Jewel Tea Co. v. Williams
| Decision Date | 15 April 1941 |
| Docket Number | No. 2185.,2185. |
| Citation | 118 F.2d 202 |
| Parties | JEWEL TEA CO. v. WILLIAMS et al. |
| Court | U.S. Court of Appeals — Tenth Circuit |
James F. Oates, Jr., of Chicago, Ill. (Richard D. Sturtevant, of Barrington, Ill., George W. Ball, of Chicago, Ill., Eldon J. Dick, of Tulsa, Okl., and Sidley, McPherson, Austin & Burgess, of Chicago, Ill., on the brief), for appellant.
W. L. Shirey, of Tulsa, Okl. for appellees.
Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.
This is an appeal from a judgment against the Jewel Tea Company1 awarding J. O. Williams, Carl Ransdell, and S. W. Mead2 overtime compensation, liquidated damages, and attorney's fees under the provisions of § 16(b) of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. §§ 201-219.
The facts hereinafter stated obtained during the periods of employment involved herein.
The Company is a New York corporation engaged in the business of manufacturing, selling, and distributing at retail, coffee, tea, extracts, baking powder, laundry and toilet soaps, and other similar merchandise. It maintains a central manufacturing and distributing plant at Barrington, Illinois. It also maintains branch establishments in various cities throughout the United States, one of which is located at Tulsa, Oklahoma. The employees and twelve others were employed by the Company as route salesmen3 to sell and distribute at retail the Company's products from the Tulsa branch, to customers in their homes, in prescribed territories in and about Tulsa. All the above-mentioned salesmen worked exclusively within the state of Oklahoma. One additional salesman from the Tulsa branch worked in Arkansas. Approximately 15/16ths of the Tulsa branch sales were made entirely within Oklahoma.
The plan under which the Company conducts its business at its several branches may be thusly described: Each salesman is assigned an exclusive territory which he covers in a light sedan delivery car owned by the Company. His territory is divided into 12 days' business, each day represented by a route book containing the accounts of customers to be served on that day. It takes 12 working days or two full weeks for each salesman to cover his route and each customer is served once every two weeks on the same day of the week. A salesman does not make sales for immediate delivery, but takes orders for merchandise which he delivers on the next call two weeks later. In order to secure and maintain the regular patronage of his customers the salesman advances to the customer with the first delivered order for coffee or groceries some useful household article as a premium. This premium is charged to the customer's account with the understanding that the charge may be traded out by profit-sharing credits which are allowed in specified amounts on each grocery item purchased. As the balance due on the premium decreases, the salesman attempts to place additional premiums with the customer. Any customer may at any time pay in cash the balance due on the premium account and discontinue trading with the Company.
The Company does no advertising, either national or local. Instead, it relies exclusively upon the individual sales efforts of its salesmen to create demand for its products.
The salesmen are employed under written contracts, the form of which has not been changed since 1937. In the contracts they are designated as salesmen and the provisions of the contracts are consistent with that designation. These contracts require salesmen to devote their entire time and best efforts to build up and keep trade for the Company, to sell all merchandise furnished by the Company for sale, and to solicit and take orders for merchandise. They provide that the salesmen shall sell all merchandise furnished by the Company at the prices established by the Company and keep a true and just account of all such transactions. They provide for the compensation of salesmen at base salaries, plus a graduated scale of commissions on collections above a certain figure.
A salesman is expected to call each day on all customers listed in his route book, which contains the names not only of those customers to whom merchandise is to be delivered in fulfillment of orders taken two weeks before, but also customers who did not place an order on the salesman's last call. In addition to the accounts in his route book, the salesman is expected to call on other potential customers and to obtain at least three new customers each week. A salesman ordinarily spends 8 to 10 minutes in the customer's home. He first delivers and collects for merchandise sold on his last call. This takes 2 to 3 minutes. The remainder of the time is devoted to salesmanship.
When a salesman is employed, the Company places great emphasis on his selling ability and before giving him a route, carefully trains him over a period of one to three weeks in selling methods and techniques. Thereafter, he is started on a route with an assistant sales manager, who stays with him for two weeks. He is then permitted to go out on a route by himself. Two or three weeks later he is given another sales course by the assistant sales manager who goes with him on his route for another two weeks' period to find out how he is progressing. After that, he receives periodical training and one night every two weeks he is required to attend a meeting of the Next Door Neighbor Club, an organization sponsored by the Company for the instruction and welfare of its salesmen. In connection with its training program, the Company has developed a sound film which illustrates methods of sale. The Company presents a different program for each two weeks' selling period. Two-thirds of the time spent in these biweekly meetings is devoted to a discussion of sales problems by the sales manager and a presentation of the sales program to become effective the following Monday. In the training course, salesmen are taught the following method, designated as a five-point sale: The salesman first delivers and collects for merchandise previously ordered, if any, and posts the customer's account. He next calls the customer's attention to previous orders and suggests other products in which the customer may be interested, elaborating on the merit of those products. He reviews with the customer a copy of the Jewel News, a publication distributed only by salesmen, and emphasizes certain items which are featured in the current number of that publication. He then calls the customer's attention to the premium special, which is a low-priced item that can be sold for cash if the customer purchases certain extra items. Next, the salesman stresses certain dramatized items by the method described in one of the Company's pamphlets. The salesman is also furnished with seasonal products and a pamphlet gives him detailed instructions as to how these items can best be sold. Finally, the salesman presents the particular premium selected for emphasis that week which, for example, may be a china teapot or aluminum ware. Before leaving, the salesman is expected to obtain from the customer the name and address of one of the customer's friends or relatives who might be interested in becoming a Jewel customer. Such names and addresses furnish the salesman his best opportunity to obtain new customers and increase the earnings from his route.
The salesman must know recipes for the preparation of the Company's products and must be able to show the housewife how they are best prepared for consumption. He must learn the general requirements of each family, in order to avoid overstocking his customer and in order to anticipate the family's needs.
Salesmen are expected to report for work at 7 A. M. each week day, in order that the first call at a customer's house shall be made not later than 8 A. M. There is no fixed or established quitting time. They are required to do certain clerical work, part of which is customarily done at home in the evening.
Orders taken by salesmen are filled from the branch out of which they work which is in charge of a stock manager. It is the duty of the stock manager to maintain constantly a sufficient supply of merchandise to fill the orders to be taken in the future by salesmen. In order to maintain an adequate stock of goods on hand at all times, it is the regular practice of the Tulsa stock manager to order goods every other Saturday. In determining the amounts of the various items to order, he ascertains from a weekly inventory ledger kept by him the total stock depletion of those items for the preceding four weeks, subtracts the quantity still on hand and orders the difference. Special and seasonal items not regularly required in the business are sent to the Tulsa branch from the Barrington Plant on an allotment basis without previous order from the branch. No articles are ever obtained from Barrington by the stock manager for specific customers. He replenishes his stock in carload lots, and in making up his orders does not take into consideration the amount and nature of customers' unfilled orders on hand, but is guided solely by his record of prior stock depletions of the various items. No merchandise is ever sent directly to customers from Barrington or from elsewhere outside the state of Oklahoma, and no items or articles are otherwise marked or identified as being merchandise purchased by any particular customer.
Merchandise is ordinarily received in carload lots at the Tulsa branch about ten days after the stock manager sends in his order or requisition. The stock manager places all such shipments in the branch warehouse, arranging the different items in an orderly manner, so that he can conveniently fill the salesmen's orders for delivery to the customers. New stock is not kept separate from old stock, except that incoming merchandise is placed behind stock on hand, so that the older stock will move out first.
The average value of the stock of...
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