Source: https://supreme.justia.com/cases/federal/us/325/578/
Timestamp: 2019-04-24 21:59:47+00:00

Document:
1. Maintenance employees of a typical metropolitan office building, operated as an independent enterprise, which is used and to be used for offices by every variety of tenants, including some producers of goods for commerce, held not to have such a close and immediate tie with the process of production as to be deemed engaged in an "occupation necessary to the production" of goods for commerce, within the meaning of § 3(j) of the Fair Labor Standards Act, and therefore not covered by the Act. P. 325 U. S. 583.
2. Kirschbaum Co. v. Walling, 316 U. S. 517, Borden Co. v. Borella, post, p. 325 U. S. 679, and this case differentiated. P. 325 U. S. 580.
Certiorari, 324 U.S. 833, to review the reversal of a judgment, 51 F.Supp. 528, dismissing the complaint in a suit under § 16(b) of the Fair Labor Standards Act to recover amounts alleged to be due for overtime.
"an employee shall be deemed to have been engaged in the production of goods if such an employee was employed . . . in any process or occupation necessary to the production thereof, in any State."
general terms of the statute to an infinite variety of complicated industrial situations."
Kirschbaum v. Walling, supra, 316 U.S. at 316 U. S. 523. Thus, Congress withheld from the courts the aid of constitutional criteria, compare, e.g., Currin v. Wallace, 306 U. S. 1; Wickard v. Filburn, 317 U. S. 111; Polish Alliance v. Labor Board, 322 U. S. 643, as well as the benefit of a prior judgment, on vexing and ambiguous facts, by an expert administrative agency. Compare, e.g., Labor Board v. Fruehauf Trailer Co., 301 U. S. 49; Gray v. Powell, 314 U. S. 402, 314 U. S. 412.
The Act has produced a considerable volume of litigation, and has inevitably given rise to judicial conflicts and divisions. The lower courts, and only in a lesser measure this Court, have been plagued with problems in connection with employees of buildings occupied by those having at least some relation to goods that eventually find their way into interstate commerce.
employees who worked in the building where the business of the manufacture of milk products goes on and employees pursuing the same occupation for the Borden enterprise in an office separate from the manufacturing building is to make too much turn on the accident of the division of the whole industrial process. The case immediately before us presents still a third situation differing both from Kirschbaum and Borden.
activities that Congress did not see fit to take over by legislation.
Renting office space in a building exclusively set aside for an unrestricted variety of office work spontaneously satisfies the common understanding of what is local business, and makes the employees of such a building engaged in local business. Mere separation of an occupation from the physical process of production does not preclude application of the Fair Labor Standards Act. But remoteness of a particular occupation from the physical process is a relevant factor in drawing the line. Running an office building as an entirely independent enterprise is too many steps removed from the physical process of the production of goods. Such remoteness is insulated from the Fair Labor Standards Act by those considerations pertinent to the federal system which led Congress not to sweep predominantly local situations within the confines of the Act. To assign the maintenance men of such an office building to the productive process because some proportion of the offices in the building may, for the time being, be offices of manufacturing enterprises is to indulge in an analysis too attenuated for appropriate regard to the regulatory power of the States which Congress saw fit to reserve to them. Dialectic inconsistencies do not weaken the validity of practical adjustments, as between the State and federal authority, when Congress has cast the duty of making them upon the courts. Our problem is not an exercise in scholastic logic.
affairs of life from a manufacturing building, or the office building of a manufacturer. And the differences are too important in the setting of the Fair Labor Standards Act not to be recognized by the courts.
We have heretofore tried to indicate the nature of the nexus between employees who, though not themselves engaged in commerce, are engaged in occupations necessary for the production of goods for commerce by describing the necessary work that brings the occupation within the scope of the Act as work that had "a close and immediate tie with the process of production." Kirschbaum v. Walling, supra, at 316 U. S. 525. Doubtless more felicitous adjectives could be chosen, but the attempt to achieve a form of words that could avoid an exercise of judgment that a particular occupation is more in the nature of local business than not is merely to be content with formulas of illusory certainty.
practically relevant to the problem in hand. We believe that is true of the line drawn in this case.
* See, e.g., Johnson v. Dallas Downtown Development Co., 132 F.2d 287; Cochran v. Florida Nat. Bldg. Corp., 134 F.2d 615; Tate v. Empire Bldg. Corp., 135 F.2d 743; Johnson v. Masonic Bldg. Co., 138 F.2d 817.
The views I expressed in my dissent in Borden Company v. Borella, post, p. 325 U. S. 679, would, if accepted, control the decision in this case. As those views have been rejected by the Court, I join in the Court's opinion in this case.
