Walling v. McKay

• Decision Date: 16 December 1946
• Docket Number: Civ. No. 155.
• Citation: 70 F. Supp. 160
• Parties: WALLING v. McKAY et al.
• Court: U.S. District Court — District of Nebraska

70 F. Supp. 160

WALLING v. McKAY et al.

Civ. No. 155.

District Court, D. Nebraska, North Platte Division.

December 16, 1946.

Reid Williams, Regional Atty., Dept. of Labor, and John A. Weiss, Dept. of Labor, both of Kansas City, Mo., for plaintiff.

C. B. Matthai and George Holdrege of the Union Pac. R. Co. Legal Staff, both of Omaha, Neb., for defendants.

DONOHOE, District Judge.

This is an action brought by L. Metcalfe Walling, Administrator of the Wage and Hour Division, United States Department of Labor, against Arthur E. McKay and Elmer O. McKay, doing business as McKay Brothers.

The parties have stipulated (plaintiff's Exhibit 1) as follows:

I. That this action is brought by the Administrator to enjoin the defendants from what the Administrator alleges to be violations of the provisions of Sections 15(a) (1), 15(a) (2) and 15(a) (5) of the Fair Labor Standards Act of 1938, Act of June 25, 1938, c. 676, 52 Stat.L. 1060, Title 29 U.S.C.A. § 201 et seq., but which allegations are denied by the defendants.

II. That this court is vested with jurisdiction to determine the issues herein by section 17 of the Act.

III. That since on and after April 1, 1942,

(a) the defendants, during the intervening period of time and including the present, have employed approximately 57 persons, normally in crews consisting of from 5 to 10 workers, and occasionally as

many as 15 workers, in and about their place of business at Sidney, Nebraska, to unload lumber from railroad cars, to mark and cut such lumber into specified lengths, and to produce, manufacture, fashion and assemble the lumber into grain doors and coal doors of various sizes for use by the Union Pacific Railroad Company on its freight cars;

(b) that all of said grain doors and coal doors so produced were delivered by the defendants to the Union Pacific Railroad Company for use by it in its railroad business;

(c) that such freight cars, so equipped, were and are used indiscriminately in interstate commerce, and in intrastate commerce within the State of Nebraska and within other states; and

(d) that the persons employeed by the defendants to perform such service were and are engaged in the production of goods for commerce within the meaning of the Act.

IV. That many of the persons so employed by the defendants to perform the services set forth in Section III have since October 24, 1940, performed and are performing said services at the defendants' place of business at Sidney, Nebraska, and have on numerous occasions been permitted by the defendants to work for work weeks longer than 40 hours, for which these employees have not been compensated for their work and services in excess of 40 hours in such work weeks during said period at rates of pay not less than one and one-half times their regular rates of pay.

V. That on October 21, 1938, the Administrator of the Wage and Hour Division, United States Department of Labor, pursuant to the authority conferred upon him by Section 11(c) of the Act, duly issued and promulgated regulations prescribing the records of persons employed and of the wages, hours, and other conditions and practices of employment which shall be made, kept and preserved by every employer subject to any provision of the Act; that on August 13, 1941, the Administrator, pursuant to said authority, duly issued regulations prescribing the records which shall be made and kept by employers subject to any of the provisions of the Fair Labor Standards Act of 1938, repealing and superseding all such regulations previously issued, and the said regulations and amendments thereto were published in the Federal Register, September 13, 1941, (6 F.R. 4694); are known as Title 29, Chapter V, Code of Federal Regulations, Part 516; and became effective September 15, 1941.

VI. That with respect to all individuals so employed by the defendants, as set out in Section IV (III) of the stipulation, the defendants have not maintained or kept records which comply with Section 516.2 of the Regulations, in that their addresses are not shown in the file, the occupations of employees are not shown, work weeks are not indicated, nor the hourly rate of pay, or the total hours of work on piece-rates for each day in each week of the period during which they were employed.

The case having been submitted to the court for its decision upon the pleadings, stipulation of facts and oral and documentary evidence, the court now makes the following additional special

Findings of Fact.

1. The defendants Elmer O. McKay and Arthur E. McKay are now, and have been since 1942, engaged in manufacturing, storing and repairing grain doors and coal doors for the Union Pacific Railroad Company at Sidney, Nebraska, under the name of "McKay Brothers". Before 1942, the defendants were engaged in the same activity at Cheyenne, Wyoming.

