Brennan v. Williams Investment Co., Inc., Civ. A. No. C-73-133.

• Decision Date: 24 January 1975
• Docket Number: Civ. A. No. C-73-133.
• Citation: 390 F. Supp. 981
• Parties: Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. WILLIAMS INVESTMENT CO., INC., a corporation, and A. Duncan Williams, Individually and as President of Williams Investment Co., Inc., Defendants.
• Court: U.S. District Court — Western District of Tennessee

390 F. Supp. 981

Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. WILLIAMS INVESTMENT CO., INC., a corporation, and A. Duncan Williams, Individually and as President of Williams Investment Co., Inc., Defendants.

Civ. A. No. C-73-133.

United States District Court, W. D. Tennessee, W. D.

January 24, 1975.

Marvin M. Tincher and Thos. L. Rasnic, U. S. Dept. of Labor, Nashville, Tenn., for plaintiff.

Edward G. Grogan, Heiskell, Donelson, Adams, Williams & Wall, Memphis, Tenn., for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

McRAE, District Judge.

This matter having come on for trial before the Court, sitting without a jury, and the Court having considered the testimony, exhibits, pleadings, the proposed findings of fact and conclusions of law, and the complete record, hereby makes the following findings of fact and conclusions of law.

This action was instituted by the Secretary of Labor, United States Department of Labor, under section 17 of the Fair Labor Standards Act, hereinafter referred to as the Act, alleging that the defendants violated the provisions of sections 6, 7, 11(c), 15(a)(2) and 15(a) (5) of the Act and seeking judgment permanently enjoining and restraining defendants from violating the provisions of said sections, including the restraint of withholding of payment of any unpaid minimum wages and overtime compensation due employees of defendants under the Act.

The plaintiff is Peter J. Brennan, Secretary of Labor, United States Department of Labor, who is duly empowered to administer and enforce said Act.

The defendant Williams Investment Company, Inc., hereinafter called "Company," is a corporation engaged in the business of managing real estate property owned by it and by A. Duncan Williams, hereinafter called Williams, individually. The management of this property includes, among other things, rental of the property, maintenance, collection of rent and handling complaints.

All of the stock of the Company is owned by A. Duncan Williams, Inc., a Tennessee corporation. All the stock of A. Duncan Williams, Inc. is owned by the defendant, Williams.

Williams is president of the Company. As the President of said corporation, he has and exercises the authority to hire, fire, set wages, hours and other incidents of employment with regard to employees of the Company.

The disputed issues in this case pertain to 18 resident managers or resident agents at various apartment complexes who were employees of the Company during the period covered in this case. The defendants first deny that there is coverage as to the resident managers, primarily on the theory that they are the ultimate consumers of goods referred to in the Act. 29 U.S.C. § 203(i). Secondly the defendants alternately deny that there has been proof of violations entitling the plaintiff to injunctive relief, including the restraint of withholding unpaid minimum wages and overtime compensation.

It is stipulated that the Company has had an annual gross volume of sales made or business done which has not been and is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated).

At all times since March 6, 1971, two or more maintenance personnel employed by the Company regularly painted some apartments, cleaned pools (in season), repaired garbage disposals, air conditioners and other appliances (not under warranty), replaced glass in windows, light bulbs and other fixtures, sowed grass seed, fertilized lawns, and otherwise handled and worked on goods which were manufactured outside the State of Tennessee, shipped into Tennessee and purchased by the Company in Tennessee and elsewhere from various suppliers and used at all the apartment complexes owned and managed by the Company.

At all times since March 6, 1971, the Company has had two or more office personnel regularly receiving correspondence, telephone messages, checks, invoices and other materials from outside the State of Tennessee, and regularly preparing and sending correspondence, checks, telephone messages and other materials to points outside the State of Tennessee.

Among the duties of the resident managers or agents were included minor maintenance matters on some occasions; for example, checking air conditioning filters, or replacing light bulbs. The resident managers or agents sometimes cut or watered the lawn and placed chemicals in the swimming pools.

