Wirtz v. Mayer Construction Co., Civ. No. 692-66.

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
Writing for the CourtGrosso, Beck & Mangino, by Marius Grosso, Orange, N. J., for defendants
Citation291 F. Supp. 514
PartiesW. Willard WIRTZ, Secretary of Labor, Plaintiff, v. MAYER CONSTRUCTION CO., and Barnegat Light Development Co., Defendants.
Decision Date16 October 1968
Docket NumberCiv. No. 692-66.

291 F. Supp. 514

W. Willard WIRTZ, Secretary of Labor, Plaintiff,
v.
MAYER CONSTRUCTION CO., and Barnegat Light Development Co., Defendants.

Civ. No. 692-66.

United States District Court D. New Jersey.

Decided October 16, 1968.

As Amended October 24, 1968.


291 F. Supp. 515

Charles Donahue, Sol., John A. Hughes, Regional Atty., Francis V. La Ruffa, Supervising Attorney, Joel H. Swift, Trial Atty., New York City, United States Dept. of Labor, for plaintiff.

Grosso, Beck & Mangino, by Marius Grosso, Orange, N. J., for defendants.

OPINION

COHEN, District Judge:

The primary issue requiring determination is whether, under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219,

291 F. Supp. 516
the "enterprise concept" relating to local businesses handling goods which had moved in interstate commerce is a proper exercise by Congress of its constitutional power to regulate interstate commerce;1 and, if so, whether it is applicable to defendants, Mayer Construction Co. and Barnegat Light Development Co., by imposing upon them an obligation for the payment of overtime compensation pursuant to the wage and hour provisions of the Act.

The matter was tried without a jury. The facts developed, and substantially conceded by the parties, disclose that defendants' construction business activities involved the handling of goods which had moved in interstate commerce, but which had "come to rest" and were purchased by defendants solely from suppliers within the State of New Jersey; that such goods were then handled by defendants' employees in the erection of dwellings solely within New Jersey; and that each of defendants' enterprises involved an annual gross business volume in excess of $350,000.00.

The plaintiff's argument in support of his complaint is that Congress is authorized by the commerce clause to regulate industries using goods which had been in interstate commerce but had "come to rest;" (2) under the Fair Labor Standards Act, supra, Congress has regulated such industries; (3) the construction materials used by the defendants' employees are "goods" as defined by the Act; and therefore, defendants' employees are covered by the Act.

In opposing the construction of the Act advanced by the plaintiff, the defendants argue that (1) the 1961 amendment, seeking to cover enterprises engaged in intrastate activities and handling good which, after movement in interstate commerce, have "come to rest" within the state, is an unconstitutional extension of the commerce power, and (2) that the building materials in their possession as ultimate consumers after purchase from local suppliers, are not "goods" within the meaning of section 203(i) of the Act.2

The attack by the defendants upon the legislation in question raises three integral issues: (1) whether Congress is empowered by the commerce clause of the United States Constitution to regulate business enterprises engaged in the handling of goods which have moved interstate, but have left the stream of interstate commerce and have come to rest within a state wherein they are solely used; (2) whether the "enterprise concept" of coverage by the Act is arbitrary and unreasonable in that it establishes size and industry differentiations and creates discriminatory classifications violative of the due process clause; and (3) whether the materials and supplies handled by the defendants' employees are "goods" as defined by the Act.

The area of dispute between these parties involves plaintiff's attempted application of the Act, as amended, to the defendants' business enterprises. The issues involved are of constitutional dimension.

291 F. Supp. 517

At the outset, it should be observed that the enactment of the Fair Labor Standards Act of 1938, supra, was an exercise by Congress of its power to regulate commerce among the several states. United States Constitution, Art. 1, § 8, cl. 3. United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609 (1941). By this legislation, Congress sought to foster the free flow of interstate commerce by establishing certain fair labor standards for the "general well-being of workers" in industries engaged in interstate commerce or in the production of goods for such commerce. In determining whether the original Act covered certain industrial activities, the test traditionally employed by the Courts thereafter was whether goods handled by the employees, sought to be covered by the Secretary of Labor, were goods which were moving in the stream of interstate commerce. Under this judicial test, once the goods left the stream of commerce and came to rest within the boundaries of a particular state, thereby exiting from the fictional "stream" of movement, employees' activities thereafter were outside the protection afforded by federal regulation of wages and hours.

After experience with the operation of the Act over the course of some 23 years, including as it did two wars and post-war economic surges and recessions, Congress determined that the declared policy of the Act,3 which was intended and designed to free the channels of our national commerce from substandard labor conditions adversely affecting such commerce, was not being accomplished. Congress realized that the Act as written and applied was too limited in breadth and therefore inadequate to accomplish the fuller scope which it sought to attain by its original legislation. Accordingly, in 1961, the Act was amended to extend its coverage to workers of certain employers who came within specific provisions. This new area of legislative coverage became known as the "enterprise concept." (See note 1, ante.) In testing the encompassment of the Act as so amended in 1961, the traditional "stream of commerce" doctrine is no longer appropriate in regard to the "enterprise" amendments. Rather, now the inquiry is whether the employer's activities, engaging its employees in the handling of goods which had moved in interstate commerce, are such as to exert a substantial impact upon commerce among the several states, which commerce is integrally related to the national economy and the general welfare of the workers therein. Such remedial legislation is to be given a liberal interpretation in favor of coverage. Stevens v. Welcome Wagon, International, Inc., 390 F.2d 75, 78 (3 Cir. 1968). And constitutionality of federal regulation of intrastate or local activities exerting a substantial impact upon interstate commerce has recent approbation. Katzenbach v. McClung, 379 U.S. 294, 300, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964); Goldberg

