act ‘(which section defines

word ‘‘produced’’), covers activities, such as those

of the Petitioner’s ‘building service employees, which

‘do not’ function ‘in the production of- goods for ‘com-

merce, and @f so, whether Pend Act is constitutional;

_, &c) What constitutes a rvice establishment”’ as

‘that -phrase is used in, Section. 13. fa) (2) of the Act

which provides that.‘‘The provisions of Sections 6

and 7 shall not apply with respect to * *; * any

employee ,ngaged in any * * °* service establish-"

ment the greater part of whose * * ‘* servicing

is in intrastate commerce * * *77;. and |

(d) Whether elevator’ gperators in a loft building

space in which is leased to tenants engaged in the.

production of goods for interstate commerce, are di-

rectly éngaged in-interstate commerce.> +’

4 .

“WwW ith respect to those questions, all of whieh are raised t

in' the present. case, the eourts‘are either uncertain or are

in conflict. “Thus an aqthoritati¥e ruling by. this Court

‘on those questions is necessary: to tesolve the. conflict and

dispel the uncertainty. °°

“gy

I. }

Although the ( ‘irenit Court in the present case: held the

“Act applicable to building service employ Pes: employ ed hy

the owner of a loft building, space in which was leased to

tenants engaged in producing goods for intersfate com-

merce’ (thus reaching a conelusion in accord with that -

subsequently reached by the Second Cireuit),’ in several

matters it went further than the Second Cirucit.. ’

Thus, whéreas the Third Circuit held, that the Peti-

_ tioner’s elevator operators “are alsé directly engaged in

1 Fleming v. Arsenal Building Cérporation,.et dl., Arends, rp 46-53, infra.

2In Fleming v. Arsenal Building C. or poration, et al., supra, Court stated:

“On the other hand the Third Circuit in Fleming v. Kirschbaum Company,

123 Fed. 2d, , agrees with us and indeed in one of two matters went

further than we have, found it necessary as yet to.go” (Appendix, p. 53, infra).

. oa ; y

commerce,’” the Second Cireuit stated that it did iat find

it necessary to decide that question.* ' .

Furthermore,‘ whereas the Third Circuit held’ that an

‘-occupation necessary to the production’’ of goods within

the meaning of Section 3(j) of the Act was one not indis-

pensable but merely - convenient and appropriate,’ the

, . Second Gireuit,. recognizing the constitutional and other

difficulties which would ensue if such an interpretation.

‘be carried to its logical conclusion, sidestepped the issue

by reasoning .that if the service employees had been

33 “employed” by. each of the manufacturer-tenants rather

‘than by the landlord, there would have been no question’

but that their services w vere * ‘necesgary) to the production

sof goods. with the ‘meaning of .the Act, consequently

they must eonfe within the Act even ina their. services

are rendered to an employer who is not a manufacturer

but merely a landlord.° a

_ In addition, whereas the Third .Cireuit held that an’

‘employer leasing skace to | ianufacturers engaged in the

production of goods for interstate commerce, did not

_ operate a ‘service establishment’? within the meaning of

‘the’ exemption contained, in Section 13 (a)(2) of the Act,’ .

the Second Citcuit after reluctantly stating that *‘ Possibly

itis nota ‘service establishment’ af all,’” failed to pass

upon the question and. he Id that even if such an employer

were a “service establishment,’’ Ms servicing would not

be in-intrastate commerce.

The Second Cireuit noted in its’ opinion that the Third

Circuit ‘‘indeed in one gr two matters went further than

-we have found it necessary as yet to go:’’ Whatever

satisfaction that may have afforded ' the Second Cireuit,

03 Fleming v. A. B. Kirschbaum Cotas (R., p. 219, footnote).

4 Fleming v. Arsendd Building Corporation, et al,,. Appendix, p. 48, infra.

5 Fleming vy. A. B. Kirschbaum Company (R., pp. 219- 220). Italics supplied.

Wg Fleming v. Arsenal Building ies hase. et al., Appendix; pp. 48-50,

infra, °

7 Fleming v. A. A. ‘Kirschbaum Company. (R., "pp. 220-222).

>. + & Fleming v. Arsenal Building Corporation, et, at.,’ «Appendix, Pp. 50, infra.

Italics supplied. ;

e e

the two decisions, read together, left important questions

raised by the litigation in much the same state of uncer-

tainty und confusion as before and furnished little comfort

to those sebking to: learn What the Act means and how

to comply with its provisions. Obviously the nature of:

activities which constitute ‘‘commerce’’ or ‘‘the produce:

tion of goods for commerce’’ within the ‘meaning of the

“Net, and the characteristics of an establishment requisite

to constitute it a ‘‘service establishment” ‘within the mean-

ing of the Act, are important questions of federal law

requiring an authoritative and final ‘deterfrination.

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, - ja TIL aie : &

In addition to the decisions OX the Second and, Third

Circuits discussed above, the applicability of the Act to

building service employees employed by a landlord who |

rents space to tenants engaged in interstate commerce or

in the production of goods therefor, has been presented

before different féderal and state courts in four other

cases, all of which have held contrary to the two above

_ Circuits that the Act does not cover such émployees.

—Tyus, on the specifie question raised in the present case—

viz., the ‘application of ‘the Act .to building service em-

ployees—the score is four to two against the view of the

Third Circuit in the present case. -” ‘

On the broader question—viz., the applicability of the

Act to employees of an employerywho is neither engaged

in interstate commerce nor in thé production of goods

“ therefor—the- conflict is even greater, the majority of the

eases in which the question. has been specifically raised

holding that.the Act doe® not egver such employees.

The exixtence of stich a ec ys ct of opinion ‘is in itself.

sufficient to warrant this Court. to review the decision in

the present case. But the need for an authoritative de¢i- -

sion is even greater because of the jurisdiction given by

; 11

) the Act itself to state courts over suits by employees to.

recover the compensation provided for in he Act.’

Typical of the view of the majority of the decisions,

that the Act does not apply to building Servigg. employees

of. a landlord not engaged jin interstate aetivity, is the

decision of the United States District Court for the Dis-—

et of New Hampshire in the case of Merryfield, et al., v.

M. Hoyt Shoe Corporation, et al., 41 F. Supp. 794 -

(ier 6, 1941). In that case suit was brought by building

service employees against the Shoe- Corporation and the

‘Reconstruction Finance Corporation as the owners of a

- . loft building in which they had been employed, to recover -

_ the compensation to which they claimed they were entitled

under the Act. The Shoe Corporation had, like tlie Peti-

tioner herein, formerly been engaged in. manufacturing.

In 1936 it ceased its manufacturing. Thereafter it rented

its factory buildings to other companies, dn no way con.

. nected with the Shoe Corporation, which engaged in the

production of goods for interstate commerce. As owner

of the factory buildings it employed the plajntiffs as build-

ing service employees. The R.F.C. foreclosed the mort-.

gage which it held and thereafter continued - ‘to rent and

operate the premises as theretofore.

In dismissing, the“action, the Court made eae that

‘the interstate activity of the tenants could not bring the

eniployees of the landlord “under the scope of the Act.

_ In his opinion Judge Morris stated (pp. 795, 796) :

“The R.F.C. never engaged in .the Sileieehaei of

any product for interstate shipment. It was merely

ag Section 16 (b) of the Act, printed iin the fans nary to this Petition,

p. 44, ‘infra, which provides as follows : “Any loyer who violates the

provisions of section 6 or section 7 of this Act chall liable to the employee

or employees affected in the amount‘pf their unpaid minimum wages, or their

unpaid @vertime compensation, as the case may be, and in an additional equal

amount as liquidated damages. Action to recover ‘such liability’ may be main- '

tained in any court of competent jurisdiction by any one or more employees

for and in behalf of shimself or thems and other oyees similarly

situated, or such employee or employees me jsignate an agent or répresenta-"

tive to maintain such action for and in b of all employees similarly situ-

ated. The Court in such action shall, in addition to any judgment awarded

to the 0 vn gh’ or plaintiffs, allow a reasonable ——- fee to be paid by ;

*the on costs of the action.” eo.

12 ‘ a

‘the owner and lessor of real estate which was occu-

pied by lessees. who were en ngaged in the manufacture --

of goods for interstate shipment. The plaintiffs had |

nothing to do with the actual manufacture of_goods~—F

but were in The employ of: the “owners of the real of

Br eu first the Hoyt Shoe Cor poration and, second, |. 5

F.C. They are set-out-in the complaint as fire-

men, watchmen and-maintenance men to look after the

aia real estate, pats bythe Shoe Corporation and Jatér

im ee Dt ih ete ae ee

eas =<] hold that employees of alandlord who is it

Aa himself. engaged in the ménu acture of—goods for

, interstate commerce but whose premises are teased

-to others who are engaged in the production ef goods

for commerce do not come ‘within the prewvigions of .

the Wages. and Hours’ Law of the Fair Labor

Stdndards Act.’’ | | a |

A similar conclusion was reached by the Supreme Court

of New York, Appellate Division, in HKillingbeck & Rid-

doch +. Garment Center Capital, Inc., 20 N.Y. Supp. (2d)

o2l, 259 App. Div. 691 (1940). Ii that case. suit was —

brought ‘by a watchman and a carpenter formerly em-

‘ployed by the defendant, the operator of a loft ‘building, ..

space in, w hich w aus lei ased to tenants engaged in the pro- .

: e; to recover over:

time’ payments: and liquidated’ ‘damages to which they

* claimed to be entitled under the Act by Treason of the

fact that as employees of such building they were per-

forming services @ecessary to the production, by. the.

( tenants of goods for interstate commerce. The facts with

veference to the activities of the empleyees in question,

the nature of the business condueted by the defendant as ~

well as that conducted by the tenants, and the relation,

of the employees to the tenants, are substantially the

Same as those inv olved in the present case. Tlie Court

directed that’ judgment be rendered -for the defendant?

and in its of pinion by Judge U ntermy er stated: —

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“We think the statute does not include sueh- 3

plovees when they _are—not employees of a manu-

_. faetitrer—ttho is engaged cin interstate commeree.,

Concededly the statute would: inchide tliose ‘em-

ployees of. a manufacturer who produced the

goods. * * * We would encounter; insuperaple diffi-

culties however, and would distor® the statute if we

should apply it to employees of others than the manu- °

facturer, having so remote and inéirect a relation to

the production of the goods as the watchman and the

“carpenter employed by a landlord a portion.of whose 4

premises have,. perhaps. fortuitously, been rénted, to

tenants engaged in interstate commerce 3 * .*

_. Such employees are not ‘engaged ‘in any process or -

~“oeeupation necessary to the production’ of: goods

destined foy interstate commerce but in an oceupa-

tiou which may, perhaps, be necessary ‘in the Opers-

‘ tion of a building wherein the Bonds: are produced.”

(Italics supplied.)

To the same effect is the’ decision -of the Court of .

Appeals for the First Appellate District of Ohio :in the

case of Cecil, et al., v. Gradison, et-al., November: 17, 1941.*"

“In that case the defendants owned a kuilding in part of

which they conducted a banking business.’ The plaintiffs,

one of whom -was employed by. the defendants to serve

as janitor and the other as engineer, and both, of whom

served as f reight“and passenger elevator operators, sought...”

to recover from the defendants thp overtime gompensation

to which they claimed they werd entitled under the- Act.

It was alleged by the plaintiffs, and admitted for the

2 purposes of the suit, that they handled shipments of

various kinds, and descriptions. to persons and corpora-

tions in other states, which: activities were alleged to be

in f urtherarice of the defendants’ business. and that other- —

Qua

2 So far as we have been able to determine the decision has not as yet been

officially reported. .However a complete copy of the opinion is Printed in the

Appendix to this Petition, ‘pp. 53-58, bi and it-also appears in 4 W. & H.

ep. HB» °

. a . ° f

° : : ;

2 ‘ ’ é %

4 °

wise the packages: could not have been transported on the

elevators ‘or have passed from the control of the respectiv

tenants to the persons to whom they were directed.’

, The Court, in affirming the action of the lower court

In sustaining a demurrer to ‘the petition, statgd:.

“AN reading of the declaration of. policy contained |

in Section 202 gnd the definition of terms makes it.

clear’ that Congress meant to protect the interstate

‘transaction. from sub-standard ‘labor’ conditions by

regulating sucl? conditions in the interstate trans--

action and those transactions that directly and sub-

. stantially affect the interstate transaction, Beyond

that, Congress could not go.

‘‘ Accordingly, the language of Section’ 206, 29 U. S.

