Callus v. 10 East Fortieth Street Bldg.

• Decision Date: 28 May 1943
• Citation: 51 F. Supp. 528
• Parties: CALLUS et al. v. 10 EAST FORTIETH STREET BLDG., Inc.
• Court: U.S. District Court — Southern District of New York

51 F. Supp. 528

CALLUS et al. v. 10 EAST FORTIETH STREET BLDG., Inc.

District Court, S. D. New York.

May 28, 1943.

Victor J. Herwitz, of New York City, (Monroe Goldwater, of New York City, and James Goldwater, of Washington, D. C., of counsel), for plaintiffs.

Proskauer, Rose, Goetz & Mendelsohn, of New York City (Joseph M. Proskauer and Harold H. Levin, both of New York City, of counsel), for 10 East Fortieth Street Bldg., Inc.

HULBERT, District Judge.

Fifty-one plaintiffs brought this action on behalf of themselves and other employees and former employees of the defendant 10 East 40th Street Building, Inc., similarly situated for the recovery authorized by Section 16(b) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq.

The statute will hereinafter be referred to as the "Act".

The case was tried by the Court without a jury on March 16, 18, 19, 22, 23 and 24.

At the opening of the trial the action was severed as to the defendant Cross & Brown Company and the 10 East 40th Street Building Corporation will hereafter be referred to as the defendant.

There was a partial stipulation as to the facts, including the amount to which the plaintiffs would be entitled if the Court found in their favor.

55 witnesses were called by the plaintiffs for the purpose of showing the area of occupancy and the character of business transacted by each tenant.

There is no substantial dispute of the facts, except as to the inferences to be reasonably drawn therefrom. The issue is whether the plaintiffs, and others, employed by the defendant, as service and maintenance employees, were engaged in commerce or in the production of goods for commerce within the meaning of the Act.

Findings of Fact.

(1) The defendant is a New York corporation having its principal place of business at 10 East 40th Street, New York, N. Y.

(2) The defendant is the owner of a 48-story and basement office building located at 10 East 40th Street, New York, N. Y.

(3) Defendant's business has consisted of the management and operation of said building, the leasing of space therein to various tenants, and the rendition of the usual type of service incident to the operation and leasing of space in an office building in New York, N. Y.

(4) During the period covered by the complaint plaintiffs were hired by the defendant as maintenance employees of its said office building.

(5) The gross area of said office building available for rental was 234,245 square feet, of which 11 per cent has been unoccupied.

(6) The rentable area of the building has been leased by defendant to, and occupied by, approximately 111 tenants, viz.:

"Class 1. Executive and sales offices of 20 concerns, carrying on elsewhere the business of manufacturing and mining, occupy 25.8% of the rented area.

"Class 2. Offices of sales agencies representing 17 manufacturers and mining concerns, carrying on elsewhere the business of manufacturing and mining, occupy 9.3% of the rented area.

"Class 3. 24 lawyers, or law firms, occupy 13.6% of the rented area;

"Class 4. The United States Employment Service, an agency of the United States of America, affiliated with the War Man Power Commission, occupies 13.6% of the rented area.

"Class 5. 10 advertising agents and publicity and trade organizations occupy 6.6% of the rented area. (8 tenants, included in Class 1 and Class 2 also arrange for advertising or maintain advertising departments, in addition to their administrative, sales and other activities.)

"Class 6. 7 tenants whose business is engineering and construction occupy 8.9% of the rented area.

"Class 7. 5 private investment, financing and credit organizations occupy 4.7% of the rented area.

"Class 8. Executive offices of 5 import and export concerns occupy 3.7% of the rented area.

"Class 9. 22 miscellaneous tenants, whose business is not of an interstate character, occupy 3.3% of the rented area."

