Document: 483 U.S. 27 107 S.Ct. 2694 97 L.Ed.2d 23 CITICORP INDUSTRIAL CREDIT, INC., Petitionerv.William E. BROCK, Secretary of Labor. No. 86-88. Argued April 20, 1987. Decided June 22, Syllabus Section 15(a)(1) the Fair Labor Standards Act (FLSA or Act) prohibits "any person" from introducing into interstate commerce goods produced in violation minimum wage overtime pay provisions §§ 6 and 7 Act. Under a financing agreement with manufacturer Ely Group, Inc. (Ely), petitioner perfected security interest Ely's inventory. After began to fail financially, took possession inventory, part which was manufactured during period employees were not paid. Concluding that such items "hot goods" under § 15(a)(1), United States Department filed suits two Federal District Courts, each granted preliminary injunction prohibiting transportation sale commerce. The Court Appeals affirmed consolidated cases. Held: applies secured creditors who acquire pursuant agreement. Pp. 32-38. (a) when paid and/or are for purposes 15(a)(1). P. 32 33. (b) As corporate entity, falls within 15(a)(1)'s plain language, since section commerce, while defines "person" include corporations. Petitioner's argument exemptions common carriers good-faith purchasers reflect congressional intent prohibition should apply only culpable parties "innocent" is persuasive. Congress' limitation effects other FLSA indicates its failure do so here inadvertent. Rather, exemption narrow categories persons suggests all others, whether innocent not, covered. There no indication Congress actually considered it enacted but, by claiming general them, without any duty ascertain compliance Act, would put them better position than purchasers, whom did specifically act protect. Detailed particular cannot be enlarged implication plainly unmistakably Act's terms spirit. 33-35. (c) By excluding tainted application furthers FLSA's goal eliminating competitive advantage enjoyed substandard labor conditions. Moreover, foreclosing selling also advances purpose establishing decent wages hours, will encouraged insist their debtors comply requirements. 35-38. (d) Applying does give "lien" on, priority in, superior state law, creditors' rights as against employer unchanged application, possessory thereby. Such simply an exercise power exclude contraband 38-39. 788 F.2d 1200, affirmed. MARSHALL, J., delivered opinion Court, REHNQUIST, C.J., BRENNAN, BLACKMUN, POWELL, O'CONNOR, SCALIA, JJ., joined. concurring opinion, post, p. ----. STEVENS, dissenting WHITE, joined, Rex Lee, Washington, D.C., petitioner. Charles A. Rothfeld, respondent. Justice MARSHALL Court. 1 1938, 52 Stat. 1068, question this case holders collateral obtained 2 * In 1983, entered Qualitex Corporation, clothing predecessor Inc., subsidiaries Rockford Textile Mills, & Walker, (collectively Ely). arrangement, agreed loan up $11 million provide working capital Ely. return, accounts receivable, assets. Petitioner applicable law. 3 imposed various reporting requirements on Ely, including submission weekly schedule monthly balance sheet income statement, reports receivable. monitored upon made cash through system audits on-site inspections. fall 1984, sales below projections, increase, reaching over $9.5 February 1985. stopped January On 8, advancing funds demanded payment full. At request management, however, immediately foreclose. It gave opportunity devise plan continuing operations, but unable so. waited until 19, at time collateral, inventory finished goods. 4 continued work ceased operations closed manufacturing facilities. Because defaulted payroll, receive periods between 19. concluded these times 1938 (FLSA), 29 U.S.C. 206 207, they could introduced commerce.1 Acting information intended transport sought enjoin shipment. 5 action Eastern Tennessee, moved temporary restraining order prohibit placing denied after hearing, Secretary's motion injunction. Donovan v. 608 F.Supp. 215 (1985). then another complaint petitioner, Western Tennessee. This accompanied order. later Ford 621 22 Both Courts held makes unlawful person ship prohibited transporting had been conformity FLSA. They found reading consistent F.Supp., 217; 25-26. courts " 'in light unjust harsh result creditor get benefit provided Act; have employees['] labor.' Id., 26 (quoting 217).2 8 cases appeal. Sixth Circuit affirmed, one judge dissenting. Brock 1200 (1986). Following language majority used creditors. 1202-1203. Like FLSA: 1203. rejected reasoning Second Wirtz Powell Knitting Mills Co., 360 730 (1966), inapplicable take F.2d, 1204-1205. noted created exceptions broad scope good faith id. 1205, "Powell exception has deemed appropriate." 1206. followed Mills. He maintained enacting provision, concerned violations occurring course ongoing production solvent manufacturer, here, insolvent corporation operations. 