Selan v. Becker

• Decision Date: 06 May 1947
• Docket Number: Civ. A. No. 4306.
• Citation: 71 F. Supp. 689
• Parties: SELAN et al. v. BECKER.
• Court: U.S. District Court — Eastern District of Wisconsin

71 F. Supp. 689

SELAN et al. v. BECKER.

Civ. A. No. 4306.

District Court, E. D. Wisconsin.

May 6, 1947.

David Beznor, of Milwaukee, Wis., for plaintiffs.

Max D. Davidson, of Milwaukee, Wis., for defendant.

DUFFY, District Judge.

This is a suit for overtime compensation brought under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq. There is no dispute as to the facts and plaintiffs have moved for summary judgment.

The employees here involved slaughtered cattle, removed the hides, split the carcasses, and did other incidental work in connection therewith. The beef and edible offal were sold in Wisconsin for local consumption, and unsegregated portions of the hides and inedible offal were shipped outside of the State of Wisconsin, but the proceeds therefrom did not constitute more than 10% of the defendant's gross revenue. For a period prior to the time covered in the complaint, and pursuant to a collective bargaining agreement, the employees had been paid at an hourly rate. This contract required the employer to pay time and one-half the hourly rate for hours in excess of eight hours per day, and double time for work on Saturday after twelve noon. In order to stimulate production defendant agreed to pay the employees at an incentive rate based upon one hour's pay for each head of cattle slaughtered. The employees on the killing floor had theretofore normally killed one head of cattle per hour.

The first question to be decided is whether the plaintiffs were engaged in the production of goods for commerce within the meaning of Sec. 7(a) of the Fair Labor Standards Act of 1938. Defendant relies on Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 460, to the effect that if a substantial part of an employee's activities relates to goods in interstate commerce "he is covered by the act." Defendant points out that the Wage and Hour Division considers "substantial" to mean 20% and that in the case at bar 10% of income from products in interstate commerce is far below the requirement of "substantial."

There is no provision in the Act which requires that the employees be "substantially" engaged in the production of goods for commerce in order to be entitled to the benefits of the Act. A construction of the Jacksonville Paper case was given by the Supreme Court in D. A. Schulte, Inc., v. Gangi, 328 U.S. 108, 119, 66 S.Ct. 925, 931, in which the court said that the Jacksonville Paper Company case "was concerned with whether a wholesaler's employees who handled stock were in commerce, not whether they were engaged in the production of goods for commerce." I conclude that the plaintiff's employees were engaged in the production of goods for commerce.

A case with a similar fact situation is Walling v. Peoples Packing Co., 10 Cir., 132 F.2d 236. In that case all of the edible meat as well as the inedible offal and a large proportion of hides were sold within the State of Oklahoma. The inedible offal was rendered within Oklahoma and a substantial portion thereof was shipped outside of the State by the rendering company. The remaining hides were shipped outside of the State of Oklahoma by a dealer who purchased them from the packer. Although the packer argued that 96 percent of the value of the carcasses went into meat products which were sold in intrastate commerce, yet the court held that the employees on the killing floor produced goods for commerce within the meaning of the Act. Other cases sustaining the same viewpoint are Crompton v. Baker, 220 N.C. 52, 16 S.E.2d 471; Sykes v. Lochmann, 156 Kan. 223, 132 P.2d 620; Brooks Packing Co. v. Henry et al., 192 Okl. 533, 137 P.2d 918.

The next question for decision is whether plaintiff's employees were paid for overtime "at a rate not less than one and one-half times the regular rate at which he is employed." Defendant states the basis of pay as follows: "The employees were formerly paid on an hourly basis. To enable them to increase their wages and as an incentive to produce more, it was agreed to give them one hour's pay for each cattle. If they handled one cattle an hour they received one hour's pay. If they handled two cattle per hour they received two hours' pay. If they handled more than eight cattle in any one day they were paid time and one-half the hourly rate even if they did not work overtime...