Petition for Writ of Certiorari — Mitchell v. Lublin, McGaughy & Associates

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PETITION FOR A WRIT OF pmeriohant’ 70 THE omieen ararns

_ COURT OF APPEALS FOR THE WRaee: orRourr © se

-~, pie

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3, URE RANKIN, |

Solicitor General,

' | Department of Suatice Meabingpen 86, DiC.”

STUART ROTHMAN, Ppa For ay i

’ BESSIE MARGOLIN,

. Assistant Solicitor, iE ile se BRS a8

EUGENE 8. {CERN Fe a! Clipe ar Re hg) Sa 3

aff Attorney, , 5% { ' : ?

Bes Depértmen of Taba, Woshigton 3... eh ee ee ae Sem S

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144 F. goal a ERT TONES a ie 2 LET 15, 16

| Alstate Construction Co. v. Durkin, 345 U. 8..18.._... 21, 23:

Bennett v. V. P. Loftis Co., 167 F. 2d 286_-.-.--.... 15

Borden v. Borella, 325 U.S. 679_-............--.-- es os.

Durkin v. Joyce Agency, -Inc., 110 F, Supp. 918,.

affirmed, sub nom. Mitchell y. Joyce Agency, Ine...

- 348 U. 8. 945, reversing, 211 F. 2d 241_..-....._- 17

10 East 40th Street v. Callus, 325 U.S. 578.-.-....-- 17, 18

Kirechbaum Co, v. Walling, 316 U.S. 517_-_.-.--.-- 18

Laudadio v. White Construction Co., 163 F. 2d 383__- 14

- MeComb v. Turpin, 81 F. Supp. 86...---: Pt Ab al 24-25

Mitchell v. Brown Engineering Co., 224 F. 2d 359, ts

_ certiorari denied, 360 U.S. 875_............_..-- reas

Mitchell v, Kroger Co., DOG T: O0-006. 5 55. e - 15, 16

. Mitchell v. Vollmer & Co., 266 U.S. 437.0..0..0--... 18

~ Powell'v. United States Cartridge Co., 339 U.S. 497: 18, 20, 22

~ * Biteh v. Puget Sound Bridge and Dredging Co. 156 F.

Pee eh ad a a iM

Roland Electric Co. v. Walling, 326 U. S. 657_. Sater A ee

‘Schulte Oo. v. Gangi, 328 U.S. 108.._...:.-.------ sca 19

Walling v. Jacksonville Paper Oe, 317 U. S. S64...... oe

456046—58—1 @ \

bia: stile:

Western Union : Telegraph Co. v. Pendleton, 122

- U-.8. BAT ..-.na-annitesnnsensnnees SAC. BALE SS Oe

Statutes:

'* Fair Labor Standinds Act of 1938, c. 676, 52 Stat.

~~ 1060, as amended, C: 736, 63 Stat. 910 (29 U.S. 3

3

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Sec. 3 Leela nga eee ------ goocooe- R.

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ee eee gee norte gens nice tb ape :

Federal-Aid Highway Act of 1956 Public ine 627,

" ~. 84th Cong., 2d Sess., 70 Stat. 374)......-- eeneonee ae

Miscellaneous: Hees :

Annual Report ot the Bureau of Public Roads for

Fiscal Year. 1955, ‘Pp. , Lib Re > wot noeane cs bebeewea 28

29 C. F. R. (1957 Supp.) Pt. 541. eae wie mils 4

95 Cong..Rec.: »

pp. ee i ee es 20.

p. rg oP OL OES i SO EE a

Pp. 2. aa 26

pp. MAE ssc clita sib Minin as eee co ae

Dept. of Labor Interpretative Bulletin, Part 776, —

- Subpart A, General (May, 400), 29 C. F. R. 776,

1 ) GC)... + -ansqenee ie <nantiky Wears 3

a Brel are jo RRR rere Ba ahi

House Document No. 300, 85th Cong., 2d Te .» Pp. 4,

. Table ©, p. 6... ---------+---------=--+----2--- 28.

United States Part I County Business Pat-

terns, Reporting Units, Employment, and Taxable

~Payrolls by Industry Groups under Old Age and

Survivors Insurance Program Published by U. S. De-

partment of Commerce and U. S. Department of

Health, — and Wellaze,, Table 1—A, p. 6... 25-26

; ; Sin: ,

| Western Union Telegraph Cc. v. Lenroot, 323 U.S. 490. 20,21 ’

6

_Suthe Sapene Gut of te Suited Stats

os Onmnens Tami, 1957, ee

Od Wes

: | Mla. de so ' )

Fire P. Mice, SECRETARY or) Lavon, UNITED

- *$raTes spupabesten' OF Lasor, PENTTIONER

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‘Litas, MoGavony & Assoctars, ile —

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PETITION FOR A WRIT OF. CERTIORARI 1 TO THE | UNITED STATES

COURT OF APPEALS siren THE FOURTH OIRCUIT -

a.

. ‘The Solicitor General, on behalf of the heislens? ”

_ of Labor, prays that a writ of certiorari issue to re-

view the judgment of the United States Court of

Appeals for the Fourth Circuit, entered i in the above

case on November 25, 1957. :

, OPINIONS BELOW

The opinion of the District Court (R..la-9a)’ is

“not officially - reported (13 WH Cases 211). The

opinion of the Court of Appeals (App) A, —s

BPs 29-44) is reported at 250 F. 2d 253. |

1 Record references are to pititionar’s appendix as printed for

tf Cont of pp sn cof of eb

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2

The judgment of the Court of Appeals was ‘entered

on November 25; 1957 (App. A, infra, p. 44). The —

= rgd of this Court is invoked under 28 U. S.C.

1254 (1). | 2 |

__QUESTION_PRESEWTED—___-__-__.—

Respondents are partners in a consultant architec-

- tural-engineering business—with offices in Norfolk,

Virginia and in Washington, D. C., and foreign as-

sociates. overseas—engaged in preparing. plans and

specifications essentially for industrial, as distin- —

_ guished_from residential, projects... A substantial pro-

_ pogfion of their work is for out-of-state clientele or

projects, and the great bulk of it consists of the prep-

' aration of plans and specifications for federal, state _

and municipal governmental projects, many of which

are for the-improvement, repair, or enlargement of

interstate instrumentalities or facilities,

- The question presented is: Whether Paationdeinta? |

non-professional employees (draftsmen, fieldmen, and _

' ¢lerical workers)—who work on the plans and spec-

ifications for projects for improvement of interstate

‘instrumentalities or facilities, and whose regular —

- duties also include the preparation of drawings, —

plans, specifications, etc., transmitted across - state

lines, or direct tl nent communica-

tion by telephone and co dence, or travel across

state lines—are engaged ‘‘in commerce or in the pro-

duction of goods for commerce” within the meaning

of the Fair Labor Standards Act.

Pertinent‘ provisions of the Fair Labor Standatds

Act of 1938, ¢. 676, 52 Stat. 1060, as amended, c. 736,

63 Stat. 910 (29 U. 8. C. 201, et seq.), are set forth in —

full in petitioner’s appendix as printed for the Court ~

of Appeals (R..116a-119a). The provisions. partic-—

_ ularly involved Deni are Sections 3 ), (i), and Gs

as follows:

Sxo. 8.-[52 Stat. 1061; 63 Stat, 911). As

used in this Act— HENS oe es he

eae See x ° . i

ms “Commerce” ‘means trode: \ commerce,

__ transportation, transmission, or eommunication

-_ among the seyeral States or between any State

‘and any place outside thereof. |

(i) “Goods”. ‘means [are (including: ‘dine

and marine equipment), wares, products, com-

. modities, merchandise, or articles or subjects of

-commeree of any character, or any part or in-

gredient thereof, but does not inelude goods

after their delivery into the actual physical

possession of ‘the ultimate consumer thereof

other than a prodseer; manufacturer, or prec: !

essor thereof.-

(j) .“Produced”’ nieans produced, manufac-

“tured, 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 employed in producing, -

. manufacturing, “mining, handling, transport-

ing, or in any other manner working op. such,

ease

“of .:

goods, or in any celosely related process or oc- _

cupation directly | essential to the Production

thereof, in any State. :

This ection: was beeaht by the Seéretary of Labor

under Section 17 of the Fair Labor Standards Act |

to.enjoin respondents from violating-the overtime and

_. record-keeping requirements of the Act with respect

' >to their rion-professional ee nett

men and stenographer-bookkeepers." ,

a Respondents are partners engaged in a oobaial-

ant architectural-engineering business, with a princi-~

pal office in‘ Norfolk, Virginia, and a branch office —

in Washington, D. C:, and with foreign associates in

France and Italy. :

— Respondents’ business relates essentially to indus-

trial, as distinguished from residential, projects, and

, admittedly a substantial amount of their work is for}

out-of-state | projects and out-of-state clientele, at |

*\. ®t is stipulated that, if the Act covers these employees, over-

time and record-keeping violations exist. (Stip. R. 11a; R. 94a-.