1207. 9 We certiorari resolve conflict among Circuits.3 479 929, 397, 93 350 now affirm. II 10 mandates compensation covered employees. 6(a) provides every employer, defined "shall his employees" less specified rate; 7(a)(1) employment employee excess 40 hours per week "unless receives compensation" rate one-half employee's regular rate. contest lower courts' findings failed several weeks preceding plant closings. Consequently, we conclude, Appeals, 15(a)(1).4 See 1201. 11 3(a) "an individual, partnership, association, corporation, business trust, legal representative, organized group persons." 203(a). clearly statute. contains shipment goods." first, original FLSA, exempts second, added 1949, purchaser acquired value, notice violation, "in reliance written assurance producer requirements" 12 claim come either statutory exemption. argues limit provision parties, therefore, subject Act.5 disagree. Although require "employers" overtime, refers person," employer." limited suggests,6 That identified persons, 15(a)(1).7 find creditors, asking us 13 past, refused "[t]o extend those [the FLSA's] spirit." A.H. Phillips, Walling, 324 490, 493, 65 807, 808, 89 L.Ed. 1095 (1945). Similarly, where detail particularity," preclude "enlargement implication." Addison Holly Hill Fruit Products, 322 607, 617, 64 1215, 1221, 88 1488 (1944). Cartridge 339 497, 512, 70 755, 763, 94 1017 (1950); Mabee White Plains Publishing 327 178, 183-184, 66 511, 513-514, 90 607 (1946). see reason deviate our traditional approach case. B 14 urges look beyond statute, citing often-quoted passage Holy Trinity Church States, 143 457, 459, 36 226 (1892): "[A] thing may letter statute yet because spirit, nor intention makers." According sole aim establish American workers. goal, claims, furthered foreclosure themselves responsible violations. However, conclude legislative fully supports achieved language. 15 While improving conditions undoubtedly concerns, certainly addition declaration policy, contained 2(a), reflects desire eliminate conditions.8 202(a). consistently recognized regulatory purpose. "The motive present regulation . instrument competition distribution conditions, injurious commerce." Darby, 312 100, 115, 61 451, 85 609 (1941). Tony Susan Alamo Foundation Labor, 471 290, 296, 105 1953, 1959, 278 (1985); Maryland Wirtz, 392 183, 189, 2017, 2020, 20 1020 (1968); Rutherford Food Corp. McComb, 331 722, 727, 67 1473, 1475, 91 1772 (1947). 16 Application Had case, creditor, converted debtor's interest; uncompensated competed Secured often monitor closely employer-borrowers, observed: "[I]f free sell across lines, temptation overextend credit marginal producers strong, likelihood become meet payrolls. finance companies institutions stand reap financial gain keeping business. A holding protect complying manufacturers unfair goods, submit, discourage type commercial leads violations." (emphasis added). C 17 literal grant holding. still owns prevents goods.9 Indeed, Tennessee recognized, brought "not compel pressure defaulting wages, keep entering channels can cure employer's paying statutorily required assets creditor.10 18 numerous statutes, exercised authority Commerce Clause which, variety reasons, considers harmful. measures bar standards commerce.11 interests laws land. 26; 217. If, example, issue fabrics federal flammability therefore banned Flammable Fabrics 111, amended, 1191 et seq., surely argue right merely virtue status creditor. "Hot inherently hazardous, determined nonetheless. different form involved. III 19 hold mandated Accordingly, judgment Affirmed. 21 concurring. I affirm even if "the workers," ante, 36, "is 15(a)(1)" ibid., disagree Court's conclusions Part II-B, join WHITE joins, 24 construes today Great Depression. failures everyday occurrence nothing history address unfortunate situation arises final days hand forced close. 25 there conclusion both before us, court ever matter, agree upon, "actually conside[r] 'hot goods' FLSA." Ante, 34—35. historical fact carries much weight subjects bankruptcy transactions constitute discrete bodies generally governed Bankruptcy Code respectively.1 Instead interpreting silence evincing invade areas whose fit nicely contexts,2 interpret utter showing never unique law.3 Kelly Robinson, 47, 353, 359-360, 216 Even confident conclusion, believe arguments favor petitioner's construction substantial enough warrant adherence settled precedent. During 28 years enactment 1966 appears circumstances these. 