Lorinser v. B & B Employment

• Decision Date: 31 August 1971
• Docket Number: No. 8664,8664
• Citation: 190 N.W.2d 21
• Parties: 20 Wage & Hour Cas. (BN 284, 66 Lab.Cas. P 32,590 Claire LORINSER, Plaintiff and Appellant, v. B & B EMPLOYMENT, Defendant and Respondent. Civ.
• Court: North Dakota Supreme Court

Page 21

190 N.W.2d 21

20 Wage & Hour Cas. (BN 284, 66 Lab.Cas. P

32,590

Claire LORINSER, Plaintiff and Appellant, v. B & B EMPLOYMENT, Defendant and Respondent.

Civ. No. 8664.

Supreme Court of North Dakota.

Aug. 31, 1971.

Syllabus by the Court

1. The interpretive rulings of the administrator of the Wage and Hour and Public Contracts Divisions of the United States Department of Labor as contained in the Federal Register, while not of a conclusive nature, are entitled to substantial weight.

2. Exemptions provided for in the Fair Labor Standards Act are to be narrowly construed against the employer seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.

3. For reasons stated in the opinion, an employment agency does not come within the exemption provisions of Section 213(a)(2), Title 29, U.S.C.A.

Harold A. Halgrimson, Fargo, and Garrity, Cahill, Gunhus, Streed & Grinnell, Moorhead, Minn., for plaintiff and appellant.

Solberg, Anderson & Stewart, Fargo, for defendant and respondent.

ERICKSTAD, Judge (on reassignment).

The plaintiff Claire Lorinser, whom we shall hereinafter refer to as Mrs. Lorinser, appeals from a judgment of the district court of Cass County, dated May 5, 1970, which dismissed her complaint against B & B Employment, Inc., which we shall hereinafter refer to as B & B company.

In the complaint, Mrs. Lorinser asserts, among other things, that she was an employee of B & B company from May 20, 1968, to October 4, 1968; that during that time she was paid at a rate lower than the federal minimum wage of $1.60 per hour, and that accordingly she is entitled to be paid $1200 as the unpaid portion of her minimum wage, and an additional $1200 as liquidated damages, together with reasonable attorney fees and costs. B & B company's main defense is that the complaint fails to state a claim upon which relief can be granted. Although it also asserted a counterclaim, it abandoned the counterclaim at the trial, so we shall not discuss the counterclaim.

The judgment appealed from resulted from a motion made by B & B company under Rule 41(b) of the North Dakota Rules of Civil Procedure, after both parties had rested and before the case was submitted to the jury, for a dismissal of the plaintiff's complaint upon the ground that B & B company is exempt from the minimum wage requirements of the federal law under Section 213(a)(1) and (a)(2) of Title 29, U.S.C.A.

The pertinent parts of that section of the Fair Labor Standards Act read:

'(a) The provisions of sections 206 and 207 of this title shall not apply with respect to-- '(1) any employee employed in a bona fide executive, administrative, or professional capacity, or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, subject to the provisions of the Administrative Procedure Act, except that an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because of the number of hours in his workweek which he devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40 per centum of his hours worked in the workweek are devoted to such activities); or

'(2) any employee employed by any retail or service establishment, more than 50 per centum of which establishment's annual dollar volume of sales of goods or services is made within the State in which the establishment is located, if such establishment--

'(iv) is in such an enterprise and has an annual dollar volume of sales (exclusive of excise taxes at the retail level which are separately stated) which is less than $250,000.

'A 'retail or service establishment' shall mean an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or of both) is not for resale and is recognized as retail sales or services in the particular industry;'

The court granted B & B company's motion, believing that it was exempt under § 213(a)(2). No serious argument was made in the lower court and none is made in our court that § 213(a)(1) applies.

The question for us to determine in this appeal is whether B & B company is a 'retail or service establishment' exempt under § 213(a)(2).

The pertinent part of Section 206, Title 29, U.S.C.A., reads:

'(a) Every employer shall pay to each 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, wages at the following rates:

'(1) not less than $1.40 an hour during the first year from the effective date of the Fair Labor Standards Amendments of 1966 and not less than $1.60 an hour thereafter, except as otherwise provided in this section:'

Mrs. Lorinser contends that in concluding as it did the trial court failed to give proper weight to the interpretive ruling of the administrator of the Wage and Hour and Public Contracts Divisions of the United States Department of Labor as contained in the Federal Register of October 17, 1967.

