Reed v. Murphey, 12173.

• Decision Date: 09 June 1948
• Docket Number: No. 12173.,12173.
• Citation: 168 F.2d 257
• Parties: REED et al. v. MURPHEY et al.
• Court: U.S. Court of Appeals — Fifth Circuit

168 F.2d 257 (1948)

REED et al. v. MURPHEY et al.

No. 12173.

Circuit Court of Appeals, Fifth Circuit.

April 7, 1948.

Rehearing Denied June 9, 1948.

COPYRIGHT MATERIAL OMITTED

Sherwood W. Wise, of Jackson, Miss., and Charles S. Corben, of Washington, D. C., for appellants.

R. W. Thompson, Jr., Bidwell Adam, and English Lindsey, all of Gulfport, Miss., for appellees.

Before HUTCHESON, HOLMES, and McCORD, Circuit Judges.

McCORD, Circuit Judge.

This action was brought by 121 named plaintiffs and two interveners against M. T. Reed and others, a copartnership doing business as M. T. Reed Construction Company, to recover overtime, liquidated damages, and attorneys' fees alleged to be due under Section 16(b) of the Fair Labor Standards Act of 1938. 52 Stat. 1069, 29 U.S.C.A. § 216(b).

The contest stems from work performed by plaintiffs for defendants during the war when defendants were engaged, under two cost-plus-a-fixed-fee contracts with the United States Government, in the original construction, and subsequent maintenance and operation, of a Naval training camp and a Naval Advance Base Depot at Gulfport, Mississippi.

The question presented is whether any or all of these plaintiffs, during the term of their employment, were engaged in commerce, or in the production of goods for commerce, within the meaning and coverage of the Fair Labor Standards Act.

The case was tried by the court without a jury upon (1) a stipulation that the defendants' request for admissions of fact and the plaintiffs' reply thereto should constitute the factual proof, and (2) the testimony of one witness for plaintiffs. The court held that 117 of the plaintiffs and interveners involved were engaged in commerce and therefore entitled to benefits under the Act. Judgment was accordingly entered for these plaintiffs in amounts aggregating $153,493.95 as overtime compensation, liquidated damages, and attorneys' fees.

We have dredged up from the record, which is in many respects vague and uncertain, the important and material facts upon which decision must turn.

During World War II, in 1942, the Chief of the Bureau of Yards and Docks of the Navy Department, as a part of the government defense program, entered into two cost-plus-a-fixed-fee contracts with the defendants to facilitate the prosecution of the war.¹ The first of these contracts was for construction of a Navy camp for training Construction Battalions, commonly termed "Seabees", and a Naval Advance Base Depot at Gulfport, Mississippi; the second contract was for maintenance and operation of the Advance Base Depot.

The defendants, in the performance of these two contracts, maintained separate and distinct organizations. Employees working under the construction contract were designated "construction" workers, and carried on the "construction" payroll, while employees working under the maintenance and operation contract were known as "maintenance and operation" or "M & O" employees, and carried on the "M & O" payroll, which was entirely separate and distinct from the "construction" payroll.

The defendants and their employees commenced work under the construction contract the latter part of April, 1942. They built warehouses, buildings, barracks, mess halls, railroad spurs, a recreation hall, a laundry and other installations appropriate for Navy encampments. In addition, they constructed a rifle range and an ammunition storage depot 25 miles north of Gulfport. Actual construction in the field was begun about May 15, 1942, and was completed April 6, 1943. Approximately 5,000 employees were engaged in construction work under this contract during the peak period. Construction materials for the project were obtained from both local and out-of-state sources. Approximately 40 per cent of the dollar value of purchase orders was issued to out-of-state vendors.

A number of plaintiffs employed under the construction contract worked as guards, timekeepers, material checkers, engineers, draftsmen, rodmen, building inspectors, blue-print machine operators, paymasters, accountants, stenographers, clerks, lumber expediters, purchasing agent, superintendent of motor pool, chauffeur and firemen. Some plaintiffs worked at several jobs in the course of their employment. The guards performed custodial duties at various posts throughout the construction area. The timekeepers kept time records of construction workers, including carpenters, concrete and steel construction workers, bricklayers, plumbers, builders and mechanics. Several timekeepers kept time records of laborers, among others, who spent part of their time unloading interstate shipments. The material checkers received and checked the materials used in the construction work as to quantity and quality. The engineers, draftsmen, blue-print machine operators, building inspectors, and rodmen all performed various duties relating to the planning and construction of buildings and other installations at the project. The accountants, clerks, and other office personnel maintained payroll records of construction workers, prepared social security and withholding tax statements, made out vouchers and invoices covering construction materials, typed orders, maintained cost records and inventories, and performed other clerical and administrative duties incident to the construction activities.