291 F. Supp. 518
v. Ed's Shopworth Supermarket, Inc., 214 F.Supp. 781 (W.D.La.1963) and Wirtz v. Melos Construction Corp., 284 F.Supp. 717 (E.D.N.Y.1968) considering the 1961 amendments sub judice. See State of Maryland v. Wirtz, 269 F.Supp. 826 (D.C.Md.1967) regarding the 1966 amendments to the Act.4

The rationale underlying the extended coverage of the Act, by the 1961 enterprise amendments, to activities wholly within a state which are subsequent to the movement of goods in interstate commerce and which intrastate activities were not covered previously by the enactment of 1938, was clearly indicated by the sponsors of the amended legislation. They concluded that subsequent activities were in...

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14 practice notes
  • Marshall v. Whitehead, No. 75-6-Civ-Ft.M-Y.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • May 19, 1978
    ...516 F.2d at 502, n. 9. 13 Wirtz v. Melos Construction Corp., 408 F.2d 626 (2nd Cir. 1969). 14 Wirtz v. Mayer Construction Co., 291 F.Supp. 514 15 "Maximum hours (a)(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged ......
  • Shultz v. Blaustein Industries, Inc., Civ. No. 20250
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • January 18, 1971
    ...F.2d 16 (3 Cir. 1962); Shultz v. Union Trust Bank of St. Petersburg, 297 F.Supp. 1274 (M.D.Fla.1969); Wirtz v. Mayer Construction Co., 291 F.Supp. 514 (D.N.J.1968); Wirtz v. Melos Construction Co., 284 F.Supp. 717 (E.D.N.Y.1968), aff'd 408 F.2d 626 (2 Cir. 1969); Irby v. Davis d/b/a D. J. D......
  • Futrell v. Columbia Club, Inc., No. IP 69-C-176
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • August 2, 1971
    ...to rest" within the state. The modern view is that the Commerce Clause reaches such activity. Wirtz v. Mayer Construction, D.N.J., 1968, 291 F.Supp. 514. Moreover, defendant is not a true ultimate consumer as it resells its food and sundry items. The FLSA amendments are constitutionally app......
  • Hodgson v. HYATT REALTY AND INVESTMENT COMPANY, INC., No. C-139-WS-71
    • United States
    • United States District Courts. 4th Circuit. Middle District of North Carolina
    • January 30, 1973
    ...enterprise uses the material as an ultimate consumer. Irby v. Davis, 311 F.Supp. 577 (E. D.Ark. 1970); Wirtz v. Mayer Construction Co., 291 F.Supp. 514 (D.N.J. 1968); Childress v. Earl Whitley Enterprises, Inc., 388 F.2d 742 (4th Cir. Because of the unique nature of the defendants' business......
  • Request a trial to view additional results
14 cases
  • Marshall v. Whitehead, No. 75-6-Civ-Ft.M-Y.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • May 19, 1978
    ...516 F.2d at 502, n. 9. 13 Wirtz v. Melos Construction Corp., 408 F.2d 626 (2nd Cir. 1969). 14 Wirtz v. Mayer Construction Co., 291 F.Supp. 514 15 "Maximum hours (a)(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged ......
  • Shultz v. Blaustein Industries, Inc., Civ. No. 20250
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • January 18, 1971
    ...F.2d 16 (3 Cir. 1962); Shultz v. Union Trust Bank of St. Petersburg, 297 F.Supp. 1274 (M.D.Fla.1969); Wirtz v. Mayer Construction Co., 291 F.Supp. 514 (D.N.J.1968); Wirtz v. Melos Construction Co., 284 F.Supp. 717 (E.D.N.Y.1968), aff'd 408 F.2d 626 (2 Cir. 1969); Irby v. Davis d/b/a D. J. D......
  • Futrell v. Columbia Club, Inc., No. IP 69-C-176
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • August 2, 1971
    ...to rest" within the state. The modern view is that the Commerce Clause reaches such activity. Wirtz v. Mayer Construction, D.N.J., 1968, 291 F.Supp. 514. Moreover, defendant is not a true ultimate consumer as it resells its food and sundry items. The FLSA amendments are constitutionally app......
  • Hodgson v. HYATT REALTY AND INVESTMENT COMPANY, INC., No. C-139-WS-71
    • United States
    • United States District Courts. 4th Circuit. Middle District of North Carolina
    • January 30, 1973
    ...enterprise uses the material as an ultimate consumer. Irby v. Davis, 311 F.Supp. 577 (E. D.Ark. 1970); Wirtz v. Mayer Construction Co., 291 F.Supp. 514 (D.N.J. 1968); Childress v. Earl Whitley Enterprises, Inc., 388 F.2d 742 (4th Cir. Because of the unique nature of the defendants' business......
  • Request a trial to view additional results

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