((. A, that ‘Every employer shall pay to each of

» his employees engaged in commerce or in the pro-

~ duction of goods for commerce wages at the following

rates’ and the provision in Section 207 that ‘No em-

plover shall—employ any of his employees. who is

engaged » an commerce or in the production of goods

. ¢. for commerce,’ must be limited by the declared pur-

' pose in Section 202 .and the definition of terms in

| Section 203, in‘ order to confine . ‘the act within the

i Oo) Congress.

‘And when so read and limited it is clear that the

: -. Act does not apply to employees of intrastate em-

ployers engaged to and actually perforfhing intrastate

acts, notwithstanding such intrastate acts incidentally

facilitate the interstate commerce or thSproduetion of

goods for such commerce carried on by others with .

whom they are not otherwige related.”

: The Supreme Court of ices accords with the tiew

of the majority of the decisions. In Robinson v. Massa-

chusetts M ceed Life Insurance eapo: deeided by that

paler 15

Court on November 29, 1941,° suit was brought by building . —

service employees against the defendant who was. the

owner and operator of threé office buildings, ninety per-

cent of the space.in which was leased to the Tennessee ~

Valley Authority, to recover ¢ompensation alleged to be

due them under the Act. In affirming the judgment of

the lower court in favor of the defendant, the. Supreme,

. Gourt stated: Y hase. ;

‘*We are of opinion that plaintiff in error and ‘those

in whose behalf he sues are not e ed in interstate

commerce or in the production of roots for commerce.

We are wholly unable to relate the work in which

plaintiff in error is engaged to the actual movement ,

.or flow of goods in interstate commerce. "As. we

interpret the Act, it is limited to those employees

who contribute directly to the production of goods for *

interstate commeree.’’ * cgeieeld

‘Plaintiff in error and a those for whom he sues are

one step removed from ‘the class of employees em-

braced in the Act. In a sense every individual whose ,

activity in any way’ touches or affects the lives of

‘those engaged in ‘producing. goods for inter state com-

merce contribute to such production, but we think.

Congress intended to limit the Act to those whe di-

rectly contribute to the production of the’ -goods.’’

> * * :

**A contrary ‘view to sg cag in the two fore-

going cases [Fleming v.“Arsenal Building Corpora-

tion, 38 F. Supp. 207 and Killingbeck, et al. v. Gar?

ment Center Capital, Ine., 20 N. Y. Supp. (2d) 521], .

was declared by Judge Kirkpatrick in Fleming v.

A. B. Kirschbaum Co., 38 F. Supp. 264, but the deci-

sion in that case, if eagril to its logical conclusion

3So far as we have been able to determine the decision has hot as yet beeri

' officially reported. However a complete copy of* the opinion is printed in the

sop to this Petition, pp. 58-65, ove, and it also appears in 4 Ww: & H.

: PY sie Ei

certain of whom were engaged in commerce or ig the pro-*.*

16 tar taed

: oO ree > we P ; .

would embrace every employee who in the remotest

degree contributed to those who produced goods for

interstate transportation, whieh, as heretofore stated,

" was not, in our. —_— the purpose of Congress.”

~ Thus, of. the ais ‘cake which have been hited involving ~

the applicability of’ the Act to building service employees

‘employed by the: owner of a building leased to tenaiits,

duction of goods therefor, ‘four hold the Act inapplicable.

"Of these. four, three* proceed-on the principle that the

‘Act is not applicable to employees of an employer who

himself is neither engaged in interstate commerce nor in

the production of goods therefor, while the other’ proceeds.

on the theory: that such employees are not engaged in the.

-. productien of goods for interstate commerce since their.

services do not directly contribute to ‘such production.

With respect to the broader question as to whether the

Act. covers the employees of an. employer who is neither

engaged in interstate commerce nor in the preduction of

goods therefor a more pronounced conflict exists.

t.inapplicable to the employees. of an intrastate em-

W addition to the three casey above cifed holding the

plover may be added the following: Pederson v. J. F.

Fitzgerald Construction Company, 262 App. Div, 665, 4

W. & H. Rep. 661 (N.Y. Sup. Ct., Appellate Division,

3rd Dept. Nov, 12, 1941); Gerdert v. Certified Poultry

and Eagq Company, 38 Fe Supp. 964 (D. C.°S.-D,, Fia., :-

April 29, 1941); Farr ‘v. Smith Detective Agency and

Night Watch Service; Inc., 38 F. Supp. 105, 4 W. & H.

veP. 230 (D.C. N. D., Tex., April 14, 1941); .and Baggett

. Heivry Fischer Packing Company, 37 F. Supp. 670, 4.

Ww. & H. Rep. 1383 (D. C. W. D., Ky., Feb. 24, 1941).

“4 Me iryheld rela. v. F. M. Hoyt Shoe. Covsoretion, et al., supra; Killingbeck

& rapes h v. Garment Center Capital, Inc., supra, and Cecil, et al. v. Gradison,

et a supra.

5 Robinson v. Massachusetts Mutual Life Insurance Company, note

SORE SA er etna et hele aa EE PARA RN nt

Pes e

Biss bids eS lel santa GO So Waa bene a adok oak MR el eas

eS a SRR AN BR aR ta Ne

in lappditidedinsiks ke dai SORE ricsa ae oe Re

Court: decisions ean of course be fownd abating dicta

to the effect that the test of coverage is dependent solely:

upon the - -activities’ of the individual’ ‘employee regardless

of the nature of t%® businss in which the employer is |

* engaged. However, those cases for the most part are of ©

the type where’ it is apparent that the employ er was

engaged either in -interstate commerce: or in the produc-

tion of goods therefor and thus the only question before, .

the Court whs whether the activities of the employees in

question were of the ‘Fequisite type to bring them within

the Act.® Lia eee et

“\There are however .decisions, in ‘addition to the deci- _

sion of the Third Circuit in. the present ease and that -

of the Second Cireuit in Fleming v. Arsenal Building Cor-

poration, et al., supra, holding that the test of coyerage

is dependent solaly upon the activities of the individual

employee regardless of the charactér of the employer’s

business. Representative of those cases is Hall v. Warren

' Bradshaw “Drilling Co., 40 FY | Supp. 272 (N. D., Tex., °

July 18, 1941). But so far as\ we have been able to de-

termine, cases directly. so ‘holding are in the iinority;

and it is significant that the courts which so hold have |

either misconstrued or completely ignored the legislative

history of the Act. What could be clearer than the‘state-

, ment which Senatox Claude Pepper, a mémber of the

Senate Conference Committee which reported the bill

which subsequently became the Act, made on the floor of:

the Senate at the aie of. the discussions of that bill ae

_ preceding its passage.’

‘Mr, Pepper. If the Senator will allow me once

more, I will not interrupt him further. On the con-

trary, the conference report provides that resort may

he had: to the cireuit court of appeals by any " peti-

on Honer who alleges that he is unlawfully affected by

6 To this class of cases. belongs Sunshine Mining Co. v. Carver, 34 we Supp.

274 (D. C. Idaho, July, 1940).

783 Cong. Rec., p. 9168.

this bill, ae if he may be able to shiek that = af not

= éngaged in.commerce or is not: engaged in the pro-

_ duction of goods for interstate onimerce it will be.

the duty of the court to‘éxempt him frony the applica-

tion of the law.”’ (Italies, icin

Not only in the Senate but in the House as well au-

_ thoritative. discussion seems clearly to support. the view

‘that the ‘test of coverage depends not only upon - the

activities of the individual employée;. but also hpon the ©

es interstate character of the employer’s . business. Thus,

Representative Schneider, a member of. the ‘Committee

‘on Labor of the House (to whom Representative Welsh,

a inember of the Conference Committee and one of the:

managers of the bill in the House, yielded), in discussing By

the scope of the ill, stated: *

“The measure as candied out by the conference

is, of course, very well

however, to avoid any, misunderstariding of the bill,

‘that it does not in any way, shape or form affect

report applies to well business exclusively. This

intrastate or purely local or State business? It covers’

only interstate commerce; ~ that is busthess which is

interstate iv- characte?.’’. (Italics Supplied.) — rig

But the conflict in ‘the decisions does ‘not end here.:

As previously noted the, Third Circuit ‘in the present

" ease held that elevator operators in a-loft building, space

in which was. rented to tenants engaged} in the production

of goods’ for interstate ‘commerce, ‘tare also directly

engaged in commerce.’ The Second Circuit stated’ that

it did. not find it nevessary to decide that question,”

On. the other hand the Court of Appeals for the, jae

Appellate District “of Ohio in the case of Cecil, et -al.,

883 Cong. Rec. p. 9260.

9 Fle ming v. A. B. Kirschbaum Company (R., p. 219, footnote).

19 Fleming v. Arsenal Building Corporation, et al, Appendix, p. 48, infra.

own. It must be repeated,.

a ee te ee wae

}

hc res - eae - ee o3.

- Gradison, et al., found to the contrary. " In its opinion

it stated :

“State, ex rel Pins ania Railroad Co. v. Knight,

192. U. S. 21, the Court held that cab service main-—

- tained by the interstate: railroad company to carry

passengers to and from its-terminus in New York—

for which a separate charge was made—was not, inter-

state Ry: os At page . 28 the Court said:

“Tf the cab which carries the passengers frou the |

hotel to the ferry landing is engaged in interstate -

' transportation, why is it not tie }porter who carries

the traveler’s trunk from his room to the carriage

also. so engaged? Jf the cab service is. interstate

- transportation, are the drivers of the cabs and_ the.

dealers: who supply hay and grain for the horses also’

engaged in interstate commerce? And where will

‘the limit be placed?

"*We are of the opinion that the cab service is: an

‘independent local service, | preliminary or stbsequent

to any interstate eee oe J iglcce ws

See-also: Minn. v. Blasius, 290 U. S..1.

| Therefore, where ‘Sine plaintiffs, as employees of

the defendants, handled articles for defendants and

their tenants,. they were performing intrastate. acts

preceding and following interstate trainsactions, and

were not engaged in interst®tc commerce,”

It is schigaiths that in the idence, case (as contrasted

with the facts in the ahove opinion), the elevator operators .—

do tot in any sense handl¢ the goods which remain at all.

times in the eustody of Gepresentatives of the tenants

_or transportation agencies. Furtherniore, Judge Woolsey?

in Fleming x Arserial Building Corporation, et al., 38 F.

“Supp. 207 (April 11, 19415, nade the eryptic obeervation

that levator operatérs, ‘if considered as engaged ir any

. . <3

Nn See ‘Secale 2, Pp. 13 of this Petition; also Appendix to this Petition,

+ PP. 56-57, infra, _

oS ee

Lh : F : é

7 4 ° ‘ : -

; WE

commerce, ; * .* were engaged i in a vertical intrastate

commerce and could’ not have been considered to newe

been engaged in interstate conunercé in any proper sense.’

As a. result of this difference of opinion, elevator

operators within the Third Cireuit engaged, in the opera-

tion of elevators in‘lott buildings space in which is leased

to. interstate tenants, can recover in .the federal courts

within that Cireuit from their landlord employers the

compensation provided for’ in the Act, whereas if they

instituted suit in the state courts of Ohio, New York or

Tennessee or in the Federal District Court of New Tftamp- .

shire, ‘they could not recover. If this we Justice, elevator

mA srators should make ‘the most of it. By Rie

% ¢As it ‘to add chaos to the already secintine Siatasion, ;

there is also wide. diverge ice among the courts as to.

What ‘activities constitute *‘production of goods far com-

‘merce’? within the rfieaning of, Section 3 (j) of. the Act

which provides as follows : Pre .

7 ‘Protluced’ meatis pfdphiced, manufactured, mined,

han@led, or in amy, othef# maaner worked on in. any

2: State: and for the purpdses. of this Act an employee:

‘shall be deémed to have Deen engaged in the produe-

tion of goods if syich. emplo} e was employed in pro-

ducing, manufacturing, “mining handling,. transport-

ing, or it any other manner woNging- on such goods,

ic or in any process or occupation Meessteyu_to the

“i produ¢tion thereof, in-any State.’’ (Ttalies sup Wied.

