Joles v. Johnson County Youth Service Bureau, Inc., IP 91-1699-C-T/F.

• Decision Date: 31 March 1995
• Docket Number: No. IP 91-1699-C-T/F.,IP 91-1699-C-T/F.
• Citation: 885 F. Supp. 1169
• Parties: Candace Rae JOLES, Plaintiff, v. JOHNSON COUNTY YOUTH SERVICE BUREAU, INC., Defendant.
• Court: U.S. District Court — Southern District of Indiana

885 F. Supp. 1169

Candace Rae JOLES, Plaintiff, v. JOHNSON COUNTY YOUTH SERVICE BUREAU, INC., Defendant.

No. IP 91-1699-C-T/F.

United States District Court, S.D. Indiana, Indianapolis Division.

March 31, 1995.

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COPYRIGHT MATERIAL OMITTED

Daniel C. McCarthy, Greenwood, IN, for Candace Rae Joles.

Stephen L. Huddleston, Franklin, IN, for Youth Service Bureau, Johnson County.

FINDINGS OF FACT AND CONCLUSIONS OF LAW.

FOSTER, United States Magistrate Judge.

This cause was tried by the Court before this Magistrate Judge pursuant to the parties' consents and the reference of the assigned district judge. The plaintiff asserts two claims. She sues under Section 16 of the Fair Labor Standards Act of 1938 ("F.L.S.A."), June 25, 1938, chap. 676, 52 Stat. 1059, as amended, 29 U.S.C. § 216(b) (hereinafter cited to "U.S.C."), for back pay, damages, and attorneys fees, alleging that the defendant failed to pay overtime compensation in violation of § 207(a)(1) of the Act. She also asserts a claim under Acts 1933, ch. 47, § 1 et seq., p. 371, as amended, Burns Indiana Statutes Annotated, Code Edition § 22-2-5-1 et seq. (1992 ed. and 1994 Cum. Supp.) (hereinafter cited to "Indiana Code"), for damages, attorneys fees, and costs, alleging that the defendant failed to pay wages owed to her. The findings and conclusions of the Court follow:

1. The Court has jurisdiction to adjudicate the plaintiff's claims under 29 U.S.C. § 216(b) and 28 U.S.C. §§ 1331 and 1367.

2. The defendant operates a group home for Indiana juveniles from Johnson County and surrounding counties in Indiana. It serves only youths from the state of Indiana. Its primary objectives are to provide temporary shelter and care to troubled youths varying in age from six to nineteen years of age who are referred by juvenile courts or county agencies, including welfare departments and probation departments.

3. The defendant is a not-for-profit corporation organized under the laws of the state of Indiana and is a tax-exempt organization under 26 U.S.C. § 501(c)(3). The home does not charge its residents or their parents for its services. During the plaintiff's employment, the defendant derived its income from Indiana counties in the nature of per diem payments. It also received other public agency and private grants or contributions. The defendant is not a public agency of any state, county, or local government.

4. The plaintiff was employed as a house-parent by the defendant from May 7, 1990 until July 16, 1990. She was not paid overtime compensation during or after her employment for hours worked in excess of forty hours per workweek.

5. As a houseparent, plaintiff was required to spend two or three consecutive days and nights, including overnight, on the defendant's premises. The plaintiff's duties as a houseparent included supervising the life of the residents, purchasing food and supplies for the house, housekeeping and maintenance, laundry, supervising child care workers, and maintaining records. There was no claim of exemption from the F.L.S.A.

6. During her employment, the plaintiff purchased food and other supplies necessary for the care of the defendant's residents at the following local establishments: Wal-Mart and Marsh Supermarket in Franklin; Sam's Wholesale Club and Greenwood Park Mall in Greenwood; and Cub Foods in Indianapolis. She did not place orders to be filled by out-of-state businesses with these local retail establishments; she made the purchases by walking through the stores and choosing items off the shelves. Some items purchased by the plaintiff for the defendant had moved in interstate commerce before arriving at the point of purchase.

7. During the period of the plaintiff's employment, the defendant received commodities from the national government.

8. Title 29, U.S.C. § 216(b) provides, in part:

Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.

Title 29, U.S.C. § 207(a)(1) provides:

Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

9. Under the F.L.S.A., an employer is defined as "any person acting directly or indirectly in the interest of an employer in relation to an employee ..." and an employee is defined as "any individual employed by an employer." 29 U.S.C. § 203(d) and (e)(1).

10. At all relevant times, the defendant was an "employer" and employed the plaintiff, who was an "employee", as those terms are defined in the F.L.S.A. None of the exceptions provided in 29 U.S.C. § 203(e)(2), (3), or (4) apply.

11. Under the F.L.S.A., the defendant was required to pay overtime compensation to the plaintiff during her employment if either of the following conditions existed:

1. The plaintiff was "engaged in commerce or in the production of goods for commerce", or 2. The defendant was an "enterprise" "engaged in commerce or in the production of goods for commerce", regardless of whether the plaintiff was so engaged.

29 U.S.C. § 207(a)(1).

12. In enacting the F.L.S.A., Congress did not exercise its full Commerce Clause power. Maryland v. Wirtz, 392 U.S. 183, 190-91, 88 S.Ct. 2017, 2021, 20 L.Ed.2d 1020 (1968); McLeod v. Threlkeld, 319 U.S. 491, 493, 63 S.Ct. 1248, 1249-50, 87 L.Ed. 1538 (1943); A.B. Kirschbaum Co. v. Walling, 316 U.S. 517, 522, 62 S.Ct. 1116, 1119-20, 86 L.Ed. 1638 (1942). Specifically, Congress intended the F.L.S.A. not to encompass activities which merely "affect" or "indirectly relate" to interstate commerce. McLeod, 319 U.S. at 493-94, 63 S.Ct. at 1250; Higgins v. Carr Bros. Co., 317 U.S. 572, 573, 63 S.Ct. 337, 338, 87 L.Ed. 468 (1943); 29 C.F.R. § 776.9 (Department of Labor's interpretation of the Act).¹ In the 1961 and 1966 amendments, Congress exercised more of its Commerce Clause powers by extending the Act's coverage to employees not themselves engaged in commerce or the production of goods for commerce but who are employed in enterprises so engaged. 29 U.S.C. § 207(a)(1). Since such employees affect commerce through their effect on their enterprises, Congress could constitutionally include them within the Act's coverage. State of Maryland v. Wirtz, 392 U.S. 183, 88 S.Ct. 2017, 20 L.Ed.2d 1020 (1968). The 1974 amendments to 29 U.S.C. § 203(s)(1)(A)(i) have been interpreted as a further extension of the Act's coverage to activities of enterprises which merely affect commerce. See Radulescu v. Moldowan, 845 F.Supp. 1260 (N.D.Ill.1994).

13. The plaintiff was not employed in "an enterprise engaged in commerce or in the production of goods for commerce". 29 U.S.C. § 207(a)(1).

a. The Act defines the above terms:

(r)(1) "Enterprise" means the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishment operated through leasing arrangements....

(2) For purposes of paragraph (1), the activities performed by any person or persons —

(A) in connection with the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution, a school for mentally or physically handicapped or gifted children, a preschool, elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is operated for profit or not for profit), or

(B) in connection with the operation of a street, suburban or interurban electric railway, or local trolley or motorbus carrier, if the rates and services of such railway or carrier are subject to regulation by a State or local agency (regardless of whether or not such railway or carrier is public or private or operated for profit or not for profit), or

(C) in connection with the activities of a public agency, shall be deemed to be activities performed for a business purpose.

(s)(1) "Enterprise engaged in commerce or in the production of goods for commerce" means an enterprise that —

(A)(i) has employees engaged in commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person; and

(ii) is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive or excise taxes at the retail level that are separately stated) (B) is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution, a school for mentally or physically handicapped or gifted children, a preschool, elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is operated for profit or not for profit); or

(C) is an activity of a public agency.

29 U.S.C. § 203(r) and (s).

b. Unless it engages in commercial activities in competition with private entrepreneurs or qualifies as one of the organization listed in 29 U.S.C. § 203(r)(2), a nonprofit charitable organization is not an "enterprise" under § 203(r) because it is...