Roland Electrical Co v. Walling

• Decision Date: 28 January 1946
• Docket Number: No. 45,45
• Citation: 66 S.Ct. 413,90 L.Ed. 383,326 U.S. 657
• Parties: ROLAND ELECTRICAL CO. v. WALLING, Administrator of Wage and Hour D vision, U.S. Department of Labor
• Court: U.S. Supreme Court

326 U.S. 657

66 S.Ct. 413

90 L.Ed. 383

ROLAND ELECTRICAL CO.

v WALLING, Administrator of Wage and Hour D vision, U.S. Department of Labor.

No. 45.

Argued Oct. 8, 1945.

Decided Jan. 28, 1946.

[Syllabus from pages 657-659 intentionally omitted] Mr. O. R. McGuire, of Washington, D.C., for petitioner.

Miss Bessie Margolin, of Washington, D.C., for respondent.

Mr. Justice BURTON delivered the opinion of the Court.

The questions presented are (1) whether petitioner's employees are engaged 'in the production of goods for commerce' so as to bring them within the coverage of §§ 6 and 7 of the Fair Labor Standards Act of 1938 (52 Stat. 1060, 1062, 1063, 29 U.S.C. §§ 206 and 207, 29 U.S.C.A. §§ 206, 207), and (2), if so, whether they are exempted from the Act because 'engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce' within the meaning of § 13(a)(2), 29 U.S.C. § 213(a)(2), 29 U.S.C.A § 213(a)(2).

Respondent sought a permanent injunction in the United States District Court restraining petitioner from continued violation of the minimum wage, maximum hour and report-making provisions of the Act. 29 U.S.C ss 206, 207, 211(c), 29 U.S.C.A. §§ 206, 207, 211(c). As to the coverage by the Act, the District Court said that 'the view of the Administrator should not be accepted,' but it rested its dismissal of the complaint upon the ground that the petitioner was exempted under § 13(a)(2). 54 F.Supp. 733, 736. The Circuit Court of Appeals, on the other hand, held that petitioner's employees 'were engaged in the production of goods for commerce' and that the petitioner was not a 'retail or service establishment' within the exemption prescribed in § 13(a)(2). It accordingly reversed the order of dismissal and remanded the cause for further proceedings in accordance with its opinion. 146 F.2d 745, 746. We granted certiorari especially because of the divergence of opinions among the Circuit Courts of Appeals as to the interpretation of § 13(a)(2).¹

Most of the relevant facts were stipulated. Petitioner is a Maryland corporation 'having its principal office, place of business and a manufacturing plant' in Baltimore. It is there engaged in 'commercial and industrial wiring, electrical contracting, and dealing in electrical motors and generators, for private, commercial, and industrial uses.'

Petitioner had 'approximately 1,000 active accounts * * * 99 per cent of which are commercial or industrial firms.' Its 'larger and most active accounts' were 33 in number. Of such 33 customers, one was a telephone company 'engaged in interstate commerce'; four were 'engaged in the repair of ships, tugs, barges, and other boats which were intended for movement in interstate com- merce'; and 'the remaining companies on said list, with the exclusion of the American Ice Company (a small account in the period stipulated to be representative), were engaged in the production of goods for commerce as defined in Section 3 of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 203, shipping at least a substantial portion of their total production to points outside the State of Maryland.' During the period stipulated, 'every mechanic of the defendant (petitioner) worked, in practically every workweek, for some of the said (33) customers, either in the repair of their motors, generators, the reconstruction of used motors sold to them, or in performing electrical work at their respective establishments.' To carry on its entire business, the petitioner had 36 employees, consisting of a foreman, 4 trouble shooters, 14 mechanics, 11 helpers and 6 office employees. No claim of coverage is made on the ground that any of the petitioner's employees were engaged 'in (interstate) commerce,' but only that they were engaged 'in production of goods for (interstate) commerce.'

I.

