Mitchell v. Anderson, 14327.

• Decision Date: 30 July 1956
• Docket Number: No. 14327.,14327.
• Citation: 235 F.2d 638
• Parties: James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. Harold S. ANDERSON, Jr., Robert W. Anderson, and Alfred F. Ohl, Individually and as Copartners, Doing Business as H. S. Anderson Company, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

235 F.2d 638 (1955)

James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. Harold S. ANDERSON, Jr., Robert W. Anderson, and Alfred F. Ohl, Individually and as Copartners, Doing Business as H. S. Anderson Company, Appellee.

No. 14327.

United States Court of Appeals Ninth Circuit.

August 25, 1955.

Rehearing Denied July 30, 1956.

Stuart Rothman, Solicitor, Bessie Margolin, Dept. of Labor, Washington, D. C., George E. Duemler, Los Angeles, Cal., William W. Watson, Washington, D. C., Dept. of Labor, Kenneth C. Robertson, Regional Atty., Dept. of Labor, San Francisco, Cal., for appellant.

Gibson, Dunn & Crutcher, Sherman Welpton, Jr., W. French Smith, James J. Ryan, Los Angeles, Cal., for appellees.

Before STEPHENS and FEE, Circuit Judges, and WIIG, District Judge.

STEPHENS, Circuit Judge.

A place called Darwin, less than 150 population, lies in the Mojave desert in California, and may be likened to a trading post for those who are engaged directly and indirectly in the mining industry of the Anaconda Copper Mining Company whose "Darwin Mine" is located about a mile from the town and is operated in two shifts under approximately 250 employees. The product moves in interstate commerce. The business part of the town consists of a post office, an automobile service station, a small short-order lunch counter, a small sandwich and chili lunch place, and a grocery store. The sandwich shop opens at 10:00 a. m., but is closed Thursdays Saturdays, and Sundays. A paved highway, connects the town with Keeler, population 150, twenty-odd miles away; Olancha, population 200, about 35 miles away; Panamint Springs, population 12, about 15 miles away; and Lone Pine, population about 1500, around 40 miles away. There are meager accommodations at each of these places. There is no public passenger service in or out of the town. There are no privately operated rooming houses in Darwin, and no public dining places other than the lunch places mentioned. Anaconda owns some house trailers and some small houses in which some of its employees live, and there are a few privately owned houses in which employees live.

Prior to November, 1945, Anaconda owned and operated a bunk house and mess hall adjacent to the mine in which some of its male employees were accommodated. Subsequently to said date, Anaconda entered into a contract with H. S. Anderson Company under which Anderson (referred to in the contract and in this opinion as "Operator") took over the possession and operation of the facility mentioned. It is of some importance to note that Anaconda kept a strong guiding hand over Operator in the operation of the facility. Neither before nor after Operator took over was the facility run as a profit to Anaconda. Operator has run the facility under a minimum profit guaranteed by Anaconda. The contract further provides that Anaconda shall furnish equipment including expendable items, though not replacement thereof, garbage and refuse disposal. Operator is required to furnish meals to employees at hours suitable for the two shifts worked, and the food shall be wholesome and under Anaconda's direction. Operator shall procure and pay for public liability and property damage insurance, as Anaconda prescribes, and the contract may be cancelled upon 30 days' notice from either party. Payment for facilities used by Anaconda's employees is deducted from their wages and made over to Operator.

The facility accommodates occasional visitors for a flat price per meal. Guests of the mine management are occasionally accommodated at the messhall, and Anaconda compensates appellee therefor.

In operating under the contract, Operator employs eleven men who, the Secretary of Labor claims, are within the provisions of the Fair Labor Standards Act (1938), 29 U.S.C.A. § 201 et seq., as employees under Section 3(j)¹ of the Act which defines the term "produced" and delimits the employees who come under the Act, as follows:

"(j) `Produced\' means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof, in any State." Emphasis added

Prior to 1949, the Act, in addition to covering employees who worked directly upon the goods produced, covered those who were engaged in any process or occupation "necessary" to the production of the goods.

The trial court found that the occupation of the employees within the facility are not essential to Anaconda's production of goods since Anaconda's employees at the mine could reasonably have secured board and lodging otherwise than through the mess hall and bunk house facility. Accordingly, the employees within the facility were held to be outside the coverage of the Fair Labor Standards Act. The Secretary of Labor is here appealing from the judgment entered.

