Donovan v. Williams Oil Co., 81-2074

• Decision Date: 07 September 1983
• Docket Number: No. 81-2074,81-2074
• Citation: 717 F.2d 503
• Parties: 26 Wage & Hour Cas. (BN 643, 98 Lab.Cas. P 34,441 Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. WILLIAMS OIL CO., a Corporation, and J.T. Williams, an individual, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 503

717 F.2d 503

26 Wage & Hour Cas. (BN 643, 98 Lab.Cas. P 34,441

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. WILLIAMS OIL CO., a Corporation, and J.T. Williams, an individual, Defendants-Appellants.

No. 81-2074.

United States Court of Appeals Tenth Circuit.

Sept. 7, 1983.

Russell Uselton (James D. Wadley, McAlester, Okl., with him on brief), of Stipe, Gossett, Stipe, Harper, Estes, McCune & Parks, McAlester, Okl., for defendants-appellants.

Lauriston H. Long, Washington, D.C. (James E. White, Regional Sol., Dallas, Tex., T. Timothy Ryan, Jr., Sol. of Labor, Beate Bloch, Associate Sol., and Peter B. Dolan, Atty., U.S. Dept. of Labor, Washington, D.C., with him on the brief), for plaintiff-appellee.

Before McWILLIAMS and BARRETT, Circuit Judges, and BRATTON, ^* District Judge.

McWILLIAMS, Circuit Judge.

Under the provisions of the Fair Labor Standards Act, the Secretary of Labor brought the present action against Williams Oil Company, an Oklahoma corporation, and its president, J.T. Williams, to enjoin Williams Oil from violating the Act's record-keeping, minimum wage, and overtime pay requirements, and from withholding back pay due persons who were allegedly employed at nine gasoline stations owned by Williams Oil. After a two-day trial, the district court held that the persons involved were "employees" of Williams Oil within the meaning of the Act, and that, as concerns such employees, Williams had failed to pay them the minimum wage and overtime compensation required by the Act. The district court further found that Williams' violations of the Act were "willful" within the meaning of the Act, and accordingly invoked the three-year statute of limitations, as opposed to the two-year statute. 29 U.S.C. Sec. 255(a). Concerning the amount of back pay, the district court entered judgment against Williams Oil in the sum of $143,359.53, plus interest, and permanently enjoined Williams Oil from further violations of the Act. Williams Oil and Williams appeal. We affirm.

The first ground raised on appeal for reversal is that the district court erred in finding that the thirty-four persons who were allegedly underpaid were "employees" of Williams. In this connection, Williams Oil necessarily argues that the district court's finding is "clearly erroneous" under Fed.R.Civ.P. 52(a), and that the record before the district court compelled a finding that the thirty-four were all independent contractors, and were, therefore, not employees within the meaning of the Act. Such is not our view of the record.

Williams Oil Company, an Oklahoma corporation with its principal place of business in Talihina, Oklahoma, is engaged in the wholesale distribution of gasoline. It sells gasoline at retail through thirteen service stations which it owns in Eastern Oklahoma. This proceeding concerns thirty-four attendants who worked at nine of these service stations between 1975 and 1980. Some of the thirteen stations were operated by persons whose relationship with Williams Oil was in fact that of an independent contractor, i.e., they did pay rent to Williams for the leased premises, and bought gasoline at wholesale from Williams and then resold it on their own at retail with an expectation of personal profit. Such persons are not involved in the present proceeding. Rather, as indicated, this proceeding, instituted by the Secretary, concerns the thirty-four persons who did not pay rent on the premises which, in form only, they were leasing and did not purchase gasoline from Williams for purposes of resale at a profit and had little income other than the salary or commission paid them by Williams.

The statutory definition in the Act of the term "employee" appears at 29 U.S.C. Sec. 203, and means "any individual employed by an employer." We have held that under the Act the definition of the term "to employ" is broad and comprehensive and includes "to suffer or permit to work." Shultz v. Mistletoe, 434 F.2d 1267, 1270 (10th Cir.1970). Further, the existence of an employment relationship "depends upon the overall situation rather than isolated circumstances." Id. at 1271. The Supreme Court, in Rutherford Food Corp. v. McComb, 331 U.S. 722, 727, 67 S.Ct. 1473, 1475, 91 L.Ed. 1772 (1947) stated that the Act's applicability should be determined by the "underlying economic realities" of the total situation, and, by way of example, should not be determined by the traditional rules concerning independent contractors.

Nineteen of the thirty-four persons here involved testified concerning their economic relationship with Williams Oil. Although all had executed "form leases" for the stations at which they worked, none in fact paid any rent for the station. As indicated, the thirty-four here involved did not buy gasoline for resale, and the petroleum products sold at the stations were consigned by...