Mitchell v. Sherry Corine Corporation

• Decision Date: 13 March 1959
• Docket Number: No. 7784.,7784.
• Citation: 264 F.2d 831
• Parties: James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. SHERRY CORINE CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

264 F.2d 831 (1959)

James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. SHERRY CORINE CORPORATION, Appellee.

No. 7784.

United States Court of Appeals Fourth Circuit.

Argued January 20, 1959.

Decided March 13, 1959.

Sylvia S. Ellison and Beate Bloch, Attys., U. S. Dept. of Labor, Washington, D. C. (Stuart Rothman, Sol., and Bessie Margolin, Asst. Sol., U. S. Dept. of Labor, Washington, D. C., on the brief), for appellant.

Robert R. MacMillan, Norfolk, Va. (Breeden, Howard & MacMillan, Norfolk, Va., on the brief), for appellee.

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

SOPER, Circuit Judge.

This action was instituted by the Secretary of Labor under the Fair Labor Standards Act, 29 U.S.C.A. Sec. 201 et seq., to enjoin the Sherry Corine Corporation from violating the minimum wage and related sections of the statute at the restaurants which it operates at the Municipal Airport in Norfolk, Virginia. The defendant contended that its employees were not covered by Secs. 6 and 7 of the Act since they were not engaged in commerce or in the production of goods for commerce, as defined in Sec. 3 thereof, and also because the business was a retail or service establishment within the meaning of Sec. 13 of the Act. The District Judge sustained these defenses and dismissed the complaint.

The Corporation operates a coffee shop on the first floor and a dining room and kitchen on the second floor of the airport building. It employs 45 persons, including a chef, 2 assistant chefs, 10 helpers and 10 bus boys. In addition to the patrons of the two restaurants, it regularly supplies meals to Capital Airlines and National Airlines to be served to their passengers enroute on flights leaving Norfolk for destinations outside the State of Virginia. This business produces between 46 per cent and 49 per cent of the Corporation's annual gross revenue.

The Capital Airlines purchases meals prepared according to its specifications at an agreed price for three of its sixteen flights leaving Norfolk each day. It notifies the defendant three hours before flight time how many meals will be required but reserves the right of cancellation one and a half hours prior to time of departure upon payment of half price. An hour before flight time the restaurant prepares the required number of trays, eight to a carrier, placing upon each tray the necessary accessories. Hot foods prepared in the kitchen in casserole dishes are kept hot in electric ovens. This equipment is the property of Capital Airlines. The trays and ovens are delivered to the planes and put in place by the defendant's bus boys twenty minutes before departure. Empty ovens, carriers and soiled equipment are removed from the plane and cleaned in defendant's kitchen. The airline hostess aboard the plane serves the passengers after the plane has reached cruising height, and generally the meal has not been served and eaten until after the plane has left the State. In the case of one flight, service is not commenced until the plane has made its first stop in North Carolina. Southbound and westbound flights cross the State's borders in eight to twelve minutes; northbound flights in twenty-four to thirty-five minutes. The planes carry from twenty-four to fifty-seven passengers. The defendant also provides coffee and fruit juices for other flights, and special cleaning service for planes from out-of-state that stay in Norfolk overnight. The defendant's arrangement with National Airlines is similar in all material respects to its arrangement with Capital Airlines.

The airlines serve meals on certain first class flights without specific additional charge. This practice has been a competitive factor in air transportation. The expense is recognized as part of the cost of operation which enters into the authorized rate structure. On cheaper flights the Civil Aeronautics Board does not permit the furnishing of meals except for a charge over and above the cost of the ticket. The airlines are not under contract to furnish complete meals but the passengers have come to except them, and sometimes when a flight is delayed meals are served to them in defendant's restaurant at the airport at the expense of the airline.

The initial question is whether the Corporation's kitchen employees and bus boys are "in commerce" or "in the production of goods for commerce" within the meaning of Sec. 6(a) of the statute. It is generally held that employees engaged in producing goods for instrumentalities in commerce, such as railroads and ships, are engaged in the production of goods in commerce. Thus, in Hamlet Ice Co. v. Fleming, 4 Cir., 127 F.2d 165, we held that workmen engaged in producing ice for sale to an interstate railroad for use in icing perishable freight, as well as food and beverages in dining cars, were covered by the statute. And in Alstate Construction Co. v. Durkin, 345 U.S. 13, 73 S.Ct. 565, 97 L.Ed. 745, the Supreme Court held that employees of a manufacturer who produces a road surfacing mixture for use in the reconstruction and repair of interstate roads are engaged in the production of goods for commerce. See also Atlantic Co. v. Walling, 5 Cir., 131 F.2d 518; Chapman v. Home Ice Co., 6 Cir., 136 F.2d 353, certiorari denied 320 U.S. 761, 64 S.Ct. 72, 88 L.Ed. 454; cf. Ben Kanowsky, Inc. v. Arnold, 5 Cir., 250 F.2d 47. In Armstrong Co. v. Walling, 1 Cir., 161 F.2d 515, it was held that workers in a commissary department, which served as a kitchen and storeroom for selling counters of sandwiches and milk in a railroad station, and also for the service of like articles on trains, were engaged in the production of goods for commerce; and in Mitchell v. Royal Baking Co., 5 Cir., 219 F.2d 532, it was held that employees of a bakery who furnished meals to cafeterias, which used them in the preparation of flight meals sold to airlines for use on planes, were similarly engaged. These decisions have not been deemed at variance with McLeod v. Threlkeld, 319 U.S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538, where it was held that an employee who prepares meals...