Lasater v. Hercules Powder Co.

• Decision Date: 29 July 1947
• Docket Number: Civ. No. 730.
• Citation: 73 F. Supp. 264
• Parties: LASATER et al. v. HERCULES POWDER CO.
• Court: U.S. District Court — Eastern District of Tennessee

73 F. Supp. 264

LASATER et al. v. HERCULES POWDER CO.

Civ. No. 730.

District Court, E. D. Tennessee, S. D.

July 25, 1947.

Supplemental Opinion July 29, 1947.

COPYRIGHT MATERIAL OMITTED

Harry J. Schaeffer, E. B. Baker, and J. N. Hunter, all of Chattanooga, Tenn., for plaintiffs.

Whitaker, Hall & Haynes, of Chattanooga, Tenn., for defendants.

DARR, District Judge.

This action is brought under Section 16 (b) of the Fair Labor Standards Act of 1938¹ particularly Section 7(a), for unpaid overtime compensation, liquidated damages and attorneys' fee.

During the period covering the time for which recovery is sought, the plaintiffs were employees of the defendant. The defendant operated the Volunteer Ordnance Works (herein called the Plant) near Chattanooga, Tennessee, under a cost-plus-fixed-fee contract with the United States Government (herein called the Government) for the manufacture of trinitrotoluene (herein called TNT).

All the real estate upon which the Plant was built, being 6207.2 acres, was owned by the Government and the Government had jurisdiction thereover. All the personal property on and used in said Plant was owned by the Government, including the TNT and the materials for the manufacture thereof.

All outgoing shipments were made by the Government on Government bills of lading. All goods arriving by incoming shipments became the property of the Government at the Plant site, except a minor portion to which title vested in the Government at the shipping point.

The whole operation was under the control of the Government. During the operating period Government officials were constantly present and actively supervised and inspected. Subject to the control reserved in the Government, the Plant was maintained and operated by the defendant as an independent contractor, including the right to hire and discharge all employees.

Much of the material for the manufacture of TNT came from out of state sources, and the finished product was shipped to foreign countries.

The defendant, under agreement with the Government and in cooperation therewith, constructed a chainlike fence around the entire Plant, which fence was seven feet high and topped by three strands of barbed wire. There were two entrances, or gates, whereby persons could enter the Plant area, one known as the South Gate and the other as the North Gate. Practically all the employees were required to enter the South Gate. At the gates were a number of time clocks. Each employee was required to have an identification badge.

The defendant had a system of intra-plant buses which operated upon the defendant's premises conveying the employees free of charge. Regular buses operated from the North and South Gates to the working places and return. Other buses were used to take care of the employees who were late and for other purposes. An employee could be as much as 10 minutes late without being charged with loss of time.

Each employee was required to be at an entrance a sufficient period before his work hours so that he might be identified, clock in and be transported to his working place in time for the commencement of his shift. The employees' working places were various distances from the gates, the furthest point being about a mile and a half. In addition to the eight hours of the shift, the time spent by employees from arrival at the gate for work until the exit from the gate at the end of the shift averaged approximately 40 minutes. It is for this claim of overtime that the plaintiffs bring suit.

The record made by the time clocks was not used to calculate the hours worked, but was used to check the presence of the employees. This check was used to authenticate the payrolls and was also a contribution toward arrangements for uninterrupted operations.

Some of the employees were required to change clothes and perhaps make other preparations for work. For the time thus spent there are incidental claims which will be hereinafter considered.

The defendant disclaims liability because (1) the rate of pay and working conditions of the plaintiffs were regulated by the Walsh-Healey Act, the Eight Hour Law, and the Davis-Bacon Act, and not by the Fair Labor Standards Act of 1938; (2) the plaintiffs were not engaged in commerce nor in the production of goods for commerce; (3) the time plaintiffs spent at the gates and in traveling on defendant's premises to and from their places of work was not working time within the provisions of the Fair Labor Standards Act of 1938; and (4) under mandate of the Portal-to-Portal Act of 1947, being Public Law 49 of the 80th Congress, 29 U.S.C.A. § 251 et seq. the defendant under no circumstances is subject to any liability and the Court has no further jurisdiction of the action.

