Stewart-Jordan Distributing Co. v. Tobin

• Decision Date: 29 January 1954
• Docket Number: No. 14458.,14458.
• Citation: 210 F.2d 427
• Parties: STEWART-JORDAN DISTRIBUTING CO., Inc. v. TOBIN, Secretary of Labor et al.
• Court: U.S. Court of Appeals — Fifth Circuit

210 F.2d 427 (1954)

STEWART-JORDAN DISTRIBUTING CO., Inc. v. TOBIN, Secretary of Labor et al.

No. 14458.

United States Court of Appeals Fifth Circuit.

January 29, 1954.

O. R. T. Bowden, Theo. Hamilton, Jacksonville, Fla., for appellant.

Sylvia S. Ellison, Atty., Bessie Margolin, Asst. Sol., Stuart Rothman, Sol., William A. Lowe, Herbert Lasky, Attys., U. S. Department of Labor, Washington, D. C., Beverley R. Worrell, Regional Atty., U. S. Department of Labor, Birmingham, Ala., for appellee.

Before HUTCHESON, Chief Judge, and HOLMES, and BORAH, Circuit Judges.

BORAH, Circuit Judge.

This suit was brought by the Secretary of Labor to enjoin Stewart-Jordan Distributing Company, Inc., and five of its employees from violating the minimum wage and record keeping provisions of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 201 et seq. From a decree granting this relief, this appeal was taken by the Stewart-Jordan Company.

The appellant is a wholesale distributor of beer, ale and wine in the City of Jacksonville, Florida. The commodities which it handles and distributes to the local trade in Florida are all obtained from manufacturers in other states. It receives beer and ale by rail in carload lots and at the rate of approximately 22 carloads per month. These commodities come in three types of containers, i. e., cans, non-returnable bottles and returnable bottles, approximately one-fourth of the total beer and ale handled by appellant being in the latter type of container.

The five individual defendants, who have not appealed, were employed by appellant as truck driver-salesmen. Their duties were to sell and deliver cases of beer and ale and wine to appellant's customers¹ along the respective routes allotted to them to pick up at the customers' establishments and return to appellant's warehouse all empty beer bottles and cases of the re-usable type. The delivery trucks are owned by appellant, who pays all their operation expenses.

Throughout the period in question helpers or "strikers" were also employed on these trucks. In the performance of their duties the helpers sometimes loaded the trucks with the required number of full cases of beer and ale. At other times the loading was done by warehouse employees. The helpers do not confine their efforts solely to the trucks on which they are respectively employed but at times assist in the loading and unloading of other trucks. The helpers ride with the driver over his route, unload at each customer's place of business the required number of cases of beer and ale and also pick up and load onto the truck the empty returnable bottles which have accumulated there. Before picking up the empties they first carefully check each case which is marked with the name of the out-state brewery to ascertain that it is full and contains only bottles of the type which were returnable to the particular breweries. Upon returning to the warehouse the helpers unload these cases of empty bottles from the trucks and stack them against the warehouse wall at a place designated by the warehouse foreman, who supervises the loading and unloading of trucks. The helpers and truck drivers pick up and return to the warehouse approximately 2,000 cases of empty bottles each week. Subsequently all of these returnable bottles are moved to the back of the warehouse by warehouse employees where they are again inspected for broken or unsuitable bottles. Approximately once a week a railroad car is loaded with about 2,000 cases of these empties and shipped back to the out-state brewery.

During the period here involved the truck driver-salesmen were employees of appellant and at all times such drivers were permitted to hire and fire their own helpers for work on the trucks, exercise control over their hours of work and supervise their activities, which were for the benefit of the company. Prior to the week ending October 7, 1950, the company considered the helpers to be its employees and paid them their wages of $5 per day directly and kept records of such employment. After that week the appellant discontinued keeping payroll records on the helpers and thereafter they received their wages from the drivers rather than in a separate envelope prepared by appellant. This change over was made under these rather significant circumstances.