2. The defendants jointly own a ranch of 3,500 acres in Colorado, and the defendant Arthur E. McKay has an interest in an estate consisting of 640 acres of grazing land in Nebraska. These properties are operated by tenants.

3. On May 4, 1939, the defendants entered into a written contract, a copy of which was duly offered and received in evidence as plaintiff's Exhibit 2, with the Union Pacific Railroad Company for the manufacture, repair and storage of grain doors and coal doors and the handling, sawing and piling of lumber required in making and repairing grain and coal doors for the Railroad Company at Cheyenne, Wyoming.

4. On February 21, 1940, the defendants and the Union Pacific Railroad Company entered into a written agreement, a copy of which was duly offered and received in evidence as plaintiff's Exhibit 3, whereby the contract dated May 4, 1939, was extended to March 31, 1941, and on February 17, 1941, the parties entered into a similar agreement extending the contract to March 31, 1942. On January 1, 1942, the parties entered into an "Addendum To Agreement dated May 4, 1939," amending Section 11 of the contract dated May 4, 1939, by increasing the amount of compensation to be paid by the Railroad Company to the defendants for performing work specified under the contract.

5. On April 24, 1942, the defendants and the Union Pacific Railroad Company entered into a written contract, a copy of which was duly offered and received in evidence as plaintiff's Exhibit 4, whereby the operations in connection with the manufacture, repair and storage of grain doors and coal doors were transferred from Cheyenne, Wyoming, to Sidney, Nebraska.

6. During the years of 1944, 1945 and 1946, the Union Pacific Railroad Company followed the procedure of placing "Standing Orders", copies of which were duly offered and received in evidence as plaintiff's Exhibits 6, 7, 8, 9, 11 and 12, with the defendants covering the manufacture, repair and storage of grain and coal doors and the handling and sawing of lumber at Sidney. These "Standing Orders" merely specify the rates of compensation to be paid by the Railroad Company to the defendants for performing specified work and contain no agreement by the Railroad Company to take any specified quantity of doors.

7. The operations carried on at Sidney are devoted exclusively to the manufacture, repair and storage of grain and coal doors for the Union Pacific Railroad Company, and are conducted on property owned by the Company and not leased to the defendants or to any one else. Trackage installed by the Railroad Company, lighting equipment, water for fire protection, a small building used by the defendants as an office, a lunch and locker room, and a place to store tools are located on the property.

8. All of the tools and equipment used in the manufacture and repair of the doors, except hatchets used by the workmen and a tractor purchased by Arthur McKay at a cost of $500, for use in moving railroad cars in the yard at Sidney, are furnished and owned by the Union Pacific Railroad Company. Gasoline for the tractor is purchased from third parties and paid for by the defendants, but electricity for lighting purposes and for operating two power saws in the yard is supplied by the Company.

9. The defendants do not go out into the open market to buy or otherwise secure necessary materials but work with materials furnished and owned by the Railroad Company, and the amount of work performed by the defendants and the other workmen is directly dependent upon the amount of materials furnished by the Company.

10. The operations at Sidney have been, since May 16, 1941, under the direct supervision of the Union Pacific Railroad Company's Assistant General Storekeeper, who usually inspects the yard at Sidney once every 60 days, and gives instructions to either Elmer or Arthur McKay concerning safe working conditions and the minimizing of fire hazards. The Assistant General Storekeeper checks the books pertaining to grain door operations, these books being signed by the storekeeper and one of the McKay Brothers. The Company's storekeeper at Sidney is under the direct supervision of the Assistant General Storekeeper.

11. The defendants are not free to exercise their own discretion in determining the manner or order in which cars are loaded or unloaded in the yard at Sidney. Neither are the defendants free to decide whether lumber which has been unloaded and sawed and piled in the yard will be made up into doors or loaded out to other points on the Union Pacific Railroad. Nor may the defendants decide whether the workmen shall refrain from making one type of door and work exclusively on another type. All of these matters are controlled by the Railroad Company, through its storekeeper and Assistant General Storekeeper.

12. Grain doors and coal doors manufactured or repaired by the defendants are made according to specifications (blueprints) furnished by the Union Pacific Railroad Company, and the making and repairing of doors requires no special skill or training but is just "hammer and nail work".

13. When finished doors, which...