Wirtz v. Broward Marine, Inc., 23232.

• Citation: 390 F.2d 788
• Decision Date: 23 February 1968
• Docket Number: No. 23232.,23232.
• Parties: W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellant, v. BROWARD MARINE, INC., et al., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

390 F.2d 788 (1968)

W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellant, v. BROWARD MARINE, INC., et al., Appellees.

No. 23232.

United States Court of Appeals Fifth Circuit.

February 23, 1968.

Bessie Margolin, Assoc. Sol., Anastasia T. Durau, Atty., Dept. of Labor, Washington, D. C., for appellant.

David A. Bartholf, Jacksonville, Fla., for appellees.

Before BROWN, Chief Judge, and COLEMAN and SIMPSON, Circuit Judges.

COLEMAN, Circuit Judge.

This action was brought by the Secretary of Labor under Section 17 of the Fair Labor Standards Act.¹ The complaint charged that from September 17, 1962 to August 21, 1964 Broward Marine and its president had violated overtime requirements of the Act. An order restraining future violations and enjoining the continued withholding of wages already owing the employees was accordingly sought.² Employers answered that the employees were exempt from the requirements of the Act under Section 13(a) (2) and (4) thereof, as it then existed.³ The case was tried to the Court, which concluded that the employees had been employed in commerce and in the production of goods for commerce within the meaning of the Act. From this the employers did not appeal. In view of the holding of this Court in Bodden v. McCormick Shipping Corp., 188 F.2d 773 (1951) it is apparent that such an appeal would have had a poor chance of success. The Court further concluded that the employers' business is a "retail or service establishment", exempt, by virtue of Section 13(a) (2) and (4) aforesaid. From this the Secretary appeals. For the reasons hereinafter set forth the Judgment will be reversed in part and remanded for further proceedings.

Based on admissions, stipulations of the parties, and oral and documentary proof, the facts were found by the trial court as now set out.

The employer is a Florida corporation. Its office and principal place of business is located at Fort Lauderdale. It constructs, sells, builds, repairs, maintains, and stores boats. During the period involved in this litigation there were 137 employees, who were engaged in the repair, construction or building of boats.

Between January 31, 1963 and August 21, 1964, the employer, for named customers, built three boats which were sold, respectively, for $73,043.41, $300,547.06, and $296,102.06.

The figures were not broken down for the years 1962 and 1964, although there was general testimony with reference thereto. In 1963 the company receipts for repairs amounted to $462,414.28; storage $40,263.41; rentals $5,001.59; Miscellaneous, $8,633.98; total, $516,313.26.

With only one exception, all employees were paid only at their straight time rates for all hours worked.

Boats constructed, stored, and repaired by Broward have been used in travel to and from points outside the State of Florida for both business and pleasure.

From all the evidence it appears that the percentage of the employer's annual gross sales for resale amounted to less than 10% of the total, so more than 75% of annual gross sales were not for resale. With the exception of $322.50 all service and boat sales were made within the State of Florida.

The company established by the overwhelming weight of the evidence that at least 75% of the sales were and are recognized within the boating industry as retail sales and services.

While the Secretary points to asserted inadequacies in the proof we are of the view that the factual findings are supported by substantial evidence and that they cannot be condemned as clearly erroneous.

The crucial issue, submerging subsidiary questions raised by the parties, is whether the Broward operation is ineligible for the statutory exemption as a matter of law. The Secretary says that an establishment primarily engaged in the manufacture and repair of oceangoing vessels is not of a retail character, and the sale of such "industrial type" services are not transactions to which the statutory retail concept applies.

Reiterating some of the findings above quoted it seems clear from the record that Broward Marine, Inc. operates what it advertises as the "largest shipyard in Florida" — a 16 acre installation which is connected with the Atlantic Ocean and the Intra-Coastal Waterway. The shipyard is equipped with a 200-ton marine railway, a 70-ton marine lift and a 35-ton crane for raising vessels from the water. It also has 40,000 square feet of construction buildings, including a machine shop, a welding shop, woodworking mills, a sheet metal shop, a paint department, a cabinet shop, an electrical and electronic department, an outfitting warehouse, fitting-out sheds, an engine overhaul shop, and a repair facility. Other facilities include a total of 90,000 square feet of covered wet and dry storage areas, yacht brokerage offices, a marine store and a central office. In addition, a plant for manufacturing large laminated wood products was also located at the shipyard until a month before trial, when it was discontinued.

Among the ships constructed during 1963 and 1964 were two 81 foot cruisers which were sold for $300,547 and $296,102, and another craft which was sold for $73,043. Other ocean-going ships, including two 102 foot cruisers, were in various stages of production or design during this period, and another ship, built earlier, was sold for $160,000 during 1963. It was explained by Broward's president that some of these ships are built to customers' specifications, while others are built without prior orders.

Broward was also engaged extensively in performing major repairs on ships used by commercial enterprises, by the United States Government, and by yacht owners using their ships for business and chartering, as well as for pleasure. Such work has included $30,292 in repairs on the M/V Columbus chartered by the United States Navy to North American Aviation, and some $20,000 worth of repairs for Port Everglades Towing Company, including work on a United States Air Force T boat used by Port Everglades for the purpose of recovering Air Force missiles. Other ships repaired included torpedo retriever boats used by the United States Navy for recovering torpedoes fired for practice, and the 65 foot British registry M/V Sundev, used by Mackay Airlines for transporting goods from Fort Lauderdale to Bimini. Repair services are also supplied to charterers and others using yachts for business and pleasure. From January, 1963, through January, 1964, ships repaired by Broward ranged in size from 32 feet to 118 feet and the amounts billed individual customers on any one invoice ranged from $291 to $36,237.

Another major activity was that of Broward's laminating plant which provided laminated parts for Broward's boat construction, and which also built and sold laminated members to construction contractors for use in building churches and schools. Some of these products were sold directly to churches pursuant to formal bidding procedures. In addition, in 1963, Broward manufactured a laminated keel and other parts for the United States...