Lonas v. National Linen Service Corporation, 9414.

• Decision Date: 24 June 1943
• Docket Number: No. 9414.,9414.
• Parties: LONAS v. NATIONAL LINEN SERVICE CORPORATION.
• Court: U.S. Court of Appeals — Sixth Circuit

136 F.2d 433 (1943)

LONAS v. NATIONAL LINEN SERVICE CORPORATION.

No. 9414.

Circuit Court of Appeals, Sixth Circuit.

June 24, 1943.

W. O. Lowe, of Knoxville, Tenn., for appellant Lonas.

Cecil Sims, of Nashville, Tenn., and Stanley I. Posner, of Washington, D.C., for amici curiae and appellee.

Herbert J. Haas and Sol I. Golden, both of Atlanta, Ga., and Ben R. Winick and Joel H. Anderson, both of Knoxville, Tenn., for appellee National Linen Service Corporation.

Irving J. Levy and Bessie Margolin, both of Washington, D.C., Jeter S. Ray, of Nashville, Tenn., Morton Liftin, of Washington, D. C., and George L. Clarke, of Baltimore, Md., for Administrator, Wage & Hour Division, U. S. Department of Labor, amicus curiae.

Posner & Fox, of Washington, D.C., for Linen Supply Ass'n of America, amicus curiae.

Cecil Sims, of Nashville, Tenn., for American Institute of Laundering, amicus curiae.

Before HICKS, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

In a suit by an employee of the appellee to recover for herself and others similarly situated, unpaid minimum wages and overtime compensation as permitted by § 16(b) of the Fair Labor Standards Act, 29 U.S. C.A. § 201, the narrow question is presented whether their employer is a service establishment exempt from the requirements of the Act by § 13(a) (2). The court dismissed the complaint on the ground that the pleaded facts, accepted as true, show that the defendant is a service establishment, the greater part of whose servicing is in intrastate commerce, and §§ 6 and 7 of the Act therefore have no application to its employees. The plaintiff's appeal was supported by a brief and argument for the Administrator of the Wage and Hour Division and the decision by briefs and arguments for national associations in the industry, as amici curiae.

The appellee corporation has its main office in Atlanta, Georgia, where it purchases and manufactures linen supplies (such as towels, nurses' and other uniforms, bus seat covers, pillow cases, hospital linens) and toilet articles which it rents to customers through branches located in various states. Each branch maintains a plant where soiled linens, collected regularly by trucks from its customers, are washed, ironed, and wrapped for delivery. The appellant and others were employed at appellee's Knoxville, Tennessee, plant where they ironed, wrapped, and otherwise worked on articles rented by customers, 20% of whom are located in Virginia and Kentucky and the balance in Tennessee. 60% of the customers are industrial or business concerns as distinguished from private families or individuals; 5% are interstate carriers.

Section 13(a) (2) exempts from the minimum wage and over-time compensation provisions of the Act contained in §§ 6 and 7, the following: "Any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce."

The Administrator, basing his argument upon Interpretative Bulletin No. 6 issued December, 1938 and revised June, 1941 by the Wage and Hour Division of the United States Department of Labor, contends that the exemptions in § 13(a) (2) are limited to establishments retail in character whether they sell goods or services. This view is based upon what he conceives to be the implications to be drawn from the legislative history of the Act and the grammatical construction of the exemption section. Since the related terms are coupled in the same sentence and are used in the disjunctive with the terms "retail" and "service" both modifying the word "establishment," they refer to...