Dowd v. Blackstone Cleaners, Inc.

• Decision Date: 25 November 1969
• Docket Number: Civ. A. No. 2-666.
• Citation: 306 F. Supp. 1276
• Parties: Symatha DOWD et al., Plaintiffs, v. BLACKSTONE CLEANERS, INC., a Corporation, Defendant.
• Court: U.S. District Court — Northern District of Texas

306 F. Supp. 1276

Symatha DOWD et al., Plaintiffs, v. BLACKSTONE CLEANERS, INC., a Corporation, Defendant.

Civ. A. No. 2-666.

United States District Court N. D. Texas, Amarillo Division.

November 25, 1969.

John W. Broadfoot, Amarillo, Tex., for plaintiffs.

O. M. Calhoun, Folley, Snodgrass & Calhoun, Amarillo, Tex., for defendant.

MEMORANDUM OPINION

WOODWARD, District Judge.

Plaintiffs allege willful violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201-219, and pray for judgment against their employer, Defendant, for back wages. The suit arises out of contracts that Defendant had with the United States Air Force to alter, dry clean, and launder individual Air Force uniforms and other miscellaneous clothing. The uniforms were those issued to the trainees at the Amarillo Air Force Base. The Air Force would pay for uniform alterations and the individual airman would pay for the other services furnished by Defendant. From November 1965 until May 1967 Defendant entered into contracts with the Air Force that required Defendant to abide by certain provisions of the Contract Work Hours Standards Act, 40 U.S.C. §§ 327-332, including the overtime provisions. After May 1967, the contract with the Air Force stipulated that Defendant would be subject to certain provisions of the Service Contract Act of 1965 (McNamara-O'Hara Contract Act), 41 U.S.C. §§ 351-357, including the provision which requires employers to adhere to the Fair Labor Standards Act of 1938. The contract also stipulated that Defendant would be subject to the Contract Work Hours Standards Act, cited above, and the Walsh-Healey Public Contracts Act, 41 U.S.C. §§ 35-45.

In their Complaint, Plaintiffs specifically contend that Defendant violated § 206(a) of Title 29 U.S.C. requiring employers to pay a minimum wage to employees engaged in the production of goods for commerce and § 207(a) of Title 29 U.S.C. requiring employers to pay one and one-half times the regular rate for overtime hours worked by employees engaged in the production of goods for commerce. In its Original Answer, Defendant asserts four affirmative defenses to Plaintiffs' contentions: (1) that the Complaint fails to state a claim against Defendant upon which relief may be granted; (2) that Defendant has at all times paid Plaintiffs the wages and compensation due them; (3) that prior to February 1, 1967, Defendant was not subject to the Act because of the exemption stated in 29 U.S.C. § 213 (a) (3); and (4) that the two-year statute of limitations applies in this suit because, if there were a violation, it was not willful. In later pleadings and in argument before the Court during trial without a jury, Defendant raised other defenses: (1) that the Court has no jurisdiction in this cause; (2) that the Contract Work Hours Standards Act, incorporated into the Air Force contracts, is exclusive in its application and hence that Defendant was not required to abide by the provisions of the Fair Labor Standards Act; and (3) that the McNamara-O'Hara Contract Act and the Walsh-Healey Public Contracts Act, incorporated into the Air Force contracts after May 1967, are also exclusive in their application and, since only the Federal Government is entitled to sue for violations under these enactments, Plaintiffs have no standing to assert their claims in this Court.

Defendant's seven contentions will be examined separately by the Court. As each question is examined, the Court will make whatever findings of fact and conclusions of law are necessary to resolve the issues and this Memorandum Opinion will constitute the Court's Findings of Fact and Conclusions of Law.