0 The Second: GQreuit,. conceding geperally speaking thie

soundness of the Nrefiment that. ‘Gooden could not hav

meant to. impose’ labor, standards upon every one who

might chance to contribute afy necessary service to, the

: production of goods ‘* produced for, commerce,’’ never-

theless was unwilling, as it said; to De drawn into “dia;

lectical niceties’? and contented itself with, the pronounce-

ment that the ‘activities < of the building service employees

of the Arsenal Building Corporation. were “necessary”’

e ‘ coe 6 on . ; :

LR AEGESP RIES SEY BELEN pti ABIES

ees AC eat. ear. a

.to the production of goods for commerce by the; sthnants ©

in that’ building? because, had they been empléyed by

‘such tenants, their services. would have been necessary to

- such, production.” a ee : oo

The Third Circuit in the ieeiniall case recognized no

‘such difficulties or dialectical niceties. SA pparently the

- Court, not gmpressed by what sometimes has been, re-

garded as a limitation’ imposed upon Congress by the

Cofstitution, construed the word ‘necessary’? as ‘used

in the Act to be 'synouymous with “convenient and ap-

propriate” ; found that the services .of ‘the watchmen,

carpenters and porters, although not indispensable, were |

“both. convenient and: appropriate to the maifitenance

of a building suitable :for the manufacture of goods for:

commerce’?; and tlius: contluded: that; since ‘the. services

.-of such employees were convenient and approprigte to 4

maintenance of a loft building, they must as a conseque

be *.*‘necessary”’ ‘to’. the cihuep cand ‘activities of the

tenants." ;

“» Courts of Kes tenacity have taken issue ‘with this view.

; j Merryfield,. et al., v. F. M. Hoyt Shoe Corporation, 41

. PF, Supp. 794, 795, 796 (Nov. 6, 1941), Judge Morris stated :

“The plaintiffs [i. e. firemen, watchmen and mairt- .

‘tenance men] had nothing to do with the actual manu- __

facture of goods but were in the employ of the owners

- of the real estate * * *, : |

‘ ‘

. . * * * * * *

.™* "1 hold that employees of. a landlord, who -is not

himself : engaged. in the manufacture ofgoods for

interstate commerce but .whose premises are leased,

to others who are engaged in the production of goods

for commerce do not come i isee” the Daly of the

ats i :

r. Arsenal Building ‘Corporation, et al> Appendix, pp. "48-50,

v. A. B. Kivechbaum n Company. (R., pp. 219; 220).

°° ‘

; oe

Farthermoreé, in Robinson ¥. Massachusetts, Mutual Life

Insurance Company, the Supreme Court of. Tennessee

‘stated : rt od baa 7 ‘

“**As we interpret thes Act, it is limited tu those em-

ploxees who contribute directly to the. production of

goods. for mterstate commeree.. > * * Tn-a sense

every individual whose activity in any way touches

. or affects the lives of those producing goods’ for’

interstate conmere é contribute to such production, but °

we think that Congress intended to:limit.the Act to

those who’ directly contribute to the production of the

goods.” if

Apd in Cecil, et al. v. Gradison, et al., decided by ‘the

‘Court of Appeals for the F irst Appellate District of ee:

the Court. MGs 2 os =

ce * © the Net does riat ‘Apply to emplot ees of i in-

. trastate employers engaged to and actually perform. *

ing ihtrasfate aets, notwithstanding such intrastate

“acts incidentally facilitate the interstate commerce or

the production of goods for such commerce earried on

‘by others with whom they are not otherwise related.’’

Te the satne. effect is Je wel Tea C ‘ompany v. W illjams,

WIS F. (2d) 202, 206 (C. C. A, Loth Cir., Mar. 6, ee)

where the Court stuted:. — : |

“The Act by its terns is limited: to employees

engaged in interstate commerce or in the preduction

of goods for interstate commerce. It does not extend’

to employmerft that merely affeets interstate com-

merece, If there could be doubt as to the correctness

of this interpretation, it-is set at.rési by, ihre legisla-

tive history of the Act” em

‘

Without, wishing to be accused of engaging in ‘‘dialec tical

“ niceties,”” we ventyre to suggest that if the words ‘‘neces-

1* See footnote ‘3, p. 15 of this Petition ; also Appendix, pp. 61-62, infra.

15 See footnote 2, p. 13 of this Petition; also Appendix, p. 58, infra.

16 Kee also Fleming v. . Arsenal Buildiyg Corporation, et al., 38 F. Supp. 207

sQ 7? 2 Fe er @F a mem aoe af 460 *”

; + 7 93! P ; ; fat

. _@- : g

sary. to production”? are given the meaning: attributed to

them by the Third Cireuit, there is no limit to which the’

coverage of the Act could not be’ carried. Thus, if the ;

activities of the Petitioner’s engineef, janitor or watch

man are ‘‘necessary’’ fo the production of goods by tl

Petitioner’ s ‘tenants and thus ‘constitute in themselves

“production of goods for commerce,”’ it could be asserted

with equal logic that the employees of the eoncern which .

manufactures the elevators, boilers and generators used |

in the Petitioner’s building, or the employees of the con-

_ tractor Who: Constructed the building, would be’ subject

to the Act (assuming they were not otherwise covered),

hecause their production of. such equipment, or their con-

struction of the buildigg, was necessary to the production

of gouds: for. commerce by Petitioner’s tenants.

Without engaging at.this time in a. discussion of the

‘constitutional problems raised by the decision of the Third

Circuit, it is sufficient to point out. that such_a-holding ~

not- only involvés a further extension of Congressional

poweP ov er intrastate commerce, but constitutes an inroad

upon logal conditions and standards of such far readgng

ii portanég as to disturb the balance of a proper distribu-

_ tion of - ‘pow er between the state and national governments.’

q | : \7 7

. © ° .. “CONCLUSION.

It i is respectfully submitted that, for the reasons stated,

this: petition, fora writ of certiorari should be granted. :

Wn, CLARKE’ Mason,

Swney bL. ‘Krauss,

Freperick H. KyiGurt,

; Attorneys for etitioner.

Morcan, Lewis & Bocktivs, 7

an Fidelity-Philadelphia Trygt Building,

pws, Penna. . |

Ze ame Of Counsel. .

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GB +

_ APPENDIX.

FR [Pu BLIC—No. 718——75rH Concitess]

(Cuarre 676—-3p Szssiow |]

~ 72. 2475]

of AN ACT

To provide for the establishment of fair labor standards

in employments in and. affecting ee comumerce;

and for other purposes. | ae

Be it enacted by, the Senate and House of Representa-

tives. of the United. States of America iy Congress —

assembled, That this A®t may be cited as the “Fair Labor’ -

Standards Act of 19387’.

. FINDING AND DECLARATION OF POLICY

Sec. 2. ( we The Congress hereby. finds that the existence,

in industries engaged in commerce or in the production

ef goods for commerce, of labor conditions detrimental to

the maintenance of: the minimum standard of living neces-

sary for. health, efficiency, ard general well- being of

Workers. (1) causes comnierce and thé channels and in-

strimentalities of commerce to be used. to spread ard

perpetrate such labor conditions: among the workers of the

several States; (2) burdens commerce and the free flow

of goods in commerce; (3) constitutes an unfair method

of competition in commerce ;. (4) leads to labor disputes

bardening and obstructing ecommerce and the free flow of

_ goods in commerce; and (5) interferes with the: orderly

and fair marketing. of goods in commer¢ge.

(b) It is hereby declared to. he the poliey of this Act,

through the exercise by Congress of its pawer to regulate

commerce among the several States, to correct and as

rapidly as practicable to eliminate thd conditions above ’

referred to in such industries without substantially

Po]

DEFINITIONS

Sec. 3. As used in this Act—

(a) **Person’’? means’ an individual, partnership, asso-

ciation, corporation, business trust, lega] representative, .

or any organized group of persons.

(b) **Commerce*’ means trade, commerce, transporta-

tion, transmission, or communieation among the several

‘States or from any State to any place outside thereof.

the District of Columbia 6r any Territory or pos ‘session

of the United States. Bae :

(d) ‘*Employer’’ ‘includes any person acting directly

or indirectly in the interest of an employer in relation. to

an employee but shall “not include tH United States or .

any State or political subdivision of a State, or any labor |

organization (other than Ww hen actilig as an employer), or

anyone acting in the capacity “of officer or agent of such -

labor organization.

(e) ** Employee’? includes any. individual itor’ by

‘an emplover. SS i gree ee ea et

(f)-** Agricuiture’’ includes farming in all- its branches

and among other things includes the cultivation and tillage

of theesoil, dairying, the production, cultivation, growing,

and harvesting of. any agricultural or horticultural com-

modities (including commodities defined as agricultural

commodities in section 15 (2) of the, Agricultural Markéet-

ing Act, as amended), the raising of livestock, bees, fur-

hearing animals, or poultry, and any practices ( including

any forestry, or Jumbe ring oper rations) performed by a

farmer or on a farm as an incident to or in conjunction:

. With such farming operations, including preparation for

tharket, deliv ery to storage dr to market or to earriers

for transportation to market.

(¢) ‘*Employ”’ inelndes to suffer or permit to w ork.

‘(h) ‘*Industry’’, means a trade, business, industry, or

branch thereofyor group of industries, in 1 which individuals

are gainfully employed. -

4 4

. r ‘

glee Aare

td = ”

‘

sy (i) “Goods”? means oon Cinelading ships and. mariné

equipment), wares, products, commodities, . ‘merchandise, ”

or articles or subjects of commerce of, any character, or

any part of ingredient thereof, hut does, not include goods

after their delivery into tlie actual physical ‘possession

of the ultimate consumer thereof other than a producer,

manufacturer, or processor thereof. . -

(j) ‘Produced’? means produced, manufacturéd, 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 production of goods-

-if such employee was empleyed in producing, mapufae-

turing, mining, handling, transporting, or in any other

inanner working on such goods, or in any process or

occupation- necessary to the production thereof, in any

State. . 7

(k) ‘Sale’? o r “sell? includes any sale, exchange, con-

tract to sell, satin for sale, shipment for sale, or

other disposition. |

- (1) $‘Oppressive ’ child | labor” means a condition of

employment under which. (1), any employee under the

age of sixteen years is employed by an employer (other

‘than a parent.or a person standing in place of a parent

employing his own child or a child m his eustody under

_ the age of sixteen years. in an oecypation other than

(ae or mining) in any oceupation, or (2) any

employee*betw‘ een the ages of sixteen and eighteen years

‘is employed. by an emploVer in any oceupation which the

Chief of the Children’s Bureau in the Department of

Labor shall find and by order declare to be partienlarly

hazardous ‘for the employment of children hetween such

ages or detrimental to their health or well-being: but’

oppressive child labor shall not be «deemed to exist by

é virfue, of the.employment in any occupation of any person

with respect fo whom the employer shall have on file an,

unexpired certificate issued and held pursuant to regula-

‘tions of the Chief of the Children’s Bureau certifying

7 ( y

= ; Vi

Q | 28

that such person is above the oppressive e .ehild-labor age.

The Chief of the Children’s Bureau shall provide by

regulation oF by Order that the employment of employees

between the ages of fourteen and sixteen years in oceupa-

-tiohs other than manufacturing and mining shall not be

deemed to constitute oppressive child labor if and to the

extent that the Chief of the Children’s ‘Bureau determines

that such employment is confitied to periods which will

shot interfere with their sch sling and to conditions which

will not. interfere With their healt}fSarid well-being.

(m) ** Wage’’ paid to any empl includes the reason-

able cost, as determined by the Administrator, to the .

employer of furnishing such employee with board, lodging.

o or other facilities, if such board, ledging. or other facilities

are customarily furhisifed by such employer to his

employees. Ea

ADMINISTRATOR Ae :

. 4. (a) There is hereby ‘created in the Department

of rite a Wage and Hour Divisions-hieh—hatbeamder

* the direction of. an Administrator, to be known as the

Administrator of the Wage and Hour Division (in this:

Act referred to as the ‘¢ Administrator’’). The Admints-

trator: shall be. appointed by the President, by and with

the advice and consent of the Senate, and Shall receive

‘compensation at the raté of $10,000 a year.

-" , (b) The Administrator may, subject to the ‘civil-service

Jaws, appoint such employeestas he deems necessary to

_earry out his funetions and duties under this Aet and shall

fix their compefisation in accordance with the Classification

‘Act of 1923, as amended. The Administrator may estab-

lish and utilize ‘such regional, local, or other agencies, and

utilize such voluntary and uncompensated services, as may

from time to time be needed. Attorneys appointed under

this section may appear for and represent the Administra-

tor in any litigation,but all sueh litigation shall be subject

to the direction and control of the Attorney General. In

_¥.

the appointment, selection, classification, and promotion of :

officers and employees of the Adwrinistrator, no political

test or qualification: ‘shall. be permitted or given considera-

tion, but-all such appointments and promotions shall be

given and made on the basis of merit and efficiency.

in the District of Columbia, but he or his: duly authorized ’ ;

representatives: may exercise any or "all of his powers in

‘any plaee.

(d) The. Adininistrator shall per ier annually in Janu-

ary a report to the Congress cov ering , his. activities for

the preceding year and inéluding such information, data,

and recommendations fgr further legislation in connection

with the matters covered. by this Act as. i may find

: advisable.

