Wirtz v. Modern Trashmoval, Inc., 8828-8830.

• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)
• Writing for the Court: HAYNSWORTH and BOREMAN, Circuit , and LEWIS
• Citation: 323 F.2d 451
• Parties: W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellee, v. MODERN TRASHMOVAL, INC., a corporation, Appellant. W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellee and Cross-Appellant, v. MODERN TRASHMOVAL, INC., a corporation, Appellant and Cross-Appellee (two cases).
• Docket Number: No. 8828-8830.,8828-8830.
• Decision Date: 23 September 1963

323 F.2d 451 (1963)

W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellee,
v.
MODERN TRASHMOVAL, INC., a corporation, Appellant.
W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Appellee and Cross-Appellant,
v.
MODERN TRASHMOVAL, INC., a corporation, Appellant and Cross-Appellee (two cases).

Nos. 8828-8830.

United States Court of Appeals Fourth Circuit.

Argued June 7, 1963.

Decided September 23, 1963.

323 F.2d 452

Charles G. Page, Baltimore, Md. (White, Page & Lentz, Baltimore, Md., on brief), for appellant and cross-appellee.

Charles Donahue, Solicitor of Labor, and Jack H. Weiner, Atty., U. S. Dept. of Labor (Bessie Margolin, Assoc. Solicitor, Jacob I. Karro, Atty., and Ernest N. Votaw, Regional Atty., U. S. Dept. of Labor, on brief), for appellee and cross-appellant.

Before HAYNSWORTH and BOREMAN, Circuit Judges, and LEWIS, District Judge.

BOREMAN, Circuit Judge.

I

FACTUAL BACKGROUND

(a) Court Proceedings.

These appeals involve three actions brought in the United States District Court for the District of Maryland by the Secretary of Labor under the Fair Labor Standards Act,¹ herein called the Act. In case No. 8828 the Secretary sought an injunction against violations of the wage and record-keeping requirements of the Act by Modern Trashmoval, Inc. (herein referred to as defendant

323 F.2d 453

or Modern) and Francis P. E. Bohager, its president.² In cases Nos. 8829 and 8830 the Secretary sought to recover from Modern unpaid compensation alleged to be due under the Act³ to nineteen of Modern's employees for work performed between April 1, 1959, and March 29, 1961. Because identical issues of coverage under the Act were involved, the three suits were consolidated for trial

The District Court⁴ held that the nineteen use-plaintiffs were covered by the Act because engaged in work "closely related" and "directly essential" to the production of goods for commerce; that Modern was not exempt as a "retail or service establishment" under section 13 (a) (2) of the Act;⁵ and that Modern, although in violation of the Act, had acted in good faith on the advice of counsel. The court declined to issue the requested injunction and dismissed that suit, but it rendered judgments for the plaintiffs in the two wage suits. Modern appeals from the judgments adverse to it in the wage suits, and also appeals from the ruling, common to all three actions, that the activities of its employees were subject to the provisions of the Act. The Secretary of Labor cross-appeals from the judgments in the wage suits on the ground that the District Court erred in not allowing interest on the wages withheld.⁶

(b) Description of Modern's Business and the Activities of its Employees.

Defendant Modern is a Maryland corporation engaged exclusively in the collection and disposal of garbage, rubbish, debris and industrial waste in the City of Baltimore and its environs. With the exception of a small amount of cardboard resold during the period covered by the proof (April 1, 1959, through March 29, 1961) and later to be mentioned, the material collected is and was either destroyed by incineration or dumped within the State of Maryland. At the times in question, Modern's employment totaled approximately thirty-two persons of whom twenty-four were drivers and helpers. The nineteen use-plaintiffs here were among approximately fifty who worked as drivers and helpers during the two-year period for which compensation was sought. Drivers and helpers proceed in Modern's trucks to the locations on customers' premises where trash has been accumulated in containers by the customers, empty the containers or load them full onto the truck, and then haul the unsorted trash and garbage to an incinerator or dump for final destruction or burial. No labor skills are needed for this work other than the requirement that each driver be able to operate his truck and remember his route.