At all times material hereto, defendant Company constitutes and has constituted an enterprise within the meaning of sections 3(r) and 3(s)(1) of the Act, in that it 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 other persons, and whose annual gross volume of sales made or business done has not been and is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated). 29 U.S.C. § 203(r), (s) (1).

Defendants were not the "ultimate consumers" of products shipped into the State of Tennessee and purchased by defendants in Tennessee. Such products were "goods" within the meaning of section 3(i) of the Act. Brennan v. Dillion, 483 F.2d 1334 (C.A. 10, 1973).

Having determined that there was enterprise coverage, the Court must resolve the difficult issues of what violations are established by the proof and what relief should be granted. On these issues the proof is sometimes complex, contradictory, and vague.

The defendant Williams was primarily in the municipal bond business from 1969; however, he also sought to acquire apartment complexes in the Memphis, Tennessee area. This was done in his name or in the name of the Company. At various times in the early nineteen seventies Williams or the Company acquired complexes referred to as Macon Manor I, Macon Manor II, Kingsbury, Willow Creek, East Hill, Rangeline, Cadraca Woods, and Raleigh Woods.

The various complexes involved in this case differed in several respects which affected the duties of the resident managers. First the size of the complex was a factor. The number of apartment units has a bearing on how a resident manager will function. Additionally, some complexes were acquired as completed units already rented, whereas some of them were acquired as new construction and the resident managers began working before all construction was completed. The proof also reflects that in some complexes the resident managers worked from their own apartments, which were standard apartments. Other managers had apartments equipped with a small office off the living room. Other complexes had offices, in which the resident managers or agents worked, that were in the complex but not in or adjacent to the apartments occupied by the managers. In this situation there was usually a model apartment to be shown to prospective tenants.

The proof establishes that the primary job of resident managers or agents was to rent apartments; this included seeing that there was a display apartment clean for showing tenants, receiving inquiries by telephone from prospects, showing the apartments, and doing some paper work in connection with the rental. Although the established complexes had a turnover of tenants, there was more time and work required to place tenants in recently opened complexes.

An additional significant duty of the resident managers pertained to receiving complaints from tenants, usually with regard to maintenance problems. This also included a duty to assist in solving complaints. However, there was a strict prohibition against giving the owner's name and phone number. In fact, the resident managers were instructed to tell the tenants who threatened to call the owner (Williams) that if the tenant did call, "it is a guarantee the complaint will never be worked." See Trial Exhibit 21, "Resident Manager Guidelines," issued over the signature of A. Duncan Williams, December 8, 1972.

The proof establishes that the Company had maintenance personnel whose duty it was to contact the resident managers and receive complaints and then remedy them. This included servicing the lawn. However, the resident managers frequently undertook to remedy minor complaints in the absence of the maintenance personnel. The defendant Williams expected the resident managers to explain to some tenants that the management was not responsible for all problems. See Trial Exhibit 21, "Resident Manager Guidelines."

There is a wide variety of proof from the different former resident managers concerning what their duties and efforts consisted of with regard to complaints and maintenance. Some watered the lawn. Others removed tacks from waste disposal units, checked air conditioning filters, or replaced light bulbs. Some of the managers even offered some tenants a haven from an irate or drunken spouse.

The plaintiff Secretary of Labor offered as part of his proof the testimony of 16 females who had served as resident managers or agents for the defendants during the period covered by this case. The Compliance Officer assigned to this case has made computations based on the version of the proof asserted by the plaintiff as the hours worked by the respective managers. This forms the basis of the plaintiff's contention that this Court should order the defendants to pay these former employees the respective amounts which total $24,675.22.

It is the further contention of the plaintiff that the time records which were kept for parts of the time and for certain ones of the employees should be disregarded because they were based upon erroneous interpretations of the law and illegal instructions from the administrative personnel of the Company and the defendant Williams.

The defendants have asserted that resident managers are entitled to pay only for the time actually spent performing services for the defendants, i.e., answering the telephone pertaining to...