Mitchell v. Gammill

• Decision Date: 29 May 1957
• Docket Number: No. 16383.,16383.
• Citation: 245 F.2d 207
• Parties: James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. Boyd GAMMILL, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

245 F.2d 207 (1957)

James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. Boyd GAMMILL, Appellee.

No. 16383.

United States Court of Appeals Fifth Circuit.

May 29, 1957.

Sylvia S. Ellison, Atty., Dept. of Labor, Bessie Margolin, Asst. Sol., Dept. of Labor, Washington, D. C., Earl Street, Reg. Atty., Dept. of Labor, Dallas, Tex., Stuart Rothman, Solicitor, Lawrence P. Hochberg, Atty., U. S. Dept. of Labor, Washington, D. C., for appellant.

Malcolm E. Lafargue, Shreveport, La., for appellee.

Before RIVES, JONES and BROWN, Circuit Judges.

JONES, Circuit Judge.

Boyd Gammill, who was the defendant in the district court and is the appellee here, operated a place of business in Shreveport, Louisiana, under the name of Cotton Boll Market. The business consisted of a market for the sale of groceries, meats, poultry, produce and other foodstuffs, a barbecue stand, a restaurant, a liquor store and bar, and a poultry processing department. The Secretary of Labor brought suit under the authorization of Section 16(c) of the Fair Labor Standards Act, 29 U.S.C.A. § 216(c), against Gammill on behalf of six of the employees of his poultry department for minimum wages and overtime pay for varying periods between July 1, 1951, and March 31, 1953. Gammill interposed three defenses: that his business was a retail establishment and exempt under Section 13(a) (2) of the Act, 29 U.S.C.A. § 213(a) (2); that the six employees were excluded from coverage by Section 13(a) (4) of the Act, 29 U.S.C.A. § 213(a) (4); and that he was not, in the operation of his business, engaged in interstate commerce.

The pertinent provisions of the Fair Labor Standards Act, Act of June 25, 1938, c. 676, 52 Stat. 1060, as amended by the Fair Labor Standards Amendments of 1949, c. 736, 63 Stat. 910, 29 U.S.C.A. 201 et seq., are as follows:

"Exemptions

"Sec. 13. (a) The provisions of sections 6 and 7 shall not apply with respect to * * *

"(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. 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; * * *

"or (4) any employee employed by an establishment which qualifies as an exempt retail establishment under clause (2) of this subsection and is recognized as a retail establishment in the particular industry notwithstanding that such establishment makes or processes at the retail establishment the goods that it sells: Provided, That more than 85 per centum of such establishment\'s annual dollar volume of sales of goods so made or processed is made within the State in which the establishment is located; * * *" 29 U.S.C.A. § 213(a) (2), § 213(a) (4).

By stipulation and affidavits it was established that at the times here material the business of Gammill was operated upon property owned by him at 2434 Southern Avenue in Shreveport. It consisted of one large building, a smaller building and a paved parking area. The grocery and market, the restaurant, the liquor store and the cocktail lounge were in the front of the larger structure. The poultry processing was done in the rear of this building. The smaller building was occupied by the barbecue stand. The business conducted by Gammill at the Cotton Boll Center was under the supervision of Arvel Ellard as General Manager. He had charge of all purchases and sales, the bookkeeping, was responsible for the money, signed the checks, hired and fired employees including those in charge of the various departments. Each of the departments, namely, the barbecue stand, the restaurant, the liquor store, the bar, the grocery and market and the poultry department, had a department head who was not concerned with any of the other departments. A single bookkeeping system was kept but it reflected the operations of each department separately as well as the business as a whole. As a rule employees in the poultry department did not work in other departments. One employee, not here involved, divided his time between the grocery and the poultry departments, for a period of four months.

In the grocery and market foodstuffs were sold to the public. The restaurant and barbeque stand sold cooked foods to the consuming public. The bar and liquor store sold alcoholic beverages to the public. In the poultry department eggs and live poultry were purchased and received. The eggs were candled and stored until sold. Poultry was weighed, killed, dressed and stored until sold or used. Some of the dressed poultry was cooked and served at the restaurant and barbecue stand. Some was sold at the grocery and market. Occasional quantity sales of dressed chickens were made to individuals for consumption at large parties. The majority of the sales of the poultry department was made to hotels and restaurants. During the period of July 1, 1951, to June 30, 1953, the poultry purchases amounted to over $300,000. Of these there were about $10,000 of purchases made on the premises from out-of-state dealers, and about $11,000 of purchases made outside of Louisiana by truck drivers of Gammill at times when local supplies were inadequate. Thus about seven per cent. of the poultry purchases might be said to be in interstate commerce. By the stipulation the parties agreed that:

"Of the gross income received by defendant Gammill from the Cotton Boll Center operated by him in said building during the period noted above, including the poultry department, in excess of 75 per cent. was received from sales retail in nature. With reference to the poultry department alone in excess of 25 per cent. of gross income was received from sales for resale. All sales were made in the State of Louisiana.

"If the grocery store, meat market and the poultry department are considered a unit and segregated from the other departments above named, then in excess of 25 per cent. of gross sales were obtained from sales for resale."

Gammill, asserting that his operation was a "corner grocery" or "department store" and a single establishment in which over 75 per cent. of his business was at retail and intrastate, claimed exemption from the burdens of the Act and moved for a summary judgment. The Government contended that the business of Gammill was of a hybrid character, that the poultry department was a separate unit not functionally related to the other departments, and that it was a wholesale...