It was said in Kirschbaum Co. v. Walling, 1942, 316 U.S. 517, 524, 62 S.Ct. 1116, 1120, 86 L.Ed. 1638: "But the provisions of the Act expressly make its application dependent upon the character of the employees' activities." And in Walling v. Jacksonville Paper Co., 1943, 317 U.S. 564, 571, 63 S.Ct. 332, 337, 87 L.Ed. 460, we find: "The applicability of the Act is dependent on the character of the employees' work." And we said in Tipton v. Bearl Sprott Co., 9 Cir., 1949, 175 F.2d 432, 435, that "* * * the applicability * * * is determined, not by the nature of the employer's business, but by the character of the employee's activities."

It is of course essential that employees have adequate food and lodging and if these are not available otherwise, there can be no product unless the employer acts to furnish them. When he does so, employees working in such facility are doing work as "necessary" or as "essential" as those who work in the "factory" proper. Such is the broad principle of our Consolidated Timber Co. v. Womack Case, 1942, 9 Cir., 132 F.2d 101, 106. The Womack case concerned the status of men employed in two cook houses conducted by a logging company. There was a lower cook house in a village providing more public eating facilities than Darwin provided in our case. The trial judge found that the employees in this lower cook house were not within the coverage of the Fair Labor Standards Act. The upper cook house was deeper in the woods, and other facilities were somewhat less than those at Darwin. The trial judge found that the employees in the upper location were within the coverage of the Act. This court, 132 F. 2d at page 106 in a comprehensive opinion written in 1942 (before the Act's amendment) by the late Circuit Judge Francis A. Garrecht, ruled that the employees in both cook houses were within the Act, quoting from Kirschbaum Co. v. Walling, 316 U.S. 517, 525, 526, 62 S.Ct. 1116, 1121, 86 L.Ed. 1638, as follows: "`* * * In our judgment, the work of the employees in these cases had such a close and immediate tie with the process of production for commerce, and was therefore so much an essential part of it, that the employees are to be regarded as engaged in an occupation "necessary to the production of goods for commerce."'" See, also, Hanson v. Lagerstrom, 1943, 8 Cir., 133 F.2d 120; and Kirschbaum Co. v. Walling, 1942, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638, supra.

And this principle is not governed by whether the facility was absolutely necessary to any operation of the enterprise. In the Womack case, supra, it would have been possible for food to have reached the men so that some lumbering could have been done. In our case the mine in all probability could continue in operation in some manner without the mess hall and the bunk house. However, in each instance the facility furnished was without a question needed, and without it the production would have been affected. We are of the opinion that the employees within the facility were pursuing an occupation which, in the circumstances, was directly essential to the production of the ore for commerce, just as in Womack the employees in the cookhouses were performing a service necessary for the production of logs for commerce.

We are not unmindful of the cause for the amendment to the Act, as revealed by committee reports and Congressional debates. Some courts, in construing the Act before the amendment, gave the word "necessary" a very broad meaning. That is, the work done was held to be necessary if it was useful and needed in the production of goods. There was no formula possible for the exact separation of employment within the Act, from employment outside the Act, and the coverage appears to have been extended beyond the Congressional intent to employees in activities not directly contributing to the production of goods. The amendment was intended to cut off incidental or fringe coverage. We think the undisputed facts of this case bring it outside the change in the coverage intended or accomplished by the amendment and that the broad principles pronounced in the Womack, Hanson, and Kirschbaum cases, supra remain unchanged.

Such is the basis for our own opinion in General Electric Co. v. Porter, 1953, 9 Cir., 208 F.2d 805. And in the opinion written by Judge Soper, in Hawkins v. E. I. DuPont De Nemours & Co., 1951, 4 Cir., 192 F.2d 294. Each of these two latter cases was decided after the amendment.

Appellee's contention that McLeod v. Threlkeld, 1943, 319 U.S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538, overrules or weakens Consolidated Timber Co. v. Womack, supra, cannot be sustained. The McLeod case is not concerned with the "production of goods for commerce" but with the subject of "in commerce". The opinion clearly states the difference. In our estimation, the cited case in no sense weakens the Wom...