“ INDUSTRY COMMITTEES

~ Sec. 5. (a) The Administrator shalt as soon as prac-

ticable appoint an industry committee for each industry

engaged in commerce or in the production of goods for —

“commerce, . =

(b) An industry committee shall he appointed by the

: Administrator without regard to any other provisians of .

law regarding the appointment and compensation. of em-

‘ployees of the United States. Tt shall include a number

af disinterested persons representing the public, one‘of

whom the Administrator shall designate as chairman, a.

, like number of persons’ Tepresenting employees in the in-

dustry, and a like number representing employers in the —

industry. ' In the appointment.of the. persons representing»

each group, the Administrator shall give due regard to the

geographical regions in which the industry is carried on.

(ce) Two-thirds of the members of an’ industry eommit-

‘tee shall, constitute ~ quorum, and the decision of the

committee shall- require a vote of not less than a majority

of all its members. .Members of an industry committee

shall receive as compensation for their services a reason-

s e .

able per diem, which the Administrator shall by rules and

-regulations «prescribe, for éach day actually spent in the

- work of the committee, and shall in addition be reimbursed

for their necessary. traveling and other expenses. The

Administrator. shall furnish the committee with adequate

legal, stendgraphie, clerical, and other assistance, and shall

by rules and regulations prescribe the procedure to be

followed by the committee. .

(a), The *Administrator shall submit to. an industry

committee. from.time to time such data as he may have

e.Vailable on the matters referred to it, and: shall cause

to be brought before it in connection with. suck matters

any witnesses -whom he deems material. An industry

committee may summon other witnesses or call “upon the

Administrator to furnish additional information to aid it

in its deliber ations. :

{e) No industry committee aipotuted under subsection

(a) of this section shall have any power to recommend the

minimum rate or rates of wages to be paid under section

6 to any employees in Puerto Rico or in the-Virgin Islands.

‘Notwitistanding any other provision of this Act, the

Administrator thay appoint a special industry committee

te recommend the minimum rate or rates*of wages to be

‘pard under section 6 to-all employees in Puerto Rico or the

‘Virgin Islands, or in Puerto Rico and the Virgin Islands,

engaged in commerce or in the production’ of goods for

commerce, or, the Administrator may appoint” separate

industry committees to’ recommend the minimum rate.or

rates of wages to be paid under section 6 to employees

therein engaged in commerce or in the production of ‘goods |

for commerée in particular industries. An industry com-

mittee appointed under this subsection shall be composed,

of residents of such island or islands where the employees

with respect to. whom such committee was appointed are

einployed and residents of the United States outside of

Puérto Riec and the Virgin Islands. In determining . the —

minimum rate or rates-of wages to be paid, and in deter-.

ae Ut -. Qe 3

- mining* classifications, such industry committees and the

Administrator shall be subject to the provisions of. section

8 and no such committee shall recommend, nor shall the —

Administrator approve, .a minimum wage rate which will

give any industry in Puerto Rico or in the Virgin Islands

a competitive advantage over-any industry in the United. -

States’ outside of Puerto Rico and the Virgin Islands.

No wage orders: issued by the Administrator pursuant

to the recommendations of an industry committee made

prior to the enactment of this joint resolution pursuant to

section 8 of the Fair Labor Standards Act of 1938 shall

after such enactment be applicable with respect to any

employees engaged in commerce or in the production of

goods for commerce in Puerto Rico or the Virgin Islands.’

— . 4

_MINIMUM WAGES ae aa

” SEc.: 6: (a) ba émployer shall pay: to each of. his

employees who is engaged in commerce or in the prodite-

tion of goods for commerce wages at ‘the following rates—

(1) during the first year from the effective date of

“ai section, nat less than 25 cents an hour,, .

(2) during the next six years from such date, not

less than 30 cents an hour,

(3) after the expiration ‘of ‘seven years from such

date, not less than 40 cents an hour, - or the rate (not

less than 9 cents an howir) prescribed in the appli-

‘ cable order of the Administrator issued under section ;

8, whichever is lower, and pars

~ (4) at any time after the’ effective date of this

section, not less than the rate ‘(not in excess of 40

cents an hour) prescribed in the applicable order

of the Administrator issued under section 8,

_» £5) ) At such employee is a home worker in Puerto

‘Rico Gr the Virgin Islands, .not: I¢ss than the minimum -

+ iemnibiok provided by Act of 5 aa 26, 1940 m— Res. No. 88, 76th

Congress).

piece rate’ prescribed, by regulation. or order; or, if.-

no such minimum piece rate is in effect, any piece

rate adopted by such employer which shall yreld, to

* the proportion or class of employees prescribed by

regulation or order, ‘not less than the applicable mini-

-mum hourly wage rate. Such minimum. piece rates. ©

or employer piece rates shall be commensurate with,

and:shall-be paid in lieu of, the minimum hourly wage ©

rate applicable under the provisions ‘of this section.

The Administrator, or his authorized representative,.

_ Shall have power to make such regulations or orders

as are necessary or appfopriate to carry-out any of

the provisions of this paragraph, including the power

without limiting the generality’ of the foregoing, te

define any operation or occupation which is performed

‘by such home work employees in Puerte’Rico or the

Virgin Tslands; to establish minimum piece rates for —

any operation or occupation so defined; to ‘prescribe

‘the method and procedure for ascertaining and prom-

-ulgating minimum piece rates;. to prescribe. stand-

ards for employer piece rates, inefdding the ‘propor- .

tion or class of employees who shall’ r@eive not less -

than the minimum hourly wage rate; to define the term

‘*home werker’’; arfl to prescribe the conditions under

which employers, agents,: contractors, - and . subeon-

tractors shall cause Hct to be produced by home .

workers." :

(bh) This section shall take’ effect upon the cipitation

of: ony hundred and twenty. days from the date of enact-

ment of, this Act.

(¢) The provisions of Sachin (1), (2), ik (3) of

subsection’ “a) of this section shall be superseded in the

ease of any employee. i in Puerto Rico or the Virgin Islands

engaged in commerce or in the production of goods for

commerce only far so long as and insofar as such employee

1 Amendment onda ‘by Act of June %, 1940 (Public Res. No. 88, 76th

Congress).

L 33

~ is covered by a wage order issued by the Administrator

pursuant to the recommendations of a. special industry

committee appointed pursuant to section 5 (e).*

. 3 Oe. 7

MAXIMUM HOURS

Sec. 7. (a) No employ er shall, except as otherwise pro-—

vided in thie section, employ any of his employees who is

engaged in comimerce or in the produetion of goods for

commerce— *

(1) for a workweek longer than forty-four hours

during the first year from the. -effective date of this —

‘ section, ; Pre

ue. (2) for.a- workweek : longer ‘than forty-two hours

. during the second year from such date, or .

(3) for a workweek longer than forty hours after

the ‘expiration of the second year from such date,

unless such employee receives compensation for his em-9

ployment in excess of the hours above specified ‘at a rate

not less than one and oge- “half times the regular rate at

which he is employed. , .

(b) No employer shall be deemePta have violated sub-

section (a) by employing any emplotee for a workweek |

in excess of that specified in such subsection without pay-

ing the compensation, for overtime employment prescribed

therein if such employee is so employed— |

' (4) in pursuance of an agreement, made as a result ‘:

*- of eollective bargaining. by representatives - of em- |

* ployvees certified, as bona ‘fide by the National Labor

Relations Board; which provides that no employee

shall be. employed. more than one thousand hours

during any period of twenty-six consecutive weeks, ~-/—

- (2) on an annual basis in -pursnance of an agree-

ment with his employer, made as a result of collective

bargaining by representatives of employees certified

as bona fide, by the National Labor Eeeiatons Board,

_ Amendment csovides by Act of June 26, 1940 (Public Res. No. 88, 7th *

. Congress). ‘

comma

34 ‘

which provides that the employee shall not be em-

ployed more than two thousand hours, during any

period of fifty-two consecutive weeks, or

(3) for a period or periods of not more than four-

teen workweeks in the aggregate in.any calendar

vear in & | industry: found by the Administrator. to be

of a seasonal nature, ; mae

‘and if such employee receives B mpensation. for emplov-

-ment in excess of 12 hours in any workday, or for em-

- ployment in excess of 56 hours in: any workweek, as: the ©

case may. be, at a rate not les&.than one and one-half -

times the regular rate at which he. is employed.

processing of milk, whey, \skimmed milk, Gr cream into

dairy — or in the ginning. and compressing of

cotton, Or in the processing of cottonseed, or in the pro-

cessing of sugar’ beets, sugar beet molasses, s sugareane, 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 employ ment whére he is

so engaged; and in the case of an employer engaged in

the first processing of, or in canning ér packing, perish-

able or seasonal fresh fruits, or vegetables, or in the

first processing, within the area of production (as defined

by the SPesinistrator), of any agricultural or horticultural

v during seasonal operations, or in handling,

slaughtering, or dressing poultry or livestock, the provi-

sions of subsection (a), during a period or periods ‘of

not more than fourteen workweeks in the aggregate in

any: calendar year, shall not apply to his employees in

any place of employment where he is so engaged.

(d) This section shall take effect upon the expiration

of one hundred and twenty days from the date of enact-

ment of this Ret. ap on etait z

’ WAGE ORDERS

Src. §. (a) With a view to carrying out the policy of

this Act by reaching, as rapidly as is economically feasible

: ;

without substantially curtailing employment, the objective

of a universal minimum wage of 40 cents an hour in each

industry engaged . in egimerce or inthe production of

goods for commerce, the A(iministrator shall frota time to

time convene: the industry committee for each such in-

dustry, and the industry committee Shall from time to

time recommend the minimum rate or rates of wages to

be paid under section 6 by employ ers engaged in com-

_meree or in the production of goods for commerce in

-such’industry or classifications therein,

(b) Upon the convening of an industry committee, the

Administrator shall refer to’ it the question of the mini-

inum wage rate or ‘rates to be fixed for such industry.

The. industry committee shall investigate conditions in the.

industry and the committee, or any authorized subcom-

. mittee thereof, may hear such witnesses and receive such ,

evidence as may be necessary 01 appropriate to enable the

. committee to perform its duties and. functions ander’ this

Act. .The committee shall recommend to the Adminis-

trator the highest minimum wage rates ‘for the industry

which it determines, having due regard to economic and

competitive conditions, will not substantially: curtail em-

ployment in the industry.

(¢) The industry committee for any industry shall

recommend such reasenable classifications within any in-

dustry as it determines to be necessary for the purpose

of fixing for each classificatién within such industry the

highest. minimum wage rate’ (not in excess of 40 cents. an.

hour) which (1) will not substantially eurtail employment

in such classification and (2) will not give a competitive

- advantage to any group in the industry, and shall recom-

mend for each classification in the industry the highest

minimum wage rate which the committee determines will

not substantially curtail | employment in such classifica-

tion. In determining whether such classifications should

_ be made in any industry, in making such classifications,

and in determining the mininium wage rates for such

nS é

classifications, no classification shall be made, and no

mininium: wage rate shall be fixed, solely on a regional

basis, but the industry committee and the Administrator

shall consider among other relevant factors the following: |

(1) competitive conditions as affected by transpor- -

_tation, living, and production costs; °

parable character by collective labor agreements —

negotiated between employers and employees by rep-

resentatives of their own choosing; and °

(3) the wages paid for work of like or comparable ,

character by employers who voluntarily maintain |

minimum-wage standards in the industry.

No classification shall be meade under this‘section on the

_/ basis of age or sex,

(d), The induste committee shall file with the Adminis-

trator a report containing its recommendations with re-

spect to'the matters referred to it: Upon the filing of

such report, the Administrator, after due notice to inter-

ested’ persons, and giving them an. opportunity to be

heard, shall by order approve and carry into effect the

“recommendations contained in such report, if he finds that ’

the recommendations are made in aceordance with law, —

are supported by the evidence adduced at the hearing,

ond, taking inte: consideration’ the same factors as are

required to be considered by the industry committee, will

varry, out the purposes ‘of. this section; otherwise . he

shall disapprove such recommendations... If the Adminis-

trator disapproves such recommendations, he shall again |

refer the matter to such committee, or to another industry

committee for such industry (which he may appoint for

such purpose), for’ further consideration ‘and = reecom-

mendations.

‘(e) No order issued aati this, rection with respect to

_ any industry prior to the-expiration of seven years from

" the effective date of section’ 6 shall remain in- “effect after

(2 2) the wages established for work of like or. com- =

37°

o% . Sates ote

such expjration, and no order shall be ssued under this

section with respect to any industry on or after such

éxpiration, unless,the industry committee by a pr@ponder- -

ance of the ev ‘idenée before it recominends, and the, Ad-

ministrator by.a preponderance of the evidence adduced

‘at the hearing finds, that. the.continued effectiveness or

fhe issuance of the order, as the case may be, is neces-

sary in order to prevent substantial curtailment of em- —

get nsent: in the industry.

