Schroepfer v. AS Abell Co.

Decision Date16 December 1942
Docket NumberNo. 1609.,1609.
Citation48 F. Supp. 88
PartiesSCHROEPFER et al. v. A. S. ABELL CO., Inc.
CourtU.S. District Court — District of Maryland

COPYRIGHT MATERIAL OMITTED

I. Duke Avnet, of Baltimore, Md., for plaintiffs.

William D. Macmillan and Semmes, Bowen & Semmes, all of Baltimore, Md., for defendant.

CHESNUT, District Judge.

This case is a civil suit under the Fair Labor Standards Act, 29 U.S.C.A. §§ 201-219, by alleged employes of the defendant to recover deficiency in minimum wages together with liquidated damages and counsel fee, in accordance with the liability therefor imposed by section 216(b). The defenses are: (1) that the plaintiffs were not employes of the defendant at all within the meaning of the Act; and (2) that the plaintiffs, if employes, were not engaged "in commerce or in the production of goods for commerce". §§ 206, 207. The defendant is a Maryland corporation which publishes and sells the well-known Morning and Evening Sun and Sunday Sun newspapers. The defendant does not dispute in this case that it is engaged in interstate commerce within the meaning of the Act, although of its large paid-for circulation only a small percentage of its newspapers are shipped to destinations outside the State of Maryland. See National Labor Relations Board v. A. S. Abell Co., 4 Cir., 97 F.2d 951, 953.

A jury trial was waived and the case has been submitted, after argument by counsel, upon testimony of witnesses in open court. From the evidence I make the following finding of relevant facts.

1. The paid-for circulation of the defendant's daily papers, morning and evening editions, was in 1937 about 150,000 copies, with a somewhat larger circulation for the Sunday Sun. About 7.5% of the daily morning and Sunday papers and about 2% of the evening papers are shipped to destinations outside the State. Its representatives gather much news matter outside the State and advertising is solicited outside the State. Raw materials used in the publication of the newspapers are derived principally from sources outside the State. In 1937 the defendant had a total employment roll of over 1100 persons with a payroll cost of nearly $200,000. Substantially the same conditions have since prevailed. The defendant is therefore engaged in interstate commerce.

2. Two of the plaintiffs, Fred and Charles R. Schroepfer, brothers but suing separately and individually for deficiency in compensation, were during the period involved in this suit, October 24, 1938 to January 19, 1942, occupied as distributors of the defendant's newspapers, to street corner vending machines and to stores wholly located in portions of Baltimore City or the immediately adjacent county. The third plaintiff, Abraham Berry, was principally employed as a helper by the Schroepfers, part of the time by one and at other times by the other, and was paid by them respectively. On Saturday nights Berry was also directly employed by the defendant for about eight hours and for that work was paid by the defendant.

3. The Schroepfers were known in the business as rack-men. Their relations with the defendant were not defined in writing and had existed for several years prior to October 24, 1938, when the Fair Labor Standards Act became effective. Each had a separate territory for the distribution and sale of newspapers. Their activities consisted in the delivery of the several successive editions of the daily newspapers to the street-corner vending machines, and of the Sunday papers to some stores in their respective territories. The vending machines were in the general form of metal racks placed on various street corners, holding a number of copies of papers, with a receptacle under lock and key for the deposit of coins to be made by the purchasers of the papers. The rack-men, of whom there were about fourteen for Baltimore City, collected the money daily from the vending machines. They were entitled to retain or be credited with the whole of the money so collected. Their accounting with the defendant was as follows. They were charged at wholesale rates, about 1¢ per paper less than the price paid by the purchaser, for the number of papers that they received from the plant of the defendant in Baltimore City, and also about $3.00 per week for so-called rack rental; and they were credited with the amount of currency collected from the vending machines and turned in to the defendant's office; and with the wholesale price of papers returned as not resold to the public; and were also credited with $25.00 per week for an allowance on account of the expenses of ownership and operation of their own automobiles used in distributing the papers, with a further allowance of $3.00 weekly for delivery of Sunday papers to various stores, since they received no personal profit from the sale of Sunday papers. If for any reason their own automobiles were out of service on a particular day they were furnished with an automobile for the delivery of papers by the defendant and charged a certain sum therefor. Weekly settlements were made by the defendant with the rack-men on this accounting basis. The rack-men directly employed and paid such helper or helpers as they needed or required for their activities. They could take for resale more or less papers of each edition provided their territory was adequately served. The defendant did not interfere with or control in any way the activities of the Schroepfers in the distribution of papers to the vending machines, or the collection of cash therefrom, and there was no requirement that the cash must be delivered to the defendant, if the papers were otherwise paid for, although for convenience the rack-men did at once turn in the many small coins to be counted in a machine and credited to them. The arrangement of the rack-men with the defendant was terminable at will by either party, but in many years only three of fourteen rack-men had discontinued (for reasons not appearing in the evidence).