1. From an examination of the Eight Hour Law,² the Davis-Bacon Act,³ and the Walsh-Healey Act,⁴ together with the Congressional history of labor laws raising standards of pay and working conditions, the conclusion is quite evident that the intended coverage of the Fair Labor Standards Act is not restricted because of these previous enactments. I deem it unnecessary to undertake to analyze the premises resulting in this conclusion.

The Fair Labor Standards Act is applicable to work under government contracts. Walling v. Patton-Tulley Transp. Co., 6 Cir., 134 F.2d 945.

2. (a) By oral presentation and the briefs, there has been extended argument on whether the plaintiffs were engaged in "the production of goods for commerce" in their employment for the defendant.

The materials for the production of the goods being owned by the United States, the finished product being munitions of war also owned by the United States, and the shipment across state lines and to foreign countries being by the United States for the prosecution of war, makes the question of whether the goods moved in interstate commerce quite perplexing. A number of courts have expressed divergent views.⁵

The settlement of this question is not determinative of the case, but I venture to offer an opinion.

The defendant offers no defense based upon an insistence that the plaintiffs were actually employees of the United States. The employment contract was between a private employer and the employees. Anyway, cost-plus-fixed-fee contractors with the Government engaged in war production are not agents of the Government and do not share the Government's sovereign immunities.⁶

If it should be that employees who work in private industry producing goods for the Government are not within the provisions of the Fair Labor Standards Act, then the purpose of the Act is defeated.

At Section 2 of the Act, 29 U.S.C.A. § 202, Congress announces findings showing the purposes which prompted it to enact the law. Among which purposes are the maintenance of the minimum standard of living necessary for health, efficiency and general well being of workers, and to prevent unfair method of competition in commerce.

If it be that persons working in private employment in producing goods that move across state lines are denied the benefits of the Act because the goods belong to the United States, there would result a probable curtailing of the earning power of such employees as compared with employees producing privately owned goods for commerce.

The Act is remedial and must be liberally construed. The fact that the employer is working under contract with the Government whereby other legislation might be applicable concerning wages and hours of the employees does not deprive such employees from claiming the benefits of the Fair Labor Standards Act. Therefore, determining whether or not the plaintiffs were engaged in "the production of goods for commerce" must rest upon a construction of the Fair Labor Standards Act.

I think that a person privately employed is entitled to the benefits of the Act if he aids in the production of any commodity that is transported across state lines regardless of who owns the commodity or for what purpose it is to be used.

(b) The insistence has been made that the TNT, being munitions of war, was not "goods" under the terms of the Fair Labor Standards Act. However, the defendant appears to concede that the definition in the Act is sufficient to cover the TNT, but that this commodity was not "goods" as having been delivered into the actual physical possession of the ultimate consumer (Sec. 3(i) of the Act, 29 U.S.C.A. § 203(i).

The proof is that the TNT moved on Government bills of lading, but the defendant remained in possession of the TNT and did the shipping upon instructions from the Government. The cars were loaded and jointly inspected by the railroad, by the Government and by the defendant. This was done to meet the rules set out by the Interstate Commerce Commission.

So actually the goods did not get into the physical possession of the United States before shipment. In addition, this provision of the Act is most probably for the benefit of the ultimate consumer and cannot be invoked by the producer.⁷

I might say parenthetically that evidently all hands thought all during the time of the manufacturing of TNT that this commodity was "goods" moving in commerce for they were scrupulous to observe the rules of the Interstate Commerce Commission.

Without an attempt to further and fully analyze this question, I give my opinion to be that the plaintiffs were engaged in "the production of goods for commerce" within the Fair Labor Standards Act.

3. The question now presented is whether the time spent at the gates and in being transported to the working places and return, or any portion thereof, was working time within the scope of Section 7(a) of the Fair Labor Standards Act.

The Supreme Court in similar situations has, in three cases, given a general formula for determining whether time so spent is a part of a statutory workweek. Tennessee Coal Co. v. Nuscoda Local, 321 U.S. 590, 64 S.Ct. 698, 88 L.Ed. 949; Jewell Ridge Corp. v. Local No. 6167, 325 U.S. 161, 65...