As to coverage, the Act is unambiguous and the petitioner's employees come squarely within it as employees 'engaged * * * in the production of goods for commerce.' This turns on §§ 6(a), 7(a), 3(b), 3(i), and 3(j). Section 6(a) provides: 'Every employer shall pay to each of his employees who is engaged in commerce of in the production of goods for commerce wages at the following rates * * *.' (Italics supplied.) Section 7(a) likewise provides: 'No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce' at wages less than 1 1/2 times the regular rate, where an employee is employed for more than the maximum number of hours prescribed. (Italics supplied.)

Section 3 includes the following:

'(b) 'Commerce' means trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof.

'(i) 'Goods' means goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacture, or processor thereof.

'(j) 'Produced' means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee 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.' (Italics supplied.)

Putting these definitions together in their own terms, § 6(a), as applied to the facts of this case, provides in effect that 'Every employer shall pay (not less than the required minimum wages) to each of his employees who is employed in any process or occupation necessary to the production, in any state, of any part or ingredient of any articles or subjects of trade, commerce or transportation, of any character, for trade, commerce or transportation among the several states.' This does not require the employee to be directly 'engaged in commerce' among the several states. This does not require the employee to be employed even in the production of an article which itself becomes the subject of commerce or transportation among the several states. It is enough that the employee be employed, for example, in an occupation which is neces- sary to the production of a part of any other 'articles or subjects of commerce of any character' which are produced for trade, commerce or transportation among the several states. This does not require an employee to be employed exclusively in the specified occupation. This does not require that the occupation in which he is employed by indispensable to the production under consideration. It is enough that his occupation be 'necessary to the production.' There may be alternative occupations that could be substituted for it but it is enough that the one at issue is needed in such production and would, if omitted, handicap the production.

The necessity to the petitioner's customers, in their productive work, of the sales made and the services supplied to them by the petitioner's employees is the foundation of petitioner's business. The essential need for motors and wiring in the conduct of electrically operated productive processes of manufacture is beyond question. When commercial or industrial producers, such as the petitioner's customers, use electric motors in the production of goods for interstate commerce, services such as those of petitioner's employees are necessary to the continuity of such production. Such sales and services must be immediately available to petitioner's customers or their production will stop. If not supplied to the customers by employees of the petitioner, such customers would have to employ comparable employees of their own or of other contractors.²

The work of petitioner's employees has 'such a close and immediate tie with the process of production for commerce, and was therefore so much an essential part of it, that the employees are to be regarded as engaged in an occupation 'necessary to the production of goods for commerce." Kirschbaum Co. v. Walling, 316 U.S. 517, 525, 526, 62 S.Ct. 1116, 1121, 86 L.Ed. 1638. The relation of petitioner's employees to the production of goods for interstate commerce by petitioner's customers is fully as close and 'necessary' as was that of the loft building watchmen and porters to the petitioner's tenants in Kirschbaum Co. v. Walling, supra; the manufacturing plant watchman of the respondent in Walton v. Southern Package Corporation, 320 U.S. 540, 64 S.Ct. 320, 88 L.Ed. 298; or the fire guards subject to call in Armour & Co. v. Wantock, 323 U.S. 126, 65 S.Ct. 165. In the latter case this Court said (323 U.S. at page 130, 65 S.Ct. at page 167):

'* * * no hard and fast rule may be transposed from one industry to another to say what is necessary in 'the production of goods.' What is practically necessary to it will depend on its environment and position. * * * What is required is a practical judgment as to whether the particular employer actually operates the work as part of an integrated effort for the production of goods.'

The foregoing conclusions follow so clearly from the language of the statute as to make unnecessary a discussion of the declared purpose or the legislative history of the Act to support them.³

II.

The second question is whether or not petitioner's employees are exempted from the Act on the ground that petitioner is a 'service establishment' within the meaning of § 13(a)(2).⁴ The language of that clause is capable of two interpretations. If read in a detached and broad sense, it can be made to exempt from the Act the employees of the petitioner together with hundreds of thousands of other employees like them, to the serious detriment of...