4. The Schroepfers contend that they were employes of the defendant, but the defendant contends that they were not its employes but independent purchasers and salesmen of papers, or in the legal sense, independent contractors. Much detailed evidence was submitted by the respective parties bearing on this particular issue. From the weight of the testimony I find as an ultimate fact (or conclusion of law as the case may be) that the legal relationship of the Schroepfers and the defendant was that the former were not employes but independent operators during the period involved in this suit. Much of the testimony related to the particular item of the $25.00 weekly allowance above referred to. Plaintiffs insist that this was in the nature of a weekly salary while the defendant says that it was allowance for automobile expense. The particular designation of the item is in my view not controlling of the issue as to whether the plaintiffs were employes, but so far as it is material, I find from the weight of the evidence that the item was properly to be classed as car allowance rather than salary. It was only one of the items entering into the weekly settlement. It was not payable except to the extent of the balance, if any, due on the whole weekly accounting.

It is clear from the evidence that the defendant did not treat the Schroepfers as employes. The defendant carried group insurance for its employes but the Schroepfers were not included therein. They were not carried on any of the books or records of the defendant as employes, or credited thereon with any salary or wages. The defendant's employes were given annual vacations with pay but this did not include the rack-men. The defendant reported and paid no social security taxes for the rack-men.

5. The plaintiffs rely upon some indicia said to be consistent only with their being employes rather than independent operators. I find from the testimony that Charles Schroepfer first became a rack-man for the Sun papers in 1929, and Fred Schroepfer in 1932. Fred Schroepfer's original arrangement with the defendant was that he received a salary of $18.00 a week, and a car allowance of $15.00, and was entitled to the profits made by him on the sales of papers from the racks. The arrangement with Charles Schroepfer in 1929 was about the same. In 1932 the racks then in use were found unsatisfactory in operation because from defective mechanism too many papers were lost or stolen therefrom. Some months later, after Fred Schroepfer first became a rack-man, the defendant substituted new and better vending machines and changed the cash credits to the rack-men by abolishing the item for salary and substituting therefor one weekly credit of $25.00 which was designated on the defendant's records as "auto allowance". (See Defendant's Exhibit No. 1). The plaintiffs said that they knew when the change was made but were not specifically advised that it abolished their salary item, and that they continued to sign a little white slip accompanying each weekly envelope with the cash due them, which read with date: "Received of the A. S. Abell Company salary in full for services rendered to date". Fred Schroepfer said that he supposed the reduction in his weekly credit from $33.00 a week to $25 meant that his salary was continued at $18.00 with reduction of car allowance to $7. I find from the evidence, however, that the continued use of the white slip to be signed by the rack-men weekly upon receipt of the balance due them in cash on the weekly accounting was merely an inadvertent clerical practice which was changed in May 1941, upon its discovery by the circulation manager; and there was then substituted for the white slip a blue slip reading: "Received of the A. S. Abell Company automobile allowance in full to date". The exhibit just referred to shows that the amounts respectively due the rack-men as cash credits as approved by Mr. Kavanaugh, assistant business manager, were designated as "auto-allow". In a letter dated September 16, 1941,...

To continue reading

Request your trial
9 cases
  • Cruz v. Chesapeake Shipping Inc.
    • United States
    • U.S. District Court — District of Delaware
    • May 17, 1990
    ...McComb, 331 U.S. 722, 723, 67 S.Ct. 1473, 1473, 91 L.Ed. 1772 (1947), although the NLRA is more farreaching. See Schroepfer v. A.S. Abell Co., 48 F.Supp. 88, 96 (D.Md.1942) ("As has often been pointed out, the expression of congressional will is more broadly stated in the National Labor Rel......
  • Marshall v. Gerwill, Inc.
    • United States
    • U.S. District Court — District of Maryland
    • August 13, 1980
    ...404 U.S. 827, 92 S.Ct. 62, 30 L.Ed.2d 56 (1971); Wirtz v. Lone Star Steel Co., 405 F.2d 668, 669-70 (5th Cir. 1968); Schroepfer v. A. S. Abell Co., 48 F.Supp. 88 (D.Md.1942), aff'd, 138 F.2d 111 (4th Cir. 1943), cert. denied, 321 U.S. 763, 64 S.Ct. 486, 88 L.Ed. 1060 Pre-Judgment Interest o......
  • Schroepfer v. AS Abell Co.
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • January 17, 1944
    ...that plaintiffs were not engaged in commerce or the production of goods for commerce within the meaning of the act. Schroepfer v. A. S. Abell Co., D.C., 48 F.Supp. 88. The facts bearing on the issue as to whether or not the plaintiffs were employees of defendant are voluminous and complicat......
  • NLRB v. AS Abell Company
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • January 16, 1964
    ...National Labor Relations Board v. Steinberg, 182 F.2d 850 (5th Cir. 1950). Also pertinent to the inquiry here are Schroepfer v. A. S. Abell Co., 48 F.Supp. 88 (D.C.D.Md. 1942), and Hearst Publications v. National L. Relations Board, 136 F.2d 608 (9th Cir. 1943), which was reversed by the Su......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT