Wood v. Central Sand & Gravel Co.

• Citation: 33 F. Supp. 40
• Decision Date: 03 May 1940
• Docket Number: No. 98.,98.
• Court: United States District Courts. 6th Circuit. Western District of Tennessee
• Parties: WOOD v. CENTRAL SAND & GRAVEL CO. et al.

33 F. Supp. 40

WOOD v. CENTRAL SAND & GRAVEL CO. et al.

No. 98.

District Court, W. D. Tennessee, W. D.

May 3, 1940.

Ben C. Welch, of Memphis, Tenn., for plaintiff.

John Montedonico, of Memphis, Tenn., for defendants.

Findings of Fact.

MARTIN, District Judge.

The plaintiff, a nightwatchman, brought his civil action under the Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 201-219, against the defendants for $876.15 wages, plus a like amount as liquidated damages, and for reasonable attorney's fees, and costs.

The defendant, Central Sand & Gravel Company, was at the time the plaintiff went to work there a subsidiary corporation of the defendant, Fischer Lime & Cement Company, a Tennessee corporation; and, after the surrender of its charter of incorporation on October 31, 1938, continued to conduct its same business under the same name as a branch of the defendant, Fischer Lime & Cement Co. For approximately nine years prior to the period involved in the instant litigation, the plaintiff worked in the employ of the defendant Central Sand & Gravel Company.

It is alleged in the complaint and admitted in the record that the plaintiff worked continuously for the defendants from October 24, 1938 (the effective date of the Fair Labor Standards Act of 1938), until November 14, 1939, constituting a period of fifty-five weeks. His working hours were thirteen and one-half hours per day, from 5:30 o'clock P. M., until 7:00 o'clock A. M., for a full seven-day week, making a total of ninety-four and one-half hours of labor per week. He was paid the flat sum of fourteen dollars ($14) per week. It is conceded as a matter of fact that, if the Fair Labor Standards Act of 1938 is applicable to the situation of plaintiff, he would be entitled to receive on the minimum wage schedule provided in the Act over-time pay for fifty and one-half hours of over-time each week, which would raise his total weekly pay to $29.93. Having received only fourteen dollars ($14) per week, he would, therefore, be entitled to receive fifteen dollars and ninety-three cents ($15.93) additional pay for each week embraced in the period from October 24, 1938, to November 14, 1939, bringing the total amount due him to $876.15, for unpaid wages due him under the Fair Labor Standards Act.

The Fischer Lime & Cement Company has been long engaged in Memphis and its adjacent territory in the building material and supply business; and caused the Central Sand & Gravel Company to be incorporated as a subsidiary, to conduct the sand and gravel business of the Fischer Company. The record shows that the intra-state (Tennessee) business of the Fischer Lime & Cement Company extends to a range of eighty to eighty-five per cent of its total sales; from which it follows that fifteen to twenty per cent of its sales constitute inter-state business.

The inter-state sales of the Central Sand & Gravel Company from October 24, 1938, to November 14, 1939 (the wage period involved herein), amounted to six and one-half percent of its total sales; while for the period from January 1, 1938, to October 24, 1938, the total out-of-state sales of the Central amounted to the insignificant percentage of one-tenth of one percent of total sales. The proof shows that the step-up in percentage was due to the fact that during the months of March, April and May, 1939, customers of Missouri Portland Sand & Cement Company and Marquette Portland Cement Company could not procure gravel from them, due to high water conditions on the Mississippi River and plant reconstruction, and were compelled to buy their requirements from Central.

Proof shows that, on the 8th and 9th of March, 1939, the Central Sand & Gravel Company shipped by rail from Memphis, in inter-state commerce, 11 car-load lots of gravel; eight car loads of which were shipped to a consignee at Marked Tree, Arkansas, and one car-load of which was shipped to a consignee at West Memphis, Arkansas. Fischer Lime & Cement Company, on March 22, 1939, shipped two car loads of gravel from the plant of Central to a consignee at Olive Branch, Mississippi. These shipments in tonnage aggregated 680.25 tons, for a total sales price of $570.64.

