Memorandum for Respondents — Rutherford Food Corp. v. Walling

¥3 |

“or a4. 1946

TAS e fleets on

é r Re : ¢

J ’ ei. se oh ee | TRE ADT rs RL omy

No. 563,

Sule gree Gute he United Ses

| Ocroser Tens, 1946. Dyn Po Rat

¢

Ru THERFORD Food Comminantot AND THE aide :

Karser Packind Company, PETITIONERS ae

° Vv. »

Marea, Wautina, ‘ADMINISTRATOR OF THE .

ela AnD. Hour Division, Unirep Statés. De-

PARTMENT oF Labor * e3 me

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED .

STATES OIRCUIT COURT GF APPEALS FOR THE TENTH we

CIRCUIT. .

= . ° ay :

scabies ‘FOR RESPONDENT

ot

e 4

re

‘

‘

INDEX

“ Opiptions below:........ na eel egivads Duns ksunmnaies Lesesde

. Jurisdiction... - . “ae A Pee woe ER reegitctnn ie 7 Rasieee Pee

Question presented. --2-..---.-/ ae ieeneudealel a ree poke

Statute involved... _.:_-__- pep a, AB RT oe AEE ee Re

I ica 5 ikon ie gable aed emcdacds.oee wen acdennie x "

DAs cnenccspeanatfascscuneswndsdgivasncess Ate SES

ct ne ee os eueak sommikan

6 iow: pa CITATIONS :

2 Automobile Banking Corp. v. Willison, 28 A. 2d 864.---__ -

- Barrow v. Adams & Co., 6 Wage Hour Rept. 1964........

°

Bowman v. Pace Co., 119 F. RRS EY SE ye oa

Brennan v. Communcly Service _— 6 Wage Hour

Brown v. Minngas. Ca,, 51 F. Supp. 363 EE NS A :

Bush v. Wilson & Co, 157 Kan. 80, 138 P. 2d oe

Collier v. Rural Educational Assn., 7 Wage Hour Rept. 151-

Cottrell v. Wetterau Grocer Co., 4 Wage Hour Rept, 482... —

_Creekmore v. Public Belt R. R. Comm., 5 Wage Hour Rept.

653, affirmed, 134 F. aa 576, certiorari denied, 320 U. S.

Dennis v.. Equitable Rguipment Co., 7-80. 2d 397....-.---

Domenech v. Cities: Delivery Express, 5 Wage Hour Rept.

Dupes v. Neshue Mfg. Co., 62 F. Sum. ei acienkntuns

Fleming v. Arsenal Bldg. Corp., 125 F. 2d 278, affirmed on

. other grounds, 316 U. 8. 5)7_-.--2..----..----2--t---

Fleming v. Demeritt Co., 56 F. Supp. 376.___- aanepieiiaios

Fleming v. Palmer, 123 F. 2d. 749, certiorari denied, 316.

U. 8. 662.....- pleat shihciadh ic aan tas biabitask tl ledaonegcna tg acess Cone

* Greenberg v. Arsenal Bldg. Corp., 50 F. Supp. 700, affirmed

144 F. 2d 292, reversed on other grounds, 324 U. 8. 697_-

Gross v. Griss6m, 5 Wage Hour Rept. 498. ____-------- aie

Helena Glendale Ferry Co. v. Walling, 132 F. 2d 616_._..-

Holmes v. Industrial Cotton Mills Co., Inc., 64 F. Supp. 20.

Keegan v, Ruppert, 6 Wage Hout Rept. 676. ------.-----

Keyer v. Hope Estates, Ine., 58 F. Supp. 1004..........-.-

Looney y.' Albert M. Wetten & Co., 7 Wage Hdur Rept: 36--

Lorenzetti-v. American Trust -Co., 45 F. Supp. 128--. --.--

‘Magann v. Long's Baggage Transfer Co., 39 F. Supp. TA2.

718789—46 (1)-

yon:

an oa an

Oo, of wa ws

Moo as a or

£2 ‘

5 ———

.

e.