The first defenses that will be examined are the contentions that the public laws incorporated into the Air Force contracts provide exclusive remedies for any alleged wage and hour violations. Defendant's assertion that the Contract Work Hours Standards Act applies to the exclusion of the Fair Labor Standards Act is without merit. This very question was examined by the Fifth Circuit Court of Appeals in Mitchell v. Empire Gas Engineering Co., 256 F.2d 781 (1958), where it was concluded that the Contract Work Hours Standards Act and the Fair Labor Standards Act were "mutually supplementary rather than mutually exclusive." Defendant's other contention that the McNamara-O'Hara and Walsh-Healey Acts provide exclusive remedy for wage and hour violations under the Air Force contracts is also without merit. In Powell v. United States Cartridge Co., 339 U.S. 497, 70 S.Ct. 755, 94 L.Ed. 1017 (1950), the Supreme Court ruled that the Walsh-Healey Act and the Fair Labor Standards Act were mutually supplementary. Petitioners in the Powell case, individual employees, were consequently allowed to maintain their cause of action against Respondent employer under the Fair Labor Standards Act even though the employer was doing work under a government contract that incorporated the Walsh-Healey Act. Since the McNamara-O'Hara Act has been only recently placed in the statutes, the Court has been unable to find any case construing the relationship of that Act and the Fair Labor Standards Act. However, in light of the contruction of the relationship of the Contract Work Hours Standards Act and the Walsh-Healey Act with the Fair Labor Standards Act, it is reasonable to assume that the McNamara-O'Hara Act was also intended by Congress to mutually supplement the Fair Labor Standards Act. This is especially so since the McNamara-O'Hara Act incorporates into its provisions certain provisions of the Fair Labor Standards Act. Therefore, it is the holding of this Court that the McNamara-O'Hara Act, like the Contract Work Hours Standards Act and the Walsh-Healey Act, mutually supplements the Fair Labor Standards Act. Consequently, the Fair Labor Standards Act is applicable in a case of this nature and the Plaintiffs have standing to assert their complaints.

The Court will now turn to Defendant's contentions that the Complaint fails to state a claim upon which relief can be granted and that the Court is without jurisdiction to hear this cause. As to the first of these contentions, it appears clear to the Court that Plaintiffs have stated a claim under the Fair Labor Standards Act, failure to pay minimum and overtime wages, upon which relief, payment of back wages, can be granted. As to the second of these contentions, it also appears clear to the Court that jurisdiction is present. Title 29 U.S.C. § 216(b) states that:

"Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated."

In this suit, Plaintiffs have alleged violations of sections 206 and 207 and this Court can entertain an action to recover damages. Defendant's contentions that there is no claim upon which relief can be granted and that no jurisdiction is present are rejected.

Next, the Court will consider Defendant's principal defense that, prior to February 1, 1967, Defendant was not subject to the provisions of the Fair Labor Standards Act because of the exemption provided by section 213(a) (3) of the Act:

"The provisions of sections 206 and 207 of this title shall not apply with respect to * * * any employee employed by any establishment engaged in laundering, cleaning, or repairing clothing or fabrics, more than 50 per centum of which establishment's annual dollar volume of sales of such services is made within the State in which the establishment is located: Provided, That 75 per centum of such establishment's annual dollar volume of sales of such services is made to customers who are not engaged in a mining, manufacturing, transportation, or communications business * * *."

Plaintiffs were employed by Defendant, Blackstone Clearners, in altering, laundering, cleaning, and repairing clothing and fabrics. It was established by testimony at trial that Blackstone's customers, the Air Force and the individual airman, most of whom were in training, accounted for over 90 per cent of Blackstone's annual dollar volume of sales for the years in question and that these sales were made at the Amarillo Air Force Base, located near Amarillo, Texas. Hence more than 50 per cent of its sales were in Texas. An examination of the facts shows that Defendant, Blackstone Cleaners, is within the exemption of the Act if it can establish that its customers, the Air Force and the individual airman were "not engaged in a mining, manufacturing, transportation, or communications business."

To support its position on this point, Defendant cites Billeaudeau v. Temple Associates, Inc., 213 F.2d 707 (5th Cir. 1954). In that case, employees who were watchmen on a construction site where housing units were being built sued their employer under the Fair Labor Standards Act for minimum wages and overtime pay. Their employer was building the housing units for the Housing Authority of the town of Ville Platte, Louisiana. The Fifth Circuit found that, under the facts in the case, the Act did not provide coverage. It rejected the argument of the employees that they engaged in the production of goods for commerce under 29 U.S.C. § 203(j) "by guarding appellee's office on the construction premises, in which office were prepared and maintained payroll records, time sheets, and other matters pertaining to the labor force, which were regularly shipped between appellee's home office in Dibold, Texas, and the office on the construction site in Ville Platte, Louisiana." The Court did not consider the exchange of documents between Texas and Louisiana to be commerce as defined by the Act. The Fifth Circuit...