Brennan v. Patio Cleaners, Inc., Civ. A. No. 72-278.

Decision Date13 March 1974
Docket NumberCiv. A. No. 72-278.
Citation373 F. Supp. 987
PartiesPeter J. BRENNAN, Secretary of Labor, Plaintiff, v. PATIO CLEANERS, INC., et al., Defendants.
CourtU.S. District Court — Southern District of Ohio

W. S. Kloepfer, Asst. Regional Sol. by Benjamin T. Chinni, U. S. Dept. of Labor, Cleveland, Ohio, for plaintiff.

John E. Holzapfel, Columbus, Ohio, for defendants.

OPINION AND ORDER

KINNEARY, Chief Judge.

This matter is before the Court on the complaint filed by the Secretary of Labor and the answer of the defendants.

This action was commenced under the provisions of the Fair Labor Standards Act of 1938. See 29 U.S.C. § 201 et seq. The Court has jurisdiction over the subject matter of this action under the provisions of Title 29, United States Code, Section 201 et seq. This matter was tried to the Court.

Plaintiff contends that the defendants are subject to the provisions of the Fair Labor Standards Act. Plaintiff further contends that the defendants have not paid their employees in accordance with the provisions of the act. The defendants deny that they are subject to the provisions of the act.

Pursuant to Rule 52 of the Federal Rules of Civil Procedure, the Court makes the following findings of fact and conclusions of law.

Findings of Fact

1. Defendant Herbert Oakley is the sole owner of the defendant Oakley Cleaners and, together with his wife, owns all of the stock of the defendant, Patio Cleaners, Inc.

2. Both Oakley Cleaners and Patio Cleaners are dry cleaning establishments. Patio is a "pick-up" store in that articles of clothing are left there by customers who later return to pick them up. However, the clothes are not actually cleaned at the store. Oakley Cleaners operates two stores, one of which is a complete dry cleaning plant which performs all of the work for Patio Cleaners and for both locations of Oakley Cleaners. In addition to dry cleaning and pressing clothes, both companies perform alterations, mend rips and tears, store clothes, operate a laundry for shirts and other garments and operate a laundromat.

3. Mr. Oakley daily supervises the operation of all of the stores run by the two companies and maintains all of their records. Mr. Oakley also establishes the employment policies of both companies.

4. In the course of their daily business operations, the defendant companies use plastic bags, hangers, buttons, safety pins, dry cleaning tags, shirt tags, various types of detergents, bleaches and additives, shirt shells, shirt bags, inkex and other products. Most of these products are purchased by the defendants from the E. J. Thomas Company of Columbus, Ohio. That company is a distributor of dry cleaning and laundry supplies and obtains many of its supplies from sources outside of the State of Ohio. The defendants' employees must use these products to perform their jobs.

5. Some of the defendants' payroll records are incomplete in that they fail to show the employee's full name and address, the date the work was performed, the employee's sex, social security number, occupation and the time of day and day of the week that the employee's workweek begins. In fact, some payroll records do not indicate the total daily hours worked, the weekly hours worked, the total straight time and overtime hours worked, the regular rate of pay and the basis upon which wages were paid.

6. An examination of defendants' payroll records indicates that at least two employees, Carl Rose and Bernice Rush, received the same amount of compensation each week regardless of the actual number of hours worked per week. For example, Carl Rose worked an average of 48 hours per week. However, he received $117.70 per week from January 13, 1972 until May 17, 1972, regardless of whether he worked 48 hours per week. This method of compensation indicates that these employees were not paid by the hour but rather received a weekly salary which compensated them for all hours worked.

7. The defendants' payroll records also indicate that at least two employees, Dawn Johnson and Linda Cook, were paid less than the minimum wage of $1.60 per hour.

Discussion

The Fair Labor Standards Act requires an employer to pay a minimum wage of $1.60 per hour to each of his employees who is employed in an enterprise engaged in commerce or in the production of goods for commerce. See 29 U.S.C. § 206. The act further provides that employers must pay time and a half for each hour worked in excess of forty hours per week. See 29 U.S.C. § 207.

The question which must be resolved in this case is whether the defendants are engaged in an enterprise engaged in commerce or in the production of goods for commerce. An enterprise is defined as:

. . . the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishment operated through leasing arrangements, but shall not include the related activities performed for such enterprise by an independent contractor. . . . 29 U.S.C. § 203(r).