It

‘Matlock v. Sanderson & Porter, 6 Wage Hour Rept. 917. --

Mitéhell v. Shefford C Co., 9 Wage Hour Rept. 321-.-

M v. Rodriguez, 5 Wage Hour Rept. Mak kkanatices

Mosier v. Retail Credit Co., 5 Wage Hour Rept. 336. _.._-

Mungovan v. Manierre, 6 Wage. Hour Rept. 638.........-

National Labor Relations Board v. Hearet Publications, 322:

U. 8. dil Rpidaha add ebddee Mi ament be ssecadwhnine ve

manaare | 8. Abell Co., 48 F. Supp. 88, affirmed on

_ other grounds, 138 F.~2d 111, certiorari Gented, oa

Sis Eh Ain atc ih ckns ckevannadinsdabestonta Mhéuanuas

’ Soto v. La Plata Sugar Co., Pen giao ese A

_ Southern Ry. Co. v. Black, 127 F.2d 280............----

_Thompron v. Daugherty, 40 F. Supp: 279.-.......----1-.

United States v: Albert Silk, No. 312, cag > aaa

¢ Van Hee v. Breuer, 8 Wage Hour Rept. 1084... ._- lism aii

Walling v. ge apy agg 139 F. 2d 60_-..--

. Walling v. T. Buettner & Co., 5 Wage Hour Rept. 279,

reversed; 133 F. 2d 306, certiorari denied, 319 U. 8. 771.

' Walling v. DeSoto Creamery & Produce Co., 5 F. Supp. 938. .

Walling v. Jacksonville Terminal Co., 148 F.2d 768---.--.

Walling v, Merchants Police Service, Ine., 59 Supp. 873..._

Walling v. Mutual Wholesale Food & Supply Co., 141 F.

Walling v. The Nashville, Chattanooga & su Louis Ry., No.

135, this Term_._._ Se ee eee wie takist SS

Walling v. New Orleans ‘Private P Patrol spol 57 F. Supp.

Walling v. Siawing, 9

Walling v. se cpa Lénes, Ine., " F.

GND Wil bio nah ccakanenbad Kewsn ESSERE OS Seton |

Walling v. Todd, 52/F. Supp. 62 enéie Aandndineacemaekie

Walling v. Wolff, 63 F. Supp. 605... ...-2..-.--.----.--.

Whatley v. Great are Co., 123 ¥. 2d 143...

Wilson v. Shuman, 140 Fi Olle eecccascknachecescs 4

Woods v. Wilkerson, 40-F. ~ sing Mn didtdacedpnash amene

€

¢

~

§

_Faac aqcanns

2

NO, SAPNA S

.

ao

~I

oon

FQAQQar—na

we

ono

oY

a =

So .

III .

Federal Statutes: ieN®

' Act of 1938, c. 676, 52 Stat. 1068): 29.U. 8. C., sec. 201

(Fair Labor Standards Act):

SU Msdbenbdedbitetsncanen, vbhacdeeiscccucnes 9

Oe Wades chestalsk dabeckcdchuutbenvcncan atesubk

Sec. M1... 42500. p-----2 ene pdeckeeddecstecioodns 9

“* Internal Revenue Code as amended; sections 1426 (b)

GG BNF Mikedadaabecbtansrcusve tanh. abc 4

Social Security Act; sections 811. (b) and 907 (c)......... 4

r 6 Pl a?

»

t ¢ ‘

4 .

: v

a.

eae

=

ie

Inthe Supreme Gourt ofthe Bnited States

OctoBerR TERM, 1946

No. 562

RUTHERFORD Foop CoRPORATION AND THE GEORGE

‘KAIsER ‘PACKING COMPANY, PETITIONERS

Vv...

| METCALFE WALLING, “ADMINISTRATOR OF THE

- Wace anv Hour Division, Untrep States De-

PARTMENT OF LABOR

?

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES CIRCUIT.COURT OF APPEALS FOR THE TENTH

CIRCUIT

MEMORANDUM FOR RESPONDENT

OPINIONS BELOW . .