A proper understanding of the nature of the activities carried on in petitioner's 48-story office building in New York City leads to the inevitable conclusion that the respondent maintenance employees, like those in Kirschbaum v. Walling, 316 U. S. 517, and in Borden Co. v. Borella, post, p. 325 U. S. 679, are engaged in occupations "necessary to the production of goods for commerce," and hence are entitled to the benefits of the Fair Labor Standards Act of 1938.
(1) Approximately 26% of the rentable area of the building is occupied by the executive offices of manufacturing and mining concerns which are concededly engaged in the production of goods for commerce. Corporate policies are formed and directed from these offices. Most of them purchase raw materials for use in the physical processes of manufacturing. They keep in constant and close contact with the factories, supervising all of the manufacturing activities. Some of these offices draft designs and specifications for the articles produced in the factories. Business and sales departments located in these offices do work in connection with the distribution of these products. One office even handles parts for the machines manufactured by the company, doing repair work on the parts and packing and shipping them to out-of-state customers.
The case in this respect is indistinguishable from the facts in the Borden case. Here, as in the Borden case, the officers and employees working in these offices are part of the coordinated productive pattern of modern industry. The fact that none of the physical processes of manufacturing occurs in the same building is immaterial. Production requires central planning, control, supervision, purchase of raw materials, designing of products, sales promotion, and the like, as well as the physical, manual processes of manufacturing. These various central offices, then, are "part of an integrated effort for the production of goods," Armour & Co. v. Wantock, 323 U. S. 126, 323 U. S. 130. And since the maintenance employees stand in the same relation to this productive process as did the employees in the Kirschbaum case, it follows that they are engaged in occupations "necessary to the production of goods for commerce."
The Kirschbaum case also made it clear that the provisions of the Act "expressly make its application dependent upon the character of the employees' activities." 316 U.S. at 316 U. S. 524. Hence, it is immaterial that the owner of the building which employs the respondent maintenance employees is not shown to have been engaged in the production of goods for commerce. As in the Kirschbaum case, it is enough if the employees are necessary to the production of goods by tenants occupying the building in which they work.
(2) Approximately 6.5% of the rentable area of the building is occupied by concerns engaged in writing and preparing mimeographed, photographic and printed matter which is shipped in interstate commerce. One company produces between 15,000 and 20,000 pages of mimeographed materials per week, 90% of which is sent outside the state. Another tenant produces 60 magazines having national circulations. Other concerns produce large quantities of pamphlets, photographs, magazines and advertising matter for interstate shipment.
Since telegraphic messages are "goods" within the meaning of the Act, Western Union Telegraph Co. v. Lenroot, 323 U. S. 490, 323 U. S. 502-503, it would seem clear that these magazines, pamphlets, etc. which are prepared in petitioner's office building are likewise "goods." And since the term "produced" includes "every kind of incidental operation preparatory to putting goods into the stream of commerce," ibid., 323 U. S. 503, the writing and preparation of these materials constitutes "production of goods" for interstate commerce. Here again, the respondent maintenance employees are related to production in the same way as were the employees in the Kirschbaum case, thus making it clear that they are covered by the Act from this standpoint.
"with respect to maintenance employees in buildings in which less than 20 percent of the space is occupied by firms engaged there or elsewhere in the production of goods for commerce."
Wage and Hour Division Release, November 19, 1943 P.R.-19 (rev.). Whether 20% occupancy by such firms is a reasonable minimum is not in issue here. Clearly a 32.5% occupancy is so substantial as to remove any doubt that the maintenance employees devote a large part of their time to activities necessary to the production of goods for commerce. Hence, they are covered by the Act.
an integral part of the productive process. Once it is clear that the activities are part of the process of production of goods for interstate commerce, the interstate character of the activities becomes obvious, and it follows that occupations necessary to those activities partake of their interstate flavor. Neither attenuated analysis nor scholastic logic is necessary to understand the scope and coordination of the modern productive pattern and the integral part played by those who manage and direct the physical processes of production. To apply the Act in light of elementary economic facts is not beyond the ability of judges or beyond the intention of Congress.
Congress plainly intended "to leave local business to the protection of the states," Walling v. Jacksonville Paper Co., 317 U. S. 564, 317 U. S. 570, when it enacted this statute. But there is no indication that it intended to divide the process of producing goods for interstate commerce into interstate and local segments, applying the statute only to the former. When Congress said that employees "necessary to the production" of goods for commerce were to be included within the Act, it meant just that, without limitation to those who were necessary only to the physical manufacturing aspects of production. Under such circumstances, it is our duty to recognize economic reality in interpreting and applying the mandate of the people.

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