Walling v. McCracken County Peach Growers Ass'n

• Decision Date: 16 July 1943
• Docket Number: No. 140.,140.
• Citation: 50 F. Supp. 900
• Parties: WALLING, Administrator of the Wage and Hour Division, United States Department of Labor, v. McCRACKEN COUNTY PEACH GROWERS ASS'N.
• Court: U.S. District Court — Western District of Kentucky

50 F. Supp. 900

WALLING, Administrator of the Wage and Hour Division, United States Department of Labor, v. McCRACKEN COUNTY PEACH GROWERS ASS'N.

No. 140.

District Court, W. D. Kentucky, at Paducah.

June 15, 1943.

On Motion to Amend Judgment July 16, 1943.

Irving J. Levy, Acting Sol., of Washington, D. C., Jeter S. Ray, Regional Atty., of Nashville, Tenn., Hugh McCloskey, of New Orleans, La., James F. Scott, of Lewistown, Ill., and Warner W. Gardner and Roy C. Frank, U. S. Dept. of Labor, both of Washington, D. C., for plaintiff.

Wheeler & Shelbourne, of Paducah, Ky., for defendant.

On Plaintiff's Motion to Amend Judgment July 16, 1943.

MILLER, District Judge.

The plaintiff, L. Metcalfe Walling, Administrator of the Wage and Hour Division, United States Department of Labor, brought this action to enjoin the defendant, McCracken County Peach Growers Association, from violating the provisions of Sections 15(a) (1), 15(a) (2) and 15(a) (5) of the Fair Labor Standards Act of 1938, Title 29 U.S.C.A. § 201 et seq. Defendant contends that it is exempt from the operation of the Act by reason of the exemptions conferred by Section 13, subdivisions (a) (6) and (a) (10), Title 29 U. S.C.A. §§ 213(a) (6), 213(a) (10).

The defendant, McCracken County Peach Growers Association, is a Kentucky corporation with its principal office and place of business in Paducah, a city of approximately 33,000 population, in McCracken County, Kentucky, within the jurisdiction of this Court. The defendant is a cooperative association, being organized and receiving the benefits of the Bingham Cooperative Act of Kentucky (Section 883f-1 et seq., Ky.Statutes, Carroll's 1936 Edition). Its membership consists of approximately 25 peach growers in McCracken County, Kentucky, who use the facilities of the organization for the marketing of their peach crops. It conducts its business in a one-story corrugated iron building, approximately 200 × 170 feet in size which was purchased in 1938 at a cost of $5,000. This building contains various types of machinery and equipment used to grade, size and pack seasonal fruits, principally peaches. The equipment was purchased by the defendant in 1930 at a cost of $8,000. Some changes or additions have been made since that. This equipment has been charged down on the books to show a present worth of about $3,000. On the east side of the plant are several large doors through which peaches are unloaded and received. On the west side are three large doors leading to loading platforms from which packed peaches are loaded on railroad cars at an adjoining spur track.

The members of the defendant association bring their peaches by truck from their respective orchards which are located in McCracken County, Kentucky, within a radius of approximately ten miles of the defendant's plant in Paducah. Upon reaching the defendant's plant it is unloaded by the grower, after which employees of the defendant handle the peaches according to the following operations: Receiving tickets are issued to the grower showing the quantity of peaches delivered. The peaches are then poured into grading machines where they first pass through a series of rotary brushes which remove the fuzz. They then pass over a series of open rollers which revolve the fruit so that graders standing on both sides of the machine can pick out the spoiled or deformed peaches. The peaches are then carried by conveyor to machines which consist of several parallel troughs with adjustable sides so that peaches can be graded for size. As each peach passes through a trough it is carried by conveyors to the proper packing table where packers place paper linings inside metal containers which are slightly smaller than a bushel backet. These containers are filled with fruit, after which the metal covering is removed and the paper held fruit is placed in a bushel basket. The filled baskets are then "ringfaced", in that the most attractive peaches are placed on the top so that the top layer of fruit presents the best possible appearance. Lids are placed on the baskets which are then labeled, stamped, and carried to the delivery point. All of the employees engaged in these operations, except receiving, labeling, stamping and checking employees, physically handle the peaches. Other employees who do not physically handle the fruit include clerical and supervisory employees, time keepers, mechanics and watchmen.

