Brown v. Minngas Co.

• Decision Date: 29 June 1943
• Docket Number: Civil Action No. 83.
• Citation: 51 F. Supp. 363
• Parties: BROWN (ELLIOTT, Intervener) v. MINNGAS CO.
• Court: U.S. District Court — District of Minnesota

51 F. Supp. 363

BROWN (ELLIOTT, Intervener) v. MINNGAS CO.

Civil Action No. 83.

District Court, D. Minnesota, Second Division.

June 29, 1943.

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Thomas R. Webb, of New York City, and Earl Hacking and Daniel S. Feidt, both of Minneapolis, Minn., for plaintiff.

A. R. English, of Tracy, Minn., and Hall, Catlin & Gold, of Marshall, Minn., for defendant.

JOYCE, District Judge.

This action was brought pursuant to the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq. (hereinafter called the Act), by Rollo E. Brown for himself and as agent for Virgil Brown and Leland Douglas. Anna Mae Elliott has intervened. All seek to recover back wages and liquidated damages as provided for in Section 16(b) of the Act.

The defendant Minngas Company is a Minnesota corporation doing business in and around Tracy, Minnesota. It sells propane gas and appliances which operate with gas. It also services such appliances. All the propane gas and most of the appliances which it sells are received from sources outside of Minnesota. Before April 5, 1939, all of the defendant's sales were intrastate, but since that time it has sold and delivered both gas and appliances at wholesale to dealers outside of Minnesota in addition to retaining its Minnesota business.

The plaintiffs Rollo E. Brown and Leland Douglas and Virgil Brown serviced appliances, transferred the propane from the railroad tank cars into defendant's tanks and gas mains, filled and maintained gas cylinders which defendant sold to customers, delivered appliances, and did similar work which the litigants do not state in detail. Plaintiff Anna Mae Elliott was employed as an office worker. She did bookkeeping, stenographic, and general office work.

In contesting this action defendant claims that:

(1) Only Anna Mae Elliott was employed by defendant.

(2) Defendant was not engaged in interstate commerce or in the production of goods for commerce during the period material herein.

(3) Plaintiff was not engaged in commerce or in the production of goods for commerce during the time material herein.

(4) Application of the maxim, De minimis non curat lex, prevents plaintiffs from recovering.

(5) Defendant's business is a local retailing or servicing business and plaintiffs were employed in local retailing capacities as required by Section 13(a) (1) and 13(a) (2) of the Act. Therefore the Act is inapplicable.

(6) Plaintiffs are within the provisions of the Motor Carrier Act of 1935 and therefore the exemption set out in Section 13(b) (1) of the Act prevents the application of the Act to the instant case.

I. Were Plaintiffs Employed by Defendant?

Since defendant admits that Anna Mae Elliott was their employee, this issue affects only the Browns and Douglas. The issue turns on whether Earl K. Ostgaard was an independent contractor. Ostgaard was a foreman of defendant company and orally contracted with defendant on December 31, 1939, to thereafter supply the labor for defendant's work.

The question is resolved by the state law, for, as pointed out in Maddox v. Jones, D.C.Ala., 1941, 42 F.Supp. 35, 41, the Fair Labor Standards Act did not intend to change any relationships which existed prior to its enactment. The court said: "* * * the definitions in the Act were not intended by Congress, however moved it was by humanitarian impulses, to destroy the well founded and long established rules fixing the status and affecting the relationship of employer and employee in actions based upon that relationship." Therefore, if the state law—the law which existed and determined the relationship between the parties prior to the enactment of the Fair Labor Standards Act—made Ostgaard either an independent contractor, or an employee of defendant, that result would still prevail.

This conclusion reasonably follows from the fact that, as held in Bowman v. Pace Co., 5 Cir., 119 F.2d 858, the purpose of the Fair Labor Standards Act was to apply the new law to existing relationships and not to impose upon one person a wage liability to another to whom the first person had not previously been liable for wages. Likewise, to create different tests for an employer-employee relationship under the Act would risk confusion in other fields of law. The only reason for a different rule would be to include or to exclude more workers from the Act.

The Minnesota Supreme Court holds that one who controls or has the right to control a worker is his employer. Wass v. Bracker Const. Co., 185 Minn. 70, 240 N.W. 464; Larson v. Duluth Woolen Co., 181 Minn. 417, 232 N.W. 915. The Restatement of Agency, Section 2, points out that the skill required for a particular job; whether the work is part of the regular business of the employer; whose tools are used; and what the parties believe is the relationship between them, are factors also to be considered in determining whether a given individual is an independent contractor.

