McComb v. Blue Star Auto Stores

• Citation: 164 F.2d 329
• Decision Date: 19 January 1948
• Docket Number: No. 9227.,9227.
• Parties: McCOMB v. BLUE STAR AUTO STORES, Inc.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

164 F.2d 329 (1947)

McCOMB v. BLUE STAR AUTO STORES, Inc.

No. 9227.

Circuit Court of Appeals, Seventh Circuit.

October 10, 1947.

Rehearing Denied October 28, 1947.

Writ of Certiorari Denied January 19, 1948.

Samuel E. Hirsch, William Ruger and Wilhartz & Hirsch, all of Chicago, Ill., for appellant.

Wm. S. Tyson, Sol., Bessie Margolin, Morton Liftin, and Frederick U. Reel, Attys., William A. Lowe, Reg. Atty., James F. O'Hare, Atty., United States Department of Labor, all of Washington, D. C., for appellee.

Before KERNER and MINTON, Circuit Judges, and LINDLEY, District Judge.

Writ of Certiorari Denied January 19, 1948. See 68 S.Ct. 387

KERNER, Circuit Judge.

The Administrator of the Wage and Hour Division brought proceedings to enjoin defendant from violating the "overtime" provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq. After a trial on the merits, the court made findings of fact and conclusions of law. He held that defendant's office and warehouse employees were engaged in interstate commerce and in the production of goods for interstate commerce within the meaning of the Act, and since defendant stipulated that it was not complying with the overtime provisions of the Act, the court issued the injunction prayed for in the complaint. To reverse the decree, defendant appeals.

There is no dispute as to the controlling facts. Defendant has its office and two warehouses in Chicago. It operates a chain of 21 retail stores at which it sells its merchandise. Of these stores, 9 are located in Chicago, 9 elsewhere in Illinois, and 3 in Indiana. It has its offices at 2001 State Street and its warehouses at 2010 Wabash Avenue and 2235 State Street, Chicago. The general offices serve as the executive, administrative, purchasing, and general accounting offices, where are employed the secretary and general manager, a bookkeeper, a pay roll clerk and a switchboard operator. The bookkeeper keeps records of purchases, goods shipped to the retail outlets, the income and expenditures of the outlets, and handles the accounts payable ledger and the ledger showing defendant's assets and liabilities. The pay roll clerk takes care of the pay roll for all of defendant's employees, both within and without the State of Illinois. The switchboard operator handles all telephone calls, including out of State long distance calls. Slightly more than twenty-five per cent of all merchandise received at the warehouses is distributed from the warehouses to the three Indiana stores, and defendant's employees devote about fifteen per cent of their time to work related to the Indiana stores, but no attempt is made to segregate the work of the employees as between interstate and intrastate goods.

The warehouse employees include a manager, receivers, pricers, order pickers, packers and shippers. The manager supervises the work of the other employees. The receivers unload the trucks delivering the merchandise. Incoming merchandise arrives at the warehouses several times each week, and outgoing shipments are made to the Indiana stores weekly. The pricers affix the proper price to each item, following which the merchandise is stored in the warehouses. When a retail store orders goods from a warehouse, the order picker selects the merchandise from the stock, the packer packs it for distribution, and the shipper loads it on the truck. In one of the warehouses these functions are combined and all the work is performed by four employees. In the other warehouse there are eight employees.

Defendant's first contention is that it is not engaged in commerce or in the production of goods for commerce. The argument is that it is engaged in the business of selling merchandise at retail.

It will be enough to say that the application of the Act depends on the character of the employees' activities rather than on the employer's activities, Engebretsen v. E. J. Albrecht Co., 7 Cir., 150 F.2d 602. All employees engaged in procuring goods from other states for transportation to and delivery at employer's warehouses are engaged in "commerce" within the meaning of the Act; likewise, employees engaged in unloading and checking goods shipped in interstate commerce, and in handling them on the platforms, as well as those engaged in shipping such goods from warehouses in Illinois to stores in another state, are all engaged in the production of goods for commerce or in an occupation necessary to such production, Walling v. Goldblatt...