(f) Orders. issued under this section shall -define the

industries and classifications therein’ to whicl/ they are to

> apply, and shall contain ‘such terms and -conditions. as.

the Administrator finds necessary to carry. oit the pur-

poses of such orders, to prevent the cireumvention or

evagion ‘thereof, and “to safeguard the minimum wage

rates established therein. No such order shall take effect

until after due notice is given of the issuance thereof by

publication in the Federal Register and by sucheother

means as the Administrator deems reasonably calculated

to give to: interested persons general notice of stich

issuance,

(gc) Due notice of any hearing providyd for. in this -

section shall be given by publication in the Federal Regis-

ter and by such other means as the Administrator deems

reasonably calculated to give general notice to interested |

persons,

ATTENDANCE .OF WITNESSES

Sec. 9. For the purpose of any hearing or investigation

prov ided for in this Act, the provisions of sections 9 and

10 (relating to the attendance of witnesses and the pro-

duction of books, papers, and documents) of the Federal

Trade Commission Act of September 16, 1914, as amended

(U. S.C.,. 1934 edition, title 15, secs. 49 and 50), are

hereby made applicable to the jurisdiction, powers, and

duties of the Administrator, the Chief of the Children’s

Bureau, and the industry committees.

~ 38

: COURT REVIEW

‘Bro. 10. (a) Any person. aggrieved by an order -of the

Administrator issued under section 8 may obtain’ a review

of such order in the circuit court of appeals of the United

States for any circuit wherein such person resides or has .

his principal place of «business, or in the United States

Court of Appeals for the District of Columbia, by filing

in such court, within sixty days after the entry of: such

order, a written petition: praying that the order of the.

Administrator be modified or set aside in whole or in part.

A copy of sach petition sliall forthwith be served upon

the Administrator, and thereupon the Administrator shall

certify and, file in the court a transcript of the record upon

which the order complained of was entered. Upon the

filime of such transcript such court shal) have exclusive

jurisdiction to affirm, modify, or .set aside such order in

whole or in part, so far as it is applicable to the peti-

tioner., The review by the court shall be limited to ques-

tions of law, and findings of fact: by the Administrator

when supported “by substantial evidence shall be con-

clisive, No objection to the order of the Administrator

shall be considered by the court unless such objection shall

have been urged before the Admjnistrator or unless there

were reasonable grounds for failure so to do, If appli-

cation is made to the court for leavé"te adduce additional

evidence, and itis shown to the satisfaction of the court

that such additional evidence may materially affect the

restlt of the proceeding und that there were reasonable

grounds for, failure to adduce such evidence in the pro-

ceeding before the Administrator, the court may order

such ‘additional ev idence to be takey before the Adminis-

trator and to be “adduced upon the hearing in» such

manner and upon sueh terms and conditions ‘as to the

court may seem proper. The Administrator may modify

his findings-by reason of the additional evidence so taken,

and shall file with the edurt’such modified or new findings -

which if supported by substantial evidence shall be con-

- 4

a eal 7

clusive, and shall also file his recommendation, if any, for ©

the modification or. setting aside of the original order.

The judgment and decree of the court shall be final, sub- -

ject to review by the Supreme Court of the United States

upon certiorari or certification as provided in sections 239

and 240 of the Judicial Code, as amended (U. S. C., title

28, sees. 346 and 347).

(b) The commencement of proceedings under subsection’ |.

(a) shall not, unless specifically ordered by the court, -

operate. as a stay of the Admigistrator’s order. . The

court shall not grant any stay of the order unless the

person eomplaiping of such order shall file in court:an.

undertaking with € surety or sureties satisfactory to the

court for the payment to the employees affected by. the

order, in the event such order is affirmed, of the amount:

by which the compensation such employees are entitled

to receive under the order exceeds the compensation they

' actually recaiye while such stay-is in effect.

INVESTIGATIONS, INSPECTIONS, AND RECORDS

_ Bao, 11. (a) The Administrator or his designated repre-

wntatives may inyestigate and gather data regarding the,

| wages, hours, and other conditions and practices of em-

joxment, in any industry subject to this Act, and may

enter and inspect such places’ wore ly records (and make

such transcriptions thereof), question such employees, and

investigate such facts, conditions, practices, or matters |

as he may deem necessary or appropriate to. determine

whether any person has violated any provision of this

Act, or which may aid in the enforcement of the provisions

of this Act. Except-as provided in section 12 and in

‘subseetion (b) of this section, thé Administrator shall

utilize the bureaus and divisions. of the Department of:

Labor for all the investigations and inspections necessary .

ander this section. Except as provided in section 12, the

Administrator shall bring all actions under section 17 to

restrain violations of this Act.

(by With the consent and cooperation ef State agencies

charged with the administration of State labor laws, the

Administratot and the Chief. of the Children’ s Bureau

may, for the purpose of carrying out their respective

functions and duties under. this Act, utilize ‘the services

of State and local agencies and their employees and, not-

withstanding any other provision: of law, may reimburse

such State’ and local agencies and their employees for

services rendered for such pffrposes.

(«) Every employer subject to any provisions of. this

Act or of any order issued under this Act shall make,

keep, and-preserve such records of the persons employed

by him and of the wages, hours, and other conditions and

practices of employment maintained by him, and shall pre-

serve such records for such periods of time, and shall

inake such reports therefrom to the Administrator as “he

shall prescribe by regulation or order as necessary oF

appropriate for the énforcement of the provisions of this

Act or the regulations or orders thereunder.: .

. . ; 6 °

ie. ‘ GHILD LABOR PROVISIONS © -

Sec. 12 (a) After’ the gxpiration*of one hundred and

twenty days from the date of enactment of. this Act, .no

producer, manufacturer, of dealer: sha!! ship; or deliver

for;shipment in commerce any goods ototisedds

therefrom any oppressive child labor has been émployed:

Provided, That a ptoseeution and conviction of a defend. -

ant for the shipmeyt or delivery for shipment of any,goods

under thé conditions hereinsprohibited shall be a bar to

any further proseeution against the same defendant for

shipments or deliveries for shipment of any such goods

before the beginning of said prosecufton. |

() The Chief of the Children’s Bureau in the Demast-

‘inent of Labor, or any of his authorized representatives,

a ; 2 - ; J | o

n.am,.estab-’

. lishment situated in the United States in or about which |

within thirty days prior to the‘ removal of such goods.

Li ce, all investigations and /aspections under sec-.

41 | ‘ -€ S

tion-11 (a) with respect to the employment of minors, and,

subject to the direction and control of the Attorney Gen-

eral, shall bring all actions undér seétion to enjoin

any act or practice which is unlawful by reason of thé

existence of oppressive child ‘labor, and shall administer

ull other provisions “of this Act relating to ‘oppressive

child Tabor.

iF 5 : EXEM {PTIONS ;

- Sec. 13 (a) The provisions of. se¢tions 6 and 7 shali:

not apply with respect. to (1) any emplo*ee, employed ‘in

a bona fide executive, administrativ e, prof essional, or local

retailing capacity, or in the capacity of outside salesman -

‘(as such terms are defined and delimited by regulations

of the Administrator); or (2) any employee engaged in,

-any retail or service establishment the greater part of

whose selling or servicing is in intrastate commerce; or

(3) any. employee employed as a seaman; or (4). any

employee of a carrier by air subject to the provisions of

title IL of the. Railway Labor Act; or (5) any employee

employed in the catching, taking, harvesting, cultivating,

or farthing of-any kind of figh, shellfish, erustacea, sponges,

seaweeds, or other aquatic forms of animal and vegetable.

Jife, ineluding the gging to and returning from work and

_ including employment in the loading, unloading, or pack- .

ing of suth.preducts for shipnufent’ér in propogating, pro-

cessing, marketing,~freezity, canning, curing, storing or

distributing the above products or, byproducts thereof;

or (6) any employee employed in agriculture;-or (7) any

employee to the extent that such employee is eXempted-by

regulations or orders, of the Administrator issued’ under

section 14; or (8) ahy employee employed in connection

with the publication of any weekly or semiweekly news-

‘paper with: a circulation of less than three thousand the

major part of whick circulation is within, the county where —

‘printed and published; or (9) any employee of a street,

. suburban, or interurban - clectric railway, or local trolley

or motor bus carrier, not inclyded in other exemptions:

contained in this aon! on (10) te any individual em-

ployed within the area of production (as defined by the

Adininisdtrator), engaged in handling, packing, storing,

ginning, compressing, pasteurizing, drying, preparing in

their raw or natural state, or canning of agricultural or

; nope cultural commodities for market, or in making cheese

sutter or other dairy products; or (11) any switch-

hoard ‘operator employed:in a public telephone exchange

which has less than five hundred stations.’

(b) The provisions of section 7 shall not apply with:

respect to (1) any ethployee with respect to whom the

“Interstate Commerce Commission has power to establish

_the employment of learners, of apprentices, ang of mes:.

qualifications and maximum hours of service pursuant ‘to

the provisions of seetion 204-of the Motor Carrier Act,

If 30 5 or (2) any employee of an employer subject to thg

provisions of Part L of the Interstate. Commerce Act:

shall not apply with respect to any employee employed

in agrieulture while not legally re equired to attend school,

or to any child employed as an actor in motion pictures

or theatrical productions. ie |

LEARNERS, APPRENTICES, AND HARDICALT ED WORKERS

Sec, 14. The Administrator, to the Rtopt necessary in

order to prevent curtailment of opportunities for employ-

ment, shall by regulations or by orders provide fyr (1)

sengers employed exclusively in delivering: letters and

messages, under. special certifi@ates issued pursuant - to -

regulations of the Administrator, at such wages lower

than the minimum wage applicable. under section 6 and

subject to such ‘limitations as to time, number, proportion,

and length of service as the Administrator shall preseribe,

and (2) the employment of individuals whose earning

capacity is impaired by age or physical or mental de-

1 Amendment provided by Act of August 9, 1939 (Public No. DH, 76th

Congtess. 53. Stat: 1266). - . :

of e

ficieney or injury, under special certificates iouand by the

Administrator, at such wages lower than the minimum

wage applicable under section 6. and for such period as

shall be fixed in such certificates.

‘4 PROHIBITED’ ACTS

»%

See, 15. (a) After the expiration of one hundred and

twenty days from ‘the date of enactment of this ‘Act, it

shall be unlawful for any person—

(1) to transport, offer for transportation, - ship,

deliver, or sell in commeree, or to ‘ship, deliver, or

sell with knowledge that shipment or delivery or sale

thereof. in commerce is intended, any -goods in the’

production of which any employee was employed in

violation of section 6 or section 7, or in violation of

any regulation or order’of the, Administrator issued

under ‘section 14; except that no provision of ‘this

Act shall impose affy liability upon any common

earrier for -the transportation. in ¢ommgree in the

regular course ofits business of any goods not pre

duced by such common carrier, and no provision of

this Act shall excuse any common. earrier from its

obligation to accept. any goods for transportation;

(2) to violate any of ‘the provisions of section 6

. or section 7, or any of the provisions of any regulation:

- or order of the Administrator issued under section 14;

(3) to discharge or in any other.manner diserimi-.

nate against any employee because’ such employee has

filed any complaint or instituted or caused to be in-

°stituted any proceeding under or related to this Act,

. or has testified or is about to testify in any soth

proceeding, or has served or is’ about to serve on

an industry committee. :

(4) to violate any of the provisions of section 12 :

(5) to violate any of the provisions of + section

11 (c), or to make any sfatement, report, or record

filed or kept pursuant to the provisions of such section

or of any regulation -or order thereunder, knowing

such statement, report, or record to be false in a

material respect. — . F

(b) For the purposes of subsection (a) (1) proof that:

any employee was employed in any place of employment

where goods .shipped or sold in ‘commerce were. produced,

within ninety days prior to the removal *of the goods

from such place of employment,: shall -be prima facie

evidence that such employ Was engaged 1 in the production

of such ‘goods.

PENALTIES | 2

Sec. 16. (a) Any person who willfully violates any of

the provisions of -section 15 shall ‘upon conviction thereof

be subject to a fine of not more than $10,000, or to im-

prisonment for not more than six months, or hott, No

person: shall be imprisoned under this ‘subsection except

for an offense committed after the. conviction of ‘such

“ person for a prior offerise under this subsection.

