Gilreath v. Daniel Funeral Home, Inc., No. 19646

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Writing for the CourtVAN OOSTERHOUT, , and MATTHES and HEANEY, Circuit
Citation421 F.2d 504
Docket Number19647.,No. 19646
Decision Date03 February 1970
PartiesRuben H. GILREATH, Elmer E. Johnson, Rodney F. Daniels, Cecil Leroy Boyd and A. Gale Williams, Appellees, v. DANIEL FUNERAL HOME, INC., Appellant. Ruben H. GILREATH, Elmer E. Johnson, Rodney F. Daniels, Cecil Leroy Boyd and A. Gale Williams, Appellants, v. DANIEL FUNERAL HOME, INC., Appellee.

421 F.2d 504 (1970)

Ruben H. GILREATH, Elmer E. Johnson, Rodney F. Daniels, Cecil Leroy Boyd and A. Gale Williams, Appellees,
v.
DANIEL FUNERAL HOME, INC., Appellant.

Ruben H. GILREATH, Elmer E. Johnson, Rodney F. Daniels, Cecil Leroy Boyd and A. Gale Williams, Appellants,
v.
DANIEL FUNERAL HOME, INC., Appellee.

Nos. 19646, 19647.

United States Court of Appeals, Eighth Circuit.

February 3, 1970.


421 F.2d 505

H. Watt Gregory, III, of Rose, Meek House, Barron, Nash & Williamson, Little Rock, Ark., for Daniel Funeral Home, Inc. and filed briefs.

Comer Boyett, Jr., of Henry & Boyett, Searcy, Ark., for Messrs. Gilreath, Johnson, and others and filed brief.

Before VAN OOSTERHOUT, Chief Judge, and MATTHES and HEANEY, Circuit Judges.

MATTHES, Circuit Judge.

This is a timely appeal and cross-appeal from the final judgment1 rendered

421 F.2d 506
on October 31, 1968, by the United States District Court for the Eastern District of Arkansas. We shall refer to the parties as they were designated in the trial court. The complaint was filed on May 5, 1967, by Ruben H. Gilreath, et al., under the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq., seeking unpaid minimum wages and overtime compensation, an additional and equal amount as liquidated damages, and reasonable attorneys' fees and costs. The district court found in favor of plaintiffs for a portion of their claim and, in so doing, found that Daniel Funeral Home, Inc., was not exempt from the provisions of the Act as a "retail or service establishment" within the meaning of 29 U.S.C. § 213(a) (2)

Most of the facts are undisputed and may be summarized as follows:

Defendant is a closely-held family corporation and at all times here pertinent operated a funeral home in Searcy, Arkansas. The sole stockholders are Mrs. Julia Mae Daniel and her daughter, Hiawatha.

Operating in the same one-story building as the funeral home is Daniel Insurance Company, a mutual assessment burial insurance company. This company has no stockholders, and ultimate control is reposed in its participating members by virtue of Ark.Stat.Ann. § 66-4509(2) (repl. 1966). The funeral home and insurance company have identical boards of directors. However, each maintains separate books of account, records, and bank accounts.

All of the plaintiffs were employed by defendant for varying periods of tenure from May 5, 1965, to July 31, 1966 — the period of time for which suit was brought2 — and were paid straight monthly salaries without any overtime compensation. Cecil Leroy Boyd, A. Gale Williams, and Rodney Daniels were employed as funeral directors; Ruben Gilreath and Elmer Johnson were janitorial and custodial employees whose principal duties were digging graves and arranging gravesites for burial services.

The business of Daniel Insurance Company involves the issuing of certificates or policies of burial insurance, mailing premium or delinquency notices, receiving premium payments, paying out benefits, and otherwise servicing policyholders. Most of the certificate holders of the insurance company are Arkansas residents; however, a substantial number are out-of-state residents.3

The insurance company was established to promote the business interests of defendant: Between 80 and 90 percent of all funerals conducted by defendant involve policyholders of Daniel Insurance Company. The insurance company has no separate employees. Pursuant to an agreement between Daniel Insurance Company and defendant, the latter agreed to operate the former and furnish all printing, stationery, postage, and office supplies, all other expenses and clerical help, in consideration for which the insurance company agreed to pay defendant 20 percent of its gross annual receipts. The insurance company has quarterly assessment periods —

421 F.2d 507
March, June, September, and December — during which the bulk of the insurance work is transacted

Two women employees and the manager of defendant, not parties to this suit, were primarily responsible for the daily insurance work. It is undisputed, however, that plaintiffs Daniels, Boyd, and Williams performed some such work, particularly during the heavy demands of the premium assessment months. The extent of their daily involvement with the insurance business was disputed.

