Goldberg v. Nello L. Teer Company

• Citation: 208 F. Supp. 552
• Decision Date: 14 July 1962
• Docket Number: No. C-60-D-61.,C-60-D-61.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor, Plaintiff, v. NELLO L. TEER COMPANY, Defendant.

208 F. Supp. 552

Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor, Plaintiff, v. NELLO L. TEER COMPANY, Defendant.

No. C-60-D-61.

United States District Court M. D. North Carolina, Durham Division.

July 14, 1962.

William Fauver, U. S. Dept. of Labor, for plaintiff.

Charles B. Nye and Jerry L. Jarvis, Durham, N. C., for defendant.

PREYER, District Judge.

This action was brought by the plaintiff's predecessor to have the defendant enjoined from violating the minimum wage (Sections 6 and 15(a) (2)), overtime (Sections 7 and 15(a) (2), and record keeping (Sections 11(c) and 15(a) (5)) of the Fair Labor Standards Act of 1938, as amended (29 U.S.C.A. § 201 et seq.), hereinafter referred to as the "Act".

The questions to be decided by this court are: Were the acts of the defendant complained of in interstate commerce and covered by the Act, and if they were, should defendant be enjoined from further violations of the Act.

The defendant is, and at all times hereinafter mentioned was engaged in numerous construction projects, including, but not limited to, the production, supplying and application of construction materials such as crushed rock, gravel, sand, and other earth materials used in connection therewith, and in the construction, reconstruction, and improvement of public highways and roads, airports, aircraft taxiways and runways, and other instrumentalities of commerce, located in the Eastern United States.

It is stipulated that defendant's employees on all these various projects, wherein occurred the alleged violations complained of, regularly worked in excess of 40 hours per week, and defendant failed to pay such employees for all their hours in excess of 40 per week at rates not less than one and one-half times the regular rates at which they were employed. The defendant, in effect, admits it violated the act if it was engaged in interstate commerce within the meaning of the act.¹

I.

1. It is stipulated that defendant's work on the Voice of America Projects was performed during the period from February 13, 1960, to January 10, 1961, at 3 sites located in and around Greenville, North Carolina.

Defendant's work under this contract involved the necessary grading, clearing and preliminary roadwork on the sites, as well as drainage, for the location of transmitter facilities of the Voice of America which are under construction at the said sites. The over-all Voice of America project, for which the defendant performed the above services, is the construction of a new Voice of America radio station consisting of various transmitters in and around Greenville, North Carolina. The new radio station, when completed, is scheduled to regularly transmit broadcasts into Europe, Africa, the Middle East and South America as a replacement and substitute for the transmission facilities now located in New Jersey and New York.

We agree with the plaintiff that defendant's work was in interstate commerce. In Bennett v. V. P. Loftis Company, 4 Cir., 167 F.2d 286 (1948) the defendant was engaged in the construction of a concrete bridge. The new bridge was to replace an existing bridge on a highway over which interstate traffic passed. After the completion of the new bridge the old one was to be abandoned and the highway moved so as to be connected with the new bridge which would then be put into use. Defendant was only engaged in constructing the replacement bridge and had nothing to do with moving the highway. No interstate traffic passed over the replacement bridge while the defendant was constructing it. The question before the court was whether the plaintiff, who was employed as a night watchman in and around the construction site as were some of these employees, was engaged in commerce within the meaning of the act. The court found that the work of the night watchmen was just as indispensable to the completion of the job as the work of any of the other employees and was in commerce. The court then discussed the "new construction" doctrine, upon which the defendant in this case primarily relies, citing authority, and then concluded "the new construction doctrine has no bearing on the instant case, because the bridge here in question, although a new structure, was being built to replace an existing structure which had long been used in interstate commerce."

We think the Loftis case is applicable and controlling in the present case. The construction of the transmission facilities of the Voice of America project at Greenville was as a replacement and substitute for existing facilities, and an enlargement of an existing world-wide system of instrumentalities of interstate and international commerce.