(b) Any employer Who violates the provisions of sec-

tion 6 or section 7 of -this Act shall be liable to the em-

| ployee or employees affected in the amount of their unpaid®

‘minimum wages, <¢ their unpaid overtime compensation,

as the case maybe, and in an additional equal amount

as liquidated damages. ” ‘Action tm recover such liability

may be maintained in any court of competent jurisdiction

by any one or more ersployeessfor and in behalf of himself

or themselyes and oth@r employees similarly sitfated, or

such employee or employees may designate an agent or

representative to majitain such action for and in behalf

of all employ ees similarly situated. The court in such

action shall, in addition to any judgment awarded ‘to the

plaintiff or plaintiffs, ellow a reasonable attorney's fee

to be paid by, the defendant, and costs of the action.

a s

Ca :

INJUNCTION PROCEEDINGS ¥ =

Sec. 17. The district vourts of the United States and

‘the United States courts of the Territories and posses-

sions ‘shall have jurisdiction, for cause shown, «and subject

to the provisions of section 20 (relating to notice to

opposite party) of the Act entitled “4An Act “to supple-

ment existing laws against unlawd ul restragnts and monop-

olies, and for other purposes’’, approves Oetober 15, 1914,

as amended (U.S. C., 1934 edition, title : 28, see. 381), to

restrain violations of section 15... 7

RELATION TO oraue LAWS

Sec. 18. No provision of this Act or of any order there-

under shall excuse noncompliance with any Federal or

- State law or municipal ordinance establishing.a minimum

age higher than°the minimum wage established under

this Act 6r a maximum ‘workweek lower than ‘the maxi-

mum workweek established« under this Act, and no_ provi-

sion of this Act relating to the employment of child labor

shall justify noncompliance with ny Federal.or State

law er municipal ordinance establishing a higher standard

than the standard established under this Act. No provi-

sion of this Act shall justify any employer in reducing a

wage paid by him which is in excess of the applicable

minimum wage under this Act, or justify any employer

in inereasing hours of employment’ maintained by him

which are shorter than the maximum hours - applicable

under, this Act. es s8 P '

SEPARABILITY OF PROVISIONS

Sec. 19. If any provision of this Act or the’ application

: such provision to any person or circumstance is held

nvalid, the remainder of the Act and the application of

seat to other persons or circumstances shall not .

Approved, June 25, 1938. * @

“on z = ‘ ‘ 2

46.

UNITE D STATES CIRCUIT COURT OF APPEALS

C. For. THE Secoxp Cicuir

No. ‘87—October *Perin, edi.

(Ar — Novemner 0, 1941 Decided December 30, 1941. )

2 DB. - Pair 'B. Fiemixe, | ebagpicie.t t

Sie... : ‘Appellant,

eo . . —?) poo “MA:

Rs AtseEn aL’ BuILpiNG ('ORPORATION et al., bak

ar Appellees.

Appeal from a judgment of the District Court for the°

Southern District. of New York, dismissing a complaint in

an action to’ compel compliance with Yi (a) of the “*Fair

Labor Standards Act of 1938," — o

"Before:

oe L.. Hann, CLark and Frank, oat

Circuit ‘Judges.

Invinc J. Levy for the ‘anpdinnt.

WaLter Gonos Merritt for the appellees.

L. Hann, C. J.:

The plaintiff < reads pet a judgment, dismissing after

trial his complaint against the defendants—filed ‘under $17

of the ‘Fair Lahor Standards Act of 1938°’’-\to restrain —

violation of §15(a)(2) of that act. The only question is

whether §7(a) requires the defendants to pay **timne and a

half’ togtheir employees.’ (We may ignore the defendant,

Spear & Co., Inc., for any decision as to it must concededdy

follow that.as to the Arsenal Building Corporation,” of

“which we shal; speak as ‘the defendant.) The facts are as

«y

W.7e

follows. The delenident owns a _ twenty- two story. loft

building in New York City, of which. it lets. out substan.

tially all the space to manufacturers of women’s s clothes, ;

who are concededly engaged in interstate commerce: L.€.,

they import part: of. their-raw materials into. the state’

and send out of the state a large part of the completed

clothes. - (With the exception of three-of these manufac-

turers, the sales of two of whom. were very sinall, the

_ percentage of interstate shipments was in every case more

than two-thirds; the pereentage of the total shipments.

. was 82.) All but ‘two occupy. less than a single story of

‘the building; one occupies one and a half stories, and

the other,-five ‘and a half. The i ga has no other

o_husiness but Jéasing the space, collectfng the rent and such

services as are incidentally necessary: ‘e.g., protecting the |

tenants” property, keeping the building itself clean, warm,

lighted and in. repair, furnishing steam and hot water,

~ and thanning and running the elevators. To render these

-.- services it employs. 25 workmen of.variots sorts (besides,

a superintendent, conce{ledly not within the act) and it

has refused to pay them “time and‘a half” for overtime

* a8 defined, by $7 (a) (1) and §7(a){2) of the actPhe plain- -

tiff’s S position is that, although these employees ‘do not lave.

any part in the actual handling of materials or of the

finished goods (except insofar’ as running the elevators

» may. be such) they are nevertheless ‘‘engaged in com-

meree’’.and ‘‘in the production. of goods for commerce?

within §7(a). The defendant denies this, and further

asserts that it is in any case exempted by §13(a)(2)

because the employees are engaged in a ‘service estab-

lishment the greater. part of whose * -*/*- servicing is

in intrastate ecommerce.’’- Finally it says that the act does

not cover the employees of employ ers who are not them-

selves ‘“‘engaged in commerce or im the production of

goods for commerce.’’. The district judge held that the

_ employees ‘were not ‘haaeeaed in the production of goods

for\commerce,’’ or ‘fin commerce’’; and that the defend-

ant was a ‘‘service establishment’? all of .whose activity

“We s Or Ee wT ee

as intrastate. “0 * CF

> ° ry

48 |

: v :

‘We think that the employees here in question are ‘‘en+

gaged *~*. * in the production of goods for commerce’’

within &7(a), and for that reason we do not find it neces-

sary to decide whether they are also ‘engaged in com-

meree.”’ First, are they engaged in the production of

goods at all? Section 3(j) defines that phrase as- mean-

ing, ‘‘employed in producing, manufacturing, mining,

handling, transporting, or in any other manner: working”

on such goods, or in any process or occupation neces-

sary to the - production thereof.’’- Whatever may be

thought of the applicability of this definition down to

the last ‘clause, we are satisfied. that the ‘oeeupation’’

of these men was ‘‘necessary to the _production’’. of the _

clothes. If instead |. f leasing space in the defendant's

buiJding, the manufacturers had ‘each owned and oceupied

a whole factory of his own, this conclusion’ seems to us

a cold or filthy buik ling y they must have light and

power te drive their machines}. they cannot be required to

carry goods from one story to another. Those. who make

and keep the faetory fit for them in. these ways “are as

‘necessary’? to “praduction’ as they are themselves.#

Yet it. would as much defeat the purpose of. the act,

as expressed in §2, to deprive such workmen of its pro-

* taetae wher they chance to be employed by a different

employer, as when they are employed by the employer of

the-enfters and ‘stitchers. And a-eompeting dressmaker

may find his rival’s lower rent.as ‘‘unfair’’ a differential

against him in‘the eost of production, as lower wages; he

will indeed feel it less directly, but it may. still be felt.

We may therefore. start. with the assumption that Con-.

gress did not mean to draw any line, based merely upon,

~ # Bowie v. Ggncaies, 117 Fed. (24) 11, 20 (C. A. A. 1): S. He Robinson

& Co. v. LaR@, Sup. Ct. Tenn. Nov. 29, 1941; Wood v. "Central S. & G.

‘9., 33 Fed. Suppl. 40; Lefevers v. General Export 1. & M. Co., % Fed

* Suppl. 838;. Muldowney v. Seaberqg Elevator Co., 39 Fed. Suppl. 275;. Flemina

v. Pearson Hardwood Flooring Co., 39 Fed. Stippl. 300. .Rogers vy. Glazer 32.

~ Fed. Suppl. 990; ,and Goldberg v: Wormar, 37 Fed. Suppl. 778 concernet

“retail estahlishments”-and are not to the contrary. -

9°

-49

the division of the same duties among several employers,

unless the language of the act’ very plainly requires us .

to believe that it did. We. can find none that compels us -

‘so to believe: on the contrary §3(i) which includes *‘ parts:

and ingredients’ of ‘‘goods’’ with the goods’ themselves,

confirms our understanding. The history of the clause

affords further confirmation; it originally read: ‘‘or

in the making’ of tools or -dies. used in the production

of sueh goods in. any State.’’ | That obviously implied

that the later. use of the tools and dies—otherwise out-

side the, act-—-might characterize them enough.from the

outset: to put within it those who made them. The final

form ok words chosen was far more general, it is true,

but there is no indication’ of any change in the original Ss

intent in this regard. : . ;

To this the defendant answers that it proves -too much,

tor Congress could not have meant to- impose ‘‘fair labor

standards’? upon everyone who might chance to contribute

any necessary “‘inetedient, ”? or service to the production

of goods ‘*produced ‘for commerce.’? The miller who fur-

nishes the flour to a baker who sells bread in other states

could not have been intended; or the cutler who selis

knives t6 a wholesale butcher; -or the service station which.

repairs, and fills a manufacturer’s trucks; or the. chemist

who supplies aleohol to a perfumer. Stated so generally,

the argument maybe sound; at any rate we will assume

arguendo that the purvevor of ‘‘ingredients’’ or services "

to all-eomers at random will not find himself within the

act merely because some part of what he sells eventually

finds its way into “goods produced for commeree.’’ Per-

haps in the end. it wilf turn upon the distribution of his

customers among those who are engaged, in interstate

commerce and those. who, are not: here, as. so often,

the test may be one of degree: ‘We need not answer, for

here at any rate no such dilemma preserfts itself. As we

have said, the work of the defendant’s employees is in

kind substantially the same as it ; would be if the manu-

—-—

facturers. employéd them, directly. That is the substance

of the matter. Since the words ‘and the purpose of

the act coalesce so far, we will not allow ourselves to be

drawn into dialectical niceties which are not before us

and whose answer need not compromise the step we. are

taking. ~ -

Nor do we think that the defendant is a ‘service estab-

lishment the larger part of whose * * ®* servicing is in

intrastate commerce’’; §13(a)(2). Possibly it is not a

‘‘service ‘establishment’? at all; perhaps that - phrase.

should be limited to those who serve consumers directly,

like tailors, or garages, or laundries; the juxtaposition of

retail selling and ‘‘servicing’’ does. indeed suggest as ,

much. But it is enough for our ‘purpose that, if it is.

a “service éstablishment,” at least its exeription must

depend upon the extent to which its servicing is intra-

state. Suppose for exe iple, that these manufacturers,

instead of pressing the ciothes themselves, sent them out

‘.to other shops which. pressed only for them; the fact

that’ the pressing took place in, the same state as the-

cutting and stitching. would not, we think, exempt the

pressers; their servicing would be ‘‘in interstate com-:

meree.”’ The *‘seryicing’’ being a part of ‘ ‘production,’ :

_ the test should be what kind of production it ts a part

of.- The goegtion is really the same as that we have

just considered: ‘i. e., whether it is important how that

production is divided among employers. It cannot be

that if the eXemption exiends beyond retail ‘‘servicing,”’

it is the character of the ‘‘servicing’’ itself that count

divorced ‘from the ‘production’? of whieh it is a part.

Again, we should be met by the, anomaly arising from

such an interpretation—the expricious ineidence’ of the

det resultivg from the accident of the industrial division

of the. wale process,

The defendant’s last argument is. based upon $§5 and 8,

_ which prove, it says, that the act covers only the employees

of @iiplovers who are themsélves ‘‘engaged in’’ interstate

se ; v

commerce. Adinow cite, as it must, that i¢-commands

each of his

“every employer’? without limitation to ‘“pay

_employees’’ the standard wage, and that 67 declares that

**no employ er’’ shall ‘‘employ any of his employees’’ for

more than the prescribed hours, the defendant rests ‘its

argument upon the constitution and functions of the ‘‘in-

dustry committees.’’ Since these must be composed only

of employers ‘‘engaged in’’ interstate commerce, and

since they have power to fix the rate of wages, the argu-

ment is that the act cannot apply to employers who are

not represented upon them. We do not agree. Section

5(a) does not confine the ‘Adininistrator’? to committees

for ‘‘each industry engaged in commerce’’; he may also

— appoint them for industries “engaged ene, Ss

production of goods for commerce.’’ One third. of its

inembership must, it is true, “‘represent employers in the

industry ’’; and §8 gives power to the committees to fix the

‘wage'in the ‘‘industry?’ (not over 40 cents,an hour) and

to report to the ‘* Administrator,”

report ‘if he finds that the recommendations are-made in

accordance with law, are supported by the evidence * * *

and * * * will carey out the purposes of this section’’;

otherwise he is to refer back the questien to the same or

another committee. (Subd. d.) Section 3(h) defines an

“industry’’ as including not only a ‘‘branch’’ of: an in-

dustry, but ‘‘a group of industries.”’

