Goldberg v. Modern Trashmoval, Inc.

• Decision Date: 13 July 1962
• Docket Number: 13529.,Civ. A. No. 13316,13420
• Parties: Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor v. MODERN TRASHMOVAL, INC., a corporation, and Francis P. E. Bohager, individually. Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor v. MODERN TRASHMOVAL, INC., a corporation (two cases).
• Court: U.S. District Court — District of Maryland

207 F. Supp. 596

Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor v. MODERN TRASHMOVAL, INC., a corporation, and Francis P. E. Bohager, individually.

Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor v. MODERN TRASHMOVAL, INC., a corporation (two cases).

Civ. A. Nos. 13316, 13420, 13529.

United States District Court D. Maryland.

July 13, 1962.

Charles Donahue, Sol., Ernest N. Votaw, Regional Attorney, Leo L. Holstein, Deputy Regional Attorney, Morton I. Schwartzman, Associate Attorney, U. S. Dept. of Labor, for plaintiff.

Charles G. Page, Baltimore, Md., for defendants.

R. DORSEY WATKINS, District Judge.

These three actions instituted by the Secretary of Labor under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., (the "Act") were consolidated and heard together. Civil Action No. 13316 is an action under 29 U.S.C.A. § 217 for an injunction against alleged violation of overtime and record keeping requirements of the Act. Civil Action No. 13420 and Civil Action No. 13529 are wage suits brought under 29 U.S.C.A. § 216(c) at the written request of nineteen employees, to recover alleged underpayment of wages. The Secretary relies upon Mitchell v. Dooley Bros., Inc., 1 Cir.1960, 286 F.2d 40, as having finally settled the issue of law in the latter two suits herein.

Background Facts

The individual defendant is the president, chief executive officer, and majority stockholder of the corporate defendant.

Defendants operate a business of collecting and disposing of garbage, rubbish, debris and industrial waste, collected almost wholly from business and industrial establishments, many of which establishments are engaged in interstate commerce or in the production of goods for interstate commerce. Defendants also make collections from the individual units of one large and several small apartment houses, under contracts with the apartment house owners or operators, not with the individual tenants. In addition, a few relatively minor calls are made on a non-recurring basis (cleanup after a fire, a major repair jobs).

With a single exception later to be noted, the material collected is either destroyed by incineration, or dumped, within the State of Maryland.

Collections are made from containers at loading platforms, elevator landings, other places adjacent to working areas; and in some, but relatively few, instances containers are removed from inside buildings.

The investigation out of which these suits arose covered the period April 1, 1959 to March 29, 1961. Within this period defendants entered into a union contract effective September 20, 1960. Prior to and during the first six weeks of the union contract, no records were kept of hours worked. Since November 2, 1960, a time-clock card record has been kept for each driver and helper, Defendants contend that the elapsed time shown on these cards is inaccurate and too high, because of the practice of employees clocking in before the assigned starting times; clocking in before being ready for work; waiting for driver or helper after clocking in, etc.

On conflicting evidence, the court finds that the employees in question worked fluctuating numbers of hours a week, ranging generally from fifty-one of fifty-seven hours. Throughout the period in question they were paid fixed weekly wages. Prior to November 2, 1960 no overtime wages were paid as such, although occasionally employees would be paid additional sums for special jobs, the amounts paid bearing no direct relation to the length of the special job, or the hours otherwise worked. Since November 2, 1960, employees have received overtime payment for hours in excess of fifty-six or sixty (in accordance with the provisions of the union contract relating to the type of work being done), but such overtime payment is not at the rates required by the Fair Labor Standards Act, if that Act is applicable.¹

The parties have, however, stipulated on the hours to be used for the purpose of calculating the amounts, if any due the individual employees.²

Questions Presented

1. Were the employees engaged in interstate commerce?

2. Were the employees engaged in the production of goods for commerce, or in a closely related occupation directly essential to the production thereof?

3. Is the corporate defendant an exempt "retail or service establishment"?

Preliminary Considerations

Concededly, the applicability vel non of the Act is dependent on the character of the employee's work, not the business of the employer. Kirschbaum v. Walling, 1942, 316 U.S. 517, 524, 62 S.Ct. 1116, 86 L.Ed. 1638; McLeod v. Threlkeld, 1943, 319 U.S. 491, 497, 63 S.Ct. 1248, 87 L.Ed. 1538; Walling v. Jacksonville Paper Co., 1943, 317 U.S. 564, 571-572, 63 S.Ct. 332, 87 L.Ed. 460; Schroepfer v. A. S. Abell Co., Inc., 4 Cir.1943, 138 F.2d 111, 113, cert. den. 1944, 321 U.S. 763, 64 S.Ct. 486, 88 L.Ed. 1060, reh. den. 1944, 322 U.S. 770, 64 S.Ct. 1149, 88 L.Ed. 1595.