97a).. This action is not concerned with “professional” employees _

" who may meet the requirements for exemption under Section 13

. (ay (1) of the Act, which provides:

“(a) The provisions of sections 6 and 7 shall not apply with”

Tespect to (1) any employee employed in a bona fide executive, ad-

- ininistrative, professidnal, or local retailing capacity, or in the

capacity of outside salésman (as such terms are defied and de-

limited by regulations of the Administrator) ; die Bg

3 iNe wbstggticns lesan: Ga ‘hel vallesil Toy seipaniionte ta'the courte

_ below and is. not presented here, the only issue being whether —

employees who do not qualify as exempt “professional” employees _-

as defined and delimited by the Secretary of Labor are within

the general coverage of the Act. See 29 C. F. R. ny saa cic

Pt. 541.3; 14 F. R. 7705.

ey :

PEOe

—

= Teast 50% of the meal of the Sediien office: relat-

_. Ang to out-of-state projects (R. 13a). As summarized

_in_the opipion below, “[tYhey 1 have worked. and are

> now employed on numerous projects in ‘Virginia,

_ Maryland and the District of Columbia, and have

worked on some projects in North Carolina and over-

seas”’ (App. A, infra, p. 31). “These activities re-

pil constant co-ordination ard communication, as

well as. transinission of information - and materials

between the two . offices” (tbid.). The plans and

> gpecifications . are “frequently transmitted out of

: state” (R. 6a), beth- between respondents’ offices .for

= correlation, integration or review (R. 68a, 72a) P and,

- a8 indicated in more detail, infra, pp. 8-10, to out-of-

\ state clients with copies for out-of-state bidders, con-

‘ tractors and suppliers of materials. — |

Respondents employ a total of 65 to 70 employees ie

_ cluding professional and non-professional), of whom

about: 30 are in- the ‘Norfolk office, about 20 in the

_ Washington . office, and about 15 to-20 overseas (R.

12a, 85a). With ‘‘a direct private telephone line be-

tween. the N orfolk and Washington offices,” ‘‘tele-

phonic communications are nunferous and the line is

used for the purpose of controlling, supervising and

coordinating: the work of the Washington office from

Norfolk” (R. 5a). Also, ‘‘payrolls for both offices,

as well as for employees in foreign offices are made

up in the Norfolk office.and checks are mailed to

- Washington and foreign countries” (ibid.). No set

rule is maintained with respect to where a set.of plans

——~is prepared—‘‘if we want:to do part in Washington

we doit; if we want to do part in Norfolk, we do it’’

(%. 68a). As both. the trial court’ and the Court of

6

Appeals’ fotind, Inedbidhdeints” bth tila arafts-

‘men, fiel ‘and clerical employees | engage substan-

- ‘tially’ in é extensive interstate communications or

; interstate travel incident to respondents’ business and —

in the preparation of plans, drawings, specifications;

Ate, “many of which are transmitted across state

~ * Tines,’’. and many of which are prepared for inter-

state projects (App. A, infra; pp. 32-34; R. 5a-6a).°

2. The great bulk of respondents’ business consists

of the préparation of plans, specifications and draw- ~

ings for federal, state and municipal governmental

projects. -As stated in the opinion below, they “‘in-

clude, primatily, projects for the improvement, en-

largement and. repair of installations at military

. bases, airfields, shipyards: and radio stations for the

United. States military services, and also a substan- -

tial number of ‘state and municipal undertakings as

projects.” (App. A, infra, p. 31.) About 60 percent

of the work of the Virginia office is done pursuant to

contracts with United States Army and Navy —

cies, and about 85 percent of the work of the Washing

‘i olllen tn oy thie ASiny ait Navy ior tye state atid

municipal government agencies (R.2a).. For details of

the nuimerous projects for improvement, repair, or

enlargement of interstate instrumentalities: or facili-

ties, on. which respondents worked for the two year —

' period ending April 1956, see. sn cra 5, infra,

‘pp 4-47

3. The plans and spelteations furnished by re-

spondents for such projects contain detailed drawings,

blueprints, surveys, estimates and other data, together

| with. specific detailed ne to the builder o on

every aspect of the actual construction work, ‘The

- industrial-type projects, and particularly the govern-

- ment. projects, on which respondents have been pri-

marily engaged ‘‘could not be constructed without the

plans and. specifications prepared -by the [respond- :

ents’] employees”’ (App. A, infra; p. 32; R. 48a=

,49a),' These plans and specifications. obviously .in-

clude. much more than a professional architect’s’

designs and advice. As -is illustrated by the vol- -

-. uminous sets. of p and specifications prepared by .:

respondents for. proji listed in Appendix A to the

stipulation. (R..18a-29a)," most of the work is evi- 4

: dently more engineering than architectural in nature, |

and it involves the assembling : and compilation of —

detailed estimates, measurements; field survey: infor-

mation, materials and. equipment specifications, car- .

pentry, electrical and other construction data, and -

similar routine work of a non-professional nature, _

The plans. and specifications. include in minute

. detail all of the data, information, and instructions

needed to guide the clients and their contractors,

_Subeontractors and material suppliers, in bidding,

financing, purchasing materials and equipment, as

well as in carrying out the actual construction work

_ GR. -100a).. The specifications inelude not only the

- general conditions, which are to govern the construc-

* Representative samples of such plans and specifications

were attached to the stipulation as Appendix.C (R. ‘12a, 33a)

‘and an_ illustrative set of specifications was introduced. as

Plaintiff's Exh. 4 (R. 44a-45a). Because of their bulk, they ,'.

tai asearscars <wtivamarahiite Sha aes alae cary necae

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tion work, but also specific data in regard. to the kinds,

. types, sizes of materials tobe used, and where and a)

how they enter into the construction. For example, —

on: projects requiring substantial brick work or con- |

crete, the composition and precise proportions ofthe |

mixture of brick imortar and concrete, as well as the

. method of mixing, are specified in detail. It is ecom-

- mon knowledge that plans and ‘specifications for gov- —

_ ernment construction projects, in particular, wenn

. . such detailed data and instructions. -

eo

4..The plans and Specifications prepared for vari- :

a ous federal, state, and municipal government agencies

. (which have been the source of the bulk of respond-

ents’ business, Stip. R. 13a) are submitted to these . :

, agencies in their original form and become the prop-

erty of the agencies (Stip. R. 14a). Since such gov--

ernment agencies frequently require numerous copies

' ” of the ‘specifications; respondents prepare and furnish _

“original; reproducible drawings ‘and © tracings

(plans), and’ stencils for making multiple copies”

(Stip. R. 18a): As stated in the findings of the trial

; _ court, the ‘government contracts admittedly require a :

great number. of specifications ‘which are reproduced

by an independent blueprint company and-ate subse _ |

quently sent by the: government agencies to prospec-

tive bidders, many of whom are without the State of

Virginia and the District. of .Columbia’”’ (R. 2a-3a).

-- ' A large portion of the governinental work (the full

60 percent at the Norfolk office) is done for the

United States Army and Navy (ibid.). The plans,

drawings, specifications, estimates, and advance-plan-

ning reports prepared by respondents’ employees for

‘these’ projects x@ furnished primarily to the Co

of Engineers, the Fifth Naval District, and

" Potomee River Naval Command. (R. 1122, 1130, 68a). :

Copies of all preliminary - plans, specifications, and .

7

~ analyses of design: furnished: to the Norfolk District

Corps of Engineers are transmitted to the Division

Engineer, North: Atlaritie: Division, New York, for

drafts of final specifications. are also transmitted to

New York for review and ‘approval; and in all cases,

‘a.set of the completed final plans and specifications

as furnished to prospective bidders are transmitted

to the North Atlantic Division in New York for _

: record ‘purposes. (Govt’s. Exh. No.2, R. 113a-114a).

z Similarly, all: advaneé-planning reports and copies of

all plans and specifications furnished by respondents

\. review and approval; for large projects, marked-up ©

to the Fifth Naval District at Norfolk are forwarded

to the Bureau of Yards and Docks, Washington,

_D. C., for review and sppromt —* ‘Exh. He. 1,

; R. 1122-118a).

_ + Copies of the final plans sits (esdteations are sideo. |

_ sent to any’ out-of-state contractors who. are interested —

_ in submitting bids (Govt’s. Exhs. 1, 2 and 3, R: 112a-

115a). In. connection with any’ proposed large proj- :

eet, it is the regular practice of the Corps of Engi- -

. neers to'send out advance notice to approximately 400

_ general. contractors, major subcontractors. and. sup-

pliers, and this potice “always results in requests for

~ sets of plans and specifications from ‘several out-of- 3

state contracting firms,’’ . in response to which sets

are sent to ‘‘several firms outside the State of Vir-

ginia to enable them to prepare and submit bids”

mas Ces: Pies

(R..115a). Since general contractors need more than

one set, two or three sets of plans and ‘specifications. —

are sent ‘upon request (tbid.). A With respect to

| projects for the Army and N. avy agencies, respond-

ents have reason and knowledge to expect that copies of |

the plans and’ specifications furnished by them will

be thus sent out-of-state to oo bidders

(CR. 460-470): :

_. There is, also,. interstate ‘cilitiaealil of plans;

aniblies and ‘specifications | for municipal govern- —

mental projects. The numerous surveys, drawings, .

plans, ete. for the approximately 50 individual proj-

eects for the Washington Suburban Sanitation Com-

e mission, located in Maryland (Jobs Nos. 893-893-3,

939-939-24; R. 23a)\26a-27a, 65a), were prepared in —

respondents’ District of Columbia office and sib- |

mitted to the Commission at its headquarters in .

