Holland v. Amoskeag Mach. Co.

• Citation: 44 F. Supp. 884
• Decision Date: 04 May 1942
• Docket Number: Civil No. 160.
• Parties: HOLLAND, Adm'r of Wage and Hour Division, U. S. Department of Labor, v. AMOSKEAG MACH. CO.
• Court: U.S. District Court — District of New Hampshire

44 F. Supp. 884

HOLLAND, Adm'r of Wage and Hour Division, U. S. Department of Labor, v. AMOSKEAG MACH. CO.

Civil No. 160.

District Court, D. New Hampshire.

May 4, 1942.

Vernon C. Stoneman, Regional Atty., of Washington, D. C., for the Government.

Kenneth E. Graf, of McLane, Davis & Carleton, all of Manchester, N. H., for Amoskeag Mch. Co.

MORRIS, District Judge.

This action is brought under Section 17 of the Fair Labor Standards Act of 1938 (Act of June 25, 1938, c. 676, 52 Stat. 1060, U.S.C.A. Title 29, § 201 et seq.), to enjoin violations of Sections 7, 15(a) (1) and 15 (a) (2) of the Act.

The complaint was filed September 26, 1941, and alleges that the defendant has had and now has in its employ a number of employees who are subject to the provisions of the Act and had employed such employees for workweeks in excess of the statutory maximum and has failed to pay the said employees the overtime compensation required by the Act. The complaint further alleges that the defendant has shipped in interstate commerce goods in the production of which employees of the defendant were employed in excess of the statutory maximum without receiving the requisite overtime compensation. The complaint alleges that all the violations referred to were repeatedly committed by the defendant.

The defendant's answer filed October 17, 1941, is a general denial of the applicability of the Act to its employees and a further denial of any violations of the provisions of the Act.

On February 12, 1942, an amended answer was filed admitting the constitutionality of the Act and the jurisdiction of this court but alleges that the application of the said Act is limited to certain of the defendant company's employees at certain times who do certain types of work.

The defendant is a New Hampshire corporation with its place of business in Manchester, New Hampshire. It employes about 160 persons.

When the business of the Amoskeag Manufacturing Corporation was wound up in the bankruptcy court, a corporation known as the Amoskeag Industries, Inc., was organized to take over the property. The properties so purchased were located in what is known as the "Amoskeag Yard." The Amoskeag Yard is approximately a mile and a quarter long, from 600 to 700 feet wide on the east side of the Merrimack River, and from 700 to 800 feet wide on the west side of the river. By its original purchase, Amoskeag Industries, Inc., obtained approximately 8,000,000 square feet of floor space, and acquired ownership of the railroad tracks running the length of the yard. It sold or leased a number of its mills and factories to various manufacturers and producers that are engaged in the production of goods for interstate commerce.

The defendant, Amoskeag Machine Company, purchased the premises now occupied by it from the Amoskeag Industries, Inc. It is a large industry divided into a number of different departments carrying on the business of a machine shop, installing machinery and equipment, replacing worn out and defective parts on machines and doing a general repair work for companies and manufacturers producing goods for interstate commerce. It also does a general repair and construction work for persons and corporations outside those leased or sold by the Amoskeag Industries, Inc. It is not a manufacturing corporation in the ordinary sense of the word, engaged in manufacturing articles for transportation in interstate commerce, but is essentially engaged in repair and construction work within the State of New Hampshire. On two occasions the defendant did work outside the State of New Hampshire, in Lowell, Mass., where they dismantled factory machinery which was removed and set up in Manchester and they installed machinery in a factory in Lawrence, Mass. During the work on the Lawrence job the defendant complied with the provisions of the Wage and Hour Act. This was not true with respect to the Lowell job.

The defendant's business is divided into various departments, including millright, carpenter, machinists, plumbing and sheet metal, piping, electrical, painting, watching and boiler house operation. The defendant supplied watchmen to comply with insurance regulations in its own and other factories and furnished necessary labor for the operation of the two boiler rooms owned by the Amoskeag Industries, Inc. The steam produced in said boiler rooms was sold by Amoskeag Industries, to various manufacturers and producers in New Hampshire engaged in the production of goods for commerce and also for heating their various and respective factories and in the processing and manufacturing of their products.

During the period covered by this action, defendant's average gross annual receipts amounted to $285,000.

An attempt was made to ascertain the income derived from each of the different departments and one witness gave estimates, without having in mind actual figures. The estimates were given in percentages of the entire business. I feel that they were so unreliable as to have little weight.

The defendant maintains an accounting department from which it can be determined each employee's weekly wage, the number of hours of work and the character of the work in which each was engaged.

During the particular period in question, nearly all the watching that was done on the property was done by virtue of an arrangement between Amoskeag Industries, Inc., and Amoskeag Machine Company, with one or two exceptions, whether the premises were leased or whether they were vacant; that during that time there came a period when Amoskeag Industries asked the Amoskeag Machine Company to bill the tenant direct for the service, rather than have it come through two sets of books; that in those instances wherein the tenant did not pay, Industries was obligated to pay the Amoskeag Machine Company. The watchmen were all employed by the Amoskeag Machine Company.

Without going into further details, the foregoing is fairly illustrative of the defendant's business.

Defendant's amended answer contains much material which need not have been alleged but which I find from the evidence supporting the same correctly states the facts.

The Fair Labor Standards Act became effective October 24, 1938. The amended answer alleges that within one year of the operative date of the Act the defendant sought the opinion of counsel on the question of the applicability of the said act to its business and was advised that the character and type of its business, being more than ninety five percent intra-state, did not make it subject to the provisions of the Act. In January, 1941, an examiner for the Wage and Hour Division examined the books and records of the defendant company and thereafter various conferences were had between the representatives of the Wage and Hour Division and the defendant company for the purpose of considering the different questions created by the peculiar type of business of the defendant. No satisfactory result was reached.

It is alleged that on March 29, 1941, the defendant company started to pay all one hundred and sixty of its employees in accordance with the provisions of the Act except for about thirty employees eighteen of whom were working as night watchmen, the others acting as laborers in the boiler house. I find this to be a fact. The night watchmen were paid in accordance with the terms of the Act from May 10, 1941, to the present time.

The defendant alleges that it has been in full compliance with the Act from August 16, 1941, on and that this fact was well known to the petitioner.

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