Moreover, in enacting the Act, Congress did not seek to legislate to the full extent of its constitutional power, but left to the States a domain for regulation, Mitchell v. H. B. Zachry Co., 1960, 362 U.S. 310, 314, 80 S.Ct. 739, 4 L.Ed.2d 753; Kirschbaum v. Walling, 1942, 316 U.S. 517, 521-523, 62 S.Ct. 1116, 86 L. Ed. 1638. Also, the Supreme Court has recognized the interplay of national and local concern in different aspects of commerce. In Mitchell v. H. B. Zachry Co., 1960, 362 U.S. 310, 315-316, 80 S.Ct. 739, 4 L.Ed.2d 753, the court said:

"* * * In Kirschbaum Co. v. Walling, supra, we found that limits on coverage cannot be understood merely in terms of the social purposes of the Act, in light of which any limitations must appear inconsistent. For the Act also manifests the competing concern of Congress to avoid undue displacement of state regulation of activities of a dominantly local character. Accommodation of these interests was sought by the device of confinement of coverage to employment in activities of traditionally national concern. The focus of coverage became `commerce,' not in the broadest constitutional sense, but in the limited sense of § 3(b) of the statute: `trade, commerce, transportation, transmission, or communication among the several States * * *.' Employment `in' such activities is least affected by local interests. A step removed from employment `in commerce' is employment `in' production which is `for' commerce. Under this clause we have sustained coverage whether the product is to be consumed primarily by commerce in the statutory sense, by its `facilities and instrumentalities,' see Alstate Construction Co. v. Durkin, 345 U.S. 13, 73 S.Ct. 565, 97 L.Ed. 745 or, as in the case of the products of the industrial consumers of water here, to move in it. Furtherest removed from `commerce' is employment not `in' production `for' commerce but in an action which is only `related' to such production. In applying this provision, we have necessarily borne in mind that it is furtherest removed in the scheme of the statute from the hub of the national interest in `commerce' upon which a limited displacement of state power is predicated."

Counsel seem in general agreement that the Supreme Court cases most nearly in point with the problem here presented are Kirschbaum v. Walling, 1942, 316 U.S. 517, 62 S.Ct. 111, 86 L.Ed. 1638; Borden Co. v. Borella, 1945, 325 U.S. 679, 65 S.Ct. 1223, 89 L.Ed. 1865, and 10 East 40th St. Co. v. Callus, 1945, 325 U.S. 578, 65 S.Ct. 1227, 89 L.Ed. 1806.³

Kirschbaum held that the jobs of building-maintenance employees, ranging in responsibility from electricians to porters, of a loft building locally owned, but tenanted by producers for commerce who had installed therein and used production facilities, had such a close and immediate tie with the process of production for commerce that they were such an essential part thereof that the employees' occupations were "necessary" to production.

In Borella, maintenance employees of a producer-owned office building occupied in part by the owner-producer's central offices, but in which it maintained no production facilities, were held to be engaged in an occupation "necessary to the production of goods" for interstate commerce, and within the coverage of the Act.

In Callus, maintenance employees of a locally-owned office building, held out for general tenancy, and in fact tenanted by a miscellany of tenants, some of whom produced goods for interstate commerce, were held not to be covered. Although the employee duties were substantially identical with those in Kirschbaum and Borella, they were "distinguished" on the basis that they were part of an enterprise which "spontaneously satisfies the common understanding of what is local business."

The Supreme Court has clearly recognized that the borderlines between coverage and non-coverage are not well defined. In Kirschbaum, the court said (316 U.S. at page 523, 62 S.Ct. at page 1120):

"* * * The Fair Labor Standards Act puts upon the courts the independent responsibility of applying ad hoc the general terms of the statute to an infinite variety of complicated industrial situations. Our problem is, of course, one of drawing lines. But it is not all a problem of mensuration. There are no fixed points, though lines are to be drawn. The real question is how the lines are to be drawn — what are the relevant considerations in placing the line here rather than there. * * *"

The Secretary, quite understandably, heavily relies upon Mitchell v. Dooley Bros., Inc., 1 Cir. 1960, 286 F.2d 40, as a Court of Appeals decision establishing the right to sue on behalf of defendants' employees, and supporting the Secretary's claim for an injunction. In that case the District Court had granted summary judgment in favor of the defendant. In reversing, the Court of Appeals stated that the only question was whether the employees in question were "engaged in the production of goods for commerce", finding it...