At the beginning of each season a sales agent is employed on a commission basis by the board of directors. He arranges to have buyers on hand at the plant at the proper time who are ready to buy the peaches at a fixed price and accept delivery of them at the plant after they have gone through the foregoing operations and have reached the delivery point. The sales agent determines the daily price of the peaches thus offered for sale which he quotes to the assembled buyers at the defendant's plant each morning. Approximately 90% of the peaches are sold to these buyers right at the shed door, who load them into their own trucks or into box cars. The other peaches are shipped to other buyers, many of whom are in states other than Kentucky. The sales agent receives a two percent commission on the sales so made but does not receive any other compensation from the defendant association. The money thus received for the peaches is used to pay the commission to the sales agent, labor costs, and the other operating expenses of the association, following which the net amount is distributed to the growers on the basis of the average price per bushel. None of the officers of the defendant association receive any salary for their services as such an officer.

The peach packing season in McCracken County, Kentucky, usually lasts about three weeks, beginning some time in June. The exact time of starting depends upon the season and the weather. It is necessary that they be picked and packed promptly when they have ripened to the proper degree, and the season can not be started until this degree of ripening has taken place. As a rule the season starts earlier in territory south of McCracken County and a little later in territory north of McCracken County, with the result that the seasons follow each other fairly closely in moving from the south to the north. It is for this reason that buyers are available in that they move from one territory to another with the opening of the respective seasons.

The employees of the defendant association work during the peach packing season from ten to fifteen hours per day. With few exceptions the male employees were paid 22½ cents per hour and the female employees were paid 17½ cents per hour during the peach packing season involved. The employees are hired by the association through its general manager who is responsible to a board of directors. They are not assigned to serve any particular grower. It is not necessary that an employee be a farmer in order to obtain such employment. A considerable number of the employees live in the City of Paducah within the vicinity of the defendant's plant.

Following the peach packing season, the defendant association has loaned or rented its plant and its equipment therein to apple growers and to sweet potato growers, but these operations have not been operations of the McCracken County Peach Growers Association.

The defendant association had 100 to 125 employees engaged in its work during the peach packing season. It would not be possible for the association to successfully operate with only ten employees or less.

The peach growers in McCracken County, Kentucky, are faced with strong competition from nearby territory in other states, particularly Illinois, where there are large individual growers owning and operating individually the same type of equipment as was owned and operated by the defendant association. The peach growers in McCracken County, Kentucky, being for the most part small growers, could not as individuals successfully compete with this competition. In order to successfully meet this competition it is necessary for them to have the services and advantages furnished by the Association and its equipment and operations.

The defendant association did not keep records of the persons employed by it as prescribed by regulations of the Administrator.

Section 6 of the Fair Labor Standards Act of 1938 provides that every employer shall pay to each of his employees who is engaged in the production of goods for commerce wages at not less than 25 cents an hour during the first year from the effective date of the section and at not less than 30 cents an hour during the next six years from such date. The effective date of the Section was October 25, 1938. Section 206, Title 29 U.S.C.A.

Section 7 of the Fair Labor Standards Act of 1938 limits the number of hours of employment of employees subject to the provisions of the Act, but excepts from its application the case of an employer engaged in the packing of perishable or seasonal fresh fruits or vegetables during a period of not more than 14 work weeks in the aggregate in any calendar year. Section 207, Title 29 U.S.C.A. The operations of the defendant fall within this exception, and accordingly the maximum hour provisions of Section 7 of the Act are not applicable to the defendant.

Section 11(c) of the Fair Labor Standards Act of 1938 provides that every employer subject to the provisions of Section 6 shall make, keep and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him as shall be prescribed by regulations of the Administrator made pursuant to the provisions of the Act. Section 211(c), Title 29 U.S.C.A Section 15(a) (1) of the Fair Labor Standards Act of 1938 makes it unlawful for any person to transport any goods in the production of which any employee was employed in violation of Section 6 of the Act, dealing with minimum wages. Section 15(a) (2)...