Under the maintenance and operation or M & O contract, the defendants maintained and operated the Naval Advance Depot where materials and equipment were received from all parts of the United States for storage, assembly, and reshipment to "Seabee" Construction Battalions at advance bases in the various war theatres. Additional duties of the defendants under this contract included purchase, assembly, fabrication, testing, and preparation of materials and equipment for shipment to these advance bases overseas.

Nearly all the goods received at the Advance Base Depot were stored in one of the M & O warehouses or in open storage areas. The period of storage varied from a few days to several months. Incoming and outgoing shipments were of daily occurrence. Directions were received daily from Washington for the shipment of materials and equipment on hand to advance bases. All purchases were made on the basis and requirements of the Bureau of Yards and Docks, Navy Department, and defendants regularly received instructions from the Bureau regarding purchases to be made. Substantial quantities of goods were shipped on government bills of lading.

From the inception of the work under both the construction and the M & O contracts, it is without dispute that all of defendants' activities and operations were for the benefit of the Navy in its prosecution of the war; that the defendants cooperated closely with the Navy Department, and were at all times subject to the general supervision and control of the Naval-Officer-in-Charge.

The record discloses that of the 117 plaintiffs held entitled to recover, 89 were employed under the construction contract throughout their employment, 21 were construction employees during part, and M & O employees during the remainder, and 7 were M & O employees throughout their employment. Eleven plaintiffs were employed in an executive, administrative or professional capacity, and drew salaries of fifty dollars or more per week. Furthermore, several of the plaintiffs were classified as "Navy" employees during all or a part of their employment. These were carried on the defendants' payroll the same as other employees, but were hired, discharged, and performed all their work at the direction of, and solely under the supervision and control of the Naval-Officer-in-Charge, or the Navy Auditor.

If the Fair Labor Standards Act were the applicable criterion determinative of the issues in this case, we would have little hesitancy, in view of the undisputed record evidence, in concluding that these plaintiffs were not engaged in commerce or in activities so closely related to commerce as to be entitled to its protection. McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 87 L.Ed. 1538; Kirschbaum v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; Walling v. Jacksonville Paper Co., 317 U. S. 564, 63 S.Ct. 332, 87 L.Ed. 460.

The 89 construction employees were shown to be engaged solely in local intrastate building activities throughout the term of their employment. It has been uniformly held that persons employed on such work are not "engaged in commerce or in the production of goods for commerce" within the meaning and coverage of the Fair Labor Standards Act. Parham v. Austin Co., 5 Cir., 158 F.2d 566; Phillips v. Graham Aviation Co., 5 Cir., 157 F.2d 443; Noonan v. Fruco Construction Co., 8 Cir., 140 F.2d 633; Soderberg v. S. Birch & Sons Construction Co., 9 Cir., 163 F.2d 37; Nieves v. Standard Dredging Corp., 1 Cir., 152 F.2d 719; Scott v. Ford, Bacon & Davis, Inc., D.C., 55 F.Supp. 982.

Plaintiffs have wholly failed to discharge their burden of proving that they, as distinguished from their employer, were engaged in commerce or production of goods for commerce, or that a substantial part of their activities were so closely related to commerce as to admit of coverage by the Act. Noonan v. Fruco Construction Co., 8 Cir., 140 F.2d 633; Soderberg v. S. Birch & Sons Construction Co., 9 Cir., 163 F.2d 37; Baloc v. Foley Bros., Inc., D.C., 68 F.Supp. 533; Kirschbaum v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 87 L.Ed. 1538.

Moreover, if we should hold that the Fair Labor Standards Act was applicable here, we think it quite clear that eleven of these plaintiffs were within the executive, administrative, and professional exemptions established by Section 13(a) (1) of the Act. Gorchakoff v. California Ship-bldg. Corp., D.C., 63 F.Supp. 309, 311; Peffer v. Federal Cartridge Corp., D.C., 63 F.Supp. 291, 292, 302; Smith v. Porter, 8 Cir., 143 F.2d 292, 296.

The "Navy" employees...