Craig v. Far West Engineering Company

• Decision Date: 07 April 1959
• Docket Number: No. 16040.,16040.
• Citation: 265 F.2d 251
• Parties: Albert S. CRAIG et al., Appellants, v. FAR WEST ENGINEERING COMPANY, Inc., a corporation, Appellee. FAR WEST ENGINEERING COMPANY, Inc., a corporation, Appellant, v. Albert S. CRAIG et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

265 F.2d 251 (1959)

Albert S. CRAIG et al., Appellants, v. FAR WEST ENGINEERING COMPANY, Inc., a corporation, Appellee.

FAR WEST ENGINEERING COMPANY, Inc., a corporation, Appellant, v. Albert S. CRAIG et al., Appellees.

No. 16040.

United States Court of Appeals Ninth Circuit.

April 7, 1959.

COPYRIGHT MATERIAL OMITTED

William Kraker, Beverly Hills, Cal., for appellants-cross appellees.

Julius A. Leetham, Los Angeles, Cal., for appellee-cross appellant.

Stuart Rothman, Sol., Bessie Margolin, Asst. Sol., Sylvia S. Ellison, Beate Bloch, Attys., U. S. Dept. of Labor, Washington, D. C., Kenneth C. Robertson, Regional Atty., U. S. Dept. of Labor, San Francisco, Cal., for amicus curiae.

Before CHAMBERS, BARNES and HAMLEY, Circuit Judges.

BARNES, Circuit Judge.

These cross-appeals involve ten consolidated similar causes of action filed in seven complaints by onetime employees of appellee Far West Engineering Company, a corporation (hereinafter sometimes referred to as Far West), to recover alleged unpaid overtime compensation; an equal amount in liquidated damages; and reasonable attorneys' fees, pursuant to the Fair Labor Standards Act of 1938,¹ as amended.

Jurisdiction below rests on 28 U.S.C. § 1337 and § 16(b) of the Act.² Timely and proper cross-appeals have been taken here. 28 U.S.C. § 1291.

Recovery was had in the district court by the ten plaintiffs below (hereinafter sometimes called the employees) in the following sums, respectively:

                  C.A. No.   Name                   Compensation      Interest     Atty. Fees
                  ---------------------------------------------------------------------------
                  1314-57    Albert S. Craig           $253.31         $ 35.55        $ 50.66
                  1314-57    Joseph P. Soldis            96.90            6.44          19.38
                  1314-57    Warren L. Gaiennie         123.60            8.05          24.72
                  1314-57    Lynn E. Morrison           415.57           35.38          83.11
                  1315-57    Carl L. Clement            586.09           80.67         117.22
                  1316-57    Sven Ingildsen           2,405.66          180.09         481.13
                  1317-57    Philip Gindes              427.87           58.95          85.57
                  1344-57    George D. Massar           165.54           21.31          33.10
                  1391-57    Frederick J. Pyle          542.37           65.38         108.47
                  1400-57    James M. D. Linick         185.62           25.33          37.12
                

These judgments carried costs, but no equal sums for liquidated damages were allowed. The district court found that there was no dispute as to the employment by Far West of the ten plaintiffs, nor as to their rate of pay. Employment records indicated they were paid at varying hourly rates.

Far West contends that the employees were exempt for two reasons: (Point 1) the work they did was "engineering design" — not in interstate commerce, and (Point 2) the employees were supervisory or professional personnel. Far West has charged error in those two particulars, and on two further procedural grounds: (Point 3) six plaintiffs having failed to appear at the trial are not entitled to recover, and (Point 4) the district court should have dismissed the complaints of two of the said six plaintiffs for wilful failure to comply with the discovery rules of procedure in the district court.

The Secretary of Labor has filed an amicus curiae brief, devoted to the first two alleged errors hereinabove numbered, urging there was no error.

Far West, an engineering firm, was located in Los Angeles, California. It engineered and designed air test equipment for Hughes Aircraft Company and other companies. Employees Craig, Pyle, Ingildsen and Clement testified in the district court that they worked all or a part of their time during the period in question as members of a "Tucson group" which worked almost exclusively on "designs" for the Tucson, Arizona plant of the Hughes Aircraft Company. Ninety-five per cent of the work done in Los Angeles during a part of the time here involved was for the Hughes Tucson plant. Hughes gave Far West the basic design; Far West prepared the engineering drawings and delivered them to Hughes. The employees testifying described this as "very elementary or simple draftsmen's work." Far West's president described it as work only a professional engineer could do. Far West says that it paid these employees by the hour only because that was necessary because of its contract with Hughes; but that despite this, the work done by these employees was "professional," and hence exempt from the coverage of the Act.