. Hyattsville, Maryland; in addition to the final plans, —

several drafts of preliminary plans and drawings re- :

lating to particular projects were thus transmitted

out-of-state to the Commission for approval, exami-

nation, and suggestions. (R. 65a).*

‘There is’ likewise considerable interstate teanentdaton of

plans and specifications for non-governmental projects to out-.

Of-state bidders (R. 6la-62a), or to out-of-state represent-

- atives of important prospective tenants for approval (R. 58a—

59a, 63a-64a). Where respondents’ employees supervise the

actual construction of the projects (for about 50 percent of .

their non-governmental. clients, R. 15a), “shop: drawings” on

articles, materials, and equipment to be installed or used in —

_ the construction are submitted by subcontractors (through the

contractor) to respondents, for checking and approval to make

, Sure: that the specifications are met. . These drawings relate to

such equipment and materials as doors, windows, floor mate-

rial, bricks and prefabricated partitions. Some of the ma-

7 3 BOS

5. The decision helow that none of respondents’

_ employees is engaged ‘‘in commerce or in the pro-

duction of goods for commerce” within ‘the coverage

of the Act rested, basically, on the ground that the

preparation of plans and specifications by an’-inde-

pendent architectural-engineering consultant firm is

an ‘essentially: local’”’ business and that any interstate

activities are “merely incidental to the local enter-

_ prise’? (App. A, infra, p. 40). Although recognizing ;

_ that the plans and specifications “consist of physical: -

material” and that “many * * * are transmitted .

across’ state lines” (id. at 32), the Court of Ap-

peals held that their: preparation was not. production

of “goods” for. “commerce” within the meaning of

the statutory definitions because they are “only a writ-

_ ten embodiment of professional advice * * * specifi-

eally prepared dg meet the particular problem of a

specific client: and are not sold or offered for sale to

_ the public generally” (id. at 35). The admitted

~ direct and substantial participation in interstate com- —

munications and transmissiqn of information and ma-.

terials, and. interstate travel, by individual employees,

_and their work in preparing plans and. specifications

_ for specific interstate projects, were held fo be out-

side the scope of the Act on the ground that “[a]ll of

these activities: related to the production of plans,

terials or equipment is submitted in the form of eamples.

After the drawing.or samples have been checked and/or cor-

rected they are returned to the contractor and then sent back

, to the manufacturer or supplier.. According to an employee

in the Norfolk office, one-half of the drawings examined and

corrected by him were from manufacturers located outside the

State of Virginia a septic |

‘

ate 12° ee

partook of their intrastate character and cannot be

fairly characterized as commerce between States” (td.

~ at 41).

REASONS YOR GRANTING THE WRIT

The FP below, ‘i in its ruling that respondents’

employees are not engaged “in commerce” under the

Fair Labor Standards Act, conflicts directly. with the ce

- decision of the Cotrt of Appeals for the Eighth Cir-

- euit in Mitchell v. Brown Engineering Co., 224 F. 2d

309, ‘eettiorari denied’ 350 U. S. 875, and is also in -

conflict with devisions of other Courts of Appeals

in closely analogous cases. In its construction of both

the ‘in commerce” and the “production of goods fom

commerce” phases of. the Act’s coverage, the decision

’- is inconsistent with this Court’s rulings. The issues

presented would be of large importance even if their

impact were limited to workers employed by similar —

architectural-engineering consultant firms. But the

importance of the issues is greatly magnified by the

implications of the opinion which would affect tho _

-Act’s coverage of numerous employees in many other -

types of businesses which might with equal, or more. -

reason be characterized as “essentially local.” |

Ae The Fourth Circuit’s decision is in direct eon-

* flict with that of the Court of Appeals. for the Eighth

Circuit in Mitchell v. Brown Engineering Co., supra,

which involved the coverage of precisely the same type

: of employees of a firm engaged in precisely the same

kind of consultant architectural and engineering busi- ©

ness, except that the Brown. Engineering firm limited:

its operations to projects within. the same state and |

a

* 5)

* uously urged there with much more reason

13

had no out-of-state branch offices or associates." The

' Eighth Circuit held that the Brown firm’s non-pro-

fessional employees were engaged “in commerce” by

reason of their participation in the preparation of:

plans and specifications for projects for the repair

and improvement of instrumentalities of commerce |

(roads, highways,‘ and power plant facilities), and

therefore that court did not need to determine whether

they were also engaged in “production of goods for

commerce.” The court rejected the contention,

facts of the instant case would justify, that consultant 2

architectural-engineering work is an “essentially

local” business and that the preparation of plans and

specifications for improvement of repair of interstate

instrumentalities and facilities was too remote from

_ interstate commerce to be within the scope of the Act’s

_ coverage. 7

In contrast to the Fourth Circuit’s erroneous con-

cept of the nature of this type of business, the Eighth |

Gircuit, in accord with.the guiding principles of. this

urt’s decisions, viewed the preparation of, plans

ahd specifications ‘‘in a practical aspect in relation to

the whole construction project”’ for which they were

. specifically designed. It concluded that, thus viewed,

| such work is no more ‘‘isolated, local activity”’ than

| _ “aetual manual labor on the projects under repair

and improvement” and is ‘‘in practical effect” as di-

rect! and vital a part of the project for improvement _

of the instrum ntalities or facilities of interstate com-—

’The opinion below recognizes the conflict with the ne

Circuit (App. A, aan 43). caees . foe,

$

oe

merce as: the ouivatela construction ait which de-

pends entirely upon, and: is directly guided in every

detail, by such plans and spécifications. The signifi- -

cance which the Fourth: Circuit attaches to the ‘‘in-

dependent enterprise” of the employer is specifically

in conflict with the Eighth Circuit’s ruling that this .

factor “is of minor significance”, in view of the set-

. tled principle that coverage is “‘determined on the.

. basis of the employee’s activity and not by the na-.

_-ture of the employer’s business” (224 F. 2d at 365):

2. As the court below itself appears to agree (App. . -

A, infra, p. 41), its decision, apart from this ‘‘inde- _.

pendent enterprise’’ factor, also runs ‘counter to the

decisions of the Second and Ninth Cireuits in Lauda-

dio V. White Construction Co., 163 F. 2a 383, and -

_. Ritch v. Puget Sound Bridge and Dredging Co., 156 ©

F. 2d 334.. The Courts of Appeals there held t..at-the

Act covered draftsmen and clerical workers prepar-

ing the plans and drawings for, as well as the workers-

engaged in the actual construction of, projects for the

improvement and expansion of interstate instrumen-

_ talities.* In opposition the Fourth Circuit’s view

that the Act’s coverage ts limited to employees par-

ticipating ‘actively at the site of construction” (App.

A, infra, p. 43), the Ninth Circuit in the Ritch case

ruled that no such distinction could rationally be drawn

een the’ so-calléd “‘white collar” workers (the

* The Telok to tie Ldedilbe cabs Wren extension of runways

at a naval air base, and the project in ‘Ritch was dredging

channels for the improvement of the harbor at the Bremerton

. Navy Yard, é..¢., both projects of the same kind that comprise a,

a primary part of the business-of the a ee rises Mc-

_Gaughy firm. "

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2

15

ms di ftximeni engaged in, designing iin nies out the

work to be done by others’) and the workers engaged :

in the actual dredging and construction operations

which were performed ‘‘all ‘Purseant to rm drafts-

men’s plans.”""

_ Similarly, the ruling below: thai the Act does not cover

. the employees’ regular. and extensive interstate .com-

‘munications and interstate travel, required by reason of-

the multi-state nature of the respondent firm’s organi-

zation and operations, is inconsistent with the reason-

_ ing of the recent decisions of the Eighth and First Cir- -

cuits in Mitchell v. Kroger Co., 248 F. 2d.935:(C. A.

8), and Aetna Finance Co. v. Mitchell, 247 F. 2d 190.

