Ware v. GUILFORD BUILDING, INC.

• Decision Date: 09 July 1969
• Docket Number: No. C-103-G-68.,C-103-G-68.
• Citation: 313 F. Supp. 1061
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Frank WARE, Plaintiff, v. GUILFORD BUILDING, INC., Defendant.

313 F. Supp. 1061

Frank WARE, Plaintiff, v. GUILFORD BUILDING, INC., Defendant.

No. C-103-G-68.

United States District Court, M. D. North Carolina, Greensboro Division.

July 9, 1969.

Walter T. Johnson, Jr., and Henry Frye, Greensboro, N. C., for plaintiff.

R. D. Douglas, Jr., of Douglas, Ravenel, Hardy & Crihfield, Greensboro, N. C., for defendant.

MEMORANDUM OPINION

GORDON, District Judge.

This case was instituted by the plaintiff, Frank Ware, to recover additional compensation, damages and attorney's fees from the defendant, Guilford Building, Inc., under the provisions of the Fair Labor Standards Act of 1938 as amended, 29 U.S.C.A. § 201 et seq., hereinafter referred to as the Act. The action involves the period of time from July 1, 1966, to March 20, 1968.

Plaintiff contends that during this period his wages were subject to the wage-hour provisions of the Act, that the defendant at no time herein mentioned has complied with this minimum wage requirement and that the plaintiff is entitled to recover the difference in his actual pay and the sum to which he would be entitled under federal law and a like sum in liquidated damages plus reasonable attorney's fees. The defendant contends that their business is not subject to the provisions of the Fair Labor Standards Act; and, therefore, the defendant was not required to pay minimum wages and overtime wages to the plaintiff under the Act. The defendant further contends that even if the Court should find that the employment of the plaintiff was under the Act, the defendant acted in good faith in the belief that the defendant was not subject to the Act; and therefore no additional recovery should be ordered, under 29 U.S.C. § 260.

On the issues properly joined, for reasons which are more fully set out herein, the Court concludes that the plaintiff's wages were not subject to the provisions of the Fair Labor Standards Act and the relief requested herein is denied.

The case was duly brought on for trial before the Court without a jury. Having considered the evidence, briefs, oral arguments, and the entire official file, the Court makes the following findings of fact:

1. The plaintiff, Frank Ware, is a citizen and resident of Guilford County, North Carolina, and was employed by the defendant, Guilford Building, Incorporated, as a night watchman and elevator operator from September, 1957, through March 20, 1968.

2. The defendant, Guilford Building, Incorporated, is a North Carolina corporation doing business at 301 South Elm Street in the City of Greensboro, North Carolina. The defendant's sole business is that of renting office space in the Guilford Building to various tenants.

3. This action involves a period of the plaintiff's employment from July 1, 1966, to March 20, 1968. The parties stipulate that the plaintiff was not paid the minimum rates as prescribed by the Fair Labor Standards Act but rather was paid the minimum rates required by the State of North Carolina; that if the plaintiff was covered by the Fair Labor Standards Act, he is entitled to $1,799.00 additional wages.

4. The defendant leases space to numerous tenants that occupy varying amounts of space in the building. The tenants at various six-months intervals and the amount of square footage occupied by them are set out in Appendix A of this opinion. The amount of rentable space in the building during the period in issue was 78,348 square feet.

5. A number of tenants, both persons and corporations, are engaged in commerce in the building or elsewhere. However, there is no actual physical production of goods for commerce within the building.

6. There is no evidence before the Court as to the length of the leases of the various tenants. Nevertheless, it is obvious from studying Appendix A of this opinion that the defendant rents available office space to any appropriate tenant without considering whether the tenant's business is national or local in nature. Further, the tenants and the amount of office space rented by tenants changes from time to time. Thus, the proportion of the offices in the building rented by persons or corporations that engage in commerce or the production of goods for commerce could vary substantially from year to year.

7. The annual gross rental receipts of the building has continuously been and still remains less than $500,000.00.

8. The Guilford Building, Incorporated, is a business that is essentially local in nature even though various persons or corporations that presently rent office space in the building are engaged in commerce or in the production of goods for commerce.

