Wirtz v. NATIONAL ELECTRIC COMPANY

• Decision Date: 20 May 1968
• Docket Number: Civ. No. 67-63.
• Parties: W. Willard WIRTZ, Secretary of Labor, Plaintiff, v. NATIONAL ELECTRIC COMPANY, Inc., and Robert G. Elston, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

285 F. Supp. 30

W. Willard WIRTZ, Secretary of Labor, Plaintiff, v. NATIONAL ELECTRIC COMPANY, Inc., and Robert G. Elston, Defendants.

Civ. No. 67-63.

United States District Court W. D. Oklahoma.

May 20, 1968.

M. J. Parmenter, Regional Atty., Nathan Rachael, Trial Atty., Charles Donahue, Sol., Dept. of Labor, Dallas, Tex., for plaintiff.

Edward E. Soulé, of Lytle, Soulé & Emery, Oklahoma City, Okl., for defendants.

MEMORANDUM OPINION

DAUGHERTY, District Judge.

Plaintiff brings this action to enjoin Defendants from violating the overtime, record-keeping, and child labor provisions of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. The Complaint did not allege enterprise coverage and the parties stipulated that such coverage was not an issue in the case.

The Defendant Company during the period in question, August 24, 1964 to February 1, 1967, was engaged in the electrical contracting business and in addition sold electrical supplies, mainly lighting fixtures. At the close of trial, the case was left with these issues:

1. Whether the defendant's warehouse employees performed work in interstate commerce by:

a. unloading extrastate shipments from common carriers, or

b. handling and storing extrastate goods after they were deposited on the receiving dock of the warehouse by the common carrier involved.

2. Whether work performed by Defendant's employees in rewiring and installing electrical equipment in a portion of the warehouse of Locke Plumbing Company, which is stipulated to be engaged in interstate commerce, was work performed on a facility of interstate commerce, where the portion of the warehouse rewired was thereafter used as a city sales office and display room.

3. If the Defendant Company is covered by the Act by reason of an affirmative answer to either of the foregoing, whether it may claim exemption as a retail establishment pursuant to 29 U.S.C. § 213(a) (2).

4. Whether the Defendants should be enjoined against future violations of the child labor provisions of the Fair Labor Standards Act, 29 U.S.C. § 212.

UNLOADING OF INTERSTATE SHIPMENTS BY WAREHOUSE EMPLOYEES

The Plaintiff's evidence consisted of testimony by two warehouse employees to the effect that they occasionally "helped" unload goods from interstate carriers. They acknowledged that they had been specifically instructed by Defendant Elston, their employer, not to assist in the unloading of any merchandise arriving on a common carrier. When pressed to recall a specific instance in which either of them participated in unloading from a common carrier in violation of instructions neither witness could recall any particular occasion. The Court was not favorably impressed with their demeanor on the witness stand under the pressure of cross examination and the Court's own questions.

Defendant Elston testified that the instructions referred to above had been in effect continuously since 1963. Considering all the evidence offered on this point, the Court does not find the testimony of the Plaintiff's witnesses to be credible and therefore is insufficient to establish that the claimed unloading by them actually did occur, and further that evidence is wholly lacking that the claimed unloading was a regular and continuing feature of the witness's employment in the warehouse.

HANDLING AND STORAGE OF GOODS RECEIVED THROUGH INTERSTATE COMMERCE

There is no dispute that the warehouse employees picked up goods deposited on the warehouse dock by the common carrier involved and carried them to their respective places of storage in the warehouse. The dispute is where interstate commerce ends: at the dock or on the shelves.

The point to which interstate commerce of goods continues depends on the ultimate destination intended for them. Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 460 (1942). The instant case falls within the third category of commerce mentioned in the Jacksonville case, that of the local merchant, to which the companion case of Jacksonville, Higgins v. Carr Brothers Co., 317 U.S. 572, 63 S.Ct. 337, 87 L.Ed. 468 (1942), applies.

Prior to the Jacksonville and Higgins cases, the precise point here involved had been determined adversely to Plaintiff's contention.¹ In the Veazey Drug Co. case, note 1, the court reasoned:

"There is a definite line of demarcation between intrastate commerce and interstate commerce. If the edge of the dock and the rear end of the truck constituted this line and the driver of the truck and his helpers removed the goods to this line and they were received onto the dock side of the line by the defendant employees, to contend that said employees were acting in interstate commerce is certainly `pushing' the construction of the statute to an extent not contemplated by the legislative body." 42 F.Supp. at p. 696.

