Brennan v. Veterans Cleaning Service, Inc., 72-3628.
Decision Date | 16 August 1973 |
Docket Number | No. 72-3628.,72-3628. |
Citation | 482 F.2d 1362 |
Parties | Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. VETERANS CLEANING SERVICE, INC., et al., Defendants-Appellants. |
Court | U.S. Court of Appeals — Fifth Circuit |
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Jere D. McWinn, Jacksonville, Fla., for defendants-appellants.
Beverley R. Worrell, Regional Sol., Anthony B. Cuviello, Atty., U. S. Dept. of Labor, Atlanta, Ga., Carin Ann Clauss, Donald S. Shire, Richard F. Schubert, Sol., Jacob I. Karro, U. S. Dept. of Labor, Washington, D.C., for plaintiff-appellee.
Before GEWIN, THORNBERRY and SIMPSON, Circuit Judges.
The Secretary of Labor brought suit under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., against Bernard Ettlinger, Veterans Cleaning Service, Inc., Rent-A-Maid, Inc., and Roto Rooter Service of Duval County, Inc. to enjoin them from violating the minimum wage and overtime provisions of the Act and from continuing to withhold payment of minimum wage and overtime compensation due for services performed since February 1, 1969. The district court, sitting without a jury, held for the Secretary and granted the relief sought, 351 F.Supp. 741. Defendants appeal from the judgment entered below arguing (1) that they do not constitute a single enterprise and are therefore not covered by the Act for most of the years in question, and (2) that the district court erred in holding that Amos Jones, a Veterans Cleaning employee, was not paid minimum wage because of certain deductions from his paycheck which reduced the net amount he received below the statutory minimum. We affirm as to coverage and affirm with a modification as to the method for computing Jones' wages for purposes of ascertaining whether he received minimum wage under the Act.
Defendant Bernard Ettlinger is owner and president of Veterans Cleaning and Roto Rooter and is secretary of Rent-A-Maid, which is owned principally by his son. He is operating manager of all three defendant corporations. The corporate defendants have common central office facilities at a single location, and central office functions, such as bookkeeping, billing, and ordering, are performed by common employees. All supplies and equipment used in defendants' activities are stored and maintained in a common storage area. Maintenance and repair work on defendants' motor vehicles is performed by a common employee in a common service area.
The district court described the business of each corporate defendant as follows:
Although the corporations have separate equipment, the trucks of Veterans Cleaning and Roto Rooter are sometimes interchanged "on an emergency basis." The employees of the three corporations are generally separate both as a book-keeping matter and in the work they do, but some employee witnesses testified that they regularly changed employment among the three companies. To some extent the three companies are held out to the public as related; on Veterans Cleaning's letterhead business stationery a bold line runs from the words "General Cleaning Contractors" in large print at the top of the page to a list of six "cleaning" businesses, which includes Roto Rooter and Rent-A-Maid.
29 U.S.C.A. § 203(s). It is undisputed that all defendants have been engaged in commerce at all times relevant to this action. Further, it is not contested that Veterans Cleaning had a gross annual volume in excess of $250,000 in 1969, and that Roto Rooter had a gross annual volume over that amount in 1971, so that considered as separate enterprises those two defendants were covered by the Act in those years, respectively, regardless of coverage of the other defendants.1 See Brennan v. Hatton, 5th Cir. 1973, 474 F.2d 9. The disputed issue is whether all defendants — the three corporations and Ettlinger as principal owner and manager — must be grouped together and considered to be a single "enterprise" under the Act. Defendants' aggregate gross annual volume has exceeded $250,000 since before 1969, so that if they are considered a single enterprise, they are all covered by the Act, including the minimum wage and overtime provisions, and have been covered since February 1, 1969.