DISCUSSION

The single issue before the Court is whether the plaintiff, Frank Ware, should have been paid the minimum wages and overtime rates as prescribed by the Fair Labor Standards Act for the time period from July 1, 1966, through March 20, 1968. The plaintiff was paid wages and overtime rates in accordance with the North Carolina minimum rates rather than the rates prescribed by federal law. If the plaintiff is entitled to recover the additional wages, he is entitled to $1,799.00.

The plaintiff contends that his employment was covered by the Fair Labor Standards Act for the following reasons:

(1) the business of the defendant was an enterprise within the meaning of Section 203(r) and (s) of the Fair Labor Standards Act and this being true, the plaintiff-employee was entitled to the minimum wages prescribed by such Act.

(2) a substantial part of the rentable space in the Guilford Building was occupied by persons or corporations engaging in interstate commerce or such space was used for the production of goods for commerce so as to make the plaintiff-employee subject to the wage-hour requirements of the Fair Labor Standards Act.

The contention that the Guilford Building, Inc., is an enterprise within the definition of the Act need not be dealt with in this opinion because the evidence was clear that the annual gross volume of sales (rentals received) was considerably less than the $500,000.00 minimum amount required for this concept to be applicable.

The plaintiff was a night watchman and elevator operator, who sometimes cleaned the elevators and the lobby of the office building, therefore the plaintiff is not covered by the Act because of his personal work. Further, the defendant-employer is not an employer engaged in the production of goods for commerce within the Act. However, under Section 203(j) of the Act, the plaintiff would be covered if he shows that he is "employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof." (Emphasis added.) Thus, the plaintiff would be covered by the Act if he were engaged in an occupation closely related or directly essential to the production of goods for commerce.

In A. B. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638 (1942) and 10 East 40th St. Bldg. v. Callus, 325 U.S. 578, 65 S.Ct. 1227, 89 L.Ed. 1806 (1945), the Supreme Court of the United States made it quite clear that the question of whether an employee was employed in a process directly essential to the production of goods for commerce could only be answered in a case by case determination. In the present case, the Court finds that the plaintiff was not engaged in such an occupation and was not covered by the Fair Labor Standards Act.

In 10 East 40th St. Bldg. v. Callus, supra, Mr. Justice Frankfurter while dealing with a similar problem concerning such an office building stated:

"For as was pointed out in Walling v. Jacksonville Paper Co., supra, (317 U.S. 564 at 570, 63 S.Ct. 332, 87 L.Ed. 460 467, we cannot `be unmindful that Congress in enacting this statute plainly indicated its purpose to leave local business to the protection of the states.' We must be alert, therefore, not to absorb by adjudication essentially local activities that Congress did not see fit to take over by legislation.

"Renting office space in a building exclusively set aside for an unrestricted variety of office work spontaneously satisfies the common understanding of what is local business and makes the employees of such a building engaged in local business. Mere separation of an occupation from the physical process of production does not preclude application of the Fair Labor Standards Act. But remoteness of a particular occupation from the physical process is a relevant factor in drawing the line. Running an office building as an entirely independent enterprise is too many steps removed from the physical process of the production of goods. Such remoteness is insulated from the Fair Labor Standards Act by those considerations pertinent to the Federal system which led Congress not to sweep predominantly local situations within the confines of the Act. To assign the maintenance men of such an office building to the productive process because some proportion of the offices in the building may, for the time being, be offices of manufacturing enterprises is to indulge in an analysis too attenuated for appropriate regard to the regulatory power of the states which Congress saw fit to reserve to them. Dialectic inconsistencies do not weaken the validity of practical adjustments, as between the State and federal authority, when Congress has cast the duty of making them upon the Courts. Our problem is not an exercise in scholastic logic.

"The differences between employees of a building owned by occupants producing therein goods for commerce, and the employees of a building intended for tenants who produce such goods therein, and the employees of the office building of a large interstate producer, are too thin for the practicalities of adjudication. But an office building exclusively devoted to the purpose of housing all the usual miscellany of offices has many differences in the practical affairs of life from a manufacturing building,

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