Walling v. Goldblatt Bros., 7892.

• Decision Date: 25 June 1942
• Docket Number: No. 7892.,7892.
• Citation: 128 F.2d 778
• Parties: WALLING, Adm'r of Wage and Hour Division, U. S. Dept. of Labor, v. GOLDBLATT BROS., Inc.
• Court: U.S. Court of Appeals — Seventh Circuit

128 F.2d 778 (1942)

WALLING, Adm'r of Wage and Hour Division, U. S. Dept. of Labor, v. GOLDBLATT BROS., Inc.

No. 7892.

Circuit Court of Appeals, Seventh Circuit.

June 25, 1942.

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Warner W. Gardner and Irving J. Levy, both of Washington, D. C., and Frank J. Delaney, of Chicago, Ill. (Edward Jay Fruchtman, John S. Forsythe, and Jacob D. Hyman, all of Washington, D. C., of counsel), for appellant.

Stanford Clinton and Abram N. Pritzker, both of Chicago, Ill., for appellee.

Charles B. Rugg, of Boston, Mass., for American Retail Federation amicus curiae.

Before SPARKS and KERNER, Circuit Judges, and LINDLEY, District Judge.

LINDLEY, District Judge.

Our question here is whether defendant's employees are within Sections 6 and 7 of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq.

Defendant owns and operates three warehouses in Chicago at which it receives merchandise from some forty-five states and from which it thereafter distributes goods to its ten extensive department stores, seven of which are in Chicago, one in Joliet, Illinois, one in Hammond, Indiana, and one in Gary, Indiana. All sell at retail the various articles usually found in a large department store. The warehouses are necessary implements of defendant's business in buying, receiving, storing and distributing goods. Merchandise is received at each daily and thereafter shipped from day to day to the retail stores in both states. A substantial quantity is retained in the warehouses for delivery, after sale at the Illinois stores, directly to purchasers.

Some manufacturing operations are carried on in some of the warehouses. There are processed bakery and food products, meat compounds, blankets, draperies, slipcovers, and other articles. One warehouse also operates a department which manufactures and binds printed forms for use in the stores and warehouses and prepares copy for advertisements.

At each warehouse one group of employees unloads merchandise received by truck and another that received by rail. After goods have been unloaded and checked, they are either moved immediately to the outgoing platform and from there sent to one of the stores or to customers, or placed on an elevator and thence taken to that department where such wares are kept until ordered out to one of the stores. When such an order is received, they are taken to the shipping platform, checked, loaded on defendant's truck and taken to the store ordering them.

Defendant admits noncompliance with Sections 6 and 7 of the Fair Labor Standards Act. The District Court found all employees engaged only in intrastate commerce.

We are concerned with only certain classes of employees; (a), those active in procurement of goods from other states and in their receipt at the warehouses; (b), those who assemble and deliver goods from the warehouses to the stores in Illinois; (c), those whose activities relate to movement of goods from the warehouses to the stores in Indiana; (d), those who produce goods for shipment to the Indiana stores, and (e), those, if any, who are engaged in an occupation necessary to the production of goods shipped to Indiana.

Section 6 of the Act applies to every "employees who is engaged in interstate commerce or in the production of goods for such commerce * * *." Section 7 provides that, (a), "no employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce," longer than a certain period of each week. Section 3(j) provides that "for the purposes of this Act chapter an employee shall be deemed to have been engaged in the production of goods if such employee was employed * * * in any process or occupation necessary to the production thereof, in any State."

It is apparent from the many exemptions provided in Sections 7 and 13 that Congress did not intend that the Act should apply to all employees connected in any way with interstate commerce. Reference to the legislative history is enlightening in this respect, but, in view of its adequate exposition by both the Wage and Hour Division and the courts, we shall avoid repetition, except to observe that in the conference committee the words "in commerce" were substituted for "affecting commerce," which had appeared in the successive earlier drafts of the statute during its embryonic stages. Kirschbaum v. Walling, June 1, 1942, 62 S.Ct. 1119, 86 L. Ed. ___, Interpretive Bulletins Nos. 1 and 4; Jax Beer Co. v. Redfern, 5 Cir., 124 F.2d 172; Jewel Tea Co. v. Williams, 10 Cir., 118 F.2d 202; Foster v. National Biscuit Co., D.C., 31 F.Supp. 552; Gerdert v. Certified Poultry & Egg Co., D.C., 38 F.Supp. 964; Eddings v. Southern Dairies, D.C., 42 F.Supp. 664, 667; Fleming v. Arsenal Bldg. Corp., D.C., 38 F.Supp. 207, 211.