(7) The services rendered and the work done in the defendant's office building by the officers, agents and/or employees of the tenants encompass the following:

"Class 1. Manufacturing and mining companies in this class use their offices for executive and administrative activities, for conferences, and for taking orders for substantial quantities of merchandise of substantial value produced and shipped from their factories and mines elsewhere located to customers in various states. Seven of these companies carry on advertising or publicity work in their offices—in some cases, in separate advertising departments. Generally, the advertising copy is written and, in every case, all printing is done outside of the building.

"Class 2. Sales agencies of manufacturing and mining companies use the offices in the building, to sell a variety of the products of the companies they represent. Orders are taken and are forwarded by mail, telephone, teletype or other means of communication to factory and mines located in various states for shipment of goods to various parts of the country. As a result of the efforts of these agencies, substantial amounts of merchandise of substantial value are shipped across state lines from factories, mines and warehouses, elsewhere located in various parts of the country.

"Class 3. The lawyers and law firms in this class carry on the usual activities incident to the practice of law.

"Class 4. The United States Employment Service places white collar workers in various factories and business houses. Practically all the registrants served by this agency are located in the State of New York, and about 96% of the placements are within the State of New York, of whom about 2% result from referrals from out-of-state branches of the U.S.E.S. in other cities through a nationwide trade job clearance system.

"Class 5. The advertising agents carry on publicity and advertising work using national publications, newspapers and radio.

"A single publishing firm receives stories for fiction magazines which are sold all over the country. These magazines are printed off the premises and are delivered by the printers to an outside firm which distributes them. The work in the building herein consists of the purchase and receipt of scripts, the examination and correction of same and the regular business and financial activities of the firm.

"The officers and employees of the trade organizations are principally engaged in research and correspondence incidental to their operations. They also prepare circulars and in some cases weekly or monthly publications which are elsewhere printed and in most cases distributed from places other than the building herein.

"Class 6. Engineering and construction firms carry on their correspondence and executive and administrative activities, including financing, collection work and estimating on and submission of bids. In some cases, plans are received for approval which are prepared outside of the building, and in other cases, the officers, agents and employees of these tenants prepare plans and sketches in the building for construction projects located in various parts of the United States and in foreign countries. All blueprints are made by blueprinting firms elsewhere located.

"Class 7. Investment, financing and credit organizations use their offices in the building herein for their executive and administrative work, conferences, correspondence, keeping of records, arranging for loans, and receiving reports concerning the same. The investments, financing and credit work is done in connection with businesses and projects located in various parts of the country.

"Class 8. Executive offices of import and export concerns make arrangements for export and import of a variety of goods of substantial value. The goods are stored at and shipped from places other than the building herein.

"Class 9. Miscellaneous tenants include accountants, a Christian Science Practitioner, dentists, charitable organizations, and other firms, organizations and individuals whose activities are not interstate in character."

(8) There is no manufacturing of any kind carried on in the office building in question, and the percentage of labor and space actually utilized in the building by employees of any of the tenants in connection with the publicity and advertising prepared in or outside of the building has not been mathematically computed, but in relation to the entire volume of business transacted and carried on by the tenants at and from said premises is not substantial.

(9) An average of 50 to 60 persons, including plaintiffs, engaged as maintenance employees of said office building, have engaged in such capacities as elevator starters, elevator operators, window cleaners, watchmen, mechanics and handymen.

(10) These employees have performed the customary duties incident to the effective maintenance and operation of this office building, such as the furnishing of heat and hot water; keeping the elevators, radiators, water and fire sprinkler systems in repair; the maintenance of electric light power systems and appliances; the operation of elevators carrying tenants and employees, customers and clients of tenants, and other passengers; carrying advertising matter, publicity releases, photographic material, magazine layouts, commercial art drawings, printers' and lithographers' proofs, construction plans and specifications, Diesel engine parts, Ediphone machines and parts, samples of merchandise, office furniture and equipment and supplies to and from tenants' premises; protection of the building in tenants' quarters from theft, fire and other damage; repair of hallways, stairways and other common parts of the building; the keeping of the building in tenant's quarters in a clean and habitable condition; renovation of interior parts of...