The opinion of the district court (R. 150-163)

"is not officially reported. The opinion of the

. Cireuit Court of Appeals (R. 175-185) is reported

at 156 F. 24513)

ws

vibe remeesenen:

The judgment of the Circuit Court of Appe ‘als

was entered July 18, 1946 (R. 185-186). A peti- —

tion for rehearing was denied August 26, 1946

(1)

‘ 2

et ee ae 2

(R. 203). The petition for certiorari was filed

' . . October 2, 1946. The jurisdiction of this Court:

is invoked under Section 240 (a) of the Judicial —

1925. ; 3

QUESTION PRESENTED

* “ f ° : —— 1

‘ y ‘° Whether all foners working im an assembly-

* ine production process in petifioners’ slaughter-_

house are employees of petitioners within . the.

meaning of the Fair Labor Standards Act, not-

withstanding contracts which characterize certain

Code, as amended by the Act of February 13,

of the.boners as ‘‘independent contractorg’’. and _

others as employees of the ‘‘iidependent con-

tractors.”’ | saeet

STATUTE INVOLVED °

The statutory Fovisions involved are set forth

in the Appendix, infra, pp. 9-10.

wy.

STATEMENT

“Petitioners operated a slaughterhouse in which

they produced large quantities , of boned meat’

_ (R. 11-12, 16).- The boning: operations were per-

formed ini.a room at the plant, known as. thé

boning vestibule, by. workers called. ‘‘boners”’

+ (R. 168). The carcasses to be boned were moved

- by an overhead rail system through a series

© 0 processes by petitioners’ employees into the .

Y4 * vestibule (R.- 178)... The carcasses were:

enema

« 1 Each Fine petitioners operated the same plant at differ-

ent times (R. 164). The issues are the same ds to both . ©

petitioners.

3 ie ' , n : te

checked, cleaned, and weighed by petitioners’ em-:

ployéeg in the boning vestibule before -being

switched onto the boners’ detour rail (R. 178).

The-meat was then removed from the bones by

_ the boners and, as removed, thrown to a trimmer,

an employee of: petitioners, or into barrels (R.

178). -As the barrelg, were filled they were re-

moved from the boning eat by petitioners’

employees (R. 178).

The boners were not hired in the same manner

as the other. workers in the plant. who admittedly °

were employees of petitioners (R, 21)—«Petition-

ers entered into contracts (R. 32-39) with one or

two boners. which provided that they, as ‘‘inde-

pendent contractors,’’ would do the boning at the -

: bn for a specified sum per hundred pounds of ©

“®D

neless ‘beef.. The contract contemplated that

e ‘independent contractor’’ boners: would hire, .

supervise, ahd pay other boners who would be

their employees,and not petitioners’ (R. 177)

The compensation :paid by petitioners for bonin

‘operations was ordinarily. divided equally among ~”

all the boners (R. 167).

The district cout held that “the rpc of .

fot employer and employee did not exist between the

defendants. [petitioners]. and the beef boners’’

(R. 169) and dismissed tke~Administrator’s. eom-

plaint (R. 171). The Circuit Court_of-Appeals.. .

for the Tenth Circuit reversed, holding that the

employment relation should be determined “by

Yantai

a

ds

‘reference to the underlying economic realities —

rather than, by traditional rules governing legal

classifications of master and servant on ‘one hand, *

and employer and indepéendemt contractor on the

other’’ and that a consideration of the ‘“‘underl>

ing*economic realities.* * * lead[s] to the.

conclusion that the boners were and are employ-

ees’’ of petitioners (R. 180, 181).

d

We believe the’ decision of the court below cor-

rectly applies the provisions of the Fair Labor

Standards Act and ‘should be affirmed iti the event —

. review by “this Court. Nevertheless, we do not °

- oppose thy granting of a writ Bf certiorari be-—

‘the desirability of obtaining an authori-

satis determination of the scope of the employ-

, _ ment relation under the At.’