To be within the Act, employees must be engaged in commerce or in "any process or occupation necessary to the production" of goods for commerce. That their activities may affect commerce is not sufficient. In this respect comparison of the Act with other commerce statutes is instructive. Many of the latter employ broad phrases or contemplate wide limitations such as "stream of commerce," "current of commerce," "restraining commerce," or "burdening, affecting or obstructing commerce." National Labor Relations Act, Sec. 10(a), 49 Stat. 449, 453, 29 U.S.C.A. § 160(a); Federal Employers' Liability Act, 1939 Amendment, § 1, 53 Stat. 1404, 45 U.S.C.A. § 51; National Bituminous Coal Conservation Act, sec. 4-A, 50 Stat. 83, 15 U.S.C.A. § 834; Packers & Stockyards Act, Sec. 2(b), 42 Stat. 159, 7 U.S.C.A. § 183; Grain Futures Act, sec. 2(b), 42 Stat. 998, 7 U.S.C.A. § 3; Tobacco Inspection Act, sec. 1(i), 49 Stat. 731, 7 U.S. C.A. § 511; Agricultural Marketing Act of 1937, 50 Stat. 246, 7 U.S.C.A. § 608c; and the Agricultural Adjustment Act of 1938, Sec. 301(a) (4), 52 Stat. 38, 7 U.S.C.A., c. 35, § 1301(a) (4). On the other hand, statutes like this are limited to parties "in commerce" or an equivalent. Federal Employers' Liability Act, prior to the 1939 amendment 35 Stat. 65, 45 U.S.C.A. § 51; Federal Trade Commission Act, 38 Stat. 717, 15 U.S.C.A. § 44; U. S. Cotton Standards Act, 42 Stat. 1517, 7 U.S.C.A. § 62(b); U. S. Grain Standards Act, 39 Stat. 482, 7 U.S.C.A. § 72; Naval Stores Act, 42 Stat. 1435, 7 U.S.C.A. § 92(l); Importation of Adulterated Seeds Act, 37 Stat. 506, 44 Stat. 325, 7 U.S.C.A. § 116(f) (2); Interstate Transportation of Petroleum Products Act, 49 Stat. 30, 15 U.S.C.A. § 715a (3); Motor Carrier Act, 49 Stat. 543, 49 U.S.C. A. § 306. Since Congress has evinced explicitly its purpose to protect some interstate commerce activities which, in isolation, are merely local, the limited scope of the Act must be kept in mind. Federal Trade Commission v. Bunte Bros., Inc., 312 U.S. 349, 351, 61 S.Ct. 580, 85 L.Ed. 881. The commerce clause endows Congress with full and plenary power to do anything and everything necessary to protect interstate commerce. United States v. Wrightwood Dairies Co., 315 U.S. 110, at page 119, 62 S.Ct. 523, 86 L.Ed. ___. The specific question is whether in the statute involved the Congress has seen fit to exercise all of its power. In view of the limitations present in the legislation, our question is whether employees are engaged in commerce or in production for commerce or in any process or occupation necessary to such production.

Our first inquiry is whether employees whose activities relate to procurement of goods from other states and those receiving and unloading them at the warehouses are "in commerce." Commerce includes more than transportation; it embraces all component parts of commercial intercourse among states. Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1, 10, 49 S.Ct. 1, 73 L.Ed. 147. Goods purchased in one state for transportation to and delivery in another are included. Currin v. Wallace, 306 U.S. 1, 10, 59 S.Ct. 379, 83 L.Ed. 441; Dahnke-Walker Co. v. Bondurant, 257 U.S. 282, 290, 42 S.Ct. 106, 66 L.Ed. 239; Lemke v. Farmer's Grain Co., 258 U. S. 50, 42 S.Ct. 244, 66 L.Ed. 458; Local 167, Brotherhood of Teamsters v. United States, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804. Defendant's purchase of goods for importation from across the state line is commerce whether delivery is made to the warehouse or to the stores. Federal Trade Commission v. Pacific Paper Ass'n, 273 U. S. 52, 63, 47 S.Ct. 255, 71 L.Ed. 534; Dozier v. Alabama, 218 U.S. 124, 30 S.Ct. 649, 54 L.Ed. 965, 28 L.R.A.,N.S., 264. It follows that employees engaged in procuring goods from other states are within the Act.

Whether workman unloading out-of-state goods at the warehouses are "in commerce," depends upon when these come to rest and lose their interstate character. They have not reached their destination until actually unloaded and deposited on the warehouse platform. Then and not until then, their interstate journey is at an end. Atlantic Coast Line R. R. v. Standard Oil Co., 275 U.S. 257, 267, 48 S.Ct. 107, 72 L.Ed. 270. Consequently, employees who unload wares at the warehouses are working on goods still in interstate commerce, and are therefore, subject to the Act. Klotz v. Ippolito, D.C., 40 F.Supp. 422, 426; Fleming v. American Stores Co., D.C., 42 F.Supp. 511, 524; Jax Beer Co. v. Redfern, 5 Cir., 124 F.2d 172, 174; Fleming v. Alterman, D.C., 38 F.Supp. 94, 98; Drake v. Hirsch, D.C., 40 F.Supp. 290; Lewis v. Nailling, D.C., 36 F.Supp. 187. See Baltimore & O. S. W. R. R. v. Burtch, 263 U. S. 540, 44 S.Ct. 165, 68 L.Ed. 433; Puget Sound Stevedoring Co. v. State Tax Comm., 302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68; Union Stock Yard & Transit Co. v. United States, 308 U.S. 213, 60 S.Ct. 193, 84 L.Ed. 198. So, too, as to all employees engaged in checking such interstate goods prior to the time they have come to rest on the platform. Fleming v. American Stores, D.C., 42 F.Supp. 511, 524; Eddings v. Southern Dairies, D.C., 42 F.Supp....