The district court, in its memorandum opinion of June 12, held that the defendant and Daniel Insurance Company constituted a single establishment within the meaning of the Fair Labor Standards Act.4 As such, it could not qualify for the retail or service establishment exemption, since less than 75 percent of the combined gross annual income of the two companies, as stipulated to by the parties, came from sales and services recognized as retail in the industry, as required by 29 U.S.C. § 213(a) (2). In its final memorandum opinion of October 10, the court held that the plaintiffs were engaged in commerce within the meaning of the Act by reason of their work for Daniel Insurance Company during each of its quarterly assessment months and for one-half of each following month.5 Accordingly, the hourly wage of each of the plaintiffs was computed, the defendant was found to have violated the minimum wage and overtime provisions of the Act, and the court made a specific award to each plaintiff in its amended order of October 31. Liquidated damages and attorneys' fees were also approved.

No. 19,646

The precise and sole issue presented on direct appeal is whether defendant and Daniel Insurance Company constitute a single establishment within the meaning of 29 U.S.C. § 213(a) (2).6

421 F.2d 508
Plaintiffs concede that if the two companies are held to be separate establishments, then defendant qualifies for the exemption, since the character of the funeral home business as involving retail sales or services is recognized in the industry, Smith v. Taylor, 375 F.2d 1000, 1003 (5th Cir.1967), and by the Secretary of Labor, 29 C.F.R. § 779.320. In that event, plaintiffs concede that their claims should be denied. Conversely, defendant admits that if it and the insurance company are held to constitute but a single establishment within the meaning of the Act, then coverage exists, since the transactions of an insurance company are not considered to be retail sales or services by the Secretary of Labor, 29 C.F.R. §§ 779.316-7, and the stipulated gross annual income of the two businesses here, when combined, fails to meet the 75 percent retail sales or services test of 29 U.S.C. § 213(a) (2)

The term "establishment" is not defined in the Fair Labor Standards Act itself. The Supreme Court, in the leading case on the question, held that "Congress used the word `establishment' as it is normally used in business and in government — as meaning a distinct physical place of business * * *." A. H. Phillips, Inc. v. Walling, 324 U.S. 490, 496, 65 S.Ct. 807, 810, 89 L.Ed. 1095 (1945). See also Acme Car & Truck Rentals, Inc. v. Hooper, 331 F.2d 442 (5th Cir.1964); Mitchell v. Birkett, 286 F.2d 474 (8th Cir.1961); Mitchell v. Gammill, 245 F.2d 207 (5th Cir.1957); McComb v. Wyandotte Furniture Co., 169 F.2d 766 (8th Cir.1948). The administrative regulations promulgated pursuant to the Act agree with this definition. 29 C.F.R. § 779.23. The question of what constitutes an "establishment" in any given case is one of law to be determined from all the facts. Acme Car & Truck Rentals, Inc. v. Hooper, supra, 331 F.2d at 444. And, in light of the remedial purposes of the Act, exemption from coverage thereunder is to be narrowly construed against the party asserting it. Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960); Mitchell v. Kentucky Finance Co., 359 U.S. 290, 295, 79 S. Ct. 756, 3 L.Ed.2d 815 (1959); A. H. Phillips, Inc. v. Walling, supra, 324 U.S. at 493, 65 S.Ct. 807. The burden is upon the employer to establish an exemption from the Act. Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190, 206, 86 S.Ct. 737, 15 L.Ed.2d 694 (1966); Mitchell v. Kroger Co., 248 F. 2d 935, 941 (8th Cir.1957).

A distinct geographical separation between the locus of the business operations of defendant and Daniel Insurance Company is not present here. Both businesses operate out of the same premises, the funeral home building. Thus, the instant case is clearly distinguishable from Mitchell v. Birkett, supra, for example, where two admittedly retail photo shops located 9 miles apart were held to be separate establishments, notwithstanding the common ownership and close functional and economic relationship between the two. But see Mitchell v. T. F. Taylor Fertilizer Works, Inc., 233 F.2d 284 (5th Cir. 1956). The existence of two separate businesses under one roof does not automatically compel a finding of a single establishment, however. Prior decisions by this court and others have gone both ways on the question, and the critical factor in each case has been the integrity of the economic, physical, and functional separation between the business units. For decisions finding separate establishments see Fred Wolferman, Inc. v. Gustafson, 169 F.2d 759 (8th Cir. 1948); Armstrong Co. v. Walling, 161 F.2d 515 (1st Cir.1947); Wirtz v. Campus Chefs, Inc., 303 F.Supp. 1112...

