Document: 366 U.S. 28 81 S.Ct. 933 6 L.Ed.2d 100 Arthur J. GOLDBERG, Secretary of Labor, Petitioner,v.WHITAKER HOUSE COOPERATIVE, INC., et al. No. 274. Argued March 30, 1961. Decided April 24, Miss Bessie Margolin, Washington, D.C., for petitioner. Mr. Philip S. Bird, Waterville, Me., respondents. Justice DOUGLAS delivered the opinion Court. 1 Respondent cooperative was organized in 1957 under laws Maine; and we assume it legally organized. The question is whether an 'employer' its members are 'employees' within meaning Fair Labor Standards Act 1938, § 3, 52 Stat. 1060, as amended, 29 U.S.C. 203, U.S.C.A. 203. raised by a suit filed 17 petitioner to enjoin respondent from violating provisions concerning minimum wages (§ 6), record-keeping 11(c)) regulation industrial homework 11(d)). And see 15(a)(5). District Court denied relief. 170 F.Supp. 743. Appeals affirmed divided vote. 275 F.2d 362. case here on petition certiorari which grnated (364 861, 104, 5 85) because importance problem administration Act. 2 corporate purpose stated articles manufacture, sell, deal 'knitted, crocheted, embroidered goods all kinds.' It has general manager few employees who engage finishing work, i.e., trimming packaging. There some 200 work their homes. A homeworker desires become member buys sample she supposed do, copies sample, submits respondent. If found be satisfactory, applicant can paying $3 agreeing bylaws. Members were prohibited furnishing others with kind dealt respondent.1 They required remain at least year. may, however, expelled any time board directors if they violate rules or regulations substandard.2 not liable respondent's debts; may assessed; each one vote; certificates transferrable; own only membership; no dividends interest payable certificate 'except manner limited amount' provided bylaws provide that 'excess receipts' applied (1) writing off 'preliminary expenses'; (2) 'necessary depreciation reserves'; (3) establishment 'capital reserve.' balance used discretion 'for patronage refunds shall distributed according percentage submitted Cooperative sale.' paid every month other sale rate-per-dozen basis. This payment considered 'an advance allowance' until there distribution 'on basis amount (respondent) 3 By 11(d) Administrator authorized make 'such orders regulating, restricting, prohibiting necessary appropriate prevent circumvention evasion safeguard wage rate prescribed this Act.' Section added 19493 provides 'all existing relating hereby continued full force effect.' 4 These Regulations4 homework, such done 'in about home, apartment, tenement, room residential unless special certificate'5 been issued. Respondent's have certificates; us operations lawful without them compliance Regulations long history. In 1939, shortly after passed, bills introduced House permit homeworkers employed rates lower than statutory minimum.6 amendments rejected.7 Thereupon issued governing homeworkers;8 sustained Gemsco, Inc. v. Walling, 324 244, 65 605, 89 L.Ed. 921, decided 1945. 1949 adopted amendment would exempted large group homeworkers.9 Senate bill contained exemption; Conference Report rejected exemption.10 Instead, added, strengthening authority restrict prohibit homework.11 Still later organized; and, said, made attempt comply these regulations. We think remiss, light history, construed loosely so ways permissible Regulations. 3(d) person acting employer relation employee.' 3(e) 'employee' 'employed' employer. 3(g) term employ (includes suffer work.' conclude 7 reason logic why employees. nothing inherently inconsistent between coexistence proprietary employment relationship. trade union bought stock employer, cease conception For corporation 'suffer permit' owned share none many. fail also employee cooperative. seem both 'members' 'employees.' affording 'the opportunity it,' use words Judge Aldrich, dissenting below. page 366. However immediate remote right be,12 same way had individual proprietor employer.13 self-employed; nor independent, selling products market whatever price command. regimented organization, manufacturing what organization receiving compensation dictates.14 Apart formal differences, engaged doing outlet products. management fixes piece work; expel substandard failure obey management, words, hire fire homeworkers. considerations mentioned, powers device too transparent survive definition 'employ' homework. short, 'economic reality' rather 'technical concepts' test (United States Silk, 331 704, 713, 67 1463, 1468, 91 1757; Rutherford Food Corp. McComb, 722, 729, 1473, 1476, 1772), 8 Reversed. 9 WHITTAKER, whom BRENNAN STEWART join, dissenting. 10 clear undisputed does apply absence employer-employee Here, upon seems me ample evidence, created being operated true Maine, 743, appeal, approved those findings. Cir., Unless findings clearly erroneous, must accepted here. Fed.Rules Civ.Proc., 52(a), U.S.C., Accepting excludes notion formed availed 'device' circumvent seriously contended two courts below 'clearly erroneous,' but Government's principal contention bona fides immaterial. 11 Doubtless, even But surely automatically commonly understood sense terms, nor, hence, subparagraphs (d) (e) Act, 203(d) (e), 203(d, e). Something more required. apply, fair 'members.' Like below, I fairly record, evidence ever did 'members,' it. shows, read it, worked herself—in her home when chose—toward production knitted marketed through cooperative, immediately advance' thereon, ultimately—after portion cooperative's 'expenses' setting up (and capital) reserves'—the proceeds 'be (to her) (she) element members. 12 If, practically inevitable Court's judgment, now dissolved, will assets, including 'depreciation reserves' well receipts,' refunded 'according (by respectively) sale,' memberships investments, just Maine statute articles? wholly suffered articles. 13 On amply supported reasonably never inasmuch relationship, judgment consonant facts law should affirmed. provision purportedly removed vote annual meeting June 26, 1958, though quorum present meeting. See Mitchell Whitaker Cooperative, Inc., 749, notes 7, 8, 751. An expulsion appealed filing 'to acted next meeting.' Cf. Me.Rev.Stat., c. 56, 16. Amendments 1949, 9, 63 910, 916. CFR §§ 530.1—530.12. Id., 530.2. H.R.Rep. 522, 76th Cong., 1st Sess., p. 10; 86 Cong.Rec. 4924, 5122. 5499; remarks Zimmerman, id., 5136, Hook, 5224—5225. Knitted Outerwear Wage Order, covers industry engaged, 4, 1942. Fed.Reg. 2592. 95 11209—11210. 1453, 81st Sess. 14927. could 'as financially solvent enterprise doubling gross income.' As date trial, arrears respects owed managerial Law, 161 795. 14 When desired reduce inventory members, withheld 'advance allowances.'

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