Shultz v. Travis-Edwards, Inc., Civ. A. No. 15083.
| Decision Date | 04 November 1970 |
| Docket Number | Civ. A. No. 15083. |
| Citation | 320 F. Supp. 834 |
| Parties | George P. SHULTZ, Secretary of Labor, United States Department of Labor, v. TRAVIS-EDWARDS, INC. |
| Court | U.S. District Court — Western District of Louisiana |
L. H. Silberman, Sol. of Labor, U. S. Dept. of Labor, Washington, D. C., Beverley R. Worrell, Roger J. Martinson, U. S. Dept. of Labor, Atlanta, Ga., for plaintiff.
Larry M. Lesh, Locke, Purnell, Boren, Laney & Neely, Dallas, Tex., Harry R. Nelson, Nelson & Evans, Shreveport, La., for defendant.
The Secretary of Labor (the "Secretary") instituted this action under Section 17 of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq., alleging that defendant Travis-Edwards, Inc. ("Travis-Edwards") has two or more employees engaged in commerce or in the production of goods for commerce within the meaning of the Act; and that Travis-Edwards is therefore an enterprise covered by the Act. The Secretary seeks judgment (1) permanently enjoining Travis-Edwards from allegedly violating the minimum wage, overtime, and record-keeping provisions of the Act and (2) restraint against the withholding of payment of minimum wage and overtime compensation.1
The material facts in this action have been stipulated. The only issue remaining for the Court to determine is whether Travis-Edwards is a covered enterprise within the meaning of Section 3(s) (1), 29 U.S.C. § 203(s) (1).
There is no question that Travis-Edwards met the dollar volume requirements.
Travis-Edwards is a corporation engaged in the operation of the Henry C. Beck Building, a twenty-story office building located in Shreveport, Louisiana, which leases office space to a miscellany of tenants. During the period at issue, Travis-Edwards employed the following classes of personnel:
1. Office employees, who regularly and customarily performed various clerical and bookkeeping duties including the preparation and making of rent ledgers, bank deposits, and accounts receivable and payable. These facts and figures are assimilated into three reports which are mailed to officers and stockholders, some of which are outside Louisiana.
2. Engineers (Boiler-room employees), who regularly utilize and install materials such as fluorescent tubes, ballasts, screws, washers, etc., in the maintenance of the building. A substantial portion of the materials used are produced outside Louisiana.
3. Maids and porters, who regularly use waxes, detergents, and other items which are customarily used in the maintenance of offices. A substantial portion of these goods comes from outside Louisiana.
4. One maid-elevator operator, who in addition to her regular duties as a maid, operates an elevator when it is used to transport deliverymen with large deliveries. The maid takes no part in the physical handling of freight delivered to tenants. Her main purpose is to operate the elevator in order to assure that it is promptly returned to the basement, changed back to automatic operation and made available to building tenants. A substantial portion of the freight delivered to tenants was and is in transit from points outside Louisiana by common carrier.
5. Parking lot attendants, who regularly drive and park automobiles for tenants and the public. These, of course, are manufactured outside of Louisiana.
6. Concession stand employees. Two employees operated a concession stand where cigarettes, notions, and various and sundry supplies were sold to the public. A substantial portion of these products were produced outside Louisiana and shipped here to a wholesaler who in turn supplied the concession stand. The average monthly gross receipts for the stand's operation was approximately $4,000. January 16, 1970, defendant leased the space occupied by the concession stand to a third party and sold all equipment and inventory used in its operation.
The Court's only inquiry in this action is to determine if Travis-Edwards is an "enterprise" subject to the Act's coverage. The Act bases coverage on engagement in "commerce" or "production of goods for commerce." A conscious choice was made by Congress not to structure the Act in terms of "affecting commerce."2 Thus, it is clear that the limits of the Act are more restricted than the broader constitutional limitations and call for an analysis of each case in light of its unique factual circumstances.3
Relying on each of the classifications of employees, the Secretary alleges that Travis-Edwards has employees who are individually covered as well as employees "handling, selling, or otherwise working on goods that have been moved in or produced for commerce." In examining these contentions, each employee classification is examined in light of the claimed statutory basis for coverage.
