Aetna Finance Company v. Mitchell, 5206.

Decision Date23 July 1957
Docket NumberNo. 5206.,5206.
Citation247 F.2d 190
Parties?TNA FINANCE COMPANY, Defendant, Appellant, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Plaintiff, Appellee.
CourtU.S. Court of Appeals — First Circuit

Harold H. Levin, New York City, with whom Matthew W. Goring, Providence, R. I., Charles S. Kelly and Floyd E. Britton, Chicago, Ill., Hinckley, Allen, Salisbury & Parsons, Providence, R. I., Proskauer, Rose, Goetz & Mendelsohn, New York City, and Hubachek & Kelly, Chicago, Ill., were on brief, for appellant.

Bessie Margolin, Asst. Sol., Washington, D. C., with whom Stuart Rothman, Sol., Sylvia S. Ellison and Lawrence P. Hochberg, Attys., United States Dept. of Labor, Washington, D. C., and Thomas L. Thistle, Regional Atty., Boston, Mass., were on brief, for appellee.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

MAGRUDER, Chief Judge.

The present appeal is from a judgment of the United States District Court for the District of Rhode Island enjoining the defendant from violating the provisions of ?? 15(a) (2) (wages and hours) and 15(a) (5) (record-keeping requirements) of the Fair Labor Standards Act of 1938, as amended, 52 Stat. 1068, 63 Stat. 919, 29 U.S.C.A. ? 215(a) (2, 5). More specifically, as applied to ? 15(a) (2), the district court's judgment directed as follows: "The defendant shall not, contrary to Section 7 of the Act, 29 U.S.C.A. ? 207, employ any of its employees engaged in commerce or in the production of goods for commerce, as defined by the Act, for a work-week longer than forty (40) hours, unless the employee receives compensation for his employment in excess of forty (40) hours at a rate not less than one and one-half times the regular rate at which he is employed."

The complaint filed by the Secretary of Labor charged that the defendant, at its branch office located in Providence, Rhode Island, was, in respect to its employees there employed, repeatedly and consistently violating the record-keeping regulations promulgated under the Act, and also was violating the provisions of ? 7 of the Act with respect to payment of wages at a rate of not less than one and one-half times the regular rate for hours worked in excess of the statutory maximum of 40 hours per week.

Aetna Finance Company, defendant-appellant herein, is a Missouri corporation, with headquarters in St. Louis, Missouri, operating a nationwide business of making installment loans, with attendant collection and credit investigation activities, through a large number of lending subsidiaries, and branch offices, located throughout the United States. This large chain organization makes more than 170,000 loans, in a total amount of more than $52,000,000 annually. It employs approximately 700 employees, of whom 650 are employed in branch offices. The individual borrowers deal only with defendant's employees at the respective branch offices, including that at Providence. However, the business is highly integrated and centrally controlled in detail out of the St. Louis headquarters. In the operation of the business there is a constant interstate flow of funds, documents, instructions, information and correspondence.

At its branch office in Providence defendant has thirteen employees, a manager, admittedly exempted as an "executive" under the provisions of ? 13(a) (1) of the Act, 29 U.S.C.A. ? 213(a) (1), three assistant managers, three outside representatives, five bookkeeper-cashiers, and a merchant representative. The employees in the Providence office are paid semi-monthly by checks sent from the home office, which also keeps the Providence office furnished with forms, stationery, envelopes, pencils and other supplies. Whenever the balance to the credit of defendant in its Providence bank exceeds $2,000, a check for such excess is drawn by the Providence manager and sent to the home office; during a period of about two years there were 94 such remittances, amounting in the aggregate to $669,000. Most of the applicants for loans from the Providence office naturally come from Rhode Island; but of the 3,412 loans outstanding as of September 30, 1955, over four per cent thereof were made to residents of Massachusetts and Connecticut, and substantial portions of the working time of the outside representatives, or of the assistant managers, was occupied with making visits to such borrowers outside the state, or keeping in contact with them by telephone or by correspondence. Borrowers who remove to other states customarily have their loan accounts transferred to another branch office. The merchant representative calls on merchants to solicit business from their customers, and in so doing regularly visits Attleboro, Mass., once or twice each month; he makes weekly reports of his activities, a copy of which is forwarded to the home office. The bookkeeper-cashiers type loan payment records and other information requisite for the completion of the loan register and payment register, prepare the periodical reports which are sent to the home office, including a daily cash report; take and transcribe dictation, type new loan applications (all of which are sent to St. Louis), take and record payments; check credit information by telephone, etc.

The facts are not in dispute, and are covered more fully in a stipulation contained in the record.

On the stipulated facts, we agree with the conclusion of the district court, elaborated in its opinion, that the employees at the Providence branch office are "engaged in commerce" within the meaning of the Act, and thus are within the general coverage of the Act.

Great reliance is placed by appellant upon a decision of the Third Circuit in Mitchell v. Household Finance Corp., 1954, 208 F.2d 667. We agree with the district court that that case is distinguishable on its facts. Furthermore, we are not at all sure that it would be followed by the Third Circuit today, in view of the enlightenment to be derived from later decisions of the Supreme Court, particularly Mitchell v. C. W. Vollmer & Co., Inc., 1955, 349 U.S. 427, 429, 75 S.Ct. 860, 99 L.Ed. 1196.

It remains to be considered whether the employees at the Providence office, assuming they are otherwise covered by the Act, are within the exemption of ? 13 (a) (2) as employees of a "retail or service establishment".

As originally enacted, ? 13 contained a long list of "exemptions" from the provisions of ?? 6 and 7, 29 U.S.C.A. ?? 206, 207 (dealing with wages and hours). Among these exemptions was that contained in ? 13(a) (2) which stated that the provisions of ?? 6 and 7 should not apply to "any employee engaged in any retail or...

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20 cases
  • Mitchell v. Telephone Answering Service, Inc.
    • United States
    • U.S. District Court — District of Puerto Rico
    • October 22, 1959
    ...cases last cited, and of other cases of comparable import decided by the Court of Appeals, Fifth Circuit. See also Aetna Finance Company v. Mitchell, 1 Cir., 247 F.2d 190, and Interpretative Bulletin, Part 779, Retail and Service Establishment and Related Exemptions, under Section 13(a) (2)......
  • State of Maryland v. Wirtz
    • United States
    • U.S. District Court — District of Maryland
    • June 13, 1967
    ...City of Birmingham v. Goldberg, 298 F.2d 367 (5 Cir. 1962); Mitchell v. Kroger Company, 248 F.2d 935 (8 Cir. 1957); Aetna Finance Co. v. Mitchell, 247 F.2d 190 (1 Cir. 1957). Thus, from these activities, as well as the out-of-state purchases and the receipt of interstate shipments which are......
  • Montalvo v. Tower Life Building
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • May 15, 1970
    ...of the company in other states were engaged in commerce and engaged in the production of goods for commerce. In Aetna Finance Co. v. Mitchell, 1 Cir. 1957, 247 F.2d 190, the First Circuit affirmed a district court decision wherein one ground for holding the employees of a finance company of......
  • Wirtz v. Healy
    • United States
    • U.S. District Court — Northern District of Illinois
    • February 20, 1964
    ...74; Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442; Mitchell v. Aetna Finance Co., D.C., 144 F.Supp. 528, affirmed 247 F.2d 190 (C.A. 1); Mitchell v. Kroger Co., 248 F.2d 935 (C.A.8); Durkin v. Joyce Agency, Inc., D.C., 110 F.Supp. 918, affirmed per curiam, Mitchell v.......
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