Mitchell v. Lublin, McGaughy & Associates

• Citation: 250 F.2d 253
• Decision Date: 25 November 1957
• Docket Number: No. 7488.,7488.
• Parties: James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. LUBLIN, McGAUGHY & ASSOCIATES, a co-partnership, and Alfred M. Lublin, John B. McGaughy, William T. McMillan and William Marshall, Jr., individually and doing business as Lublin, McGaughy and Associates, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

250 F.2d 253 (1957)

James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. LUBLIN, McGAUGHY & ASSOCIATES, a co-partnership, and Alfred M. Lublin, John B. McGaughy, William T. McMillan and William Marshall, Jr., individually and doing business as Lublin, McGaughy and Associates, Appellees.

No. 7488.

United States Court of Appeals Fourth Circuit.

Argued October 23, 1957.

Decided November 25, 1957.

Bessie Margolin, Asst. Sol., United States Department of Labor, Washington, D. C. (Stuart Rothman, Sol., Eugene R. Jackson, Attorney, and Jeter S. Ray, Regional Attorney, United States Department of Labor, Washington, D. C., on brief), for appellant.

Robert C. Nusbaum and Alan J. Hofheimer, Norfolk, Va., for appellees.

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

SOPER, Circuit Judge.

The Secretary of Labor brings this suit under the Fair Labor Standards Act, as amended,^* against Lublin, McGaughy and Associates, a co-partnership, and against the individual members of the firm who are architects and engineers with a main office in Norfolk, Virginia, and a branch office in Washington, D. C. The complaint charges that the defendants have violated various sections of the statute, in that they have employed many persons in interstate commerce and in the production of goods for interstate commerce for workweeks longer than forty hours without compensating them for the excess hours of employment at rates not less than one and one-half (1½) times the regular rates at which they were employed, in violation of §§ 7 and 15(a) (2) of the statute; and in that they have failed to keep adequate records of their employee's wages and hours and other conditions — as prescribed by the Federal Regulations — in violation of §§ 11 (c) and 15(a) (5) of the Act; and in that they have transported goods in interstate commerce, in the production of which many of their employees had been employed, in violation of § 7 of the Act. An injunction was prayed restraining the defendants from further violation of the statute. The District Judge, after hearing, denied the relief prayed, resting his decision in large part on the conclusion that the plans and specifications prepared by the firm were not "goods" within the meaning of the Fair Labor Standards Act.

The principal questions to be considered grow out of the contentions of the Government: (1) that the drawings, plans and specifications prepared by the employees of the firm are "goods" and that the preparation thereof is "production of goods for commerce" within the meaning of § 3 of the statute; and (2) that the employees of the firm who participated in interstate travel and communications required for the conduct and co-ordination of the firm's offices in Norfolk and Washington were "engaged in commerce" within the meaning of § 7(a) of the statute; and (3) that a large part of the work of the firm's draftsmen, fieldmen and clerical employees is so closely related to projects for the improvement, expansion or replacement of interstate instrumentalities as to bring them within the "in-commerce" coverage of the Act. The Government recognizes that employees engaged in a professional capacity are exempted by § 13 of the statute, but seeks to bring the non-professional employees of the firm within the coverage of the Act.

The defendants, who reside in Norfolk, are architectural and consulting engineers. They have worked and are now employed on numerous projects in Virginia, Maryland and the District of Columbia, and have worked on some projects in North Carolina and overseas. They include, primarily, projects for the improvement, enlargement and repair of installations at military bases, airfields, shipyards and radio stations for the United States military services, and also a substantial number of state and municipal undertakings and projects. These activities require constant co-ordination and communication, as well as transmission of information and materials between the two offices. In general, the defendants collect the necessary data for the projects, confer with their clients in regard thereto, and prepare the drawings, estimates and surveys which are used in connection with the projects. They also supervise and inspect the construction from an architectural and engineering standpoint by furnishing surveying and engineering services to contractors while construction is in progress.