Determination’ of who is an ‘“‘employer”’ or

““employee”’ under federal. regulatory legislation

does not depend upon abstraét conceptual consid-

‘erations. National Labor Relations Board. v-

Hearst Publications, 322 U. 8. 111, 129, estab- -

lishes that the applicability. of these terms is de-~

termined by the ‘underlying economic - facts

rapher than technically and exclusively by pre-

a . i

* The scope of the employment relation unger Sections °

$11 (b) and 907 (c) of the Social Security Act @nd Sections

_ 1426 (b) and 1607 (c) of the. Internal Reventie Code, as

‘ . amendéd,.is pending before, this Court in United States of

America vy. Albert Silk, No. 312, certiorari granted October -

ee. f.

© tn ot

viously established legal classificationsQ’ How-

ever, the approach taken in the Hearst decision

has not been uniformly followed by the lower

courts in dealing with the numerous ‘“‘employ-

ment’’ casés constantly arising under the Fair

Labor Standards Act! > er

* Additional support for a liberal interpretation of the

scope of employment under the Fair Labor Standards Act

is to be found in the broad definition of “employ” in Section .

3 (g), not contained in the National Labor Relations Act, 1 ASN

including “to suffer or permit to work.” —

‘The decisions construing the concept of employment

under the Act have been legion. They have applied varied

criteria and reached divergent requits. Reconstruction Fi-

nance Corp. ¥- Merryfield, 134 F.2d 988 (C. C. A. 1); Flem-

ing v. A Bldg. Corp., 125 F. 2d 278 (C. C. A. 2), af-

firmed on other grounds, 316 U. S. 517; Greenberg v. Arsenal

Bldg. Corp., 80 F. Supp. 700 (S. D. N. Y.), affirmed, 144 F.

2d 292 (C. C. A. 2), reversed on other grounds, 324'U. 8. 697; °

Looney v. Albert H. Wetten & Co.,7 Wage Hour Rept. 36

(N. D. TIL, 1943); Mungovan vy. Menierve, 6 Wage Hour |

4 638 (N. D. Ill, 1943) ; Keyer v. Hope Estates, Inc., 53

- F. Supp. 1004 (S. D. N..Y).; Lorensetti v. American Trust

Co., 45 F: Supp. 128 (N. D. Calif. ); Brennan ommunity

Service Society, 6 Wage Hour Rept. 696 (N: Y. C. Ct., 1943) ;

Barrow v. Adams & Co., 6 Wage Hour Rept. 1264 (Munic.

ae” S , 1943) ; Walling v. Mutual Wholesale Food & Sup- _

| ply Coy 14 F. 2d 331 (C. C. A. 8); Woods v. Wilkerson, 40

F. Supp. 131 (W. D. La.) ; Keegan v, Ruppert, 6 Wage Hour

Rept. 676 (S. D. N. ¥.,.1943) ; Cottrell v. Wetterau Grocer

Co., 4 Wage Hour Rept. 482 (E. D. Mo., 1941); Brown v.

ree Co., 51 F. Supp. 363 (D. Minn.) ; Schroepfer v.

A. 8. Abell Co., 48 F. Supp. (D. Md.J, affirmed on other

grounds, 138 F. 2d 111 (C. C. A. 4), certiorari denied, 321 -

U. S. 763; Walling v. Southwestern Greyhound Lines, Inc.,

65 F. Supp. 52 (W. D. Mo.) ; Walling v. DeSoto Creamery &

pag 5 51 F, Supp. 938 (D. Minn.) ; Bush v. Wilson

& Co, 7 Kan. 8), J38—P. 2d 457; Mosier v. Retail

~

5

a '

_of an employment

i

: : 6, A 25. ?

The circuit courts of. appeals have usually rec-

ognized ‘‘economic a. to find the existence

lation under the Act, what-

ever the label used in the contract between the

‘ parties, where there is a direct contract between

the “employer,” and the ‘‘employée.”’ Fleming v.

