Phillips v. Star Overall Dry Cleaning Laundry Co.

• Citation: 149 F.2d 416
• Decision Date: 07 May 1945
• Docket Number: No. 78.,78.
• Parties: PHILLIPS et al. v. STAR OVERALL DRY CLEANING LAUNDRY CO., Inc., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

149 F.2d 416 (1945)

PHILLIPS et al. v. STAR OVERALL DRY CLEANING LAUNDRY CO., Inc., et al.

No. 78.

Circuit Court of Appeals, Second Circuit.

May 7, 1945.

COPYRIGHT MATERIAL OMITTED

Before L. HAND, CHASE, and CLARK, Circuit Judges.

CHASE, Circuit Judge.

As Star was not the employer of the plaintiffs, it is clear that the complaint was properly dismissed as to it and no one now disputes that.

It should be noted at the outset that the plaintiffs were not engaged in interstate commerce simply because they performed part of the work involved in washing or otherwise cleaning and making ready for delivery to Star garments which Star later returned to its interstate customers as and when it saw fit to do so. Whether an employee is engaged in interstate commerce for the purposes of the Fair Labor Standards Act depends not upon "whether the employee's activities affect or indirectly relate to interstate commerce but upon whether they are actually in or so closely related to the movement of the commerce as to be a part of it. Employee activities outside of this movement, so far as they are covered by wage-hour regulation, are governed by the other phrase `production of goods for commerce.'" McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 1251, 87 L.Ed. 1538. If these plaintiffs are within the statute it must be because they are engaged in the production of goods for commerce. That alone would be enough to bring them within the Act unless the exemptions of § 13 apply to them. United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430; Fleming v. Arsenal Building Corporation, 2 Cir., 125 F.2d 278. As it appears that about four per cent of the cleaning and pressing which the appellant did for Star was of garments used in Star's interstate business and that the plaintiffs were engaged in this work, it is obvious that if this was a production of goods within the statute it was a production of goods for interstate commerce.

We think it clear that the cleaning and pressing of these garments was work in an occupation "necessary to the production" of goods for commerce within § 3(j). A. B. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638.

In § 3(j) of the Act are found the statutory definition of "produced" and a statement of the conditions upon which an employee "shall be deemed to have been engaged in the production of goods" within the scope of the statute. That subsection reads 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 process or occupation necessary to the production thereof, in any State."

Assuming for the moment that the garments cleaned and pressed were "goods" as defined in the statute, there can be no fair doubt but that the plaintiffs were engaged in the "production" of them within the meaning of that term in the statute. They were engaged in doing what of necessity required that the garments be "handled" or in some other manner "worked on."

Whether these garments were "goods" within the statutory meaning depends upon whether they are excluded by the last part of the definition of "goods" found in § 3(i) of the Act. That subdivision reads as follows:

"(i) `Goods' means goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof."

In determining whether the garments cleaned and pressed are within the statute as goods we will lay aside those, if any, which may have been owned by the people who wore them. Though it may be that those who wore such garments out were ultimate consumers "other than a producer, manufacturer, or processor thereof", we now find it unnecessary to decide whether garments which may have been delivered "into the actual physical possession" of such ultimate consumers ceased upon such delivery to be goods within the Act. A large part if not all, of the garments were in another category. They were owned by Star and rented to its customers who had physical possession of them only temporarily and returned them to Star after they became dirty. It is impossible to tell from this record whether the same garments were returned to the same customers each time after cleaning but very likely they were not. While it is true in a sense that Star's customers were en masse the ultimate consumers, no delivery to them but for a special and limited purpose was shown. Star merely surrendered possession and regained possession at intervals while using the garments in conducting its own business. The delivery contemplated by § 3(i) of the statute is, we think, one which gives the ultimate consumer the right to deal with the "goods" as his own while they are being consumed. As no such delivery to the customers of Star was shown, these rented garments remained "goods" within the meaning of the statute after their rental and delivery to Star's customers.

In so far as Star itself may be said to be the ultimate consumer because the garments were used up in its business, the essential kind of delivery to it was shown. But that does not advance the cause of the appellant because the nature of Star's business required it to handle, work on, and transport these garments. Indeed without transportation of the garments in interstate commerce in furtherance of the business of Star there would be no basis at all for the application of the Act. Though Star may then have been an ultimate consumer in the sense that the garments were consumed in its business, it was not one "other than a producer, manufacturer, or processor thereof." An essential part of its business was to produce clean and pressed garments for the use of its customers and whenever a dirty garment was cleaned and pressed for Star's business purposes it was "produced" for such purpose. The delivery of those garments to Star did not, therefore, affect their status as goods within the meaning of the statute. Indeed, this recurrent cleaning and pressing was so like repairs for use that cases dealing with the effect of the statute upon employees engaged in making such repairs are in point. For examples of such cases see Slover v. Wathen, 4 Cir., 140 F.2d 258; Bracey v. Luray, 4 Cir., 138 F.2d 8.

The remaining question raised by the appellant is whether the provisions of sections 6 and 7 of the Act upon which the plaintiffs rely in bringing this suit apply to them in the light of § 13(a) (2) of the Act which provides that they shall not apply to "any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce."

It has been held that despite the disjunctive "or" between...