Mitchell v. HB ZACHRY COMPANY, Civ. No. 2704.

• Decision Date: 04 January 1955
• Docket Number: Civ. No. 2704.
• Citation: 127 F. Supp. 377
• Parties: James P. MITCHELL, Secretary of Labor, U. S. Department of Labor, Plaintiff, v. H. B. ZACHRY COMPANY, a corporation, Defendant.
• Court: U.S. District Court — District of New Mexico

127 F. Supp. 377

James P. MITCHELL, Secretary of Labor, U. S. Department of Labor, Plaintiff, v. H. B. ZACHRY COMPANY, a corporation, Defendant.

Civ. No. 2704.

United States District Court, D. New Mexico.

January 4, 1955.

Paul Larrazolo, U. S. Atty., Albuquerque, N. M., Harry Campbell, Jr., Asst. Reg. Atty., Dallas, Tex., for plaintiff.

T. B. Keleher (of Keleher & McLeod), Albuquerque, N. M., Chester H. Johnson, San Antonio, Tex., R. Dean Moorhead, Austin, Tex., for defendant.

ROGERS, District Judge.

This is an action seeking an injunction pursuant to the provisions of Title 29 U.S.C.A. § 217, against the defendant H. B. Zachry Company, a corporation, for alleged violations of the Fair Labor Standards Act of 1938, and amendments thereto, same being Title 29 U.S.C.A. § 201 et seq. The plaintiff in this case is James P. Mitchell, Secretary of Labor, U. S. Department of Labor.

From the admitted allegations in the pleadings, from an extensive stipulation entered into between the parties at a trial of this cause, and from additional evidence adduced at said trial, the following undisputed facts appear:

The defendant corporation is organized and exists under the laws of the State of Delaware, and has its principal office and place of business in San Antonio, Texas. Its main course of business is that of a construction company.

The operations of defendant sought to be adjudged as within the Fair Labor Standards Act are performed at the Holloman Air Force Base in Otero County, New Mexico, and are being performed pursuant to a certain contract entered into on May 24, 1954 between the United States of America, Department of the Army, Corp of Engineers on the one hand, and the defendant corporation on the other.

The work to be performed under such agreement is for the construction of airfield pavement. In effect, work under this contract repairs, renovates, widens and considerably extends existing airfield runways at Holloman Air Force Base. There is also to be constructed a new runway at said Base.

Practically all the construction called for under this agreement, is within a restricted area, which, for security reasons, is not open to the general public, and taxi-ways and runways in such region are not used by conventional commercial airlines, but are restricted to military aircraft, as hereinafter more fully explained, and for certain experimental activities, the nature of which need not be set forth herein.

It appears that in the region in which defendant is working, at least one daily flight of interstate origin, lands, and at least one interstate flight originates. These flights carry both personnel and cargo on Government owned and operated aircraft. In addition to these flights, it appears that training flights in excess of 25 leave and return daily to this area.

In a different section of Holloman Air Force Base, and on runways on which defendant's contract does not apply, Continental Airlines have operated since the middle of September, 1954. Continental Airlines are undisputedly engaged in interstate commerce.

Holloman Air Force Base, New Mexico, is a government owned and operated airfield installation, and at all times material hereto has been used by the U. S. Army and the U. S. Air Force for certain restricted research activities, and for the training of Air Force personnel. Its runways are used by light and heavy bombers and military transport and cargo ships, together with other types of military aircraft.

At the inception of performance of defendant's contract, defendant paid its employees in strict compliance with the Fair Labor Standards Act of 1938, in that each employee who worked in excess of 40 hours in a week was paid time and a half for the hours worked in excess of said 40 hours. This method of payment was the result of an error on the part of one of defendant's superintendents. When this method was known to the home office of defendant, instructions were given to those in charge of the project to discontinue the practice, and only pay overtime payments of time and a half to laborers who worked in excess of 8 hours per working day. This latter method of payment is that specifically prescribed in the above-mentioned contract between the United States and defendant corporation. This latter method of payment continued for several months, and until the instant cause was filed. At that time, in order to avoid a separate hearing on an Order to Show Cause for a Temporary Injunction, it was agreed between the parties hereto that the defendant would comply with both the Fair Labor Standards Act, and the Contractual and Statutory Eight-Hour Law, compliance with the former Act not to be an admission on the part of the defendant as to ultimate liability thereto.