From March 21, 1939, to May 29, 1939, the defendant, Central, sold 275.6 tons of gravel to a customer at West Memphis, Arkansas, who transported the gravel purchased from Memphis, Tennessee, to West Memphis, Arkansas, in the customer's own trucks. There was evidence, also, of specific sales in small quantities to inter-state commerce customers at West Memphis, Arkansas, and to customers in Byhalia, Tunica, Lake Cormorant and Nesbit, Mississippi. Other sales were made at the plant of Central to persons using Mississippi and Arkansas licensed trucks.

The evidence discloses that the total sales price of the sand and gravel sold by the Central Company during the period involved amounted to $12,522.64; whereof the portion of such sand and gravel that was transported into other states amounted to $884.36. It appears, further, that the defendants sell the major portion of their products, consisting of building material and supplies, to the City of Memphis, the State of Tennessee, the Works Progress Administration and to contractors, who, in turn, use the same in construction work; and that many of such sales are in bulk lots.

It is evident from checks introduced into the record that the wages of the plaintiff for the full period of time embraced in the controversy, except the first week thereof, were paid by Fischer Lime & Cement Company. Only the first week's wages for the period were paid by Central Sand & Gravel Company. It appears, however, that the accounts of the Central branch of the Fischer Company were kept separately; and that the Central accounts were charged with the wages paid plaintiff by the Fischer Company.

It appears from the evidence, that the forms used in the sale by Central of materials were receipted by the customer to whom the goods were delivered in the name of Fischer Lime & Cement Company. But the sales slips covering all sales of material by Central, or by Fischer from the Central plant, were billed on the stationery of and in the name of Central Sand and Gravel Company.

The record reveals that as a part of his duties the plaintiff, in addition to serving as nightwatchman to protect all the property and equipment of the defendant at its Riverside plant, fired the engine so as to keep up steam and have the engine ready for use each morning.

Conclusions of Law and Opinion.

On the foregoing facts, the defendants contend that the Fair Labor Standards Act of 1938 (June 25, 1938, Ch. 676, Sec. 1, 52 Stat. 1060, 29 U.S.C.A. §§ 201 to 219, incl.), is not applicable to this case, for the reason that (1) the plaintiff is not an employee "who is engaged in commerce or in the production of goods for commerce" within the meaning of the Act, 29 U.S.C.A. §§ 206, 207, Secs. 6 and 7 of Ch. 676, 3rd Session, 75th Congress, Public Act No. 718; and that (2) the plaintiff falls within the exemption provided for "any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce", 29 U.S.C.A. § 213(a) (2), Sec. 13(a) (2) of Ch. 676, 3rd Session, 75th Congress, Public Act No. 718.

(1) The first question presented on the facts found is, therefore, was the plaintiff as an employee of the defendants engaged in the production of goods for interstate commerce? Counsel for defendants stresses the decision of Judge Miller in Bagby v. Cleveland Wrecking Co., D.C.W.D.Ky. (June 23, 1939) 28 F.Supp. 271, 272, in which a complaint under the Fair Labor Standards Act of 1938 was dismissed because the petition failed to state facts showing plaintiffs to have been engaged in "the `stream of commerce,' as described in the Jones & Laughlin case infra."

In National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352, the Supreme Court upheld the constitutionality of the National Labor Relations Act of July 5, 1935, 29 U.S.C.A. § 151 et seq., and speaking through the Chief Justice, said (op., 301 U.S. 37, 38, 57 S.Ct. 624, 81 L.Ed. 893, 108 A.L.R. 1352): "Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control. * * * The close and intimate effect which brings the subject within the reach of federal power may be due to activities in relation to productive industry although the industry when separately viewed is local."

Indeed, even in Schechter Poultry Corp. v. United States, 295 U.S. 495, 544, 55 S.Ct. 837, 849, 79 L.Ed. 1570, 97 A.L.R. 947, the Court said: "We have held that, in dealing with common carriers engaged in both interstate and intrastate commerce, the dominant authority of Congress necessarily embraces the right to control their intrastate operations in all matters having such a close and substantial relation to interstate traffic that the control is essential or appropriate to secure the freedom of that traffic from interference or unjust discrimination and to promote the efficiency of the interstate service."

The obvious purpose described by Congress in its declaration of policy, in Section 2 of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 202, was to obviate "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." To accomplish the beneficent purposes of the Act, Congress manifestly intended and expected the courts to apply broadly and liberally the coverage of the Act to include those engaged in the production of goods, a portion of which were designed for interstate commerce. The legislative history of the Act...