29 U.S.C.A. § 203(r). Thus, three elements must coexist if defendants are to be considered a single enterprise: (1) related activities, (2) unified operation or common control, and (3) a common business purpose. See Brennan v. Arnheim and Neely, Inc., 1973, 410 U.S. 512, 93 S.Ct. 1138, 35 L.Ed.2d 463; Wirtz v. Savannah Bank and Trust Co., 5th Cir. 1966, 362 F.2d 857, 859. Appellants admit as they clearly must, that the element of common control is present in this case, but they deny that the activities of the three corporations are "related activities . . . for a common business purpose."
The legislative history of the Fair Labor Standards Act sheds light on the meaning of the word "related" in § 203(r). The Report of the Senate Committee on Labor and Welfare, Senate Report No. 145, 87th Cong. 1st Sess. 31 (1961) U.S.Code Cong. & Admin.News, p. 1660 hereinafter Senate Report No. 145,2 explains:
Within the meaning of this term, activities are "related" when they are the same or similar such as those of the individual retail or service stores in a chain, or departments of an establishment operated through leasing arrangements. They are also "related" when they are auxiliary and service activities such as central office and warehousing activities and bookkeeping, auditing, purchasing, advertising, and other services. Likewise, activities are "related" when they are part of a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products under unified operation or common control for a common business purpose. Emphasis added.
Thus, the three "related" concepts indicated in the Senate Report are: "same or similar," "auxiliary and service activities," and "part of a vertical structure." In finding the activities of the defendants to be "related" the district court relied primarily on the "auxiliary and service activities" concept, as developed in Wirtz v. Savannah Bank and Trust Co., supra.
We agree that the day to day operations of the three corporate defendants and the unified public image they present are such that they must be considered "auxiliary and service activities" under the Act. As examples of such activities Senate Report No. 145 U.S.Code Cong. & Admin.News, p. 1660 lists "central office and warehousing activities and bookkeeping, auditing, purchasing, and advertising." An "insurance company which existed for the purpose of serving the needs and convenience of customers who purchased cars from the automobile company" was held to constitute an auxiliary or service activity to a new car sales business in Hodgson v. Harvey Motor Co., 20 Wage & Hour Cas. 493, 68 CCH Lab Cas. ¶ 32,667 (1971), aff'd per curiam, 5th Cir. 1972, 461 F.2d 847. The same case, however, held sale of automobiles and sale of farm implements not to be auxiliary and related when "the only common aspects of their operations were the single office in which their separate books were kept, the single bookkeeper in charge of their accounts, and several customers who did business with both companies." In Wirtz v. Savannah Bank and Trust Co., supra 362 F.2d at 861, the renting out of office space in a bank's building was held auxiliary to the banking business in the same building where it was shown that the operation of the...
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Table of cases
...(5th Cir. 1973), §9:3 Brennan v. Harrison County , 505 F.2d 901 (5th Cir. 1975), §9:3.D.2.a Brennan v. Veterans Cleaning Serv., Inc. , 482 F.2d 1362 (5th Cir. 1973), §§9:1, 9:1.B.3.c Brennan v. Victoria Bank & Trust Co. , 493 F.2d 896 (5th Cir. 1974), §19:3.C Brennan v. Winters Battery Mfg.......
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Wages, Hours, and Overtime
...(1985); see also Donovan v. Janitorial Servs. , Inc. , 672 F.2d 528, 530 (5th Cir. 1982), and Brennan v. Veterans Cleaning Serv., Inc. , 482 F.2d 1362, 1367 (5th Cir. 1973). Applying this definition, the district court in Reich v. Priba Corp. , 890 F. Supp. 586 (N.D. Tex. 1995), found a par......
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Table of cases
...(5th Cir. 1973), §9:3 Brennan v. Harrison County , 505 F.2d 901 (5th Cir. 1975), §9:3.D.2.a Brennan v. Veterans Cleaning Serv., Inc. , 482 F.2d 1362 (5th Cir. 1973), §§9:1, 9:1.B.3.c Brennan v. Victoria Bank & Trust Co. , 493 F.2d 896 (5th Cir. 1974), §19:3.C Brennan v. Winters Battery Mfg.......