730, 733 (CA2 1966). When attempt use novel way, summarily interpretation, explaining: "We Congressional concerns creditor's] 15. forcing advanced long default forecloses lien, least value exceed debt left unpaid. Since creditor] giving consideration, neither force employer] make withhold earners itself. already cash, doubt went effect ought it, backhanded way attacking position. stresses point desired bona fide strict wording easy amending appropriate safeguards. indeed persuasive indications problem attention Congress. loses apparently done, contention weakened he predecessors appear read spite myriad instances similar titles must enforced." 733. subscribed 1966, now. more Circuit's decision, called addressed issue, except decisions review. Shultz Factors, CCH LC ¶ 32,487 (CA4 1971); Dunlop Sportsmasters, 77 33,293 (ED Tenn.1975). Given practice prior judicial acceptance seen amend decisions,4 retained rejects it. Commissioner Fink, 89, 102-103, 2729, 2736-2737, 74 (1987) (STEVENS, dissenting); Shearson/American Express McMahon, 482 220, 268, 2332, 2359, 96 185 dissenting). 30 respectfully dissent. codified 215(a), relevant part: "(a) [I]t shall person— "(1) transport, offer transportation, ship, deliver, knowledge delivery thereof intended, employed 207 title, issued 214 title; chapter impose liability carrier carrier, excuse obligation accept transportation; offer, shipment, delivery, chapter, unlawful." stay pending permitted condition place proceeds separate interest-bearing account former event that, appeal, stay, same subsequently modified permit withdraw $1.5 account. (1971), Fourth adopted requirement "that collusion financier permitting introduction market Act." Sportsmaster, Tenn. 1975) (following Mills). suggest violate "address rates, rather nonpayment due insolvency." Brief 16. ignores employers financially otherwise 7. proposition complies promised rates equal minimum, regardless compensation, render illusory protections. demonstrates, rule encourage unstable obtain unlikely able evidence knew funding payroll ceased, obligations. For 12(a)'s prohibitions child enforceable "a producer, dealer," 212(a). 15(a)(4), 215(a)(4). 16(b), backpay "employer." 216(b). And 16(a) imposes criminal willful 216(a). exempting concern nonculpable suggests, "to prevent involving constitutionality arising suit shipper Government party, inasmuch constitutionality, transportation." H.R.Rep. 2182, 75th Cong., 3d Sess., (1938). Nor 1949 amendment support To contrary, House Report understanding law exempt provision. ships violated wage-and-hour commits act." 267, 81st 1st 39 (1949). generally, unnecessary. changed existing extent "lawful commerce," H.R.Conf.Rep. 1453, 31 (1949), she assurances Ibid. Thus, first time, mechanism protecting unwitting liable. supra, 39. 202(a), provides: finds existence, industries engaged ., detrimental maintenance standard living necessary health, efficiency, well-being workers (1) causes instrumentalities spread perpetuate States; (2) burdens flow commerce; (3) constitutes method (4) disputes burdening obstructing (5) interferes orderly fair marketing commerce" President Roosevelt's message Congress, served inspiration point: "Goods rudimentary decency regarded allowed pollute trade." H.R.Doc. 255, (1937). 516, 765, (1950). President's cited approvingly throughout See, e.g., S.Rep. 884, 1-3 (1937); 1452, 5-7 5. Despite expansive purpose, insists about 'chiselers' driving down 24-25. based history, decisions, exclusion means enforce goals; itself central Of course, lien property lien. Tenn.Code Ann. 66-13-101 (1982) (creating "corporate firm character description"). exist independent interfere operation Code. bankruptcy, us. 1192 (fabrics failing conform standards); 1211 (household refrigerators prescribed safety devices); 1263(a)-(c), (f) (misbranded hazardous substances); 331(a)-(d) (adulterated misbranded food, drugs, cosmetics); 458(a)(2)-(4) (adulterated, misbranded, uninspected poultry products). wages. designed producing low cost undersell competitors what wage. impact market. remotely perennial distress follow wake failure. sale—whether trustee creditor's committee trying raise shortage payroll—would illegal. Judge Engel explained dissent Appeals' decision: practical majority's decision remove for, happened almost always sold, foreclosure, attaching go out market, sold competitively destructive prices depend manner event. real interpretation create lawful Citicorp possessed my view, kind motivation government done so, not. State governing rights, non-payment great deal relief protection defunct seems me special area concern, sources sufficient. sense looking instead obtaining like Circuits." 1207 Aside barred goods," doubts participated "employed FLSA]" meaning produced. 30, n. 1. complied performed services everyone expected well true committed am sure branded subsequent amended four occasions decision. Pub.L. 99-150, 99 787 95-151, 1245 (1977); 93-259, 55 (1974); 89-601, 80 830 (1966).

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