Mitchell v. Kroger Company
Decision Date | 04 November 1957 |
Docket Number | No. 15817.,15817. |
Parties | James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. The KROGER COMPANY, a Corporation, Appellee. |
Court | U.S. Court of Appeals — Eighth Circuit |
Bessie Margolin, Asst. Solicitor, U. S. Dept. of Labor, Washington, D. C. (Stuart Rothman, Solicitor, Harry M. Leet, Atty., and B. Harper Barnes, Regional Atty., U. S. Dept. of Labor, Washington, D. C., were with her on the brief), for appellant.
James E. Lockwood, Kansas City, Mo. and Richard V. Runyan, Cincinnati, Ohio (Roscoe C. Van Valkenburgh and Brenner, Van Valkenburgh & Wimmell, Kansas City, Mo., were with them on the brief), for appellee.
Before GARDNER, Chief Judge, and VOGEL and VAN OOSTERHOUT, Circuit Judges.
The Secretary of Labor brought this action against the Kroger Company, asking that the latter be enjoined from violating the provisions of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 201 et seq. It was charged that the Kroger Company failed to pay overtime to certain store auditors and failed to keep proper records of the hours worked by the auditors. The Kroger Company is an Ohio corporation which operates a large number of retail stores throughout the country. It maintains a warehouse and one of its branch offices at North Kansas City, Missouri. This branch office and warehouse serve as a merchandise distribution point for 36 retail stores located in Missouri and 12 retail stores located in Kansas. The branch office in North Kansas City, Missouri, supervises the operations of both the warehouse and the retail stores. For some years the Kroger Company has had in its employ, within the territory covered by the branch office referred to, certain retail store auditors. These auditors have worked in excess of 40 hours in a work week. They have been paid a straight weekly salary regardless of the number of hours worked each week. If the auditors are covered by the Act, the Kroger Company has been guilty of a violation of the provisions thereof and the injunction should have been granted. The parties stipulate that neither the branch office nor the branch warehouse is exempt as a retail establishment and they further stipulate that the Kroger Company stores, 36 in Missouri and 12 in Kansas, are retail establishments within the meaning of the Act and that more than 50% of the annual sales of each store is made within the state in which the store is located.
The branch office supervises and performs various administrative functions for the 48 stores within its area. In conjunction with the auditing and accounting departments of the branch office, store auditors are employed by the Kroger Company to check and audit the operations of the 48 stores. These auditors perform their work in accordance with directions from the branch office. During the time covered by this action two to six auditors were employed. These auditors regularly visit, inspect and audit the retail stores in accordance with instructions from the branch office. A chief auditor directs the store auditors who work under him. The auditors make the rounds of the stores in accordance with a "cycle" or schedule established by the Kroger Company, which provides for an audit once every 13 weeks. The schedule is submitted to and approved or revised by the branch office. The auditors prepare reports on some five different forms prescribed by the branch or home office. They are a store cash and merchandise verification, a form showing value of items located in the several sections of the store, a weekly expense statement of the auditor's travel expenses, a form listing the results of the spotchecking of weights done by the auditors, and a store equipment inventory. One admitted purpose of these audits is to afford the local store manager a periodic check on his reconciliation of inventory, sales and cash. The audit reports are mailed by the auditors to the branch office. This mailing is generally from the town where the retail store is situated, although occasionally the reports are mailed from the post office nearest the auditor's home. As stated by the trial court, Mitchell v. Kroger Company, 150 F.Supp. 30, at page 32:
(Words in brackets supplied.)
The present auditors are residents of Missouri. While auditing stores located in Kansas they leave their homes in Missouri in the morning and return the same night excepting in the case of three stores located in Iola, Garnett and Topeka, Kansas. When auditing those stores they remain away from home overnight. They carry no goods or supplies excepting only their work sheets. They are reimbursed for their automobile and other travel expenses. The trial court concluded that under these circumstances the auditors were not "engaged in commerce or in the production of goods for commerce" within the meaning of the Fair Labor Standards Act, 29 U.S. C.A. § 201 et seq. The trial court further concluded that even if the auditors were engaged in commerce or in the production of goods for commerce, they were nevertheless exempt from the Act by reason of 29 U.S.C.A. § 213(a)(2), which exempts persons "employed by" an exempt retail establishment.
The trial court, in its opinion (150 F. Supp. 30), supports its conclusion of no coverage herein by referring to the fact that the Fair Labor Standards Act is not co-extensive with the maximum limits the Congress might exercise over commerce, citing A. B. Kirschbaum Co. v. Walling, 1942, 316 U.S. 517, 522, 62 S.Ct. 1116, 1119, 86 L.Ed. 1638, "The history of the legislation leaves no doubt that Congress chose not to enter areas which it might have occupied"; McLeod v. Threlkeld, 1943, 319 U.S. 491, 493, 63 S.Ct. 1248, 1249, 87 L.Ed. 1538, "Congress did not intend that the regulation of hours and wages should extend to the furthest reaches of federal authority"; and Overstreet v. North Shore Corporation, 1943, 318 U.S. 125, 128, 63 S.Ct. 494, 496, 87 L.Ed. 656, it "* * * did not choose to exert its power to the full by regulating industries and occupations which affect interstate commerce".
The foregoing statements by the Supreme Court refer, we believe, to activities affecting commerce and in no way justify ignoring the plain language of the statutory definition of commerce, supra. We think that is made clear by the Supreme Court in its further statement in Overstreet v. North Shore Corp., 1943, 318 U.S. 125, 128, 63 S.Ct. 494, 496, supra:
While Congress obviously has not extended coverage under the Act to all activities affecting commerce, as it might do if it so chose,1 this does not and, as indicated by the Supreme Court in the Overstreet opinion, should not narrowly circumscribe the meaning of the phrase "engaged in commerce" or detract in any way from the statutory definition as to the meaning of commerce itself. Such definition is not to be given a strained and narrow construction. Transportation, transmission or communication among the several states are literally within the Act's coverage. We find nothing to justify Congressional intent to the contrary. Instead of a strict or limited construction of this Act, the Supreme Court has pointed out in Mitchell v. C. W. Vollmer & Co., 1955, 349 U.S. 427, 429, 75 S.Ct. 860, 862, 99 L.Ed. 1196, that this Act has been "* * * given a liberal construction * * *" and Mitchell v. Brown, 8 Cir., 1955, 224 F.2d 359, 362, certiorari denied, 350 U.S. 875, 76 S.Ct. 119, 100 L.Ed. 773. The practical considerations which control a determination of coverage of the Act in a particular case are the activities of the subject employees. See Overstreet v. North Shore Corp., 1943, 318 U.S. 125, 132, 63 S.Ct. 494, 498, where it is stated:
See also Title 29 C.F.R. § 779.3 (Supp. 1957). This court, speaking through Judge Woodrough, in subscribing to the above doctrine in Mitchell v. Brown, 8 Cir., 1955, 224 F.2d 359, 362, certiorari denied, 350 U.S. 875, 76 S.Ct. 119, 100 L.Ed. 773, pointed...
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