An enterprise engaged in commerce or in the production of goods for commerce is defined as:

. . . an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person, and which —
(1) during the period February 1, 1967, through January 31, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level which are separately stated) or is a gasoline service establishment whose annual gross volume of sales is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated), and beginning February 1, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated);
(2) is engaged in laundering, cleaning, or repairing clothing or fabrics;
(3) is engaged in the business of construction or reconstruction, or both; or
(4) is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution, a school for mentally or physically handicapped or gifted children, a preschool, elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit).
Any establishment which has as its only regular employees the owner thereof or the parent, spouse, child, or other member of the immediate family of such owner shall not be considered to be an enterprise engaged in commerce or in the production of goods for commerce or a part of such an enterprise, and the sales of such establishment shall not be included for the purpose of determining the annual gross volume of sales of any enterprise for the purpose of this subsection. 29 U.S.C. § 203(s).

The concept of enterprise coverage was first added to the Fair Labor Standards Act in 1961. Under this concept, related activities conducted by what may be separate business entities are considered as part of the same enterprise if they are joined either through common control or unified operation into a unified business system or economic unit to serve a common business purpose. See generally Wirtz v. Columbian Mutual Life Ins. Co., 246 F. Supp. 198 (W.D.Tenn.1965), aff'd, 380 F.2d 903 (6th Cir. 1967).

A careful examination of the facts of this case indicates that the defendants' business activities are related activities. The defendant companies are both engaged in the laundry business, and both are operated and controlled by Mr. Oakley. Both defendant businesses provide essentially the same services to their customers. The Court therefore concludes that the defendants' business activities fall within the definition of the term "enterprise."

The Court also believes that the defendants' enterprise is an enterprise engaged in commerce or in the production of goods for commerce. Most of the products used by the defendant companies come from states other than the State of Ohio. The defendants' employees regularly handle and work with these products. See Wirtz v. Melos Construction Corp., 408 F.2d 626 (2d Cir. 1969); Wirtz v. Mayer Construction Co., 291 F.Supp. 514 (N.J.1968); Brennan v. Dillion, 483 F.2d 1334 (10th Cir. 1973). In addition, the defendants are clearly engaged in laundering, cleaning or repairing clothing or fabrics. See National Automatic Laundry and Cleaning Council v. Shultz, 143 U.S.App.D.C. 274, 443 F.2d 689 (1971); Hodgson v. Jones, 453 F.2d 515...

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4 cases
  • Marshall v. R & M ERECTORS, INC.
    • United States
    • U.S. District Court — District of Delaware
    • 11 Marzo 1977
    ...record-keeping and overtime provisions. Injunctions are frequently granted in cases of this nature, e. g., Brennan v. Patio Cleaners, Inc., 373 F.Supp. 987, 991 (S.D.Ohio 1974), because of the significant public interest affected by violations of the FLSA, see Bay Ridge Co. v. Aaron, supra,......
  • Marshall v. Davis
    • United States
    • U.S. District Court — Middle District of Tennessee
    • 24 Abril 1981
    ...463 F.Supp. 1329 (M.D.Fla. 1978); Brennan v. Williams Investment Co., Inc., 390 F.Supp. 981 (W.D.Tenn.1975); Brennan v. Patio Cleaners, Inc., 373 F.Supp. 987 (S.D.Ohio 1974). A further determination is now required. Specifically, is this enterprise an enterprise with employees engaged in co......
  • Brennan v. Plaza Shoe Store, Inc.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • 19 Agosto 1975
    ...concept of related activities. Furthermore, this conclusion is supported by several court decisions. Compare Brennan v. Patio Cleaners, Inc., 373 F.Supp. 987, 989-90 (S.D.Ohio 1974); Hodgson v. Eunice Superette, Inc., 368 F.Supp. 639, 641-42 (W.D.La.1973); Jackson v. Airways Parking Co., 29......
  • Wanner v. Glen Ellen Corporation
    • United States
    • U.S. District Court — District of Vermont
    • 25 Marzo 1974
    ... ... The GLEN ELLEN CORPORATION ... Civ. A. No. 73-288 ... United States District Court, ... Inc., Barre, Vt., for defendant ... ...

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