(CC. A.1). Kroger involved the coverage of interstate

_ travel and interstate communications of auditors em-

ployed by a multi-state chain organization to make

. audits at its local retail units in two ‘states, and to

a transmit their auditing reports to. branch headquar-.

ters. -Pointing out that such communication and —

The narrow view expremed in the ruling below is ‘ahio con-

_ trary to the Fourth Circuit’s own earlier decision in’ Bennett

v. V. P. Loftis Co., 167 F. 24 286. In that case, the court held —

the nightwatchman: guarding # road bridge under construction

to be engaged “in commerce” within the coverage of the Act,’

' “although [the. watchman ] took-no part in the actual construc-

tion of the bridge in the sense of driving nails, or pouring —

concrete, or. the like,” on the specific ground that (167 F. 2d

at 288):

”. “Tf the declared purpose of the Act is to be accomplished, |

a project should be considered as a -whole,'in a realistic way;

not broken down into its various phases so as: to defeat - the -

purpose of the Act. This latter unrealistic approach was con- . ic

demned by the Supreme Court in Walling v. Facksonville Paper

Co. 317 U.S. 564. {Emphasis added. Bs a2,

ge ate

6 a

trikvel are ‘ ‘ ‘transportation, tranamission, and com-

munication’ -between states within the meaning and

the literal terms of, the statute’’ (248 F. 2d at 939),

the Eighth . Cireuit- held that there is “nothing to _

justify Congressional intent to the contrary,’’ and.

that, ‘‘[iJnstead of_a.strict-or limited construction,” —

this Court’s decisions required ‘‘a liberal construc-

tion” of the statutory terms of coverage—in particu-

lar a construction that does ‘‘not, narrowly cireum-

scribe the meaning of the phrase ‘engaged.’ in

commerce’ or detract in any way from the statutory —

definition as to the meaning of, commerce itself” (id. |.

at 938, eniphasis added). Kroger | held not only that

the auditors’ interstate communication and travel

were “literally within the Act’s coverage”’ (1bid), but ©

also, on the basis. of practical facts comparable to—

those. here, that such interstate communication and

travel were not “‘merely incident to a local retail ©

business’’ but were “‘a part and parcel of the Kroger

Company’s interstate activity’’ (id. at. 939). In Aetna

Finance, the First Circuit held that employees of a :

branch office of 4 sthall loan company were engaged

‘in ‘ecommerce”’ by feason of their interstate com-

munication, ‘ correspondence and ‘transmission of

various reports and documents, even though over 95% 4

of the branch office’s business’ consisted of loans’ ‘to

jJoéal borrowers within the same state. ‘The court

found no difficulty in agreeing with the District

‘Court’s. railing. that coverage of these activities was

sufficiently sustairied - either by reason of the small

proportion of the branch’ 3: business with out-of-state”

borrowers or by reason of the relationship of the

~

17

branch employees’ work ‘‘to the conduct and further- —

ance of défendant’s nationwide business’’ under the

“‘broad guiding principles” of this Court’s decisions

(247 F. 2d at 192, affirming 144 F. Supp. 528 at 533)."

3.-The Fourth Cireuit’s :

——~sistent with this Court’s decisions construing the cov-

erage of the Act and establishing the guiding prin-

ciples for. determining whether _— comployers :

are covered. —

’ (a). The decision rests mainly, if not solely, upon

- @ supposed analogy between the instant case and 10

East 40th Street v. Callus, 325 U. 8S. 578, onsthe un-

“and engineering business of the type here involved is |

‘‘essentially local.’’ Apart from the error in the court’s

view of respondents’ business as ‘‘essentially-local’’

(see supra, pp. 4-6, 8-10; infra, pp. 24, 26, 45-47), Cal-

employees engaged substantially and directly i in inter-

state activities are excluded from the Act’s 8 coverage if |

the‘employer’s business is shown to be an “essentially

local’’ enterprise. On the contrary, this Couft has —

specifically and - repeatedly held that “the applicabil-

ity of the Act is dependent on the character of the ;

employee’s work,” and therefore “the fact that all of .

respondent’s [employer ’s] business is not shown to |

* The ruling below on interstate communication is also in

conflict-with the decision of the District Court in Durkin v. Joyce

- Agency, Inc., 110 F. Supp. 918, which was affirmed per curiam by .

this Court sub nom. Mitchell v. Joyce Agency, Inc., 348 U. S.-945, _

reversing the Seventh Circuit’s decision (211 F. 2d 241), which

chad held specifically, inter alia, that so-called “internal” inter-

state communication was not within the coverage of the Act. . -

substantiated premise that a consulting architectural ~

.lus lends no support to the conclusion that individual _

18 ; |

have interstate character is not important’’ (Walling

- -¥. Jacksonville Paper Co., 317 U: 8. 564, 571-572;

Kirschbaum Co. v. Walling, 316 U. 8. 517, 524). The

ruling below is also inconsistent with the well-settled

principle, most recently reemphasized in Mitchell v.

Vollmer & Co., 349 U. 8. 427, that the statutory terms

of coverage of this Act must be given « “liberal” —

_ construction, and that the literal terms of the stat-—

utory definitions should be accorded the “breadth of.

coverage” consistent with the “terms of substantial

universality’’ in which the broad purposes of the Act

ae Sree. United States Cartridge Co.,

889 U. 8. 497, 516). - |

Specifically, Callus is not an‘authority for exclud-

ing employees from the coverage of the Act simply

because they are employed by an “independent enter-

prise” performing work “for a general miscellany

of clients” (App. A, infra, pp. 42-43). In no respect |

‘ material to the Act’s coverage can either the em-

' ployer’s enterprise or the employees’ activities in this _

_ activities and where the claim of coverage rested

solely upon “thin” evidence of relationship to inter- =

state manufacturing carried on by some of the build-—

ing tenants elsewhere... Even on the “thin” evidence

there presented, Callus found the question of cover-.

age to be a very close one. Plainly, no such close

_ borderline question is presented with respect to re-

_. spondents’ employees who are admittedly engaged —

Se ee Smo eae

ie | |

| tion, transmission, oF communication”, within the lt

- eral terms of the statutory definition.

The Fourth Circuit’s extension of Callus is not only

inconsistent with the principles established by this —

Court’s jurisprudence on the coverage of this Act,

but it is also contrary to decisions applying these prin-

ciples to employees of independent enterprises deal- .

ing with a miscellany of customers. . Thus in Roland

Electric Co. v.. Walling, 326 U. 8.657, the Court up-

: held coveragé of employees of an independent elec-

age of employees of public u

trical contracting company serving a general miscel-

' lany of customers, on the basis of evidence that the

employees regularly performed work for 33‘customers

(out of a total of approximately 1,000) who were —

engaged in commeree or in production of goods for

commerce. See also Schulte Co. ¥. Gangi, 328. U. 8.

: 108, 118, sustaining coverage even of building mainte- ,

nance employees in an independently operated build-_ :

: tenanted by a general miscellany of oecupants,

} the evidence showed that a sufficiently substan-

tial proportion of the oceupants -were regularly en- :

gaged in producing various kinds of goods for ship- .

ment in interstate commerce. -/ of

= The coverage ruling.of Roland Electric was ex-

pressly approved by Congress at the time of the enact-

ment of the 1949 amendment to the Fair Labor Stand-

- ards Act, as were other upholding the eover- —

engaged in supply-

ing fuel, power and water to customers generally,

fuel, power or water in the production of other goods

| SS eee Qe

_ for commerce or in the operation of instrumenitalities

of commerce. . ae ee a tn See

Senate Conferees: (95 Cong. Rec. 14874~75), which

says that the work. 6f such employees is covered by |

the Act “whether they are employed by the producer —

of goods or by someone else who has undertaken the

performance of particular tasks for the producer” .

(ibid., emphasis added). Similarly, the House Man- _

agers’ report stated that the 1949 Amendments “are

not intended to remove from the Act: maintenajce,

_ eustodial, and clerical employees” of the ‘type held.

covered in Kirschbaum and. in the public utility de-

cisions, also expressly stating that such employees”

“will remain subject to the Act, notwithstanding they

_ are employed by an independent employer * * *”

"(95 Cong. Ree. 14929, emphasis added).' While these

statements were made with reference to the ‘“‘produc- _

- tion for commerce’’ phase of coverage (which was. |

the coverage provision modified by the 1949 Amend- —

ments), the statements-were obviously premised on a

principle equally applicable to determining coverage

_ef the ‘in commerce” phase, é. ¢., that the determin- —

ing factor is the relationship of the employee’s work

to the interstate commerce regardless of the independ-.

ent character of the employer’s enterprise. wy ?

(b). The ruling below that the plans, specifications

"and similar materials are not “‘goods”’, and therefore

: the work of preparing and assembling them for trans- .

mission in interstate commerce is.not ‘production of

goods for commerce”, is based on reasoning which is.

contrary to Western Union Telegraph Co. v. Lenroot,

$23 U. S. 490; Powell v. United Btetes Cartvidge Co.,

cs tio, 21

839 U. 8. 497; Borden y. Borella, 325 U. 8. 679; and —

Alstate Construction Co. v. Durkin, 345 U. 8. 13.

First, the view that plans and specifications are not

“goods” simply because they represent the ‘‘embodi-

. ment of ideas’? (App. A, infra, p. 37) is difficult.to

reconcile with the Western Union ruling that “‘tele-

- graphic messages are cleatly ‘subjects of commerce’

and hence that ‘they are ‘goods’” within the scope of ae

_. the: statutory definition, since prior to the adoption

. of the satutory definition it had been held (in

‘Western Union Telegraph Co. v. Pendleton, 1220.8

847) that “* Gdeas, wishes, érders, and intelligence’

are ‘subjects’ of the interstate commerce in which

telegraph companies engage’”’ (323 U.S. at 502-503).

e The physical embodiment of mental ideas into tan-

gible and bulky plans and specifications is obviously —

_the product of considerable routine, clerical and other

physical work, as is evident from a mere glance at

some of the plans and specifications for industrial

sede steed thee eae ‘These physical prod-

' ucts are tangible maf€rials which ean be: and. are

“subjects of commerce”’ (i. ¢., interstate “*transporta-

_ tion” or “transmission’’) within the literal terms of

the statutory definitions; and their production un-

questionably requires the type of routine, clerical, and ne

physical workers ‘with whom this Act is seated

concerned.

seedy too: view Shanthi entaldn hese

-templation of the Act because: incidental to profes-

| sional planning and davies is contradicted by the

Borden case, supra, where maintenance employees of

Borden’s central office building for its executive

hu .

