Perkins v. Endicott Johnson Corporation

Decision Date19 August 1941
Citation40 F. Supp. 254
PartiesPERKINS, Secretary of Labor, v. ENDICOTT JOHNSON CORPORATION et al.
CourtU.S. District Court — Northern District of New York

Ralph L. Emmons, U. S. Atty., of Binghamton, N. Y. (David Lloyd Kreeger, Sp. Asst. to Atty. Gen., and Clifford P. Grant, Atty., Division of Public Contracts, Department of Labor, of Washington, D. C., of counsel), for plaintiff.

Howard A. Swartwood, of Endicott, N. Y. (William H. Pritchard, Jr., of Endicott, N. Y., of counsel), for defendants.

BRYANT, District Judge.

A hearing has been had in conformity with my decision. D.C., 37 F.Supp. 604. The present issue is whether or not an order, directing defendants to obey an administrative subpœna duces tecum, should issue.

My decision (supra) sets forth the facts leading up to the controversy in sufficient detail to obviate the necessity, except in a few instances, of a re-statement.

The Endicott-Johnson Corporation is an integrated industry. It is plaintiff's contention that all of the corporation's factories and departments, regardless of where located and how operated, wherein materials, which went into the articles manufactured, were made or in any manner worked upon, are within the provisions of the so-called Walsh-Healey Act, 41 U.S.C.A. §§ 35-45, and that the pay rolls and records of these varied factories and departments are subject to inspection by representatives of the Division of Public Contracts of the Department of Labor.

Plaintiff further contends that this Court is without authority to determine whether or not the request for an Order compelling obedience to an administrative subpœna is well grounded. She says that it is her right to determine whether or not the corporation's varied and numerous factories and departments are covered by the Act. I am not aware that I have held otherwise. Had the Secretary of Labor made such a finding, this controversy would not be here. Her complaint contains no allegation of such a finding. In fact, it states the opposite. A considerable portion of her brief is directed to the proposition that the allegation "the Secretary of Labor has reason to believe" deprives the Court of all discretionary power. Like an automatom, it must make the order requested. The last two contentions are not here germane. I ruled upon them in my opinion (supra).

The defendants maintain, and have consistently maintained, that the stipulations in the contract, required by Sec. 1 of the Walsh-Healey Act, apply only to the corporation's footwear factories. Generally, they maintain: (1) That the tanning of leather, the manufacture of rubber soles and heels, cut soles, counters and cartons are all separate, distinct and unrelated industries from the manufacture of footwear; that, being separate and distinct industries, the stipulations, included in a contract limited to the manufacture of footwear only, do not apply. (2) That Endicott-Johnson Corporation, in the tanning of leather and in the manufacture of the articles named, was not a manufacturer subject to the stipulations of the contract because its tanneries, rubber mills, etc., were not engaged in producing upon the premises any of the articles of the general character described in the footwear specifications. Art. 101 of Regulations covering the Act.

I shall consider defendants' last contention first. The Act provides that the contract must contain a stipulation that the contractor is either a manufacturer of or a regular dealer in, the articles to be manufactured or used in the performance of the contract. Walsh-Healey Act. Sec. 1, 41 U.S.C.A. § 35. Subd. (a) and (b) of Art. 101 of the Regulations of 1937, covering the Act, simply give the Department's definitions of manufacturer and dealer. They read:

"(a) A manufacturer is a person who owns, operates, or maintains a factory or establishment that produces on the premises the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications.

"(b) A regular dealer is a person who owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business."

These definitions are for the purpose of determining who may receive contracts. Their purpose is spent when the contract is awarded. Any limitations therein stated cannot be construed as a limitation on the construction to be placed upon subd. (b) and (c) of Sec. 1 of the Act, which set forth the stipulations in controversy here.

