Montgomery Ward & Co. v. Antis

• Decision Date: 13 January 1947
• Docket Number: No. 10295.,10295.
• Citation: 158 F.2d 948
• Parties: MONTGOMERY WARD & CO., Inc. v. ANTIS et al.
• Court: U.S. Court of Appeals — Sixth Circuit

158 F.2d 948 (1947)

MONTGOMERY WARD & CO., Inc. v. ANTIS et al.

No. 10295.

Circuit Court of Appeals, Sixth Circuit.

January 13, 1947.

Max Veech, of Detroit, Mich. (George Haggarty, Max L. Veech, and Dickinson, Wright, Davis, McKean & Cudlip, all of Detroit, Mich., and Stuart S. Ball, of Chicago, Ill., on the brief), for appellant.

Daniel G. Shea, of Detroit, Mich. (George Fitzgerald, of Detroit, Mich., on the brief), for appellee.

Before SIMONS, MARTIN and MILLER, Circuit Judges.

SIMONS, Circuit Judge.

Once again, as in Allesandro v. C. F. Smith Co., 6 Cir., 136 F.2d 75, 149 A.L.R. 382, and in Fletcher v. Grinnell Bros., 6 Cir., 150 F.2d 337, we are confronted with the problem of determining to what extent the employees of a chain store warehouse are within the coverage of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. A judgment for complaining employees was entered in the cause by the district court, in part accepted and satisfied by the appellant, and in part challenged by this appeal.

The appellant is a retailing corporation with more than 600 retail stores, of which four are located in the Detroit area. To stock merchandise for these four stores the appellant operates a central warehouse which, in addition to distributing merchandise to the stores, houses its service department which furnishes repair and service facilities both to the stores and retail customers and provides facilities also for deliveries of merchandise direct to customers who make their purchases at the stores. No merchandise is sold from the warehouse. The plaintiffs below were 81 employees of the central warehouse, seeking unpaid overtime compensation under the Act. They worked in many job classifications falling into three categories. The first included employees engaged in receiving, unloading, assembling and handling merchandise as it was received at the warehouse, most of it from outstate shippers, in the clerical work incidental thereto, and in factory, engineering and warehouse service for the warehouse building. The judgment awarding compensation to employees in this category has been satisfied and no issue in respect to such employees is raised by the appeal. The controversy is in respect to the status of 36 employees who, in the second category, were engaged in loading, checking and dispatching retail deliveries to customers, in receiving uncompleted retail deliveries and in the clerical work incidental thereto, and those in the third category, who were engaged in the repair and servicing of merchandise for the stores and their customers, and in handling the incidental clerical work. Employees engaged in transportation of goods from warehouse to stores are not here involved.

The district court held that each employee in the three categories was engaged in commerce within the meaning of the Act, that the warehouse was not a retail or service establishment within the exemptions set forth in § 13(a) (2) of the Act, and that none of the employees was engaged in a local retailing capacity within the exemption set forth in § 13(a) of the Act.

When Allesandro v. C. F. Smith Co. was decided we undertook, with great pains, to apply the decision and rationalization in Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 499, and Higgins v. Carr Bros. Co., 317 U.S. 572, 63 S.Ct. 337, 87 L.Ed. 468, both decided a few months before the problem was presented to us. In the Jacksonville case we were advised that goods purchased by a wholesaler upon the order of a customer with definite intention that such goods shall be carried at once to the customer, and goods obtained by a wholesaler to meet the needs of specified customers pursuant to an understanding, though not for immediate delivery, were all within the stream of commerce until delivery was made, so that employees working upon such goods were within the coverage of the Act. We were also advised that evidence that goods based upon anticipation of the needs of specific customers rather than upon prior orders or contracts, might not at times be sufficient to establish that practical continuity in transit necessary to keep a movement of goods in commerce within the meaning of the Act. Noting that the findings disclosed that the C. F. Smith Company stocked its goods in its warehouse without previous arrangement with customers, under circumstances differing not at all from the practice of local merchants in respect to goods for local disposition, we overruled a judgment for overtime compensation to employees engaged in delivery from warehouse to stores, as coming within the third category of the Jacksonville case. We also considered the C. F. Smith grocery chain to be a "retail establishment" under § 13(a) (2) of the Act. We thus had two bases for decision.

On March 26, 1945, however, the Supreme Court announced its decision in Phillips v. Walling, 324 U.S. 490, 65 S.Ct. 807, 808, 89 L.Ed. 1095, 157 A.L.R. 876. That case rejects the concept that a retail chain store warehouse is part of or an adjunct to a retail establishment, and while it does not expressly disapprove of the Jacksonville reasoning with respect to the third category of goods handled by a wholesaler, it undoubtedly extends the coverage of the Fair Labor Standards Act somewhat beyond the limits there laid down. Insofar as factual aspects of litigated cases come within that decision we have dutifully followed it. Grinnell Bros. v. Walling, supra. The Phillips case, in broadly interpreting the Act and narrowly construing the exemptions of § 213(a) (2), assigns to a warehouse servicing a chain of retail stores, the status and function of the...