The pertinent part of the Register follows:

'Pursuant to the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), Reorganization Plan No. 6 of 1950 (3 CFR 1949--53 Comp., p. 1004), and Secretary's Order No. 16--67 dated July 21, 1967, I hereby amend 29 CFR Part 779 as set out below.

'The procedural and effective date requirements of Section 4 of the Administrative Procedure Act (5 U.S.C. 553) do not apply as this amendment is concerned solely with interpretive rules. I do not believe such procedure and delay will serve a useful purpose here. Accordingly, this amendment shall become effective upon publication in the FEDERAL REGISTER.

'1. Section 779.317 is amended to read as follows:

' § 779.317 Partial list of establishments lacking 'retail concept.'

'There are types of establishments in industries where it is not readily apparent whether a retail concept exists and whether or not the exemption can apply. It, therefore, is not possible to give a complete list of the types of establishments that have no retail concept. It is possible, however, to give a partial list of establishments to which the retail concept does not apply. This list is as follows:

'Employment Agencies (Yunker v. Abbye Employment Agency, Inc., 32 N.Y.S.2d 715 (N.Y.C.Munic.Ct.1942).)' Federal Register, Vol. 22, No. 201, October 17, 1967, page 14327.

In the instant case, Mrs. Lorinser's employment consisted mainly of finding employers who needed temporary employees, and then finding employees for those employers. B & B company's office is situated in Fargo, but Mrs. Lorinser's work necessitated the use of the telephone across state lines into Moorhead and also on occasion required personal visitation on her part with prospective employers in Moorhead.

Commerce is defined as meaning trade, commerce, transportation, transmission, or communication among the several states or between any state and any place outside thereof. Section 203(b), Title 29, U.S.C.A., page 295.

Lest someone question at this point whether B & B company was engaged in commerce within the meaning of the federal Act, we draw attention to and rely upon what was recently said by the Supreme Court of Minnesota pertinent thereto.

In holding that a plaintiff accountant employed by an accounting firm was engaged in 'commerce while working on an account for an out-of-state client', the Minnesota Supreme Court said:

'An interpretative bulletin published by the Department of Labor's Wage and Hour Division supports this proposition. 29 CFR (Rev.1968) § 776.8(b) provides:

'It should be observed that the term 'commerce' is very broadly defined. The definition does not limit the term to transportation, or to the 'commercial' transactions involved in 'trade' * * *.

'The inclusion of the term 'commerce' in the definition of the same term as used in the act implies that no special or limited meaning is intended; rather, that the scope of the term for purposes of the act is at least as broad as it would be under concepts of 'commerce' established without reference to this definition.'

'For cases holding that the term 'engaged in commerce' is to be given a broad, liberal construction rather than a strained, technical one, see Overstreet v. North Shore Street Corp., 318 U.S. 125, 63 S.Ct. 494, 87 L.Ed. 656; Mitchell v. Lublin, McGaughy & Associates, supra (358 U.S. 207, 79 S.Ct. 260, 3 L.Ed.2d 243); Mitchell v. Kroger Co. (8 Cir.) 248 F.2d 935.

'The next section of the bulletin, 29 CFR (Rev.1968) § 776.9, continues the definition:

'Under the definitions quoted above, it is clear that the employees who are covered by the wage and hour provisions of the act as employees 'engaged in commerce' are employees doing work involving or related to the movement of persons or things (whether tangibles or intangibles, and including information and intelligence) 'among the several States or between any State and any place outside thereof." (Italics supplied.)'

Otis v. Mattila, 281 Minn. 187, 160 N.W.2d 691, 695 (1968).

Inasmuch as the ruling relied upon by Mrs. Lorinser that an employment agency is not exempt is an interpretive ruling, we think it important to deterine what weight the federal courts give to such a ruling.

In 1944 the Supreme Court of the United States, in dealing with the authoritative weight to be given interpretive bulletins, said:

'There is no...