The Secretary urges that the statutory definition of "goods"4 and "produced"5 encompass the work performed by defendant's office employees in connection with the numerous accounts, reports, analyses, and correspondence which they work upon and mail out of the State. He contends these activities constitute "production of goods for commerce." In support of that position, the Secretary cites numerous cases in which office employees have been found to be engaged in commerce or in the production of goods for commerce and thus subject to the Act's coverage.6
Significantly, in each of the cited cases, the office employees were engaged in activities which were incidental to interstate business or interstate business transactions.
The Supreme Court in 10 East 40th Street Building, Inc. v. Callus,7 concluded:
"Renting office space in a building exclusively set aside for an unrestricted variety of office work spontaneously satisfies the common understanding of what is local business and makes the employees of such a building engaged in local business."
Since Callus, Congress has had ample opportunity legislatively to change that result if it so desired. It has not chosen to do so. Absent such action, it must be concluded that operation of an office building leased to a miscellany of tenants, without more, "satisfies the common understanding of what is local busiiness and makes the employees of such a building engaged in local business." The cases cited by the Secretary are inapposite, there being no interstate business or transactions.
Nor can it be contended successfully that the mere fact of mailing reports to out-of-state stockholders and officers places the enterprise in commerce or in the production of goods for commerce. Mere use of the mails incident to a purely local business does not constitute engaging in commerce or in production of goods for commerce.8
In light of the fundamentals enunciated in Callus, that operation of an office building, as here, constitutes local business, we cannot conclude that the activities of the office employees in transmitting reports across State lines constitutes their or defendant's, being engaged in commerce or in production of goods for commerce. Accordingly, we hold that the office employees do not meet the individual coverage requirements of the Act.
The Secretary contends that work of the maids, porters, engineers and parking lot attendants makes them "employees handling, selling, or otherwise working on goods that have been moved in commerce" and thus they are covered by the Act. This contention primarily is based on these employees' use of products which were produced outside the state and employed in performance of their respective duties. We cannot accept such a strained interpretation of the Act.
"`Goods' means goods * * * wares, products, commodities, merchandise, or articles * * * 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." (Emphasis added.)10
Clearly, Travis-Edwards is neither a producer, manufacturer, or processor.
The Secretary argues that the 1966 amendments to the Act extended coverage to the above captioned employees. That clearly strained interpretation of legislative intent is not supported.11 This legislative history does not support such a revolutionary interpretation. We think the rearrangement in phrasing of the section probably was more of an attempt to correct unartful draftsmanship, in light of the several amendments, rather than to create an entirely new theory of coverage.
The Secretary's own interpretation of the Act disposes of his contention with respect to the maids,...
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...provided only as a convenience to visitors, is not related to the primary purpose of the institutions. Cf., Shultz v. Travis Edwards, Inc., supra, 320 F. Supp. at 839-840. Nor do I think that the second part of the enterprise test, whether there are any employees engaged in commerce, is met......
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...Wilson Building, Inc., 478 F.2d 1090 (5th Cir.), cert. denied, 414 U.S. 855, 94 S.Ct. 156, 38 L.Ed.2d 105 (1973); Shultz v. Travis-Edwards, Inc., 320 F.Supp. 834 (W.D.La.1970), rev'd on other grounds sub nom. Hodgson v. Travis-Edwards, Inc., 465 F.2d 1050 (5th Cir.), cert. denied, 409 U.S. ......
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Hodgson v. HYATT REALTY AND INVESTMENT COMPANY, INC.
...still must find that they produced goods "for commerce." The employee activities here come closer to those in Shultz v. Travis-Edwards, Inc., 320 F.Supp. 834 (W.D.La. 1970). There the employees compiled facts and figures into reports and mailed them to out-of-state officers and stockholders......
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...of the ultimate consumer applies to him. The trial court so held in reliance on three district court decisions. See Shultz v. Travis-Edwards, Inc., W.D.La., 320 F.Supp. 834, rev. on other grounds 5 Cir., 465 F.2d 1050, cert. denied 409 U.S. 1076, 93 S.Ct. 685, 34 L.Ed.2d 665; Shultz v. Arnh......