Palmer, 423 F. 2d 749 (C; C. A. 1), certiorari

denied, 316°U. S. 662 (members of cooperative) ;

Walling v. American Needlecrafts, Inc., 139 F. 2d

60 (C. C..A. 6) (independent contractors) ; South- — .

ern Ry. Co. ¥v. Black, 127 F. 2d 280 (C. C. A. 4)

(licensees). But cf.: Walling v. Plymouth Mfg.

Co., 139 F. 2d 178 (C. C. A. 7), certiorari denied,

322 U. S. 741 (cé-partneys): The holding of the.

court below that the bouérs with whom petitioneys —

‘made their contracts are employees of petitioners,

despite the contracts’ characterization of them. as

‘‘imilépendent contractors,” is therefore in accords

_ with the weight of authority.

Credit Co., 5 Wage Hour Rept. 336 (D. Kains., 1942) ; Pose:

‘whan V. Retail Credit Co., 5 Wage Hour Rept. 401 (D. Kans.,

1942) ; Molina v. Rodrigues, 5 Wage Hour Rept. 259 (D. P.

R., 1942); Van Hee vy. Breuer, 8 Wage Hour Rept. 1084

(N. D. Ohio. 1945) ; hres v. Great Southern Trucking

Co., 123 F. rece (C.C. A. 5); Wilson v. Shuman, 140 F. 2d

644. (CO. A. 8); Walling v. Jacksonville Terminal Co., 148

F. 2d 768 (C. 'C. A. 5); Walling v. Norfolk Southern Ry. cd,

6 Wage Hour Cre 252 (E: DN. C., 1946) ; Walling v. T.

Buettrher & Co., 5 Wage Hour Rept. 2 (N. D. fil. , 1942),

-. peversed on ae ory s, 133 F. 2d 306 (C. C, A. 7), cer-

tiorari denied, 319 U. 8. 771; Walling v.“Wolf,, 63 F. Supp.

605 (E. D.N. Y.); Fleming v. Demeritt Co., 56 F. Supp. 376

(D. Vt.) ; Nelson v. Kuepper Favor Co., 4 WageHour Rept.

699 (N. D. Il, 1941); Walling v.-Sieving, 9 Wage Hour

a ‘ * ee “RR,

“ys

f

rnd!

7 > SC ni

"Where an intermediate person is’designated as | |

the “ employer,”’ however, the circuit courts of — ,

appeals have shown greater reluctance to pene-

trate contract forms and in some cases have en-

. grafted limitations of a-technical character upon. .

the statutory ‘definition of ‘“‘employ’’ as including

_ “to suffer or permit to work.’’: Bowmah v. Pace:

“Co., 119 F. 2d 858 (CC. A. 5); Walling v. Sand-

4 ers, 136 F. 2d 78 (C..C. A. 6); Helena Glendale

Ferry Co. v. Walling? 132 F. 2d 616 (C, CG. A. 8).

The -Bowman and Helena Glendale cases adopt

the view that an employment relationship exists

_within the meaning ‘of the Act only if there is

an express or implied obligation to pay wages

Rept. 356 (N. D. Il1., 1946); Walling v. Todd, 52 F. Supp. -

62 (M. D. Pad); Gross v. Grissom, 5 Wage Hour Rept.,498

(N. D. Miss., 1942) ; Domenech v. Cities Delivery Express, 5

Wage Hour Rept. 562 (D. P. R., 1942) ; Automobile Banking .

Corp. v, Willison, 181°Md. 118, 28 A. 2d 864; Soto v. La Plata

‘+ Sugar C'9.,6 Wage Hour Rept. 943 (D. P. R., 1943); Walling

v. Merchants Police Service, Inc., 59 F. Supp. 873 (W. D.

Ky.) ; Dugas v. Nashia Mfg. Co., 62 F. Supp. 846 (D. N.

H.); Walling v. New. Orleans Private Patrol Service, 57 F.

" - Supp_#43 (E. D. La.).; Bhompson v. Daugherty, 40 F.Supp. .

279 (D. Md.) ; Magann vy. Long’s Baggage Transfer Co., 39

F. Supp. 742 (W. D. Va.}; Holmes v. Industrial: Cotton

Mills Co., Inc.; 64 F. Supp. 20 (W. D. S.C.) ; Creekmore v.