It is certainly undesirable, and it is probably impossible,

to define with accuracy “just what are the limits imposed

“upon the ‘* Administrator's”

prpper places the definitions of §3(h) and §3(j), we get

bstantially the following. The ‘‘ Administrator’ is di-

reyted to appoint a number of persons ‘‘represénting, em-

plovers’’ for eac ay group of industries’? whose employees

are ‘‘employed . * * in any process or occupation

necessary to the mala of **goods for commerce.’’

ie ‘Certainly this grants him the power if he thinks ‘best to

who is to approve ‘the |

| choice by $5, but if we readg

- subdivisions a and b together and interpolate in their

‘ : -

mae 2

put upon: one committee an employer “engaged ol

iri the production of goods for commerce,’’ like the defend-

ant, with employers ‘‘engaged in interstate commerce,”’

like the tenants. Opp Cotton Mills vy. Administrator, 312

U.S. 126, 149, 150. The history of §$6 and 7 in. Congress

leaves no doubt’ that«this is the right view. In the Senate

the sections read in substance as they. now do, though the

wording was somewhat different (Senate Bill 2475 passed

July 31, 1937). T he House amended them to limit them -

to employers engaged in commerce or in industry affect-

ing commerce (taking the view now urged by the defend-

ant) and to include all the employees of ‘such employers.

The conference report partic ‘ularly’ dealt with this differ-

ence (House Report 2738, 75th Congress 3rd Session pp.

29 and 30) and | dered that the only test should be the

oceupation of the employees; Senator Pepper, one of the

managers in the Senate, expressly stated on, the. floor that

this was its meaning. catat Fe ee

As has alréady appeared from the (cc}}ioms cited, the

question now at bar has come up a number of times when

“the -aneillary service was performed by: -employ@es of the +

same employer who was himself “ongag® in commerce” z

and the result has heen fairly uniform. We have found

five decisions. of appellate courts which have dealt with

employees of an employer, who was not “engaged in com-

merce,”’ or whofn at least the courts tre vated as. not se

‘ongaged.’’ So far the seore’is four to: one ‘against the

view we take, In Killingheck v. Garment Center Capitol

Ine.,6259 App. Div. 691; Robinson. Massachusetts Mutugl

Life Insuranee Co, (Sup. Ct. Tenn. Nov. 29, 1941); Cécil

v. Gradison (Ohio Ct. App. Ist Dist. Nov. 17, 1941): and

Pederson ~. Fide gerald Construction Co. (N.oY. App. Div.

3rd Dept. Nov. 12, 1941) it was’ held the act did not

apply to employees who were assisting in the work of

another emplover, himself “engaged in commerce.’”’ It is

true that in some «f these it would have been something of

a strain upon the word, ‘production,”’ to say that the em-

‘ Kg 53 *

ployees were ‘‘engaged in the production of s’’ at all;

but it is doubtful that the courts meant ‘to rffy upon any

such distinction, and it is for this reason that we count

ther against our view. On the other hand the Third Cir-

cuit in Fleming v. Kirschbaum Co., 123 Fed, (2d) ;

_ agrees with us and indeed in one or two matters went

_ further than we have found it’ necessary, as yet to go. In

the district courts Farr v.. Smith Detective A. i Fe oe

Service Inc., 38 Fed, Suppl. 105, went off upon the fact

‘that the ancillary services to the employer engaged in

interstate egnimerce wage occ vasional; but Allen v. Moe, 39

Fed. Suppl. 5; anust be counted with Fleming vy. Kirsch-

baum Co:, though it.is not on all fours.4 Obviously. th

question will not be set at rest until the Supreme. Cou

wakes an authoritative ruling.

Judgment ‘reversed.

APPEAL ON QUESTIONS OF LAW, FROM COERT

OF 5 eae PLEAS, H AMILTON COUNTY, OHTO. -

Y HasmLtox Cov NTY, ‘No. 6009,

Ix tne Cover or Apprass, Finst APPELLATE ais OF -

Ouro.

James B. Cevit, and Eweil Telthester,

A ppellants, s

Vv.

‘Willis D. Gradison, et al., Trustees, etc.,,

; A ppell COS,

OPLNIon.

Noveuper ai 194.

e is

Mr. Leonard J. De ampsey, for . Appe ‘llants,

Messrs, Steer, Strauss & Adair, for Appellees.

Marrnews, P. J. x

This is an aetion by émployees to recover under the

provisions of the Act of Congress, known as the Fair

' # Merryfield v. Hoyt Se Corp, U. S. Y.-C. N. H., is to the contrary.

“2

Labor Standards Act (52 Stat., 1060, 29 U. S. C. A. 201,

et seq.) for “overtime, at the rate of one and one-half

times the regular contractual rate. The trial court sus-

‘tained a demurrer to. the amended petition on the ground

that it did not state a cause of action and the plaintiffs

not desiring! to plead further, judgment was rendered in

favor of the defendants.

The only question presented by this tecord is whether

the court erred in sustaining the defendhnts’ demurrer.

The plaintiffs alleged in the amended petition that the

defendants own premises known as 406 Elm Street, Cin-

cinnati, Ohio, which, they ‘“maintain, operate, control, .

manage and: direct the Peoples Bank Building” located

therein.

It is also alleged that certain of the defecdante con-

dué ted a banking business in part of said. building.

It ix also alleged that the defendants employed ene of

- the plaintiffs as-n janitor and thé other as an engineer,

‘and that each was required to opérate the elevators in

‘the building, both freight and passenger, and that ‘‘in

‘engaging in aml upon his various duties in and about

-said building and said batik for said defendants, he -was

caused to handle ‘shipments of aH and varied kind and

description, such as, packages, eartons, cardboard and

wooden eases, heavy and light boxes. Such shipments

were constantly transported, forwarded * * * > ‘and

shipped to’ persons and corporations in other cities beyond

the boundaries of the state of, Ohio.”’

‘It is abso alleged that this activity was in furtherance

of his employers” business, and that without it, the pack- —

res, ete., moving ‘into and out*of the building, into afd.

from the various. tenants of the various floors, could...

not have been transported fp or down the elevators; or

pass from the, control of the shipper’ or fenant to the

_person to whom the same was directed. /

There is no posjtive statement that the plaintiffs were

engaged in interstaté commerce, unless the activity de-

re ‘55

scribed constitutes such commerce. There is an allega-

tion that the plaintiffs were ‘‘engaged in an occupation

necessary for the production of goods for commerce,”’

which is not equivalent to a statement that they were

engaged in production of goods for ‘commerce, particu-

larly in view of the specific description of the nature of

plaintiff” s activities. ace :

The power conferred upon Congress . by: the ‘*Com-

merce Clause’’ (Const. Art. I, see/ 8) extends not only

to the making of the rules tf govern all the persons,

‘ instrumentalities,..and commodities while in“ the channel

_of igterstate commerce, but

flow of interstate commerce from any and all. harmful

interference or influence from intrastate acts outside the

‘channel, but so closely- and intimately connected with

Steel Corp., 301 U: S. 1; U.S. v. Darby Luinber Co.,

or interstate “producelted be handled and transported

alter they are produe

stat channel, and that those engaged in handling: them

in producing for interstate.commerce.

In construing the Fair Labor Standards Act ‘é 1938,

the extent of the ‘pow’rs of Congress over interstate com-

merce must be taken into. account. “ :

Production is not commerce, either interstate or intra-

state. Products—the results of production—may be the

objects of commerce. Until the article produced enters

the channel of interstate commerce or the activity in rela-

tion to it approaches that channél so closely aséto directly

and substantially affect the flow im the interstate channel,

the exclusive power of the states. -

so the power to protect the .

the jnterstate transaction as to substantiall) affect it.

- National Labor Relations Board v. Jones & Laughlin |

12 U. S. 100 | é ;

It ts clear from the cases that goods which are produced

nd before they enter the inter-

would not be engaged either i interstate commerce or

the'article and the activity in relation to it remain under.

e .

te a ie

Now when does the interstate transaction. a a That

is or red by the case of Coe v. ‘Errol, 116 U.. 8: “81,

at ; 25, W here the court said:

op here must he a point of. time when they cease to

be. governed exclusively by thé domestie ‘law and

begin to be goverhed and protected’ by. the national

law of commercial regulatjon, and that moment seems

to us to be-a legitimate one for this purpose, if

which they commence their final movement for trans

portation from the State of their origin to that of

their destination. When the products of the farm

or the forest are collected and brought in from the

surrounding country to a town orestation serving as

an entrepot for that particular region, whether on,a ~

_river or a line of railroad, such products.are not yet

exports, ‘nor are they in precéss of exportation, nor

is exportation begun until they are committed to the

common g¢arrier for transportation out of the State -

to the State of their destination, or have started on.

their ultimate passage to that State. Until then it is

reasonable to regard them as not only within the

State of their origin, bat as a part.of the general

mass of property of that State, * °°.”

And having entered the channel of inferstate. ecommerce,

the article continues until the end of the engages emp

_ In-State, ex rel Pennsylvania Railroad Co. v. Knight, 192

U. S. 21, the epurt held that cab service ie by

the ‘tnteeebiie railroad. company to carry passengers to

and from its terminus in New York—for which a separate

charge “was made—was not interstate commeree. At

page 28,-thé court said:

“If the. eab which carries the passenger from the

hotel_to’the ferry landing is engaged in interstate

transportation, why is pot the porter who earries

the traveler's trunk from his room to the carriage

also so engaged? -If the- cab service is interstate

transportation, are the drivers of the cabs and the

\, dealers who. supply -hay and grain for «the horses

) also engaged ‘in interstate commeéreet And where

will the limit be placed? eae

“We are of opinion that. the tes is an inde-

pendent local service, prelimi rv. or subsequent to

any interstate transportation, hee

See prey Minn. v. Blasius, 290 ti. S. 1.°

Therefore, where these plaintiffs, ‘as employees of the

defendants, handled articles for defendants and their

tenants, they were performing intra-state acts preceding

and following interstate transactions, and were not en- .

gaged in interstate commerce. 6

Now, as already stated the Congress under its power

to regujate. interstate commerce can protect the interstate -

transaction from harmful extraneous intrastate activities,

and where such aetivities are commingled with: or are so

closely and directly associated with the intersfate trans-

action as to constitute a- continuous threat to the free.

and nneorrupted flow, regulation of such activity is an

appropriate nieans. of exercising the power to regulate

interstate commerce. Production by one engaged in inter-

state commerce bears that close relatiénship to the inter-

state business of the producer which warrants its reguila-

tion by Congress in order to protect the interstate business.

A reading of the declaration of policy cotitained in

Section 202 and:the definition of terms makes it clear

that Congress meant to .protect tlie interstate transaction

¢*

from sub-standard labor conditions by -regulating such -

condifions in the interstate transaction and those trans-

actions that directly and substantially affect the intérstate

transa action. Bey ond that, Congress could not go.

‘Accordingly, the language of Section 206, U. S.C. A,,

that ‘‘every employer shall pay to each of his employees

engaged in commerce or in -the production of goods for

commerce wages at the following rates’’ and the provision

in Section 207 that ‘“‘No employer shall" employ any

of his employees. who is engaged in. commerce or in

the production of. gocds ‘for commerce,’’? must be limited

by the dee lared purpose in Section 202 and the_definition

of terms in Section 203, in order to confine the act within

the constitutional power of Congress.

And’ when s@ read and limited it is clear that. the Act does

not apply to-employees of jntra-state employers engaged té

and actually performing intra-state acts, notwithstanding |

such intra-state acts incidentally’ facilitate the interstate

commerce or the production of goods: for such commeivce

carried on by others with whom they are not otherwise re-

lated. And, that this was the intention of Congress is made

clearer by the provisions of Section '213, exempting from 4

the operation of the act ‘fany employee engaged in any

retail or service establishment, the greater part of whose

selling or servicing is in intra-state commerce.&

We are of. opinion that-the amended petition does not ,

state. a cause: of action and .that no error was corimitted-

in sustaining the demurrer thereto.

For these reasons, .the judgment is affirmed. /

Filed. Nov. 29, 1944. eis Bead ‘

Fi , S. E. Crieace,

; % Clerk

Hamit4on & Ross, J. J., Concur.

/ ao

;

‘ } & F ;

TENNESSE E SupieME Court. %

Horace Lee Robinson, Plaintiff in Error, o

v. ,

Massachusetts Mutual Life Insurance Company, Defendant

: eee in Error.

Decided November 29, 1941.

