Baldwin v. Emigrant Industrial Sav. Bank

• Decision Date: 12 July 1945
• Docket Number: No. 356.,356.
• Citation: 150 F.2d 524
• Parties: BALDWIN et al. v. EMIGRANT INDUSTRIAL SAV. BANK.
• Court: U.S. Court of Appeals — Second Circuit

150 F.2d 524 (1945)

BALDWIN et al. v. EMIGRANT INDUSTRIAL SAV. BANK.

No. 356.

Circuit Court of Appeals, Second Circuit.

July 12, 1945.

Moses M. Cohen, of New York City (James L. Goldwater and Leon Liner, both of New York City, on the brief), for appellants.

Harold H. Levin, of New York City (Proskauer, Rose, Goetz & Mendelsohn, of New York City, on the brief), for appellee.

Before SWAN, CHASE, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

Plaintiffs, maintenance employees in defendant's thirteen-story building in New York City, rented to some thirty-five tenants, brought this action for the recovery of overtime wages, liquidated damages, and counsel fees under § 16(b) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 216(b). The District Court ruled that, since "with minor exceptions the building was used by tenants for offices and showrooms," with "no manufacturing or processing" carried on at the building, plaintiffs were not within the coverage of the Act. Accordingly it dismissed the action, and plaintiffs have appealed.

The ten plaintiffs include passenger elevator operators, a freight elevator operator, a porter, a relief elevator operator, watchmen, and firemen. The District Court found that a substantial number of the tenants in the building who occupy offices, storerooms, and showrooms take orders for goods manufactured elsewhere and sell them to customers within and without the state and are thus clearly engaged in interstate commerce. But this does not mean that the plaintiffs, too, are engaged in interstate commerce, for their activities are not "actually in or so closely related to the movement of the commerce as to be a part of it." McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 1251, 87 L.Ed. 1538. The Fair Labor Standards Act, however, regulates wages and hours not only of employees who are "engaged in commerce," but also of those engaged "in the production of goods for commerce." §§ 6, 7, 29 U.S.C.A. §§ 206, 207. We must ascertain, therefore, whether or not the plaintiffs here are covered by virtue of this latter phrase.

The Supreme Court has held that service employees of a building occupied by tenants engaged in manufacturing are in an occupation necessary to the production of goods for commerce and therefore within the coverage of the Act. A. B. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638. In Callus v. 10 East Fortieth Street Building, Inc., 2 Cir., 146 F.2d 438, this court interpreted the Kirschbaum case to imply coverage of maintenance employees of a building of which more than 20 per cent was devoted largely to miscellaneous offices of manufacturers. We adopted the figure of 20 per cent because it was the reasonable standard fixed by the Administrator. But the Supreme Court reversed on the ground that the renting of office space used for the carrying on of ordinary office activities "is local business and makes the employees of such a building engaged in local business." 10 East 40th Street Building, Inc., v. Callus, 65 S.Ct. 1227, 1229. The Court did, however, reaffirm its holding in the Kirschbaum case. The line it drew appears to be that maintenance employees of a building such as the one here involved are covered by the Act only if a substantial amount of the rentable area is devoted to the actual physical production on the premises of goods for interstate commerce. What proportion of the total rentable area would be considered a substantial amount is not stated in express terms. The dissenting Justices did refer to the Administrator's standard, saying, however, that whether 20 per cent occupancy was a reasonable minimum was not in issue, since the 32.5 per cent occupancy for production was clearly so substantial as to remove any doubt. There seems to us, therefore, no reason to withdraw our approval of the Administrator's conclusion; but as we shall see, here, too,...