4 22

officers and administrative employees were held within

the Act’s coverage, on‘the ground that the “economic 3

production” with which this Act is concerned includes -

“not simply the manual physical labor involved. in

changing the form or utility of a tangible article” but

. also “planning and controlling” and the work of ore —

“who conceives or directs a productive activity” (325-

UL 8. at 683). ° ‘The apparent confusion by the court 4

below of the Act’s “professional” exemption (Section |

13 (a) (1)) with the Act’s general coverage provisions :

is contrary to this Court’s explicit: statement that:

“Indeed, the fact that §13 (a) (1) specifically ex-

cludes * * * those employees employed in a bona fide _

executive, administrative or professional capacity is

* ¢learly consistent with the conclusion that these activi-

ties are included within” the coverage of the Act, and ke

‘A “that full effect should be given that fact unless other-

‘ wise provided’’ (325 U. 8. at 684).°. . :

} \ Thitd, the view that jilsins exkd specifications are not

“goods for commerce” because they lack the charac-

teristics of ordinary articles sold commercially to the |

_publie. generally (App. A, infra, pp. 35-36, 37-38) is

con to the basic rationale of Powell, which ex-

plicitly : diated the contention that coverage is lim- _

ited to ‘‘commercial”” transactions or to “articles that

are intended for sale, exchange or other ac-

' tivities” (339.U. 8S. at 512), while emphé the.

“terms of substantial universality” “in which the

broad statutory purposes and the statutory coverage

definitions are stated eu at 509-516).

: * The “professional” exemption isnot involved fn. the pron

CAS. Se otnte epee

~

a

ee - 93

Finally, the reasoning below is. inconsistent with

Alstate Construction Co., sipra, sinee the preparation

of plaris and specifications specifically for use in the

‘improvement of interstate facilities cannot be dis-

tinguished from the ‘preparation of road materials

for these same purposes, except on the unwarranted

assumption that ‘the statutory definition of “*goods’’

is limited to ‘‘products”’ < Winarily sold to the public,

‘The preparation of the plans and specifications for a —

specific: highWay improvement project, no less than

the preparation of ‘the road materials pursuant to

those: ‘plans and specifications, directly serves’ the in-

terstate commerce’ ‘on that highway. ‘While the road |

materials may be physically incorporated: into: the

road, tlie plans and specifications guide and-determine —

the execution of the improvement in every detail from

* the beginiting to the end of the construction work.

‘Both “‘serve commerce”’ and are produced specifically

and directly “for commerce’’ in the sanie degree.’

4. The ‘Fourth Circuit’s' reliance on the ‘paragraph ©

in the Labor Department’s: Interpretative Bulletin

relating to employees of a “‘local: architectural firm’’

(see App. A, infra, p. 36) is ‘misplaced: The term

_ “local. architectural firm,’’ and the paragraph-in the

_ ‘Interpretative’ Bulletin, are patently not descriptive

_ of respondents’ multi-state practice or of its extensive

" engineering operations. The statement in the bulle- _

* tin is merely a’ restatement (indeed, a quotation) of

legislative history from the House Conferees’ Report

~ on the: 1949 Amendments, which: refers’ otily to “the

preparation: of plans for the’ alteration of buildings

eos 5 rr yrty

s e

24

‘Mihi iatatiieliaaeed sscknimiin imate

interstate commerce.” (95 Cong. Rec. 14929, par. 5,

‘emphasis. added.). It-is expressly limited to.a ‘‘local’’ :

business conducted within the confines of a single state

_ and related to interstate commerce only indirectly and —

remotely by’ reason ‘of the fact that some’of the local

buildings for which it prepares plans may be “used to

produce. goods for interstate commerce.’ . This is

hardly. descriptive of respondents’ architectural-engi-

- neering enterprise which is not only specifieally organ- ae

ized so as to conduct its operations across state: lines,

te but is also engaged extensively in work for out-of-state it

projects and out-of-state clientele, and, in addition,

engages directly and_substantially in work fot ‘the

improvement and expansion; of interstate instrumen-

talities and facilities. The content of the term ‘‘local.

architectural, firm”? is-evident, from the other exam: |

"ples cited in-the legislative history immediately pre- :

+ eeding and following the reference to a ‘‘local. archi-

tectural firm’”’—i. ¢., “‘a lotal independent nursery —

concern’’ whose business might: include ‘‘mowing: the —

lawn around the plant of a customer within: the state

engaged in producing goods for interstate commerce,’

_ and ‘fa’ local exterminator service firm’? whose em- .

'. ployees ‘ ‘work wholly within the state’’ serving gen- —

erally “‘buildings within the state’’ some of. which

may a hoa gree magpie caper eg

ET anes Reape eine :

>: The importance of the. issues: presented, eyen. if

their impact were limited. to einployees of | similar’. =

‘ architectural-engineering | firms, is evidenced by. the

number and size of such firms and the extent to which

their business depends. upon interstate. operations in

. the modern industrial pattern... While official. up-to- a

date statistics are not available, a recent coniprehen-

sive. survey of the. private practice ‘of. engineering in _

the United States hy.the publication Consulting En-

_ gineer," together with some statistics for earlier years

- . in, Government.reports, leaves no doubt that there

-_ are thousands of non-professional emp!oyees in. this

field.” According’ to a 1953 report. of. the Depart- ,

ments of. Commerce and Health, Education and Wel- _

. fare, 12,219 architectural-engineering | consultant firms .

_ reported on employees to the’ Bureau: of Old Age and

Survivors. Insuranee, and listed. a total of almost

img) Of thet Qdbinionsis,: we ‘sabmit; far-fetched” and san unwar-

ranted... Even if..the citation of that decision could be con-

strued as an administrative acceptance of it, the factual record ”

| in the ‘instant case is bo different: in crucial respects as to -pre-

elude any’ inference that the firm heré involved qualifies as a |

epee magsap mp iad yore lapacuis Naha wey As |

the opinion in the Turpin decision emphasized, “the

Bin esesaes bed onrellSopeomtlterir pom bhi thie base} |

- furnishes only meager’ information”. Ties tees cc dernier,

Spero emer rec

- ©

in ie record “ec fox the

Pp. 8

ruary 1957 i issue, pp. 7 71-82.

26

| | 130,000 eisaiaopiat for the mid-March payroll tied. ”

. The Consulting Engineer’s 1957 survey of the engi- -

ae neering profession shows. that ‘the average size of

engineering: firms is 31. persons, about two of whom

are principals and the remainder about evenly di-

vided between engineering and non-engineering em-

ployees (January issue, pp. 87-88). At peak periods,

-the average figure is about 50 persons, many firms,

of course, employing a much larger number than this

average, one or two of the largest firms having as

many as 25,000 to 30, 000 non-engineering employees

during peak periods (id. p. 87). The survey also re-.__

ports that 20 percent of the engineering firms also do

architectural work to some extent and that the trend —

- today from ‘the. scope of eperetions of firms 3

is toward combining both services in one firm lew ;

- Tuary issue, p. 77).

Contrary to the assumption by the court ‘Walow that

the business of such firms is “essentially local,’’. the . |

‘Cousilting Fiigineers survey reports that ‘most of

the firms in. this tield do not limit. their operations

to any one state;. 72 percent. of the engineering con-

sulting firms are active: in more than one state, and

28 ‘percent have expanded ‘their -geographical | range —

to foreign projects. The survey emphasizes" that.

é “consulting engineers are ‘greatly expanding ‘their | :

geographical range,” the situation being “quite differ-

3 Patterns, ,

mrt Pr

t.

when first wa. at which time 53% of the firms

(in contrast to only 28% today) limited themselves

to operation within one st&te. The survey adds:

“This geographical expansion will continue. In fact

12 percent indieated that they plan to expand fur-

. ther their geographical fields. of operation. Of these

about two-thirds indicated that they planned to

change from intra- to inter-state operation, while

one-third plan to go into foreign work.” ncpbataess

issue, p. 79). IN: Gaetacty

In addition to this expansion. into direct interstate

operation, the survey shows that industrial work (par-

ticularly for. federal, state, and. municipal govern-

ments) constitutes a major part of the business in

_. this field .and is constantly increasing. As of the

time of the survey, 29% of the consilting engineer

ing firms were doing work for the Federal Govern-

ment, 28% for state governments, and 44% for local —

: governments, and in every section of the country “a

higher percentage of firms are increasing their. work

~ for Federal Government than are reducing their work -

for this client.” Some indication of the substan-

tiality of . this type of: work - is evidenced by the

- expenditures of the Army and Navy for architec-

tural and engineering contract work during the year:

"1957, which totaled over $113,000,000 (on almost 2,000 __

contracts for $10,000 or more each). Undoubtedly

a large proportion of this work consists of the prep-

aration of plans and specifications for interstate in-

48 February issué, p. 81, Table 4, p. 82.

“This data was obtained from the Office of the Assistant

Secretary of Defense for Supply and ‘Logistics, Division of

| and Analysis.

