Wirtz v. Barnes Grocer Company
| Decision Date | 01 August 1968 |
| Docket Number | No. 19007.,19007. |
| Citation | 398 F.2d 718 |
| Parties | W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellant, v. BARNES GROCER COMPANY, a Corporation; Piggly Wiggly Twin State Distributors, Incorporated, a Corporation; and Bowling Stores, Inc., a Corporation, Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Robert E. Nagle, Atty., U. S. Department of Labor, Washington, D. C., for appellant; Charles Donahue, Sol. of Labor, Bessie Margolin, Associate Sol., and David Meyers, Atty., U. S. Dept. of Labor, Washington, D. C., and Harper Barnes, Regional Atty., U. S. Dept. of Labor, Kansas City, Mo., on the brief.
H. K. Wangelin, of Wangelin & Friedewald, Poplar Bluff, Mo., for appellees.
Before VAN OOSTERHOUT, Chief Judge, BLACKMUN, Circuit Judge, and VAN PELT, District Judge.
This is an action under the Fair Labor Standards Act of June 25, 1938, for injunctive relief. Following a trial, the District Court dismissed the complaint. See Wirtz v. Barnes Grocer Company, 271 F.Supp. 894. Plaintiff Secretary of Labor has appealed.
The primary question involved is whether the three defendants are one enterprise within the meaning and definition of the Act.
Barnes Grocer Company of Poplar Bluff, Missouri, has since 1933 been engaged in the wholesale grocery business. Barnes sells the defendant's three stores and one other Piggly Wiggly store and a group of approximately seventy stores known as Circle B on the basis of cost plus 3½% of markup. It sells its other customers, who number approximately 400, at cost plus 8% markup. Piggly Wiggly Twin State Distributors, Incorporated, hereafter called Piggly Wiggly, operates two retail groceries under franchise from the national Piggly Wiggly Corporation; one is in Poplar Bluff, Missouri and one in Piggott, Arkansas. In the agreement with national Piggly Wiggly it is provided that the "Operator shall be permitted to place on his window in letters substantially smaller the words `Owned and operated by Barnes Grocery Company', or `Barnes Grocery Company Licensee,' inserting his own individual, partnership or corporate name therein." Bowling Stores, Incorporated, hereafter called Bowling, operates a Piggly Wiggly franchised store in Corning, Arkansas.
The trial court's findings in the reported opinion set forth the gross dollar volume of sales of Barnes and of each of the retail stores and the amount of the sales by Barnes to each store. From these figures it is evident that in 1964 and 1965 Barnes supplied the three retail stores with over 50% of their total purchases of goods and merchandise except for the Corning store in 1965 in which the percentage was 47.3%. Substantial items, dollar wise, sold by the retail stores, such as meats, were not handled by Barnes. Hence the dependency on Barnes as a grocery supplier is greater than these percentages would indicate. The stock ownership as set out in the trial court's opinion is undisputed as are the officers and directors enumerated. We note, as did the trial court, that J. B. Jeffress and Mrs. D. S. McMullan are brother and sister, and G. L. Jeffress and his wife are their parents. These three related families own all of the stock of Barnes and, with Barnes, all of the stock of the other corporations except 20 shares in Bowling which are owned by James Hammack, the Barnes Company accountant. The remaining 4,061 shares in Bowling are owned either by Barnes or by members of the Jeffress family. The Jeffress and McMullans held all of the offices, including directorships, in Barnes and Piggly Wiggly during 1964, 1965 and 1966. Floyd Naylor, hereafter mentioned, and accountant Hammack, are officers and directors of Bowling, along with Mr. McMullan.
J. B. Jeffress negotiated the lease of the two Piggly Wiggly stores and Barnes is joint lessee with Piggly Wiggly of the land on which the Poplar Bluff store is located. Barnes is guarantor of the lease on the Piggott store.
Barnes leased the premises on which the Bowling store is located and sublet the ground to Bowling. In this sublease it is provided:
"It is further understood and agreed that the Barnes Grocer Company will make available to said Sublessees such items of merchandise as said Barnes Grocer Company carries, at competitive market prices during the term of this lease, and that the said Sublessees agree to purchase from the Barnes Grocer Company all such merchandise as is available from the said Barnes Grocer Company exclusively."
Each store has a manager who may hire, discharge and set the wages for the store employees. The manager is allowed to select the type, sources and quantities of goods to be carried and the price at which they are to be sold. None of the managers have a financial interest in the store operated. He pays wages and certain other bills in cash and deposits the rest in a checking account on which he cannot write checks. Floyd Naylor supervises the three managers. They can be hired and fired by him and he supervises their hiring and sets their salary. Each is under an identical incentive bonus plan.
Barnes supplies auditing services for these and other stores, for which a separate charge is made. The books are kept by James Hammack, who prepares the checks and invoices. Hammack signs for Bowling; McMullan for Piggly Wiggly. He prepares the income tax return for each. Although they could file consolidated returns since they "are considered an affiliated group" they have elected to file separately.
It is conceded that Barnes is an enterprise within the meaning of 29 U.S.C.A. sections 203(r) and (s) (1). Barnes is not only under the Act but is complying so far as the record in this case is concerned.
The applicable statutes read:
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