The Jacksonville case, in relation to the question of when interstate commerce ends, devised only the test that it should end when the goods arrived at their intended destination. This test was immediately applied in the Higgins case, with the result "that when the merchandise coming from without the state was unloading at respondent's place of business its `interstate movement had ended.'" 317 U.S. at p. 574, 63 S.Ct. at p. 338, 87 L.Ed. at p. 471. Cases decided subsequent to these two expressions of the Supreme Court have had no difficulty in terminating interstate commerce at the warehouse dock.²

Plaintiff infers that the Supreme Court in the Jacksonville case approved a holding by the Fifth Circuit from which the case was appealed (Fleming v. Jacksonville Paper Co., 128 F.2d 395 (Fifth Cir. 1942)) that warehouse employees handling and storing goods left on the dock by the carrier are in interstate commerce. A reading of the case does not support Plaintiff's position.³ The opinion does not qualify "delivery" and "property." Thus it is safe to presume that these terms were used in their ordinary sense. Delivery is complete when the goods pass out of the possession of the carrier, and with that transfer of possession, the goods as of that moment (if not before) become the property of the wholesaler, subject to his disposition.

Additionally, Plaintiff cites a number of cases as supporting the proposition that interstate commerce continues on past the unloading dock and into the warehouse bins and shelves, but these cases turned on the fact that either interstate goods were unloaded from the carrier by warehouse employees⁴ or on the finding that there was a practical continuity or flow of interstate goods through the warehouse.⁵ Obviously, these authorities do not control as neither of the mentioned circumstances are here present.

Plaintiff cites only one case which appears to be in conflict with the proposition that interstate commerce ends at the independent wholesaler's dock.⁶ Sucrs. de A. Mayol & Co. v. Mitchell, 280 F.2d 477 (First Cir. 1960), cert. den. 364 U.S. 902, 81 S.Ct. 235, 5 L.Ed.2d 195 held that interstate commerce did not end until the goods were sorted and stored within the employer's warehouse. This opinion rests entirely on the First Circuit's view that physical, rather than legal, commingling of the interstate goods with goods in the warehouse is necessary to bring the interstate movement to an end. The Court does not find in the opinions cited by the First Circuit in support of its conclusion a justification for this view.⁷ Rather, the Court believes that the First Circuit misapplied the "temporary pause" test used in the second of the enumerated Jacksonville situations, which is the practical continuity doctrine. In the case of a local independent wholesaler, serving intrastate the general trade, this doctrine has no application.

Apart from the technical consideration previously discussed, the Court is of the opinion that any rule which, in the circumstances of this case, permits extension of interstate movement beyond the warehouse dock and into the warehouse bins and shelves does violence to the Supreme Court's repeated admonitions to adhere to the practicalities of the situation. Assuming, but without deciding, that the rule of de minimis does not apply, it is hardly practical to tell an employer that by receiving any item, however infinitesimal in value, from outside the state, his employees are engaging in interstate commerce, if they have anything whatsoever to do with its storage. The law should not be burdened with such trivialities.

The Court considers a holding that commerce ends at the loading dock to be the most eminently practical one possible: it is clear and it depends upon one fact. It can be understood by any local merchant. There are few times now when there is certainty in the law; these occasions should be encouraged.

WORK ON LOCKE PLUMBING COMPANY WAREHOUSE

One-third of a Locke Plumbing Company warehouse used to facilitate the interstate movement of goods was converted to a local sales office and display room. Defendant installed wiring and electrical fixtures in the course of this conversion pursuant to contract with the Plumbing Company. The converted portion continues to be used as a local sales office and display room. The remainder of the building is used as a warehouse as before.

At oral arguments, the Court entertained some doubts that the display and local sales office areas of the warehouse should be considered a facility of interstate commerce, and counsel for Plaintiff was unable to explain away the Court's doubts. Plaintiff did acknowledge that a business generally engaged in interstate commerce could have a separate facility or department which is not so utilized and its operation would not be covered by the Act. However, assuming that this portion of the warehouse is a facility of interstate commerce (an assumption not necessarily valid, as the parties offered no evidence on the point), the Court is of the opinion that the work done was not "essential to" nor "directly related" to the production of...