28

strumentalities and facilities of the type that com-

‘prise a major part of the respondent - Lublin, Mc-.

Gaughy firm’s business (supra, p. 6, infra, pp. 45— -

47). Another major source of the. business of such

firms is highway construction. According to the An-

_ nual Report of the Bureau of Public Roads for Fiscal

- Year 1955, the state highway departments had com-

“ mitted 3.5 million dollars for fees to private engi-

cheering firms in connection with their federally-aided —

road projects alone (Annual Report, :p. 7). This _

type of business will, of course, be considerably in- —

-ereased under the gigantic road construction program |

initiated by the 24°‘billion dollar. Federal-Aid High- | a

way Act of 1956 (Public Law. 627—84th Cong., 2nd

Sess., 70 Stat. 374). The Department of Commerce

has estimated that the cost of preliminary engineer-

ing (surveys, detail plans, specifications and contract

documents) required for this program will exceed 114

billion dollars (House Document No. 300, 85th Cong.,

2nd — P. x Table ¢, p. 6).

“Iti is respectfully submitted that this petition for a .

writ of certiorari should be granted. _ :

: J. Lez RaNKIN,

: et ss Solicitor General. °

Solicitor,

Besste MARGOLIN, _

Assistant Solicitor, .

EUGENE R.: JACKSON,

_ Attorney, | .

Department of Labor.

FEBRUARY 1958.

concLusion ——— ty — — a : ~~-

APPENDIX A

OPINION OF THE COURT OF APPEARS

United States Court of Appeals: for: the _—

3 Circuit - ~

3 "No. 7488

James P. Mercumz, SECRETARY OF Lavon, Unrrep

STATES Derangement OF pete: APPELLANT

v.

Enis McGavuGHY AND i iiine Minar A Co-Panrum-

SHIP, AND ALFRED M. LUBLIN, Joun B. McGavauy, --

Wuiuw T. McMuian AND Wuiiam MarsHath,

Jn., InpIvipvaLLy aNp Domne. Bustvess as. LUBLIN,

-MoGaveny AND Assooraras, APPELLEES :

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR

THE micsincal DISTRICT OF VIRGINIA, AT NORFOLK

_ (Argued October 23, 1957.. Decided ‘November

25, 1957)

Before Pannen, Chief J udge, and Soren and Hayns-

7 he Wonee, Cireuit J udges ‘

7 Bessie ikivoctin, Assistant Solicitor, United States

- Department of- Labor (Stuart Rothman, Solicitor,

Eugene R. Jackson, Attorney, and Jeter 8. Ray, Re-

gional Attorney, United States Department of Labor,

on brief) for Appellant, and Robert C. Nusbaum and

Algn. J. Hofheimer for Appstion. :

(2)

a

oo |

‘Soper, Circutt J are

. The Secretary of Labor brings this suit under the

Fair Labor Standards. Act, as amended,* against -

Lublin, McGaughy and Associates, a co-partnership,

and against the individual members of the firm who

_ are architects and engineers with a main office in ~

_ Norfolk, Virginia, and a branch office in -Washington, —

‘DQ ‘The complaint charges that the defendants

have violated various sections of the statute, in that

they have employed many. persons in-interstate com- -

merece and in the production of goods fo ' interstate

commerce for workweeks longer than

without compensating them for the exe

employment at rates not less than one ar |

- (144) times the regular rates at which |they were

employed, in. violation of §§ 7 and 15 (a) (2) of the

statute; and in that they have failed to keep adequate

records of their employees’ wages and hours and other —

conditions—as prescribed by the Federal Regula- —

tions—in violation of §§ 11 (e) and 15 (a) (5) of the

Act; and in that they have transported goods in inter-

state commerce, in the production of which many of

their employees had been employed, in violation of §7—

of the Act. An injunction was prayed restraining

the defendants from further violation of the statute.

The District Judge, after hearing, denied the relief

prayed, resting his decision in large part on the con-

_ clusion that the plans and specifications prepared by

_” the firm were not “goods” within the meaning of the :

Fair Labor Standards Act. . |

_ The principal questions to be considered grow out

of the contentions of the Government: (1) that the ©

drawings, plans and specifications prepared by the

employees of the firm are “goods”’ and that the’prep- _

| ” Cet of June M5, 1996, ch:.676, as amended by the Fair Labor.

Standards amendments of 1949, ch. 736; 29 U.S. C. 520 of. oy,

31:

aration thereof is “production of goods - for com-

merce” within the meaning of §3 of the statute; and

(2) that the- employees of the firm who participated

_in interstate travel and communications required for

the ¢onduct and co-ordination of the firm’s offices in

‘merce’’ within the meaning of §7 (a) of the statute;

and (3) that a large part of the work of the firm’s

draftsmen, fieldmen and clerical employees. is’ so

closely related to projects for the improvement, ex-

‘pansion or replacement of interstate instrumentalities _

as to bring them within the ‘‘in-commerce” coverage

of the Act. The\ Government~recognizes that. em-

. ployees engaged in ‘a. professional capacity are ex-

empted by § 13 ofthe statute, but seeks to bring the

non-professional employeés of. the rac within the .

coverage of the Act. —

_ oThe defentants, who reside in Norfolk; are archi-

tectural: and consulting. engineers. They have worked

and are now employed on numerous projects in: Vir-

. sinia, Maryland and the District of Columbia, and.

'. have worked on some projects in North Carolina and

overseas. They include, primarily, projects for the

improvement, enlargement and repair of installations ——

at military bases, airfields, shipyards and radio sta-

tions for the United States military services, and also -

a substantial number of state and municipal under-

takings and projects. These activities require con-

‘stant co-ordination: and ‘communication, as -well as.

transmission of information and materials between

the'two o In general, the defendants collect the

"Necessary gf 2 for the projects, confer with their

_ clients in regard thereto, and prepare the drawings,

estimates and surveys which are used in connection —

with the projects. They also supervise and. inspect

_ the construction from an architectural and engineer-

Norfolk and Washington ‘were ‘“‘engaged in com- . |

, ; 32

| ing standpoint by furnishing surveying and engineer- 5

‘ing services to contractors. while: construction. is in

progress,

To. seetorsn, this work. the defendants ai: about

thirty employees in the Norfolk office and twenty

employees in the Washington office, including archi-

tects, engineers, draftsmen, fieldmen, office managers,

stenographers and bookkeepers.. This action is con- -

cerned only . ‘with the nonprofessional employees

consisting of draftsmen, eee, clerks and —

stenographers. ;

In the course of the business necessary surveys

and typographical maps are made and then ‘the: *

draftsmen, working under the supervision of the |

.engineers and architects, prepare the drawings and

designs from which bluepgints are reproduced. The.

drawings, together with explanatory specifications,

contain the information necessary for estimating the

cost, financing the project, the bidding of contractors,

and guidance to the contractor in constructing the

project. The military, governmental and commercial:

structures on which the defendants are now and in

___recent years have been engaged are intricate in design .

and construction and could not be constructed without

the plans and specifications prepared by the em-

ployees, many of which are transmitted across state

lines. They consist of physical material of negligible

value in itself, though, as copies of the master draw-

ings, they contain information which. may be of sub- —

stantial value to the particular client in the construc-_

’ tion _of the project and in planning subsequent.

alteration and repair. It is esttmated that on: the.

_ ‘average,| one-half of the. charges of the defendants _

for thei architectural and engineering services is

. for work upon the master.drawings and specifications

and in the development of information ‘embodied in ©

¥

if

33

The sic specifications and sathiaiiie ces for

government agencies, which. comprised the greater

part of the. defendants’ work, are submitted to these

J~ agencies and become. their property. Frequently

‘numerous copies of. the specifications and drawings

are required. The advertisement of a proposed gov-

ernment project results in requests for sets of plans.

and specifications from out-of-state contracting firms

_ and these are sent by the Government to the prospee-

tive bidders to enable them to prepare and submit

bids, When required by the terms of the contract the

defendants furnish copies of the specifications and —

drawings which are reproduced by an outside blue-

- print cothpany. For commercial clients copies of the

drawings and specifications are furnished while the

originals are retained by the defendants in case addi-

tional copies are needed. These copies are also ob-

tained from commercial blueprint establishipents at.

an additional cost-to: the clients.

