Fleming v. Arsenal Bldg. Corporation, No. 87.

CourtU.S. Court of Appeals — Second Circuit
Writing for the CourtL. HAND, C. E. CLARK, and FRANK, Circuit
Citation125 F.2d 278
Docket NumberNo. 87.
Decision Date30 December 1941

125 F.2d 278 (1941)


No. 87.

Circuit Court of Appeals, Second Circuit.

December 30, 1941.

Irving J. Levy, of Washington, D. C., for appellant.

Walter Gordon Merritt, of New York City, for appellees.

Before L. HAND, C. E. CLARK, and FRANK, Circuit Judges.

L. HAND, Circuit Judge.

The plaintiff appeals from a judgment, dismissing after trial his complaint against the defendants — filed under § 17 of the "Fair Labor Standards Act of 1938" — to restrain violation of § 15(a) (2) of that act 29 U.S.C.A. §§ 217, 215(a) (2). The only question is whether § 7(a) 29 U.S.C.A. § 207(a) requires the defendants to pay "time and a half" to their employees. (We may ignore the defendant, Spear & Co., Inc., for any decision as to it must concededly follow that as to the Arsenal Building Corporation, of which we shall speak as the defendant.) The facts are as follows. The defendant owns a twenty-two story loft building in New York City, of which it lets out substantially all the space to manufacturers of women's clothes,

125 F.2d 279
who are concededly engaged in interstate commerce: i.e., they import part of their raw materials into the state and send out of the state a large part of the completed clothes. (With the exception of three of these manufacturers, the sales of two of whom were very small, the percentage of interstate shipments was in every case more than two-thirds; the percentage of the total shipments was 82.) All but two occupy less than a single story of the building; one occupies one and a half stories, and the other, five and a half. The defendant has no other business but leasing the space, collecting the rent and such services as are incidentally necessary: e.g., protecting the tenants' property, keeping the building itself clean, warm, lighted and in repair, furnishing steam and hot water, and manning and running the elevators. To render these services it employs 25 workmen of various sorts (besides a superintendent, concededly not within the act) and it has refused to pay them "time and a half" for overtime as defined by § 7(a) (1) and § 7(a) (2) of the act. The plaintiff's position is that, although these employees do not have any part in the actual handling of materials or of the finished goods (except insofar as running the elevators may be such) they are nevertheless "engaged in commerce" and "in the production of goods for commerce" within § 7(a). The defendant denies this, and further asserts that it is in any case exempted by § 13(a) (2), 29 U.S.C.A. § 213(a) (2) because the employees are engaged in a "service establishment the greater part of whose * * * servicing is in intrastate commerce." Finally it says that the act does not cover the employees of employers who are not themselves "engaged in commerce or in the production of goods for commerce." The district judge held that the employees were not "engaged in the `production of goods for commerce,'" or "in commerce"; and that the defendant was a "service establishment" all of whose activity was intrastate

We think that the employees here in question are "engaged * * * in the production of goods for commerce" within § 7(a), and for that reason we do not find it necessary to decide whether they are also "engaged in commerce." First, are they engaged in the production of goods at all? Section 3(j), 29 U.S.C.A. § 203(j), defines that phrase as meaning, "employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof." Whatever may be thought of the applicability of this definition down to the last clause, we are satisfied that the "occupation" of these men was "necessary to the production" of the clothes. If instead of leasing space in the defendant's building, the manufacturers had each owned and occupied a whole factory of his own, this conclusion seems to us scarcely debatable. Cutters and stitchers cannot work in a cold or filthy building; they must have light and power to drive their machines; they cannot be required to carry goods from one story to another. Those who make and keep the factory fit for them in these ways are as "necessary" to "production" as they are themselves.1 Yet it would as much defeat the purpose of the act, as expressed in § 2, 29 U.S.C.A. § 202, to deprive such workmen of its protection when they chance to be employed by a different employer, as when they are employed by the employer of the cutters and stitchers. And a competing dressmaker may find his rival's lower rent as "unfair" a differential...

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