McComb v. Southern Weighing & Inspection Bureau

• Decision Date: 05 November 1948
• Docket Number: No. 5780.,5780.
• Citation: 170 F.2d 526
• Parties: McCOMB, Administrator of Wage and Hour Division, U. S. Department of Labor, v. SOUTHERN WEIGHING & INSPECTION BUREAU.
• Court: U.S. Court of Appeals — Fourth Circuit

170 F.2d 526 (1948)

McCOMB, Administrator of Wage and Hour Division, U. S. Department of Labor, v. SOUTHERN WEIGHING & INSPECTION BUREAU.

No. 5780.

United States Court of Appeals Fourth Circuit.

November 5, 1948.

Bessie Margolin, Assistant Solicitor, of Washington, D. C. (William S. Tyson, Solicitor, Frederick U. Reel and Helen Grundstein, Attorneys, all of Washington, D. C., and Beverley R. Worrell, Regional Attorney, United States Department of Labor, of Birmingham, Ala., on brief) for Appellant, and Thomas B. Gay, of Richmond, Va. (Hunton, Williams, Anderson, Gay & Moore, and H. Merrill Pasco, all of Richmond, Va., on brief) for Appellee.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PARKER, Chief Judge.

This is an appeal from a summary judgment for defendant dismissing a suit instituted by the Administrator of the Wage and Hour Division of the Department of Labor to enjoin alleged violations of the maximum hour provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 201-219, and regulations promulgated under the Act with regard to the keeping of records. The defendant in the court below, appellee here, is the Southern Weighing and Inspection Bureau, one of six associated bureaus maintained by the railroads operating in the southeastern portion of the United States to perform transportation services which they can perform more economically and satisfactorily through a common bureau serving them all than through individual effort on the part of each railroad. The court below held the bureau not subject to the Act on the ground that it was "no more than a joint department of the member lines of the common carriers involved and that the employees in question are the joint employees of such common carriers". The court concluded that they were employees of employers subject to the provisions of Part I of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., and hence excepted by section 13(b) (2) of the Fair Labor Standards Act. 29 U.S.C.A. § 213(b) (2). We think that this was clearly correct.

The facts are that the bureau is not a corporation, or a partnership or an independent business undertaking of any sort, but, precisely what it professes to be, a department maintained by a number of railroads jointly for enforcing certain standards necessary to the performance of their duties as common carriers in the transportation of freight. Its purpose as set forth in the articles of association under which it is organized is "to promote and obtain, through inspection and supervision, correct and uniform weighing, classification, marking and packing of freight originating at, or passing through, or destined to points on and cast of the Mississippi River, and on and South of the Ohio and Potomac Rivers." It is controlled by an executive committee composed of officials of the member railroads, and the one hundred and seventy odd employees which it directs are paid from funds belonging to the railroads through checks issued by the Southeastern Railroads Associated Bureaus, an accounting and treasury department of six bureaus maintained by the railroads for handling matters of common concern. Any increase in pay which might result from holding the Fair Labor Standards Act applicable here would be paid by the railroads from these funds.

The services performed by the employees here involved are services for the railroads. They are directly connected with transportation in interstate commerce and relate to matters covered by tariffs and regulations which the railroads have filed with the Interstate Commerce Commission. The bureau makes no charge to the railroads for these services, but the fund which has been set up for the operations of the bureau is reimbursed by each railroad for the actual cost of services performed for it. The bureau renders no service to shippers or the public, although the same functions that its employees perform for member railroads are performed, upon request, for non-member railroads at cost.

The bureau operates under its name as a bureau and keeps records, hires and discharges employees, makes purchases, procures certain insurance, has its telephone listed and does several other things in that name. All of this, however, is manifestly a mere matter of convenience and does not indicate that the bureau is anything other than a joint department maintained by the railroads. It owns no property except such items as office equipment, portable scales and inspection tools. It rents office space; but this is paid for by the member railroads through the funds handled by the Southeastern Railroads Associated Bureaus. It does not make or attempt to make any profit, but each member railroad pays monthly assessments on the basis of services received, and the total of these for each month equals the total of salaries, wages and other expenses. Official accounts carried and maintained by government agencies in connection with the Railroad Retirement Act, 45 U.S.C.A. § 228a et seq., the Railroad Unemployment Insurance Act, 45 U.S.C.A. § 351 et seq., and the Carriers Taxing Act of 1937, 45 U.S.C.A. § 261 et seq., are in the name of the bureau as employer; but all taxes imposed are, like rent and wages, paid by the member railroads through funds handled by the Southeastern Railroads Associated Bureaus.

The employees here involved receive wages comparable in amount to wages paid to other railroad employees, and they have received the general wage increases granted other railroad employees. For many years the Interstate Commerce Commission has recognized their status as employees of the railroads and has approved their being allowed free transportation in that capacity in accordance with section 1(7) of the Interstate Commerce Act. In "Employee" under Railway Labor Act, 136 I.C.C. 321, which determined the status of personnel of a certain Trunk Line Association, the commission said:

"The status of some of these employees has been previously determined in connection with the use of free transportation, In Conf. Ruling 371, which relates to free transportation of employees of bureaus of carriers, we said: The following persons may lawfully use free transportation: (a) Employees of a weighing and inspection bureau who perform and supervise the weighing of cars for the carriers maintaining such bureau are exclusively engaged upon the work of such carriers, and are subject to the direction of their officials, but report to and are paid by the weighing and inspection bureau."

The Trunk Line Association dealt with by the commission was precisely the sort of joint undertaking on the part of railroads as is involved here, and in holding the employees working under the Association to be employees of the railroads within the meaning of the Railway Labor Act, 45 U.S.C.A. § 151 et seq., the commission used language which is very pertinent to the case before us. It said:

"The Trunk Line Association is exclusively in the service of certain carriers and performing work for them. The performance of such work is the sole function of the association. The character of the work is the same as that ordinarily performed by employees or subordinate officials of common carriers and which the carriers otherwise must perform individually in order to render adequate transportation service. The member carriers through their executive officers who form the Trunk Line Association committee have sole and continuing authority to supervise and direct the personnel of the association in all matters relating to the rendition of services.

"It is therefore found that the work defined as that of an employee or subordinate official in orders of this commission now in effect defining and classifying employees and subordinate officials of common carriers includes the work of employees of the Trunk Line Association and brings employees performing the work of said association within the term `employee' as used in the railway labor act."

Section 13(b) of the Fair Labor Standards Act, 52 Stat. 1068, 29 U.S.C.A. § 213 (b), provides:

"(b) The provisions of section 7 shall not apply with respect to * * * (2) any employee of an employer subject to the provisions of Part I of the Interstate Commerce Act."

Since section 7 of the Fair Labor...