The fieldmen include surveyors, transit then - and

‘chain men who work under the. supervision of a pro-

—from-

fessional enginees. .They survey boundaries, take —

borings, ete. e work site, frequently traveling

a of Columbia to the site in Maryland

and returning to the defendants’ office in Washington

in connection. with their duties. They have little or

no duty-in the office but gather the material and ~

bring it to the office as a basis for the preparation of

the drawings and specifications. Some of the field

_ work ‘was done on. projects for. the Washington

Suburban Sanitation Commission located in Maryland

to. which a large part of the time of the firm’s Wash-

ington office has been devoted for the peried of a —

-year. A survey -reports, to’ the Washington

office each morning, drives to Maryland with the

necessary field books ard field equipment, makes

surveys and gathers data, which. is brought back to

34°

' the Washington office at the end of each day and

- turned over to the draftsmen. For approximately

- 50 per cent of their commercial clients, for whom a

minor part of defendants’ work is performed, the

defendants supply employees who supervise the con-

_ struction of the project so as to determine whether

__made for this type of work.

_. Proje for the improvement or repair of inter-

~—

out-of-state as well as loeal creditors. :

We consider first the contention of the Government

the non-professional employees of the defendants are -

“goods”? within the meaning of §3°(1) of the Act.

where the term is defined as ‘‘goods, wares, products,

° commodities, merchandise, or articles or subjects of

- @ommeree of atiy character.”” The District Judge

seuss HE ei

iil ae ih an

oe FH i ; 3 | a E 4 ges = i

of Sek E£8seg: & Paz. oss =

ae il f I oe

6S 3 ae

Tae! Heit tt

ins

36

of commerce. Bozant v. Bank of New York,

2 Cir., 156 F. 2d 787. This distinction was

well. made by Cireuit Ju Learned Hand in

the ease just cited, 156 + 2d at page 780 as

follows:

“Some of the activities which went on, we

rs, or “aan deeds or i or pre-

pocse Maer fon, wanes is not on that account

i wouee Deee C53 same is true of the

The tion o's broke e208 (i) might

. 0 in i e.

' literally go so far even as that; but it would be

| Congress meant to cover sich indent of «

| snientaiaa al limictaliie this Gost in tue

— Bulletin, Part .776, Subpart A, Gen-

eral (May, 1950), Title 29, Chapter V, Code of vied

Reg. (776.19 (b) (2)), where it said: :

On the other hand, the legislative histo

makes it clear that employees of a “local ras

tectural firm’’ are not brought within the cov-

erage of the Act by reason of the fact that

_their activities ‘‘include the preparation of

plans for the alteration of buildings within the ~

_ §state which are used to produce goods for in--.

“directly « essential’’ enough to the production

Roem close relationship between their per- —

: ormance and such. uction when they are -

‘ performed by employees of such a “local’’ firm.

“We are now told, however, that this pronounce-

ment is no longer tenable because of the decisions of |

the Supreme Court in Western Union Telegraph Co. -

v.. Lenroot, 323:°U. 8. 490 (January 8, 1945), and

| eae

Powell v. U.S. Cartridge Co; 339'U. 8. 497 (May 8;

1950). In the Western Union case the Supreme

Court held that telegraph messages are “goods’* with-

in the meaning. of § 203 (i) because they are “sub-

jects of commerce”, one of the terms in the inclusive

list enumerated in the section. In the course of the

opinion, the Supreme Court noted that in Western

Union Telegraph Co. v. Pendleton, 122 U. 8.-347, in

declaring invalid a statute which attempted to regu-

late the activities of telegraph companies, it had held

that intercourse between the states by. telegraph-mes-

sages amounts to interstate commerce in the trans-

portation of ‘ideas, wishes, order, and intelligence’’.

This holding, it is now said, demonstrates that the

embodiment of ideas contained in plans and specifi-

Aet. —

The Powell case held that munitions mitilientired

by a private: contractor at a government plant were

production of goods for commerce’. Munitions were

held to be “‘goods’’, - because they were “produ

within the meaning of '§ 203 (i) of the statute; and.

cations are also “goods’’ within the meaning of the .

. ‘‘goods”, and that his employees were engaged ‘‘in the.

ee

iy

the employees were held to be engaged in ‘the’ pro- |

__ duction of ‘“‘goods” for commerce, although the. muni-

- tions were not to be sold but used in the war, because — |

of their. “transportation’’ to destinations outside the —

_ state. :

We.-do not think that these decisions: require us to

abandon the conclusion reached by Judge Chesnut and

by Judge Hoffman in the pending case. The Depart-

ment of Labor itself did not give this effect to the

‘ Western Union decision of 1945, notwithstanding the

holding therein-that the transportation of ideas em-

bodied in tangible form may amount to:commerce

between the states: On..the contrary, it issued its

Bulletin in 1950 following the lines laid down’ by

e

. Judge Chesnu The enchant distinction between ‘

the business of interstate cornmunication by telegraph |

. and the activity of making plans and drawings which

are used merely as guides for building construction,

is so obvious as not to deserve further discussion.

Nor does the Powell case support the Government’s

position. It does show that the term “ ” in.

§ 203 (i) of the statute is not limited to those bought .

and sold, ‘but its holding that munitions of war are %:

*‘goods”” in. no way tends to show that such articles

as plans and specifications, which possess markedly -

different characteristics, are also. goods” a

statutory-sense. —

The defendants uy this case ‘were independent oe

gineers and architects engaged in essentially local.

activity in each ‘of the officéS which they maintained. _

They were not employed to manufacture documents

. to be sold or transported in interstate commerce but

to give’ professional . advice and. assistance which of

“necessity was given permanent form as plins or speci- _

fications so as to be available for guidance and refer- —

»

ence. Clearly sych plans were not “goods” in the .—

ordinary ease, although it is possible to conceive a sit-

uation in which standard plans or blueprints for build-

ing construction might be prepared for transportation

or sale in such a way. as to fall within the coverage —

of the Act. That, however, did not happen here. The .

' \ eopies of the plans that were made and sent out for

the convenience of the clients and their bidders were _

not transported as subjects of co! but in order —

to show the interested parties the sort of. construction

' that was required; and the mere fact that the docu-

| ments crossed state lines did not alter their inherent

‘nature. |

a The: second: contention of the Government is based aa

on the interstate travel and communication of the —

employees of the firm between its two offices and

ye

- :

39

nen these offices and the locations of its oe

state clients and their contractors. It is said that

- these activities constitute engagement.“in commerce”. —

event thongh the plans and sptcifications .are not

| ” produced in commerce within the meaning —

of. the Act; and many cases are cited in which the

Courts have found that the transportation of docu- .

ments-and records as well as the travel of employees _

which mga oom reahat seer digo

, and other facilities of interstate

an important, if not a vital fune-

_ tion in the operation of businesses which extend

_ beyond state boundaries, e. g., a holding company in

a eae seventeen on

N eat ht 348 U. 8. 222; the business transactions

\ across state lines of a fire insurance company, United

_ States v. Underwriters Assn., 322 U. 8. 533; the

spondence through the mails from state to state, Jn-

Tet Book Co. v. Pigg, 217 U. 8. 91;

Federal Trade Commission v. Civil Service T. Bu-

reau, 6 Gir. 79 F. 24 113; and the. business of com-

cati s itself by use.of the telegraph, Western

legraph Co. v. Lenroot, 323 U. 8. 490, and

Seorgiersnanare tag L. BR. B., 30k

"that a clerk who prepated payroll checks mailed to

from state to state are forms of interstate commerce -

/

40

: onus in different states and 4 kept personnel al S

‘statistical records in the office of an oil company —

concerned with the interstate transportation of petro-

leum products. was engaged in commerce; and in

Durkin v. Joyce Agency, D. C., N..D., Tk, 110 F.

Supp. 918, 923; 348 U. S. 945, that clerks and switch-

- board operators employed by a warehouse ¢orpora-

tion concerned with interstate transportation who |

_.used the telephone and mails in carrying on the

business were engaged in interstate commerce, and in

‘Aetna Finance .€o. v.. Mitchell, 1 Cir., 247 F. 2d. 2.

190, that employees of a loan company whose opera-

tion involved a constant flow of documents, informa-

tion, etc., through the mails were’ engaged in inter-

_ state commerce. The transportation of persons from

state to state in the course of business operations

. May also. constitute interstate commerce, Edwards

-¥. California, 214 U. S. 160;.Caminetti v. United.

- States, 242 U. S8.-470; Hemans v. United States,6 _

— Cir., 163 F. 2d 228, 239 ; Cleveland v. United ‘States,

329U.S.14 7

‘It is manifest however, nokintthatensdiily. this well ~

established line of authority, that the mere use of the

mails and of transportation facilities across state lines.

is not necessarily interstate commerce. There must be

-some-relatio;: toa business whieh: is interstate in

character. This is found most clearly where the very

_ essence of the business is interstate commerce itself,

as in the sending of telegraph messages, and it also

exists where the employer’s business is interstate in

character, as illustrated above, in the course-of which

interstate communication is a material But

_ . where the business is essentially local and there is no

production of “goods”, communication which is merely

incidental to the local enterprise cannot be classed

as commerce. The interoffice communication in this

ease related to the local production: of plans and

&

41

specifications, and the fieldmen who travelled from

state té state were sent out to get the information

_ as to the character of the work to be done, so that the

- architects and engineers might. do their preparatory

work. All of these activities related to the production |

of plans, partook of their intrastate character, and

cannot. be fairly characterized as commerce between

states.

Finally, the Government contends that it should

prevail because the work of certain. draftsmen, field-

_men. and clerical employees relates to projects for

the improvement, enlargement and repair of instru-

mentalities of interstate commerce; for the most part .

military installations, airfields, shipyards and radio

facilities for the United States, as’ well as municipal

governmental projects such as turnpikes and road im-

provements, and projects for private enterprise such’

_as was done in the remodeling of Trailway Bus tter- .

minals ‘in Washington and in Baltimore. Undoubt-

edly the term “in commerce” covers not only the ac-

tivity of workers who share directly in the work.of

construction but also those who do the paper work,

such as the preparation of lists of material or pay-

Tolls, or who serve as fieldmen and timekeepers on —

the job. In some cases there is reference to the prep-

aration of plans or drawings for construction work

by" employees of the eontractor.as evidence that work

“in. commerce” is being performed. See Laudadio v. .