In accordance with the provisions of Sec. 1 of the Act, the stipulations contained in subdivisions (b) and (c) thereof were embodied in the contracts. These stipulations are that all persons "employed by the contractor in the manufacture or furnishing of the materials, supplies, articles, or equipment used in performance of the contract" will be paid certain minimum wages and that they will not be permitted to work over forty hours per week, except as they are paid for overtime.

My attention has not been called to any authorities bearing directly upon the application of the stipulations in connection with integrated industries. Plaintiff has cited large numbers of cases, but the facts upon which they are based make them inapplicable to the issue here. The list is so lengthy that separate distinguishment is impossible.

Plaintiff, by permission, submitted with her brief several rulings of the Department of Labor made by letter. She, also, by permission, included in her brief oral rulings on coverage of employees in integrated industries. The above, with the Rulings and Interpretations issued by the Department on July 6, 1937, and September 29, 1939, have been carefully studied. I believe I am safe in saying that I am in accord with the rulings that have been brought to my attention. As I interpret the submitted rulings, the Act covers those employees, regardless of location of factories or departments, whose tasks are a part of and normally associated with the production of the contracted articles. Perhaps it would be clearer to state that the Act covers in all factories where the production is a part of an uninterrupted process of manufacture. Negatively speaking, the Department does not claim coverage over manufacture of materials taken from general stock for use in performance of the contract. To make such a claim would give the statute a retroactive application. The Act does not cover employees working on parts where, until after manufacture, it is impossible to determine whether the parts are suitable for use under the contract. Such employees are manufacturing for general stock as distinguished from working on contracts. This is so even though some of the parts, after manufacture, are selected as suitable material for manufacture under the contracts. The above seem to be the interpretations placed upon the Act by a letter of Administrator Walling, dated April 26, 1939, and by letters of Acting Administrator Reilly, dated January 9, 1937, and December 30, 1936. The other letters submitted do not apply to the facts in this case.

At the time of the making of the contract, and during the period of performance, there were no published rules relating to coverage of employees in integrated industries. After the beginning of this dispute Sec. 2 of the Rules of September 29, 1939, were published. This section seems to be a codifying of the...

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4 cases
  • United States v. Russell Electric Co.
    • United States
    • U.S. District Court — Southern District of New York
    • 15 Noviembre 1965
    ...when the contract is awarded. See Perkins v. Lukens Steel Co., 1940, 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108; Perkins v. Endicott Johnson Corp., S.D.N.Y., 1941, 40 F.Supp. 254, rev'd on other grounds, 2 Cir., 128 F.2d 208, aff'd, 317 U.S. 501, 63 S.Ct. 339, 87 L.Ed. 424. Russell cannot as......
  • Endicott Johnson Corporation v. Perkins
    • United States
    • U.S. Supreme Court
    • 11 Enero 1943
    ...secretary, and both participated in the subsequent litigation. For convenience we refer to both as 'the petitioner.' 2 37 F.Supp. 604 and 40 F.Supp. 254. 3 128 F.2d 208. 4 317 U.S. 607, 63 S.Ct. 35, 87 L.Ed. —-; General Tobacco & Grocery Co. v. Fleming, 125 F.2d 5 Rulings and Interpretation......
  • Peoples Natural Gas Co. v. Federal Power Commission
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • 16 Febrero 1942
    ...44 S.Ct. 336, 68 L.Ed. 696, 32 A.L.R. 786; Perkins v. Endicott Johnson Corporation, D.C.N.D.N.Y., 37 F. Supp. 604; Id., D.C.N.D.N.Y., 40 F. Supp. 254. 1 Illinois Natural Gas Co. v. Central Illinois Public Service Commission, 314 U.S. 498, 62 S.Ct. 384, 387, 86 L.Ed. 2 Public Utilities Commi......
  • Board of Review v. Williams
    • United States
    • Mississippi Supreme Court
    • 27 Septiembre 1943
    ... ... Company, a corporation, showing the stockholders and ... employees of that corporation for the ... The ... Board relies mainly on the case of Endicott Johnson ... Corporation v. Perkins, Secretary of Labor, 317 U.S ... ...

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