In view of these factors I am of the view that defendant was the plaintiffs' employer. When Leland Douglas quit his job, Henley, defendant's general manager and president, told him that he could return to his job if the new one did not prove satisfactory. Likewise, when Virgil Brown asked Ostgaard if he could return to work for defendant company, Ostgaard informed him that he must see Mr. Henley first. Neither Ostgaard nor any representative of defendant informed plaintiffs that Ostgaard would be their employer after December 31, 1939. On the contrary, Henley continued to give plaintiffs orders with respect to their work after that date. These orders consisted, among other things, of written job orders which usually were quite detailed. According to plaintiffs' testimony Henley also gave them oral instructions. Certainly, it seems obvious that these job orders were not his only instructions to plaintiffs with respect to their work. On March 5, 1940, Mr. Henley issued a "Bulletin to All Employees" and on June 11, 1940, he issued a "Notice to all Employees". These directives pertained to work which plaintiffs performed. Indicating in the March Bulletin that he was the one to whom those performing the work were responsible, Mr. Henley concluded, "I will not accept any excuses from anyone in not obtaining this information." Both directives were initialed by plaintiffs. Since they were not initialed by the other employees and pertained to plaintiffs' work, they were evidently directed primarily to plaintiffs and by their very titles show what relationship defendant considered itself to be in with plaintiffs. Significantly, the June notice was also initialed by "E. K. O." presumably Earl K. Ostgaard.

There is no claim that Ostgaard furnished labor for any other company. The tools, trucks, and equipment used by plaintiffs were owned by defendant company and not by Ostgaard. Plaintiffs were paid directly from defendant company funds. In fact, for a period after January 1, 1940, they were paid by defendant's checks which Henley signed. When plaintiffs asked Ostgaard about a raise, he informed them that he must see Mr. Henley about it first.

Therefore, it would appear that defendant company controlled the hiring of the labor which Ostgaard contracted to supply, determined the wages which they were paid, supplied them with the equipment necessary to do the work of defendant, and gave them orders with respect to that work. It is clear in view of these facts and the authority above noted that Ostgaard was not the independent contractor alleged. The fact that Ostgaard's wages were to be determined by the cost of labor and defendant's sales does not require a different conclusion when viewed in the light of the other evidence. Likewise, the fact that Ostgaard requested and obtained a Social Security number as plaintiffs' employer does not change the result. Although such an act might have probative value, it is not conclusive evidence. If the transfer of a social security account without an employee's knowledge could make the transferee an employer, irresponsibles could become employers in a technical but not actual sense, to the detriment of the employee and the general public. The uses for such a rule as a dodge to justifiable liability are manifest.

Therefore, in view of all of the evidence, I am of the opinion that all of the plaintiffs were employees of the defendant company.

II. Are Plaintiffs Covered by the Act?

Defendant contends that plaintiffs cannot recover if defendant was not engaged in commerce or in the production of goods for commerce. A determination of that argument is unnecessary here, for it is elementary that plaintiffs cannot recover if plaintiffs are not engaged in commerce or in the production of goods for commerce. Fair Labor Standards Act, Sections 6 and 7, 52 Stat. 1062, 1063, 29 U.S.C.A. §§ 206, 207. Section 6 of the Act by providing the minimum wages which shall be paid by every employer "to each of his employees who is engaged in commerce or in the production of goods for commerce", and Section 7 by providing the maximum hours such employees shall be employed, look to the nature of the employee's work and not to the nature of the employer's. Fleming v. Jacksonville Paper Co., 5 Cir., 1942, 128 F.2d 395; Fleming v. A. B. Kirschbaum Co., 3 Cir., 1941, 124 F.2d 567 at page 570. See also Fleming v. American Stores, D.C. Pa., 1941, 42 F.Supp. 511. Therefore, the real question is whether the jobs performed by plaintiffs caused them to be engaged in commerce or in the production of goods for commerce within the meaning of the act.

(a) Unloading goods from an interstate carrier: Persons engaged in unloading interstate carriers are engaged in commerce within the meaning of the Act. Walling v. Mutual Wholesale Food & Supply Co., D.C.Minn., 1942, 46 F.Supp. 939. See also Klotz v. Ippolito, D.C.Tex., 1941, 40 F.Supp. 422; Super-Cold Southwest Co. v. McBride, 5 Cir., 1941, 124 F.2d 90; Fleming v. Alterman, D.C....