White Const. Co., 2 Cir., 163 F. 2d 383, 386; Rituh et

al, v. Puget Sound: Bridge & Dredging Co., Inc., 9

Cir., 156 F. 2d 334, 337; Archer v. Brown, 5 Cir, 241

‘F,. od 663, 668; Chambers Const. Co. v. Mitchell, 8

Cir., 233 F. 24 117, 723; Mitchell v. Vollmer & Co., |

248 U. S. 427. There is, however, no clean-cut holding |

that the work of employees of independent architects,

uals ns ana -Dekore: ‘asin Site: enge, is ih cnace ceed

under the Act. : :

\

, ‘ , : i

It may be that the activities of the employees in

_ question constitute an indispensable link in the chain

\

\. of causation whereby instrumentalities of commerce

. are extended or improved; but’ it does not follow

Bp ener their work is so closely. connected with interstate

as to be a part of it. In determining the

the character of the work of the employees

| rather than the occupation’ of the employer is the

factor, but the oceupation of the-employer

eless. ‘be taken: into consideration, for the

doe not attempt to repute local activity. This

BT, which we sided oi thaueuna

it was - that the mainte-

5

Poa

alge

| ‘nanee employees of a building owned and chiefly used.

for cetitral offices by an interstate producer were

_within the regulated area as persons engaged in an

oceupation necessary to the production of goods for

_ Commerce; but in the second case it was held that

PR erm pein cig ene ae eo

owe > Sicseiaieds oh tm aie ion from

heniaehastoie < peeinaian not pre-

clade applieation . of the eon Labor or Standards

| b aabarytise ia 000 may

scored indgpendenh carpi ton ay

eee: —. Such remoteness i is insu-

<

43

lated from the Fair alibie Standards Act by

those considerations pertinent to the federal sys-

tem which led Co not to sweep predomi-

nantly local si oms within the confines of

the Act. To Sais Gudllakeles den of

such an office buil to the productive process.

en portion of the offices in the

soeeie may, for the time being, be. offices sa

man ing. enterprises is to indulge -in

ane too attenuated for ‘a ig! 3a “orang

e regulatory power of tates

Chingeas saw. fit to reserve to them. | Dialectic

_ inconsistencies do not weaken the validity of

| Federal au rity, ia Oheraa te Pct the :

| au when

of making “them | upon the Net ay Our

wees em is not an exercise in scholastic logic.

. _ The partners: in. the-pending case niay be likened -

to the owners of the general office building in the

Callus case. ‘They did work for a general miscellany te

of clients in connection ‘with construction p

- some of which were jocal in nature while. others were

such that the construction workers themselves. were

within the coverage of the Act. “But the architectural

work itself was local and of necessity gave color to -

the . activities of their subordinates and took. them.

outside the scope of the statute. It is this element

which the Government. and the decision in Mitchell

v. Brown, 8 Cir., 224 F. 2d 359, upon which the Gov-

ernment relies, seems to 4gnore. For these reasons we

@ . do not think that the employees of the defendants —

"were subject to the provisions of the statute. This is’

not, to say that some employees of the may not

have participated so: actively at the site of construc-

tion as to be covered; and nothing in this decision is —

intended to preclude further proceedings as to them.

. There is howeyer no > sufficient sept e ay; nature

\

of their activities in the record in this case as-to

Satie tee enn at en ee: ot i

: Affirmed:

NS vanilla. ee .

Filed poe Entered N ovember 25, 1957.

__ United States Court of Appeals for-the Fourth |

| Cireuit

No. 7488.

Jock P, ‘ieitiaec SECRETARY OF Ligon’ UNITED.

States DEPARTMENT OF Lasor, siamese

v. i gecalst i

LUBLIN, McGavany AND ASSOCIATES, A CO-PARTNER-

- SHIP, ND! ALFRep M. Lusiin; Joun B. McGavaxy,

Wuuam T. McMnian AND WItLIAM MARSHALL,

Jz., INDIVDYALLY AND Dore BUSINESS AS LoBLIn, =:

MoGavany AND ASSOCIATES, APPELLEES —

_ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR

‘THE BASTERN DISTRICT OF VIRGINIA

This cause Garis on to be heard.on the'record from

the United States District Court for the Eastern Dis-

trict of Virginia, and was argued by counsel. .

On considerati s whereof, it is now here divdiaredl

and adjudged by this Court that the order of the said

’ District Court appealed from, in this cause, be, —

the same is weil affirmed.

a | Morris A Soper, ae

Hee ako: United States Circut Tadge. |

Noveamnen 25, 1957. )

| APPENDIX B oi

Risiponnsaree’ PROJECTS FOR IMPROVEMENT, REPAIR OR

ENLARGEMENT OF a ENSTRUMENTALEITES OR

Factnrrtes |

1, AIRFIELDS AND AIRPLANE FACILITIES

‘Widening. streets on a naval operating bas? in the .

vicinity of the. base motorpool and post exchange, and .

extending and. paving plane taxiways and, parking

aprons at the Naval Air Station installation at

Oceana, Virginia, which is a naval jet base and part

of the East Coast defense system for, intereepting

enemy aircraft (Stip. R. 16a; Job No. 928, R. 25a).

_, Replacing paving between hateare at the Naval Air

Station at Norfolk, Virginia (Stip. R. 16a; Job No. ,

881, R. 22a). It was agreed at the trial that the

Navy airplanes using both these facilities, regularly

fly across State lines (R. 84a).

Repair and alterations of hangars at the Naval Air |

Station at Oceania, Virginia ‘(a naval jet air base, part

of the East Coast defense system for intercepting

enemy aircraft) (Jobs Nos. 892, 892-1; Stip. R. 16a,

22a, 23a); the Naval Air Station in Washington,

D.C. (Job No. 963, R. 29a, repairs to three hangars) ;

' and the Naval Air Station at Norfolk, Virginia (Job

No. 901, R. 23a) (alterations to Hangarg LP4 and

_ -LP14);. advance planning for runway -extension,

' Byrd Field (Job No. 822, R. 20a) ; advance planning

| ‘Norfa for pneumatic test facility, Naval Air Station,

— — (Job No. 921, R. 25a) ; estimates for

(45)

> 46

| Pinceastle Air. Force Base, Florida (J ob No. @:%

21a) ; pile test, Langley Field, Virginia (Job 0. 835,

_ R. 21a); estimates for Beaufort, South Carolina, Air.

field (Job No. 882, R. 22a) ; advance planning, Naval

. Air Station, Norfolk, Virginia (Job No. 748, R. 18a)

and work relating to Patuxent Air Station, Mary-.

land ae No. 869, R. 22a’) .

2. SHIPYARDS

‘Recabe. to buildings located at the » United States -

BiG Navy. Ship Yard, Portsmouth, Virginia (Job No.

948, R. 28a—repairs to 10 buildings, and Job No. 952,

R, 28a—r to buildings) and other

projects ( obs Nog. 858 and 903; : R. 21a, 23a) ; repairs

to Pier 12, Naval ting Base, Norfolk, Virginia

(Job ‘No. 965, R. ); and work relating to the

machine shops and administrative buildings at, the

‘Norfolk Navy Yard and Norfolk Naval Base, Nor-

folk, Virginia (Stip. R. 16a; Job No, 920, B. 25a).

- 3. RADIO AND TELEVISION ‘PACILITIES |

Relocation of the Coast Guard Radio. Station at

Oceana, Virginia: (Job Nos. 785, 917, R.. 19a, 24a).

Making ‘the necessary site examination and prepaiing'

the advance planning report for relocating the Coast

Guard Radio Station at Oceana, Virginia, which is a

. part of the Oceana Naval Air facility. When the

‘mouth, beau sts No. ™, sas Ma).

new ’station is completed, the old station will be

abandoned. A letter. of intent to proceed with the -

final plan and specifications for this project has been —

Treceived by appellees from the Navy (R. 69a-70a).

Work relating to television station WAVY, Ports-

»

oe ee

4, "TURNPIKE AND ROAD IMPROVEMENTS, BUS TERMINAL

REPLACEMENT AND WATER AND SEWER UTILITIES

Road improvements, Oceana, Virginia (Job No. 911,

_ R. 24a); Richmond Turnpike (Job No. 814, R. 20a) ;

| Old Dominion Turnpike Authority (Job No. 847, R.

_» 21a); road survey, Columbia, North Carolina (Job

. No. 788, R. 19a). Replacement of the Trailways Bus

Terminal i in Washington, D..C. ¢R. 90a). Numerous

water and sewer designs for the Washington Sanitary

Commission (Job Nos. 898, 893-1 through 893-3, 939,

_ 939-1 through 939-24; R. is 26a-27a).

a

G. S. GOVERNMENT PRINTING OFFICE: 1983

R