Three alternative types of service are provided by Modern depending primarily

323 F.2d 454

upon the volume of trash to be collected. At so-called "container stops," Modern furnishes containers two to six cubic yards in size and collects the accumulated trash, using a specially designed truck known as a Dumpmaster which, by mechanical means, lifts each container, dumps it contents into the truck, compacts the trash in the truck and replaces the empty container on the customer's premises, taking approximately two to three minutes' time per container. Normally, the Dumpmaster is operated by a driver without a helper. At "hand stops" a driver and his helper manually carry and dump standard garbage cans, usually owned by the customer. The time required for a "hand stop" can vary from two minutes up to forty minutes with the average time estimated at twenty minutes. The third type of service, termed "miscellaneous," is devoted to answering special calls from regular customers and calls from one-time customers. The "container stops" and "hand stops" are served at regular intervals from once a week to twice a day by drivers and helpers assigned to regular routes

At the trial below uncontradicted evidence showed that trash-collection service is available to anyone in Baltimore and vicinity upon calling Modern's office. However, most of Modern's business consists of regular route collections from commercial establishments, some of which are engaged in producing goods for interstate commerce. One of Modern's witnesses estimated that not over 10% to 15% of its customers were industrial or manufacturing firms. No special discounts are given to particular classes of customers, and charges to all customers are based on the time required to collect trash at that location, the volume of trash handled and competition in the area. Modern's drivers and helpers are not in any way concerned with the business or productive activities of customers. Drivers merely need to know the location of the customer's collection point and how frequently to stop there. Because the price of Modern's service is in part dependent upon time, most trash containers are so located as to provide convenient access for trucks and to facilitate rapid collection. To maintain a more attractive appearance, a relatively small number of customers place containers in an inclosure and require the trash collectors to summon assistance before entering. Some large containers owned by Modern are mounted on wheels and moved about the premises while the customer loads them with trash, but Modern's employees do not enter the customer's premises to pick up scattered trash in general collections. The sole exception is certain "miscellaneous" calls in which Modern's employees are required to clear debris after a fire or to clean up a particular littered area.

Modern placed in evidence a charted analysis of its service stops and charges for the month of September 1961, the month in which suit was brought. The chart showed that in September 1961 Modern's trucks made a total of 20,112 stops representing total sales of $52,841.13. Of the total number of stops, 38.41% were for charges of less than $1.00 per stop; 77.13% were for less than $4.00 per stop; only 3.45% were for charges of $10.00 or more per stop. The chart also showed that 66.50% of Modern's total sales for the month were made at prices of less than $6.00 per stop.

(c) Evidence Relating the Occupations of the Use-Plaintiffs to Interstate Commerce.

In an effort to obtain proof that the use-plaintiffs were engaged in work having sufficient relationship to interstate commerce to bring them within the coverage of the Act, the Secretary undertook extensive proceedings directed to identifying Modern's customers, their activities in commerce or in producing goods for commerce, and the contacts of the use-plaintiffs with customers having such activities related to interstate commerce. To avoid the inconvenience accompanying the resulting lengthy examination of its personnel and records, Modern agreed to a stipulation that each

323 F.2d 455

of the nineteen use-plaintiffs, during each week of his employment by Modern between April 1, 1959, and March 29, 1961, collected trash from at least one customer who was then engaged in the production of goods for commerce. Six witnesses, each employed by a different customer of Modern, testified that cessation of Modern's collection service would cause various inconveniences at their respective production and distribution locations, and several of them suggested that, under certain circumstances, work stoppages could result (see discussion, 207 F.Supp. at 603-604). However, only four of these witnesses stated that shipments were made in interstate commerce from their places of business, no identification was made of particular use-plaintiffs as the employees serving these customers, and no proof was presented to show that these customers or their shipments in interstate commerce were representative of Modern's customers as a whole. Modern had between 800 and 1,000 customers during the period in question but, except with respect to the above mentioned six customers, there was no proof as to whether their activities affected interstate commerce, or as to the nature and extent of trash collection services rendered to customers in commerce or producing goods for commerce, the possible effects on commerce of interruption of that service, and the employment of the use-plaintiffs in serving such customers. Thus, on this record, the stipulation merely states that, during the period in suit and his employment, each use-plaintiff worked a minimum of two to three minutes per week in collecting trash from an unidentified customer who was engaged in the production of goods for commerce

(d) Evidence on the "Cardboard Issue."

A second and independent area of proof, termed the "cardboard issue" by the parties (as distinguished from the "removal of waste" issue described above), is claimed by the...