Asselta v. 149 Madison Avenue Corporation

• Decision Date: 17 June 1946
• Citation: 65 F. Supp. 385
• Parties: ASSELTA et al. v. 149 MADISON AVENUE CORPORATION et al.
• Court: U.S. District Court — Southern District of New York

65 F. Supp. 385

ASSELTA et al. v. 149 MADISON AVENUE CORPORATION et al.

District Court, S. D. New York.

December 31, 1945.

Judgment Affirmed June 17, 1946.

Samuel D. Friedman, and Frederick E. Weinberg, both of New York City, for plaintiffs.

Joseph Caine, and Moses M. Cohen, both of New York City, for 149 Madison Avenue Corp.

McLanahan, Merritt & Ingraham, and Robert R. Bruce, all of New York City, for Williams & Co., Inc.

Judgment Affirmed June 17, 1946. See 156 F.2d 139.

BONDY, District Judge.

This action was brought by maintenance employees in a building owned by the defendant, 149 Madison Avenue Corp., and operated by the defendant, Williams & Co., Inc., to recover unpaid overtime compensation, liquidated damages and a reasonable attorney's fee pursuant to Secs. 7 and 16(b) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 207, 216(b).

The building consists of a basement and 12 floors, each covering 7,700 square feet. Of the basement, only 3,850 square feet are rentable. The total rentable area of the building is 96,250 square feet.

Maintenance employees of a building in which at least 20 per cent. of the rentable area is devoted to production of goods for interstate commerce are to be regarded as engaged in an occupation necessary to the production of goods for commerce and are covered by the Act. Baldwin v. Emigrant Industrial Savings Bank, 2 Cir., 150 F.2d 524, 525, certiorari denied 66 S.Ct. 171; Fleming v. Post, 2 Cir., 146 F.2d 441, 443, 158 A.L.R. 1384; Gangi v. D. A. Schulte, 2 Cir., 150 F.2d 694, 696. See 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, 572, 63 S.Ct. 332, 87 L.Ed. 460. A tenant is engaged in production of goods for interstate commerce if at least 20 per cent. of his activity is directed on the premises to the production of such goods, Fleming v. Post, supra, which authority is deemed binding on this court. Under Sec. 3(j) of the Act, 29 U.S.C.A. § 203(j), handling of goods incidental to their preparation for shipment in interstate commerce is sufficient to constitute production thereof. Baldwin v. Emigrant Industrial Savings Bank, supra; Fleming v. Post, supra. See Western Union Telegraph Co. v. Lenroot, 323 U.S. 490, 503, 65 S.Ct. 335.

Testimony was given as to the extent of occupancy and the nature of the business of only five out of about twenty tenants.

Lawrence Fertig & Co. were engaged in creating on the premises advertising material for their clients. They shipped from the premises at least 1,750 engraving plates of the advertisements per month for use in publications outside the state. This constituted more than 50 per cent. of the business they conducted on the premises and yielded more than 50 per cent. of their revenue. Gehring Laces, Inc., was a wholesale jobber of laces and embroideries which were manufactured for it elsewhere and delivered at the premises. From 25 to 30 per cent. of its revenue of over $1,000,000 each year was derived from goods shipped from the premises to places outside the state. Oliver & Kaufman converted goods on the premises and shipped them to places outside of the state to the extent of about 75 per cent. of their billings. Each of these tenants occupied a floor, or together 23,100 square feet, amounting to 24 per cent. of the rentable space. At least 20 per cent. of the activities of each of these consisted in handling goods for interstate commerce on the premises. The plaintiffs accordingly are covered by the Act. This is so without the inclusion of the Dell Publishing Company which did on the premises all the preliminary and creative work for its publications but none of the printing or purely mechanical work. It shipped therefrom only a comparatively small number of complimentary copies to advertisers and others at special request, amounting at most to 1/10th of one per cent. of all copies of its publications. This is also exclusive of the Atlanta Knitting Mills, which maintained only their executive offices at Madison Avenue, but carried on all their manufacturing at a mill in Catskill, New York, from which all shipments were made to points outside of New York City. The goods of these tenants were produced elsewhere without any manufacturing or substantial handling on the premises. Cf. 10 East 40th Street Building, Inc., v. Callus, 325 U.S. 578, 65 S.Ct. 1227.

It is not essential that the plaintiffs prove their damages with mathematical precision. Caperna v. Williams-Bauer Corp., 184 Misc. 192, 53 N.Y.S.2d 295, cited with approval in De Pasquale v. Williams-Bauer Corp., 2 Cir., 151 F.2d 578, 579. For the period from October 24, 1938, to April 20, 1942, the overtime worked by plaintiffs was based on computations made by an accountant from the pay-rolls of the defendant, Williams & Co., Inc., and audited by the Wage and Hour Division. The maintenance manager of Williams & Co. testified that only infrequently were unworked hours not noted on the pay-rolls. Compensation based on these computations was subsequently paid by the defendants to the plaintiffs in exchange for receipts and general releases.

The record does not disclose that there was any dispute of any kind culminating in the payments of overtime compensation for this period. There accordingly was not any accord and satisfaction of the plaintiffs' claims for liquidated damages equal to such compensation. Fleming v. Post, supra; Rigopoulos v. Kervan, 2 Cir., 140 F.2d 506, 151 A.L.R. 1126. Nor do the releases constitute a bar or waiver of any right to recover such liquidated damages under the provisions of Sec. 16(b) of the Act. O'Neil v. Brooklyn Savings Bank, 293 N.Y. 666, 56 N.E.2d 259, affirmed 324 U.S. 697, 65 S.Ct. 895; Fleming v. Post, supra. See Gangi v. D. A. Schulte, supra. The acceptance by the employees of a belated payment of overtime wages does not preclude recovery of liquidated damages, the right thereto being mandatory. Rigopoulos v. Kervan, supra. Nor were these claims barred by the New York three-year statute of limitations relating to actions on statutory penalties or forfeitures. Civil Practice Act, § 49, subd. 3. An action under the Fair Labor Standards Act is not an action on a penalty but on a liability created by statute, to which the six-year statute is applicable. Civil Practice Act, § 48, subd. 2; Walsh v. 515 Madison Avenue Corp., 181 Misc. 219, 42 N.Y.S.2d 262, affirmed 267 App.Div. 756, 45 N.Y.S.2d 927, affirmed 293 N.Y. 826, 59 N.E.2d 183. The liquidated damages constitute additional compensation and not a penalty or punishment. Overnight Motor Co. v. Missel, 316 U.S. 572, 583, 62 S.Ct. 1216, 86 L. Ed. 1682.

It does not appear definitely on what date before October 1, 1939, Gehring Laces, Inc., occupied any part of the building. Consequently, so far as the record discloses, before October 1, 1939, the tenants engaged in the production of goods for interstate commerce occupied less than 20 per cent. of the rentable area.

Plaintiffs accordingly are entitled to recover liquidated damages in an amount equal to overtime compensation paid to them for the period between October 1, 1939, and April 20, 1942.

Defendants contend that from April 21, 1942, to the time of the service...