McKisvey, Justice :—The qnestion before us is whether

plaintiff i in error .nd those for. whom he sues are subject

—comingled .tegether, the same is sold and ‘delivered te

‘ . } : : al ‘})

eo i

&) f: 2 ; ;

to the provisions of the Fair Labor Standards. Act of 1938, .

Chapter 676, 52 Stat. 1060. The issue ‘was raised by de- ?

murrer to the declaration which the trial court sustained

and dismissed the suit. : ; >

The defendant in error is a corporation: with -its main

office in Massachusetts, but ‘with a local office in Knoxville,

Tennessee: It is engaged in.writing life j insurance and in

such other activities as are usually carried on by like

organizations, and it may be concedéd that in the prosecu-

tion of its insurance business it is engaged im “interstate

commer $a! It is averred in the declaration :

“That? ili furtherance of its business of divesting capital *

received from policvholders as premiums on insurance

contracts, the defendant became the owner of and operator

of three office buildings situated. in the Sixth W ard ‘of zs

City of Knoxville, a municipal corporation located |

Knox County, Tennessee, known as the ‘Union Building,”

located at 410 Union Street, the ‘Daylight Building,’

located, at 506 Union Street, -and’.the ‘New: Sprankle

Building,’ located at_508 Union Street, in which are located

_ business. offices for rent, and the money: received from

this rent is controlled and allocated by the defendant from

its main office in Massachusetts, either'directly or through

its district office in Atlanta, Georgia, and used in the

furtherance of its said ‘business.

“That the defendant rents said. buildings Sebautvitiy

or more than 90% of space in said buildings to the

Tennessee Valley Authority; which builds and operates

dams’ in the streams of ‘Tennessee, Alabama, North

Carolina, and Kentucky, to make said streams navigable

for interstate commerce, and to; generate electricity and

buys electricity. generated in states other than the State

of Tennessee, amongst them being North Carolina are

Alabama, and after the electricity thus generated:

transmission lines to business. econeerns located in Ten-

‘nessee and in states other than the State of Tennessee.’’

oi,

"360

; “

Defendant in error does not have an office or: conduel

any. of its business in either of these buildings. ;

The declaration further avers:

‘That the’ plaintiff individually and thace: for ‘whem

he sues as agent an& other employees similarly situated,

“are employed by fhe dc fentant ‘as firemen, cleaners and

washers, , and assigned to keep said building ‘clean

and in‘rentable condition, which are duties necessary to

keep said office space in a rentable condition, which is a

necessary occupation or activity in the prea of

the defendant? s said business.’ :

It is then-alleged that plaintiff in’ error and those for

whom he sues come within the provisions of said statute,

and that, as such employees for the past two and‘one-Halt-

vears, they are entitled to back wages, liquidated damages,

and atterney’s, fees as provided therein. — - ge

The purpose of the set, as stated by Mr. Justice Stone

’ in The United States of Americas. F. W. Darby Lumber

Company and ‘Fred W. Darby, 312 U. S. 100, 85 L. ed.

609, ‘is to-exelude from interstate commerce goods. pro-

duced for the commerce and to’prevent their production

for interstate commerce, under conditions detrirental te

the maintenance of the minimum standards of living

necessary for health and general well-bemg: and to pre-

vent the use of inte rstate commerce as the means of

competition in “the: distribution of goods so produced, and

as the means of spreading and pery petuating such eub-

standard labor conditions among the Workers of ‘the

several. states. The Act also sets up an administrative

procédure whereby those standards may from time te

to the Act or within an industry in @cordanee with specified

standdids, by an administrator Acting in collaboration

with ‘Industry Committees’ appointed, by him.’

The Act applies to every employe ‘who ise engaged

in commerce or in the preduction of goods for commerce.”

The following definitions appearing in three subsection:

of: ‘Section 3 of the -Act are pertinent :

(b) “* ‘Commerce’ means -trade, commerce, transporta-

tion, transmission, or communication among the several

States or. from any: State. to any place outside. thereof.’’

mh } te “Employee” includes any individual many by .

an employer.”’ ; i oe

- (j) ** *Prodiced’ means produced, manufactured, mined,

| handled, or in‘-any other manner worked on in any State;

sand for the purposes of this Act an‘ employee shall be

deemed to have been-engaged in the prodtiction of goods

if such employee was employed ii producing, manufac-

turing, mining, handling, transporting, or in ‘any’ other

‘manier working on such? goods, or in any process or

oecupation. necessary to the production thereof, in any

State.’” :

Counsel agree that an eutitoy de seeking back wages

must show that he is engaged in interstate commerce or

in the -production of goods for interstate commerce. The

mere fact that the employer is engaged in interstate eom-

merce or in the production of goods for interstate com-

‘merce is not sufficient to bring - ‘the employee within the

purview of the Act. An employer may, be engaged in

hith interstate and intrastate commerce. and some: of its

employees concerned solely with its ‘intrastate business.

This tonelusion is supported by the following authorities

which are citi od in the briefs of counsel: eg 8 et al. v,

—— W recking Co., 28 Fed: Supp. 271, 272: Foster

. National Biseuit Co., 31 Fed: Supp. 553; ° Gates v.

visa Tee Creath Co., 31 Fed. Supp. 854; Wood v.

Central Sand & Gravel Co. ‘et al., 33 Fed. Supp. 40, ,46;

Reck: v. Zarnoeay, S. Ct. Trial Term, New. York’ City,

N.Y. NYLJ, Jane 49941; p. 2509. . Pua 3

We are of opinion: that plaintiff in error and those

in Whose behalf. he sues : .are_not-“engaged in in interstate

commerce: or in the ‘production of goods for conimeree.

We are wholly ‘anable to relate’ the work in which plain-

tiff in error is engaged to the detual inovement or flow

‘of goods in interstate commerce. As we interpret the Act,

SP re anes | “Aenatiamery | a

it. is limited to those: employees who contribute ditectly

to.the production of goods for. interstate. commerce.

-If the defendant in ‘error were conducting its inter-

,state ‘insurance business in those buildings, the result

might be different.

~The only thing which it can be said. that defendaint

ity error produces in the operation of these office build-_

ings: is rent in the, form of. money. “While money, in a

_ sense, may be’ treated as commerce it is not. ordinarily

so considered, but in the ordinary acceptation of the term

it is defined as merely. a medium of exchange. Republic.

Acceptange’ Corporation v. Bennett, 220 Mich. 249, 189

N. W. 901; Boddy 7. Continental Inv. Co.,°18 Ala. App.

65, 88 So. 294. HBr pony agate aa ae

In Sunshine Mining Co. v. Carver, wi als Saad 274,

" 277, it is sid:

“The expressions ‘produced’ and ‘goods’ in: the “Act

* indigate that Congress’ intended the Act to apply to ém- .

- plovees engaged in produeing goods which are processed

further or changed as to forny by other persons befgre

gging into Interstate commerce and the employee who

produces goods whigh form an ingredient or part of other |

goods which: go into interstate commerce is ‘engagéd in

- the production of goods for interstate commerce.” ”’

Tf this is a proper interpretation of the Act; and, we

‘think’ it is, then the Congress did not: intepd that the

words ‘goods, wares, products, commodities, merehandise,

“or artie ‘les, or subjects of commerce’ ? should: antuce: and .,

- inelude’ “money. ‘ie . ae eS pees

We are unable to agree that the mere fact thnt the

‘Tennessee V alley Authority, with offices in these buildings, —

"generated electricity at other places and transmitted: cur-

ate

‘rent in interstate commerce is sufficient, to relate com-

plainant-to stich commerce. Plaintiff in error and. those

for whom he sues are one step removed. from the class of

employees: embraced in the Act. In a sense every in-

commerce contribute te such productiony but ‘we think

Congress intended‘ to limit the Act to those who directly

. contribute to ‘the production of the goods. The line of

supra, seems to us to conform to th legislative, Antent

above set forth:

The most recent ease to which’ our attention has been

of Fleming v. Atsenal Bldg.. Corporation, 38 Fed. Supp.

> Judge Wolsey as follows:

does the National Labor Relations Act, extend the Lingst

of the federal, jurisdiction to any act ‘affecting commerce.’

Labor Relations ‘Board v. Jones & ‘Laughlir Steel Corp.,

301 U. S. 1, at pages’ 2932, 57 8. Ct. 615, 81 Ed. 893, 108

A. L. R: 1352. . °

“The limits of the fedéral jurisdiction iiitee the Fair

commerce’ U, 8. C, A. §§203,.206, 207.

“Thus the connection of the. employees wlio come under

the Fair Labor Standards Act must be direct with com-

narrower ° concept than the words. ‘affecting. epmmerce’

as an analogy by the Government Counsel during the

argument of this cause.

\ ! a

bal “ ; - , ¥ . al, : ® ae

' y f F xe oo ,

demarcation has to be drawn somewhere, and that desig-— a

‘ nated in the opinion in Sunshine Minins-€o- v. “Carver, fhe, Wee

“The Fair ‘Labor: Standards Act ‘ies not, however, as

Labor Standards Act is extended only to employees ‘en- —

; gaged in ynerce or in the production of goods for ‘

_merce,, as defined in that act. This involves an obviously

“used in the National Labor: pennies AS which was cited

“Furthermore, the’ legislative Meborg of -the Fair Labor

Standards. Act shows clearly, I- think, that as a result of -

the Conference between the Committees of the two Houses .

of C ‘ongress, the, words ‘ production. of Goods for commerce? .

~ diydual whose activity ‘in any’ way touches or affects the

lives ‘of those engaged in producing goods for interstate.

and harmonizes with the — of the, Act as. herein-

‘207, 211-212, from which we quote from the opinion of

_ Cf 29 TS. CLA, §§152 (7), t59(e) ‘and dlso. National

“Ck:

~ had bee tained in the successive drafts of the statute

during its embryonic: stages. . Cf. 75th Congress, Ist ‘Ses-

sion, Report No. 884, of July 6, 1937, by Senator Black,

of the Senate Conimittee on rage g and Labor; . 75th

Congress, lst Session, Report No. 4452, of August 6, 1937,

by Mrs. Norton, of the oe Committee on Labor; 75th

Congress, 3rd Session, Report No. 2182 (at page 2), of

April 21, 1938, by. Mrs. Norton, of the House Committee

_on Labor; 75th Congress, 3rd Session, Report No. 2738,

of June 11, 1938, being the:Conference R port made ‘by

Mrs. Norton, of the House Committee on [,ibor; see, also,

‘The coverage of the Fair Labor Standar Act and other

_ Problems in its’ Interpretation,’ to be found in ‘Law and

— Contemporary fern The. Wage and Hour Law’—

i ge by the, Schoo of Law of Duke University, in the

- summer of 1939, Volume 6, No. 3, pages 334-352,

pages 338-339.

-“'Phis- indicates “quite—graphieallythatwhen- the— Bair

Labor Standards Act of. 1938 was passed the intent of

Congress ‘was that its ambit should be: narrower than

the ‘ambit of the National “Labor Relations Aet, dnd.

_ consequently, it seems perfectly clear to me, that the

employees of the defendants are not to be , considered

specially

‘as included pithin the Fair Labor Standards Act of 19: 38.

“The acts of these employees. might ‘affect commerce,’

but I find that they: did not function in the ‘production

_ of goods ‘for commerce’ even under the’ broad definition

of ‘produce’ given by the statute and quoted above.

ies | find, therefore, that the employees of the defendants

producing goods fOr. commerce?

The facts of fhat case, as set forth in the seventh

syllabus, are as follows: —

‘*Where sole mUsiness of building | owner’ was limited

to the leasing @f ‘space in_its building to tenants,- the

maintenance of #s building in good order and condition

ts en

and rendering to its tenants, many of whom were engaged -

ia manufacture of goods for interstate commerce, the

ordinary type of seryice customary in the operation of

office building, the owner was not a ‘manufacturing estab-

lishment’ engaged in the. ‘production of .goods for com-

merce,’ and therefore its employees were ‘not. entitled

to protection ‘of the Pair Labor Standards Ack?™ 3

Under’ similar facts the Supreme Court of Net York

in Killingbeck et al. v. Garment Center Capital, Ine.,

0 N. Y. Supp. (2nd) 521, held that the employees were

not protect ed. - the Fair Labor Standards Act.

SION

in that. ease, if carried to its logical conclusion, would

embrace every employee who in the remotest degree con-

tributed to those who produced goods for’ interstate.

- B, . Kirschbaum Co., 38 Fed. cide 204, hut the " tsi

or-opinion, the purpose of Congress.

For the reasons ‘set forth he rein, we feel sonstrained ~

to overrule the assignments, of errors and. ‘x ae

udgmént of the trial court., — : of ae

transportation, “which, . as heretofore stated, was. not, not, in

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