During September of 1950, an investigator of the Wage and Hour Division made an investigation of appellant's operations. At the conclusion of that investigation he informed appellant's vice-president and general manager that the helpers were being employed on an average workday of ten hours and were being paid a daily wage of $5 which was less than the 75 cents an hour minimum wage required by the Act. The appellant thereupon paid the helpers the back wages due them but thereafter and at the conclusion of the work week ending October 7, 1950, the company dropped the helpers from its payrolls and at the same time increased the truck drivers' salaries from $30 to $32 per week plus a "bonus" of $5 per day when their daily sales of beer and ale exceeded 135 cases. The evidence shows that this daily quota was exceeded practically every day. The only exception was on one route on which the driver did not have a helper. In addition to their base salary the appellant had prior to October 7, 1950, paid its truck drivers a commission of 6 cents for each case of beer and ale sold plus an annual commission of one-half cent per case on beer and ale and a four percent commission on sales of wine. After that date it continued to pay these commissions in addition to the new "bonus" of $5 per day. Apart from the change in payroll procedure there was no change in relations between the drivers, the company and the helpers. After October 7, 1950, the same helpers continued to work on the trucks for the same number of hours each day performing the same duties and for the same pay of $5 per day until the new bonus for the drivers was raised to $6 per day at which time the pay of most of the helpers also arose to $6 per day. After October 7, 1950, as before, the helpers reported for work at the company warehouse at 7:30 A.M., worked an average minimum of ten hours each work day, and were paid first five and then six dollars per day or in any event less than the statutory 75 cents an hour minimum wage.

On the basis of this evidence the district judge found: (1) that at all times subsequent to January 25, 1950, appellant continued to be the employer of the drivers' helpers and that its drivers were employees within the meaning of the Act in that they acted in the interest of appellant in relation to appellant's employees; (2) that the drivers' helpers are engaged in a stream of commerce which begins at the establishment where the empty containers are picked up and continues throughout the journey to the warehouse, through the warehouse to the railroad car and to the ultimate destination of such containers at the out-state brewery.

The appellant relying on cases such as Clougherty v. James Vernor Co., 6 Cir., 187 F.2d 288, and Walling v. Sanders, 6 Cir., 136 F.2d 78, is here contending that the "production of goods for commerce" phase of coverage should be interpreted so as not to include the handling of goods for the mere purpose of furthering their interstate transit. On the basis of this premise it is argued that the drivers' helpers who were picking up empty bottles were not engaged in the "production of goods for commerce" but were at most merely handling for transit purposes and marshaling the bottles on a local basis and returning them to the warehouse, all of which is a purely local operation preparatory to being put in the stream of commerce and, therefore, without the provisions of the Act.

There is no contention on the part of the administrator that these drivers and helpers are engaged in the production of goods for commerce. This phase of the Act's coverage is not in issue and the cases upon which appellant relies are beside the point. In Clougherty v. James Vernor Co., supra 187 F.2d 292, one of the questions presented was whether employees who perform a local delivery and pickup at retail outlets, returning the empty ginger ale bottles to the local plant for a use which is partially interstate, are engaged in an occupation necessary to the production of goods, that is, ginger ale. In answering this question in the negative the court observed that the controlling test as to the drivers is not how the bottle is used in the plant, but how the drivers handle it. And considering the character of their activities the court said: "Their handling of the bottles not only precedes the process of producing the ginger ale but is no part of the production. The city drivers do not even unload the bottles at the plant, and neither they nor the helpers nor the highway drivers cooperate in the washing, the blending of the ingredients, the twirling, or any other part of the process which ties in with the production of the ginger ale." Thus it is plain that the court did not even consider the coverage issue which this case presents. Nor was there any occasion for it to do so for the administrator did not there contend that the empty bottles were in interstate commerce when being returned to the plant. As to Walling v. Sanders, supra 136 F.2d 81, it is not easy to understand how this case can be regarded as having any applicability to the question we are presently considering since the court specifically stated that it was not deciding the question The court pointed this out clearly when it said: "Whether a different conclusion would be necessary in respect to the local drivers² of beer delivery trucks by reason of their pick up of empty cases and bottles destined ultimately for return to the out-state breweries, if such drivers were in the employ of the defendant, we have no need to decide because upon careful consideration of all of the facts and circumstances, we are not...