Boisseau v. Mitchell, 15014.

• Decision Date: 02 February 1955
• Docket Number: No. 15014.,15014.
• Citation: 218 F.2d 734
• Parties: H. J. BOISSEAU, Appellant, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

218 F.2d 734 (1955)

H. J. BOISSEAU, Appellant, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellee.

No. 15014.

United States Court of Appeals, Fifth Circuit.

February 2, 1955.

Robert Weinstein, Henry F. Yoder, Rittenberg, Weinstein & Bronfin, New Orleans, La., for appellant.

Bessie Margolin, Chief, Appellate Division, U. S. Dept. of Labor, Washington, D. C., Earl Street, Dallas, Tex., Stuart Rothman, Sol., William W. Watson, Atty., U. S. Dept. of Labor, Washington, D. C., for appellee.

Before HUTCHESON, Chief Judge, BORAH, Circuit Judge, and DAWKINS, District Judge.

DAWKINS, District Judge.

Appellant operates a "letter shop" in New Orleans. He appeals from a judgment enjoining him from further violating the minimum wage and record-keeping provisions of the Fair Labor Standards Act,¹ Mitchell v. Boisseau, D.C.La., 118 F.Supp. 480.

The record discloses that the activities carried on in appellant's establishment consist of duplicating, mimeographing and otherwise reproducing form letters, advertising circulars and materials and other general private and commercial materials, affixing signatures to form documents, inserting names and addresses in these documents, addressing and "stuffing" envelopes, and stamping and mailing these materials to addressees or delivering them to appellant's customers for mailing. Sometimes, appellant simply duplicates or reproduces in quantity certain documents or data which are not mailed but are desired by the customer. All of appellant's customers were located in New Orleans; but it was agreed that approximately 30 per cent of his total volume of business was addressed to points outside the State of Louisiana, and a substantial proportion of this was actually deposited in the mails by appellant's employees.

Appellant had two men working in his establishment whom he called "office boys", whose principal duty was to affix signatures to documents. They were paid $1.00 per thousand for this work, but the record shows that they also engaged in other activities upon request, and that each participated in every phase of appellant's operation except typing at one time or another.

In addition, appellant employed several "contract workers", ladies who used the typewriter to address letters and envelopes. They worked no specified number of hours and reported for duty only when they were called and when they desired to work. They were allowed to do their work either at appellant's establishment or at their homes, and were paid as follows: $3.00 per thousand for addressing two-line envelopes; $3.50 per thousand for addressing three-line envelopes; $4.00 per thousand for addressing three-line letters; and $4.50 per thousand for addressing four-line letters.

Appellant resisted the suit on the ground that his employees were not engaged in interstate commerce or in the production of goods for interstate commerce and therefore were not subject to the provisions of the Act. Further, he contended that he was entitled to the exemption for retail or service establishments provided by Section 13(a) (2) of the Act.²

The trial court held that appellant was subject to the Act generally, that he had failed to pay his employees the minimum wage and to keep proper records, and that he had not sustained the burden of proving that "his sales or services are regarded as retail in the particular industry of which he is a part." 118 F.Supp. 482.

Appellant here argues that: (1) his employees are not covered by the Act for the reason that their duties are not sufficiently related to interstate commerce; (2) since the employees could not testify with any degree of certainty the number of letters or envelopes they addressed per hour, there was no competent proof that he had violated the minimum wage provisions of the Act; and (3) his employees are exempt from the coverage of the Act because his business is a retail service establishment.

We think there is no doubt that even if appellant's employees themselves are not engaged in commerce, they are certainly engaged "in the production of goods for commerce" within the meaning of the Act. A great volume of the work appellant turns out finds its way into the mails and at least 30 per cent of the total volume of business is placed in the mails addressed to out-of-state parties. Much of this volume is placed in the mails by appellant's own employees. We think it clear that the Act generally applies. McLeod v. Threlkeld, 319 U.S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538; Mabee v. White Plains Publishing Co., 327 U.S. 178, 66 S.Ct. 511, 90 L.Ed. 607; Mitchell v. Household Finance Corp., 3 Cir., 208 F.2d 667; Ivey v. Foremost Dairies, Inc., D.C.La., 106 F.Supp. 793; affirmed in part, 5 Cir., 204 F.2d 186; Russell Co. v. McComb, 5 Cir., 187 F.2d 524.

Neither are we impressed by appellant's argument that the Secretary's evidence failed to prove he had paid his employees less than the minimum wage. It is true that none of the employees could state positively the exact number of letters or envelopes they could address, or signatures they could affix, in an hour. However, they testified generally as to the conditions under which they worked, the circumstances which would determine the number they could turn out per hour and the manner in which they worked. Further, they estimated the maximum work they could do per hour. While lacking the degree of mathematical certainty for which appellant contends, this testimony, when fairly considered, shows rather plainly that in many instances appellant's employees earned substantially less than 75¢ per hour; and appellant does not deny that he failed to keep adequate records from which the exact hourly wage could be computed.

We turn now to a discussion of the exemption upon which appellant principally relies. The problem presented is not without difficulty.

Prior to the 1949 amendment, Sec. 13 (a) of the Act exempted from the coverage of Sections 6 and 7 "any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce".³ The test established under this statute was that the sales or services must have been made or rendered to the ultimate consumer for personal rather than commercial or industrial use. Roland Electrical Co. v. Walling, 326 U.S. 657, 66 S.Ct. 413, 90 L.Ed. 383. Under that test, appellant's business could not be considered retail, for the greater portion of his work is for commercial use. However, in 1949 the statute was amended to read as quoted in footnote 2, supra; and the dispute here centers around the motives and intentions of Congress in passing the amendment.

The exemption as now phrased establishes three tests: (1) more than half of the establishment's sales or services must be made or rendered within the state where the establishment is located; (2) at least 75 per cent of the sales or services must be not for resale; and (3) at least 75 per cent of the sales or services must be "recognized as retail sales or services in the particular industry."

We think it was clearly the purpose and intention of Congress to clarify the old law as to what constituted "the greater part" and to abolish the old test as to what is "retail."⁴ In doing so, however, it created a difficult problem of administration, for the courts must now identify the "industry" of which the business is a part and determine whether the sales or services are considered "retail" in that industry.

Manifestly, many business concerns engage in activities which have some characteristics of more than one industry and cannot with legal certainty be placed in either. Further, different results may be shown dependent upon the purposes of the classification, so that the Bureau of Census might well disagree with the classification announced by a retailer's organization or by a manufacturer's sales group. In such cases, there might also be discordant views as to whether sales or services are considered retail. The inherent difficulties were recognized by the Congress⁵ and by the Administrator.⁶

We think it clear that while the burden of proof is on the party seeking refuge in the exemption, the problem of identifying the industry and determining the classification of the sales or services is one of law to be decided from all the facts in each case, including the nature of the business activities themselves, the practices of firms and organizations associated or doing business with the establishment involved, the testimony of "experts" and the general commercial status of the establishment, all considered in the light of experience and common knowledge.

In the instant case, the Secretary assumed that appellant's business was a part of the advertising industry, apparently relying heavily upon the classification in the U. S. Department of Commerce Census of Business, 1948, where "duplicating, addressing, blueprinting, photostating, mailing, mailing lists and stenographic services" were listed under the heading ...