I. Were the employees "engaged in the production of goods for commerce" within the meaning of the Fair Labor Standards Act?

We think that the Supreme Court has decided this question for us. In Borden Co. v. Borella, 1945, 325 U.S. 679, 65 S.Ct. 1223, 1225, 89 L.Ed. 1865, the Court said production of goods "is not simply the manual, physical labor involved in changing the form or utility of a tangible article. * * * He who conceives or directs a productive activity is as essential to that activity as the one who physically performs it." Id., 325 U. S. at page 683, 65 S.Ct. at page 1225. And in Mitchell v. Lublin, McGaughy & Associates, 1959, 358 U.S. 207, 79 S.Ct. 260, 263, 3 L.Ed.2d 243, the respondent was an architectural and consulting engineering firm which was hired to design public, industrial and residential projects and to prepare plans and specifications necessary for this construction. It had offices in Norfolk, Virginia and Washington, D. C., but many of its projects and clients were located outside Virginia and the District of Columbia. Much of its work related to government contracts and these required respondent firm to produce plans, specifications, drawings and designs which were sent out of the state to prospective builders.

The "architects and engineers" were classified as "professional employees," and hence exempted by the provisions of § 13(a) (1) of the Act.³ The "draftsmen" were grouped with the "fieldman, clerks and stenographers," as nonprofessional employees and held subject to the Act. Mr. Chief Justice Warren then says:

"The question at issue is whether these non-professional employees are `engaged in commerce\' as that term is used in §§ 6 and 7 of the Act, 29 U.S.C. §§ 206, 207, 29 U.S.C.A. §§ 206, 207. To determine the answer to this question, we focus on the activities of the employees and not on the business of the employer. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 460; Mitchell v. C. W. Vollmer & Co., 349 U.S. 427, 75 S.Ct. 860, 99 L. Ed. 1196. We start with the premise that Congress, by excluding from the Act\'s coverage employees whose activities merely `affect commerce,\' indicated its intent not to make the scope of the Act coextensive with its power to regulate commerce. Kirschbaum Co. v. Walling, supra; McLeod v. Threlkeld, 319 U. S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538. However, within the tests of coverage fashioned by Congress, the Act has been construed liberally to apply to the furthest reaches consistent with congressional direction. * * The test is `whether the work is so directly and vitally related to the functioning of an instrumentality or facility of interstate commerce as to be, in practical effect, a part of it, rather than isolated, local activity.\' Mitchell v. C. W. Vollmer & Co., supra, 349 U.S. at page 429, 75 S.Ct. at page 862. Coverage in the instant case must be determined by that test for, as the parties stipulated below, the draftsmen, fieldmen, clerks and stenographers all worked intimately with the plans and specifications prepared by respondent for the repair and construction of various interstate instrumentalities and facilities including air bases, roads, turnpikes, bus terminals, and radio and television installations. In our view, such work is directly and vitally related to the functioning of these facilities because, without the preparation of plans for guidance, the construction could not be effected and the facilities could not function as planned. In our modern, technologically oriented society, the elements which combine to produce a final product are diffuse and variegated. Deciding whether any one element is so directly related to the end product as to be considered vital is sometimes a difficult problem. But plans, drawings and specifications have taken on greater importance as the complexities of design and bidding have increased. Under the circumstances present here, we have no hesitancy in concluding that the preparation of the plans and specifications was directly related to the end products and that the employees whose activities were intimately related to such preparation were `engaged in commerce.\'"

Id., 358 U.S. at pages 211-212, 79 S.Ct. at page 263. Emphasis added. Cf. also, Mitchell v. Brown, 8 Cir., 1955, 224 F.2d 359, certiorari denied 350 U.S. 875, 76 S.Ct. 119, 100 L.Ed. 773; Ritch v. Puget Sound Bridge & Dredging Co., 9 Cir., 1946, 156 F.2d 334; Laudadio v. White Const. Co., 2 Cir., 1947, 163 F.2d 383.

Here, of course, there exists not only the general rule for this type of endeavor as delineated by the Supreme Court, supra, but the further fact that some of the employees, if not all, worked almost exclusively on drawings that were shipped to Tucson, Arizona, outside the state of California. Compare, Western Union Tel. Co. v. Lenroot, 1945, 323 U.S. 490, 65 S.Ct. 335, 89 L.Ed. 414. We conclude that the employees "were engaged in the production of goods for commerce" within the provisions of the Fair Labor Standards Act:

II. Were the employees exempt as professional or executive employees, within the provisions of the Act and the regulations promulgated thereunder?

Title 29 U.S.C.A. § 213(a) (1) provides:

"The provisions of sections 206 and 207 of this title shall not apply with respect to (1) any employee employed in a bona fide executive,

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