Walling v. Friend
| Decision Date | 12 July 1946 |
| Docket Number | No. 13311.,13311. |
| Citation | 156 F.2d 429 |
| Parties | WALLING, Administrator of Wage and Hour Division, U. S. Dept. of Labor, v. FRIEND et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Frederick U. Reel, Sr. Atty., U. S. Department of Labor, of Washington, D. C. (William S. Tyson, Sol., and Bessie Margolin, Asst. Sol., both of Washington, D. C., Reid Williams, Regional Atty., of Kansas City, Mo., and Morton Liftin and Helen Grundstein, Attys., U. S. Department of Labor, both of Washington, D. C., on the brief), for appellant.
Gene Frost, of Joplin, Mo., for appellees.
Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.
The Administrator of the Wage and Hour Division, United States Department of Labor, brought this action to enjoin defendants James Friend et al., co-partners, doing business as Owen Bros. & Friend Livestock Commission Company, from violating Sec. 15(a) (1, 2, 5) of the Fair Labor Standards Act, 29 U.S.C.A. § 215(a) (1, 2, 5). It was alleged that defendants were engaged in interstate commerce and subject to the provisions of the Act, and that they violated the Act by failing to keep required records and by requiring employees to work overtime without paying additional compensation for such work. The District court held that the employees involved were neither engaged in commerce nor in the production of goods for commerce and were, therefore, not within the protection of the Act, and dismissed the complaint. See Walling v. Friend, D.C., 63 F.Supp. 143. The case is before us on plaintiff's appeal from the decree dismissing the complaint.
The controlling facts are not controverted. Defendants are engaged in business in Joplin, Missouri, and act as brokers in selling livestock on commission basis for farmers and stock producers. Defendants rent office space from the Joplin Stockyards Company and use cattle pens, scales and other equipment of the stockyards company necessary to conduct their business. Livestock is consigned and shipped to defendants for sale, and on arrival at the stockyards the stock is sorted, graded and occasionally watered by defendants' employees. Upon sale, the stock is weighed by employees of the stockyards company and delivered to the purchaser. Ten to twenty percent of the consignors give out-of-state addresses when shipping livestock to defendants, and approximately 50 percent of stock sold by defendants is purchased by packers who ship most of it out of the state. Defendants have nothing to do with shipping in, billing out or transportation of the livestock sold.
This suit involves two office employees of defendants who perform clerical duties, including bookkeeping, accounting and ledger work. They prepare statements for sellers showing gross proceeds of sales, defendants' commissions and other expenses, and pay sellers net amounts due. They also prepare statements for purchasers and collect the purchase price.
The defendants admit that they do not comply with the record keeping provisions of the Fair Labor Standards Act and that at times the employees work longer than the statutory work week without overtime compensation.
Having in mind the remedial purposes of the Fair Labor Standards Act, we cannot escape the conclusion that regardless of whether defendants and their employees may be said to be engaged in commerce, they are without doubt engaged in the "production of goods for commerce" within the applicable provisions of the Act. The term "production of goods" is defined in Sec. 3(j) of the Act, 29 U.S.C.A. § 203(j), as including the "handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State." Thus it appears that Congress intended the term "production of goods for commerce" to be comprehensive and to include every incidental operation preparatory to putting goods into the stream of commerce. Western Union Telegraph Co. v. Lenroot, 323 U.S. 490, 65 S.Ct. 335, 89 L.Ed. 414. Defendants sort and grade the stock and furnish facilities for sales to buyers who immediately ship much of the livestock out of the state. Defendants suggest that they have no way of knowing the places to which it is sent by the buyers, but the fact is that the activities of defendants constitute a necessary part of a general plan for sale and distribution of livestock and it is stipulated that much of the livestock is shipped out of the state. See Warren Bradshaw Co. v. Hall, 317 U.S. 88, 63 S.Ct. 125, 127, 87 L.Ed. 83, wherein the Supreme Court said:
"Petitioner, closely identified as it is with the business of oil production, cannot escape the impact of the Act by a transparent claim of ignorance of the interstate character of the Texas oil industry."
Defendants conduct an operation preparatory to putting the goods into the stream of commerce.
In Enterprise Box Co. v. Fleming, 5 Cir., 125 F.2d 897, certiorari denied Enterprise Box Co. v. Holland, 316 U.S. 704, 62 S.Ct. 1312, 86 L.Ed. 1772, it was held that a Florida employer which manufactured and sold cigar boxes to cigar manufacturers who distributed their cigars in interstate commerce was engaged in the "production of goods for commerce" within the Fair Labor Standards Act, even though the employer's manufacturing was done in Florida and all its sales were made to the cigar manufacturers within the state. See also Dize v. Maddrix, 4 Cir., 144 F.2d 584.
The clerical activities of defendants' employees are within the protection of the Act as activities necessary to the production of goods for commerce. Hertz Drivurself Stations, Inc., v. United States, 8 Cir., 150 F.2d 923; Borden Co. v. Borella, 325 U.S. 679, 65 S.Ct. 1223, 89 L.Ed. 1865.
The District court having found that defendants and their employees were not within the orbit of the Fair Labor Standards Act, did not specifically rule on other questions presented. But the appellees contend that even though we do not sustain the judgment of dismissal on the ground assigned by the District court, it should be affirmed on the ground that they are within the agricultural exemption of the Fair Labor Standards Act, and that, in any event, the record discloses no violation of the Act in regard to the employee Fred P. Evans, because this employee worked for two distinct employers and did not work more than 40 hours in any week for defendants. These questions were presented below and are briefed by the parties on appeal. Recognizing our duty to sustain a judgment if it is the proper one, even though the trial court assigns an improper reason for entering it, we consider these questions. J....
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