Public Belt R. R. Comm., 5 Wage Hour Rept. 653 (E. D. La.,

* 1942), affirmed;134 F. 2d 576 (C. C. A. 5), certiorari denied,

320 U. S. 742; Matlock vy. Sanderson & Porter, 6 Wage Hour

Rept. 917 (Ark. Cir Ct., 1943) ; Dennis v. Equitable Equip-

ment Co., 7 So. 2d 397 (La. Ct. App., 1942); Mitchell v.

Shefford Cheese Co., 9 Wage Hour Rept. 321 (M. D. Tenn.,

1946); Collier v. Rural Educational Asen., 7 Wage Hour

Biase 151 (Tepn. Ch. Ct, 1948).

¢

9 7 8. t ‘

apart from the statute.’ “The Senders t ease makes -

- the-existence of the, relationship depend upon the

right to hire 4nd “fire. Since in the instant case.

petitioners we under no contract obligation to’ |

pay wages to the boners ‘“‘employed”’ by the “in- |

dependent contractor” boners, and petitioners had

no contractual right ‘to hire or fire such em-.

‘ sistent with the theories of the above decisio

; ployees, the holding of the court below is ne

Tn view of the different approaches of the circuit

éourts of appeals and the district courts, the im-

_ portance of an authoritative clarification of the ,

_ proper tests of the employment relationsliip under.

aie:

the Fair Labor Standards Act co clear. “Ac-

cordingly, we do-not oppose tHe granting of a

writ of certiorari. _

Respectfully submitted. |

il Howarp McGratH,

P eae = Solicitor General.

WILLIAM S. Tyson, ) : %

Solicitor, :

ra Morton. ALIFTIN,

Assistant Solicitor,

Faye BLacKBURN, {) a4 | ;

Attorney,

§ * United States Departntnd of Labor.

Oo BER 1946.

° Walling v. The Nashville, Chattanooga & St. Louis Ry.

_and Walling v. Portland Terminal Co., Nos. 835 and 336, cer-

tiorari granted October 14, ne, — & narrew phase of

this —

‘

4

: Fair Labor Standards Act of 1938, c. 676,52 -

_ APPENDIX .

Stat. 1060, 29 U. 8. C., sec. 201 et seq:

Sec. 3. As used in this Act—

(d) ‘“‘Employer’’: includes any person

acting directly or indirectly in the interest

of,an employer in relation to an employee .

but shall not include the United States or

-any State or political subdivision of a

_ State, or any labor organization (other

than when acting as an employer), or any-

- one acting in the capacity of officer or

agent of such labor organization. .

* * * e @ ° *

(e) ‘*Employee”’ inchides any individyal

employed by’ an employer.

* * ee. * x 2

(g) ‘‘Employ”’ includes to suffer or per-

mit to. work. h

* * + *- *

Sec. 7. (a) No eniployer ‘shall, except as .

otherwise provided in tliis section, employ

any of his employees who is engaged in

commerce or in the production of goods tor

commerce—

* a. -s eee

(3) for a workweek longer_than. forty |

heurs after the expiration of the second

_ year from such date, | Tae

~ unless such employee rec8ives compensation

i

for his employment in excess.of the hours

above. specified at a rate not less than one

and one-half times the regular rate at which

he is employed. tea

_ @ _ # _ es

" (9)

/

i)

°

- é 9 ~~ “

i

na

k

es

sean P

: “10

Sec. 11,

*

* 2 * *

_ .(e) Every employer subject to any pro-

vision of this Act or of any order issued

under this Act shall make; keep, and pre- ‘

serve 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 preserve such

records for such periods of time, and shall

make such reports therefrom to the Ad-

ministrator as he shall prescribe by regu-

lation or order as necessary.or-appropriate —

for the enforcement of the provisions of

; sr Act or the regulations or orders there-

under. Rat

? e rs a

1 8 GUVEFOUEN! PRINTING OFFICE: 1946

¢

%