To perform this work the defendants have about thirty employees in the Norfolk office and twenty employees in the Washington office, including architects, engineers, draftsmen, fieldmen, office managers, stenographers and bookkeepers. This action is concerned only with the nonprofessional employees consisting of draftsmen, fieldmen, clerks and stenographers.

In the course of the business necessary surveys and topographical maps are made and then the draftsmen, working under the supervision of the engineers and architects, prepare the drawings and designs from which blueprints are reproduced. The drawings, together with explanatory specifications, contain the information necessary for estimating the cost, financing the project, the bidding of contractors, and guidance to the contractor in constructing the project. The military, governmental and commercial structures on which the defendants are now and in recent years have been engaged are intricate in design and construction and could not be constructed without the plans and specifications prepared by the employees, many of which are transmitted across state lines. They consist of physical material of negligible value in itself, though, as copies of the master drawings, they contain information which may be of substantial value to the particular client in the construction of the project and in planning subsequent alteration and repair. It is estimated that on the average one-half of the charges of the defendants for their architectural and engineering services is for work upon the master drawings and specifications and in the development of information embodied in them.

The plans, specifications and estimates prepared for government agencies, which comprised the greater part of the defendants' work, are submitted to these agencies and become their property. Frequently numerous copies of the specifications and drawings are required. The advertisement of a proposed government project results in requests for sets of plans and specifications from out-of-state contracting firms and these are sent by the Government to the prospective bidders to enable them to prepare and submit bids. When required by the terms of the contract the defendants furnish copies of the specifications and drawings which are reproduced by an outside blueprint company. For commercial clients copies of the drawings and specifications are furnished while the originals are retained by the defendants in case additional copies are needed. These copies are also obtained from commercial blueprint establishments at an additional cost to the clients.

The fieldmen include surveyors, transit men and chain men who work under the supervision of a professional engineer. They survey boundaries, take borings, etc. at the work site, frequently traveling from the District of Columbia to the site in Maryland and returning to the defendants' office in Washington in connection with their duties. They have little or no duty in the office but gather the material and bring it to the office as a basis for the preparation of the drawings and specifications. Some of the field work was done on projects for the Washington Suburban Sanitation Commission located in Maryland to which a large part of the time of the firm's Washington office has been devoted for the period of a year. A survey party reports to the Washington office each morning, drives to Maryland with the necessary field books and field equipment, makes surveys and gathers data, which is brought back to the Washington office at the end of each day and turned over to the draftsmen. For approximately 50 per cent of their commercial clients, for whom a minor part of defendants' work is performed, the defendants supply employees who supervise the construction of the project so as to determine whether the construction is proceeding in accordance with the plans and specifications. An additional charge is made for this type of work.

Projects for the improvement or repair of interstate instrumentalities on which the defendants have worked include airfields and airplane facilities for which streets are widened or constructed, hangars are repaired or altered, and extensions are built. Radio and television facilities are relocated, repairs to government buildings at shipyards and machine shops are made, and other work in Maryland, Virginia and North Carolina is constructed.

Stenographers type letters, specifications and other documents, some of which are mailed to points out of the state. Some of the employees handle telephone calls, and some of those calls are from and to localities out-of-state. Payroll data for employees in the Washington office is mailed bimonthly to Norfolk where payroll checks are prepared and returned to Washington through the mail. Employees of the bookkeeping department, who prepare vouchers for the payment of bills of the defendants, prepare those for out-of-state as well as local creditors.

We consider first the contention of the Government which goes to the heart of the case, that the plans, drawings, specifications and blueprints prepared by the non-professional employees of the defendants are "goods" within the meaning of § 3(i) of the Act where the term is defined as "goods, * * * wares, products, commodities, merchandise, or articles or subjects of commerce of any character." The District Judge held to the contrary, following the decision in McComb v. Turpin, D.C.Md., 81 F.Supp. 86, where, as in the pending case, an injunction was sought to prevent violation of the...