In Mitchell v. Five Boro Construction Company, 1st Cir., 291 F.2d 371 (1961), cert. den. Five Boro Const. Corp. v. Goldberg, 368 U.S. 900, 82 S.Ct. 179, 7 L.Ed. 2d 95, defendant's employees were engaged in "constructing a transmitter building, a communications center building, a receiver building, three power plants, all support buildings and utilities which, when finished were to take their place as a communication relay center of the Army Communication Administration Network" in Puerto Rico. These facilities had never existed before, but their purpose was to improve an existing world-wide Army communication network by establishing a new relay station in Puerto Rico to enhance and improve the world-wide reception and transmission of messages. The employees were engaged in construction of the buildings and not the installation of radio equipment. The court agreed that this was new construction but held that nevertheless the project was in commerce and said: "* * * the distinction between new construction and repairs has been expressly rejected by the Supreme Court as a determinative touchstone whereby to decide the coverage of the Act."

The facts in the case at bar are even stronger than those in the Five Boro case as the facilities here were to replace those already being used in interstate commerce, and to improve and expand the world-wide communication system of the Voice of America project. See Mitchell v. C. W. Vollmer & Co., Inc., 349 U.S. 427, 75 S.Ct. 860, 99 L.Ed. 1196, (1955). There the court did not apply the new construction doctrine. Justice Frankfurter in the dissent says the test is in effect being abandoned. See also Mitchell v. H. B. Zachry Co., 362 U.S. 310, 313, 80 S.Ct. 739, 4 L.Ed. 753 (1960). The court there said the Vollmer case expressly rejected the new construction doctrine and further that "* * * whether construction work is covered depends upon all the circumstances of the relation of the particular activity to `commerce' in the statutory sense and setting." See also Mitchell v. Hodges Contracting Company, 5 Cir., 238 F.2d 380 (1956).

The defendant relies strongly on the Zachry case, supra, for the proposition that new construction is not per se within the act. We agree with defendant on this and that the test is as set out by the court above in Zachry. A logical interpretation of this would be that the fact that new construction is involved does not necessarily mean the activity is within or without the act, but rather that the fact that new construction is involved is a fact to be considered along with all the other facts and circumstances in determining whether the activity is covered or not. This is the defendant's contention, but the Zachry case is distinguishable from the Loftis and Five Boro cases on the facts. The latter two cases dealt with the question of whether an activity was itself in commerce while Zachry dealt with the production of goods for commerce.

In the present case the defendant went into land which was both swampy and undeveloped to prepare a site for facilities which would be in interstate commerce. These facilities were to be later constructed by another contractor. The defendant's position is that the employees here were not so directly and vitally related to the functioning of an instrumentality or facility of interstate commerce as to be, in practical effect, a part of it rather than an isolated, local activity. The test to be applied is the one set out in Zachry. In applying the test we believe that to accomplish the purposes of the act the project must be viewed as a whole and not broken down into various isolated parts. This is the view expressed in Loftis, supra. We believe that the work done by the defendant is directly and vitally related to the functioning of the radio transmitters of the Voice of America project because without the roadwork and grading done by the defendant the construction of the facilities could not have been effected and they could not function as planned. We conclude that the work of the defendant was directly related to the Voice of America project and the employees were engaged in commerce within the meaning of the Act. See Mitchell v. Lublin, McGaughy & Associates et al., 358 U.S. 207, 79 S.Ct. 260, 3 L.Ed.2d 243 (1959), where it was held that the employee of an architect who prepared the plans, specifications, etc. for interstate instrumentalities and facilities were in commerce. The employees of the defendant in the present case were certainly not any more remote from the stream of commerce than were the employees who prepared the plans for the project.

2. It is stipulated that defendant performed the work on its Seneca River projects during the period from July 23, 1960, to November 11, 1961. There were two separate projects there, but the same law concerning coverage is applicable to both.

a) The comprehensive plan for the development of the Savannah River is an 11-project plan calling for the construction of reservoirs and dams at Clark Hill, Hartwell, and nine other places. The Clark Hill Dam and Reservoir was completed in 1954. It has increased the minimum flow of the Savannah River from Augusta to Savannah so as to produce a navigable channel depth of 7 feet at ordinary summer low-water. It...