Mid-Continent Pipe Line Co. v. Hargrave

• Decision Date: 14 July 1942
• Docket Number: No. 2415.,2415.
• Citation: 129 F.2d 655
• Parties: MID-CONTINENT PIPE LINE CO. et al. v. HARGRAVE.
• Court: U.S. Court of Appeals — Tenth Circuit

129 F.2d 655 (1942)

MID-CONTINENT PIPE LINE CO. et al. v. HARGRAVE.

No. 2415.

Circuit Court of Appeals, Tenth Circuit.

March 24, 1942.

Rehearing Denied July 14, 1942.

I. L. Lockewitz and C. A. Kothe, both of Tulsa, Okl. (J. C. Denton, R. H. Wills, J. H. Crocker, and J. P. Greve, all of Tulsa, Okl., on the brief), for appellants.

H. W. Carver, of Wewoka, Okl. (Geo. C. Crump, of Wewoka, Okl., on the brief), for appellee.

Before BRATTON, HUXMAN, and MURRAH, Circuit Judges.

BRATTON, Circuit Judge.

Hubert Hargrave, as agent for fifty-six named persons, instituted this action in the district court of Seminole County, Oklahoma, against Mid-Continent Petroleum Corporation, herein called the petroleum company, and Cosden Pipe Line Company, now Mid-Continent Pipe Line Company, herein called the pipe line company, to recover overtime compensation, liquidated damages, and attorneys' fees, under the provisions of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. §§ 201-219. The cause was removed to the United States Court for Eastern Oklahoma and there tried without a jury; three of the persons disclaimed during the trial; findings of fact and conclusions of law were made in which it was found and concluded that forty-four of the claimants were entitled to overtime compensation and liquidated damages in respective specified sums, and that attorneys' fees in the lump sum of $750 should be allowed. Judgment was rendered in favor of plaintiff for $1,295.92, the aggregate amount of the overtime compensation and liquidated damages, and for the attorneys' fees. Both companies appealed.

It is contended that the services rendered were of such nature that the claimants are not entitled to any of the benefits of the Fair Labor Standards Act. The petroleum company was engaged in the business of producing, refining and marketing oil and gas products. It owned oil wells in Seminole County, and it owned and operated a refinery at Tulsa. Its refined products consisted of gasoline, lubricating oil, naphtha, kerosene, distillate, road oil, asphalt, wax and grease. These products were sold to jobbers, dealers and consumers; and a large part of them were shipped into twelve or fourteen other states. The pipe line company was a common carrier of crude oil by pipe line, it transported oil for the petroleum company from Seminole County to the refinery, and it transported oil for others, all in Oklahoma. A strike was in progress and violence to the properties of both companies was being committed or threatened. About four hundred persons including the claimants were employed as watchmen to guard the wells, pipe lines, and other property and equipment against depredation, injury or destruction. Section 3(b) of the act defines "commerce" to mean trade, commerce, transportation, transmission, or communication among the several states or from any state to any place outside thereof; and section 3(j) defines "produced" to mean produced, manufactured, mined, handled, or in any other manner worked on in any state, and provides that for the purposes of the act an employee shall be deemed to have engaged in the production of goods if he was employed in producing manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any state. It is manifest that the act specifically requires that in order for an employee to come within its provisions, the nature of his services must be such that he is engaged in commerce or in the production of goods for commerce. Fleming v. A. B. Kirschbaum Co., 3 Cir., 124 F.2d 567. But in order to be engaged in the production of goods for commerce, it is not requisite that he come in actual, physical contact with the goods produced. It suffices if his services are useful and essential in a process or occupation necessary to the production of goods for commerce. Fleming v. A. B. Kirschbaum Co., supra; Fleming v. Arsenal Building Corporation, 2 Cir., 125 F.2d 278, certiorari granted 62 S.Ct. 801, 86 L.Ed. ___.

Here the petroleum company was clearly engaged in interstate commerce, and injury or destruction of the wells, pipe lines, and other property and equipment would have impeded, hindered and perhaps destroyed that commerce. The services of the watchmen to protect the property were deemed to be and were essential to the production of the goods for commerce along with the services of the employee who operated the pump, the employee who operated the booster station, the employee who repaired the machinery, and the employee who operated the gadgets which refined the crude oil into gasoline, lubricating oil, or kerosene. The claimants were engaged in the production of goods for commerce within the meaning of the act. Fleming v. A. B. Kirschbaum Co., supra; Cf. Fleming v. Arsenal Building Corporation, supra.

Next it is urged with emphasis that under no theory are the watchmen employed by the pipe line company entitled to claim benefits under the act for the reason that the business of that company was solely and exclusively the transportation of crude oil in intrastate commerce. Manifestly it was contemplated from the outset that the crude oil produced from the wells of the petroleum company in Seminole County would be transported by the pipe line company from the wells to the refinery, that it would be there processed, and that much of the refined products would then be shipped in interstate commerce to jobbers, dealers, and consumers. The stop at the refinery was not intended as the end of the journey, but merely as an interruption for the purpose of being processed into the refined products. And the transportation of the crude oil in the pipe lines was an essential incident or part in the preparation of the goods for commerce. It seems clear that the watchmen who guarded the pipe lines and other property of the pipe line company used in connection with the transportation of such crude oil for that purpose were engaged in the preparation of goods for commerce, as defined in the act.

It is further contended that since the contracts pursuant to which the several watchmen were employed specified a wage in excess of the minimum provided by the act, and since such wage was established prior to the employment of the watchmen and was accepted by them, the claimants are not entitled to further compensation. The basis of the employment at the start was $5 per day of twelve hours, and seven days per week. The hours were later reduced to eight but the compensation per day and the days per week continued without change. Section 6 of the act provides that every employer shall pay to each of his employees engaged in commerce or in the production of goods for commerce not less than 25 cents per hour during the first year from the effective date of the section, not less than 30 cents per hour during the next six years, and not less than 40 cents per hour after the expiration of seven years from such date; and section 7 provides that a workweek shall not exceed forty-four hours during the first year after the effective date of the act, shall not exceed forty-two hours during the next year, and shall not exceed forty hours after the expiration of the second year, and that compensation for overtime shall be not less than one and one-half times the regular rate. The act applies and exacts in mandatory terms the payment of minimum wages and overtime compensation computed on the basis of sections 6 and 7, even where the contract of employment calls for compensation in excess of the minimum wages prescribed in the act. Bumpus v. Continental Baking Co., 6 Cir., 124 F.2d 549; William H. Missel v. Overnight Motor Transportation Company, Inc., 4 Cir., 126 F.2d 98.

The judgment is attacked on the additional ground that there was no evidence which showed that during the period of the employment of these watchmen any of the oil produced and refined by the petroleum company moved or was intended to be moved in interstate commerce. No evidence was submitted affirmatively showing that on the very days these employees worked as watchmen any of the oil produced and refined by the petroleum company actually moved in interstate commerce. But there was evidence showing generally that the petroleum company was engaged in the business of producing crude petroleum, refining it, and selling and shipping a large part of the refined products in interstate commerce. And there was no suggestion in the course of cross-examination or otherwise that any cessation or change occurred during the period in...