The Answer is, in effect, a general denial, coupled with defenses that the remedy sought is premature; that the reasons for the prayer of the complaint are moot, and that the alleged violations, if any, are de minimis. At the conclusion of the hearing at which the above-related facts were adduced, the Court called for memoranda, and excellent briefs were submitted by each party hereto. The Court has studied the briefs and authorities therein contained, and now is ready to announce its decision on the two following questions:

1. Are the defendant's employees, while performing their functions under the above-mentioned contract between defendant and the United States, engaged in commerce within the purview of Title 29 U.S.C.A. § 207(a); and

2. If the Fair Labor Standards Act of 1938 applies to defendant's contract, should an injunction be issued enjoining and restraining the defendant and its officers from violating the provisions of said Act? The questions will be considered in the order named.

At the outset, the Court is of the opinion that neither the training flights, the restricted experimental activity, nor the Continental Airlines flights should be considered, one way or another, in arriving at the eventual question of whether defendant's employees are engaged in the interstate commerce. In the first place, from the evidence adduced at the trial, the training flights are purely military in nature, and by no rational basis could they be construed to transport either personnel or goods in commerce. Many of these flights return to the base without any intervening landings, and any intervening landings which might occur, would be only for the purpose of repair of the aircraft, or refueling thereof.

As to the second category, that of experimental activity, the nature of such activity is of such high security that no probative evidence was furnished the Court on the trial hereof, and, accordingly, no weight can be given thereto.

As to the regular flights of Continental Airlines, this activity, in the opinion of the Court, has no effect in this matter, because of the fact that the landings and take offs of Continental Airlines is in a region far distant from that where defendant is working; that the construction of the runways used by the commercial airlines differ from that involved in the contract; the area used by the commercial airline is relatively unrestricted, and lastly, the use by Continental Airlines of certain facilities at the Air Base is some four months subsequent to the date of the agreement between the United States and defendant corporation.

We are thus confronted with the eventual problem of whether the duties required under the contract between the Government and the defendant, and performed by defendant's employees in repairing, renovating, widening and extending existing runways, and the building of new taxiing areas, and a new runway, constitute an engagement in interstate commerce, within the Fair Labor Standards Act of 1938.

The question is an extremely close one, in the Court's opinion, but must be answered in the affirmative. The briefs submitted by each party were most exhaustive in their scope, and the Court feels that every applicable citation of authority was included in either one or both the memoranda, which it has at hand.

The first problem that occurred to the Court was whether, assuming that the personnel and cargo which arrives and leaves Holloman Air Force Base by interstate flight are military personnel and military matériel, are such flights, flights in interstate commerce, within the provisions of the Fair Labor Standards Act? In this connection, it appears that the question has been settled with quite a degree of finality, by the case of Powell v. U. S. Cartridge Co., 339 U.S. 497, 70 S.Ct. 755, 94 L.Ed. 1017, decided by the Supreme Court of the United States in May of 1950. This case stands for the proposition that the Fair Labor Standards Act applies to employees of a private contractor operating a government-owned munitions plant under a contract with the Government. While, strictly speaking, the holding is limited to whether the employees are engaged in the production of goods for commerce, within the meaning of the Act, the reasoning set forth in the opinion is applicable with like force to the related question of whether employees are engaged in interstate commerce. The Court specifically held that in the Fair Labor Standards Act, the primary purpose of Congress was not to regulate interstate commerce, as such, but was to eliminate sub-standard labor conditions throughout the nation; that said Act sought to raise living standards, without substantially curtailing employment or earning power, and applying such reasoning to the Powell case, held, specifically, that the Government's munitions plants provided an appropriate place for the beneficial application of the Act's standards of working conditions, without danger of reduced employment through loss of business.

If the Supreme Court so reasoned in the Powell case, relative to munitions manufactured through a contract with the Government, transported to another branch of the Government by various agencies of transportation, and...