To continue reading

Request your trial
15 practice notes
  • Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., No. 06-15931.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • January 29, 2008
    ...entitled to benefit from the § 213(a)(3) recreational and amusement exemption. See also Gilreath v. Daniel Funeral Home, Inc., 421 F.2d 504, 510 (8th Cir.1970) ("Since the three prerequisites of 29 C.F.R. § 779.305 are joined in the conjunctive, the defendant cannot prevail on its exemption......
  • Karabetis v. Mayor and City Council of Baltimore, No. 1697
    • United States
    • Court of Special Appeals of Maryland
    • September 4, 1987
    ...at 90, 63 S.Ct. at 126. See also Noonan v. Fruco Constr. Co., 140 F.2d 633, 634 (8th Cir.1943); Gilreath v. Daniel Funeral Home, Inc., 421 F.2d 504, 511 (8th Cir.1970); Edwards v. Riverside Products Co., 85 F.Supp. 290, 293 (N.D.W.Va.1949); Winslow v. National Electric Products Corp., 5 F.R......
  • Futrell v. Columbia Club, Inc., No. IP 69-C-176
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • August 2, 1971
    ...with several departments, such as a department store, is but a single establishment. Gilreath v. Daniel Funeral Home, Inc., 8 Cir., 1970, 421 F.2d 504; Acme Car & Truck Rentals, Inc. v. Hooper, 5 Cir., 1964, 331 F.2d 442; Mitchell v. Gammill, 5 Cir., 1957, 245 F.2d 207. Thus, added to the g......
  • Brennan v. Parnham, Civ. A. No. 72-674.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • November 20, 1973
    ...(See Footnote 2 from opinion set forth below as Footnote2) 366 F. Supp. 1021 Chief Judge Matthes in Gilreath v. Daniel Funeral Home, Inc., 421 F.2d 504, 510 (8th Cir. 1970) succinctly stated the correct law as "Coverage under the Fair Labor Standards Act, however, is dependent upon the char......
  • Request a trial to view additional results
15 cases
  • Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., No. 06-15931.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • January 29, 2008
    ...entitled to benefit from the § 213(a)(3) recreational and amusement exemption. See also Gilreath v. Daniel Funeral Home, Inc., 421 F.2d 504, 510 (8th Cir.1970) ("Since the three prerequisites of 29 C.F.R. § 779.305 are joined in the conjunctive, the defendant cannot prevail on its exemption......
  • Karabetis v. Mayor and City Council of Baltimore, No. 1697
    • United States
    • Court of Special Appeals of Maryland
    • September 4, 1987
    ...at 90, 63 S.Ct. at 126. See also Noonan v. Fruco Constr. Co., 140 F.2d 633, 634 (8th Cir.1943); Gilreath v. Daniel Funeral Home, Inc., 421 F.2d 504, 511 (8th Cir.1970); Edwards v. Riverside Products Co., 85 F.Supp. 290, 293 (N.D.W.Va.1949); Winslow v. National Electric Products Corp., 5 F.R......
  • Futrell v. Columbia Club, Inc., No. IP 69-C-176
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • August 2, 1971
    ...with several departments, such as a department store, is but a single establishment. Gilreath v. Daniel Funeral Home, Inc., 8 Cir., 1970, 421 F.2d 504; Acme Car & Truck Rentals, Inc. v. Hooper, 5 Cir., 1964, 331 F.2d 442; Mitchell v. Gammill, 5 Cir., 1957, 245 F.2d 207. Thus, added to the g......
  • Brennan v. Parnham, Civ. A. No. 72-674.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • November 20, 1973
    ...(See Footnote 2 from opinion set forth below as Footnote2) 366 F. Supp. 1021 Chief Judge Matthes in Gilreath v. Daniel Funeral Home, Inc., 421 F.2d 504, 510 (8th Cir. 1970) succinctly stated the correct law as "Coverage under the Fair Labor Standards Act, however, is dependent upon the char......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT