Source: http://openjurist.org/411/f2d/56/wirtz-v-f-m-sloan-inc
Timestamp: 2016-12-03 03:24:24
Document Index: 770366718

Matched Legal Cases: ['§ 6', '§ 201', '§ 213', '§ 206', '§ 5', '§ 207']

411 F2d 56 Wirtz v. F M Sloan Inc | OpenJurist
411 F. 2d 56 - Wirtz v. F M Sloan Inc HomeFederal Reporter, Second Series 411 F.2d.
411 F2d 56 Wirtz v. F M Sloan Inc 411 F.2d 56
W. Willard WIRTZ, Secretary of Labor, United States Department of Laborv.F. M. SLOAN, INC., a corporation, Appellant.
As Amended June 6, 1969.
Rehearing Denied June 11, 1969.
This is an appeal from a Judgment of the United States District Court, Western District of Pennsylvania, permanently enjoining defendant-appellant, F. M. Sloan, Inc. ("Sloan"), from violating the minimum-wage and overtime provisions, §§ 6 and 7, of the Fair Labor Standards Act of 1938, as amended ("Act"), 29 U.S.C.A. § 201 et seq.,1 and restraining Sloan from the withholding of a total of $2712.11, inclusive of interest, found by the court to be due to five employees as minimum wage and overtime compensation under the Act. The Opinion of the District Court is reported at 285 F.Supp. 669 (W.D.Pa.1968).
During the period relevant to this action, December 13, 1964 to April 17, 1966,4 Sloan was engaged in the production of natural gas from twenty-six wells owned or leased by it, all within the state of Pennsylvania. All of the gas so produced was sold, as required by contractual agreement, to The Peoples Natural Gas Company of Pittsburgh ("Peoples"), a Pennsylvania corporation. The gas was delivered on a continuous, almost daily basis from Sloan's pipeline into a Peoples' pipeline, where it was commingled with much larger quantities of gas produced by Peoples' own wells and those of other producers who sold to Peoples. The District Court found, and it is undisputed, that it would be impossible to trace any particular cubic foot of gas back to its source once it had merged with the other gas in Peoples' pipelines. We agree with the District Court's conclusion that it is not "essential to coverage that any particular cubic foot of defendant's gas should be so traced." D. A. Schulte, Inc. v. Gangi, 328 U.S. 108, 121, 66 S.Ct. 925, 90 L.Ed. 1114 (1946); Mitchell v. Jaffe, 261 F.2d 883, 887 (5 Cir. 1958).
Although Peoples did not sell or deliver gas to customers located outside the state of Pennsylvania, and thus was not directly involved in interstate commerce, it did distribute a large percentage of the gas in its pipelines on a daily basis to the mills of Braeburn Alloy Steel Company at Braeburn, Pennsylvania, and Allegheny-Ludlum Steel Corporation at Brackenridge, Pennsylvania and approximately 95 percent of the gas so delivered was utilized in producing steel products of which 85 to 90 percent was shipped in interstate commerce on a regular basis. It is settled that, under the facts as outlined above, the employees of Peoples, regardless of the nature of the work they performed, would fall within the coverage of the Act because of their engagement in a "closely related process or occupation directly essential to the production" of goods for interstate commerce. See Wirtz v. Idaho Sheet Metal Works, Inc., 335 F.2d 952 (9 Cir. 1964), aff'd 383 U.S. 190, 86 S.Ct. 737, 15 L.Ed. 2d 694 (1966), reh. den. 383 U.S. 963, 86 S.Ct. 1219, 16 L.Ed.2d 305, 306; Mitchell v. Independent Ice and Cold Storage Company, 294 F.2d 186 (5 Cir. 1961), cert. den. Independent Ice & Cold Storage Co. v. Goldberg, 368 U.S. 952, 82 S.Ct. 394, 7 L.Ed.2d 386 (1962); Mitchell v. Mercer Water Co., 208 F.2d 900 (3 Cir. 1953), aff'g Durkin v. Mercer Water Co., D. C., 112 F.Supp. 656.
Since the Supreme Court has ruled that in applying the Act "we focus on the activities of the employees and not on the business of the employer," Mitchell v. Lublin, McGaughy & Assoc., 358 U.S. 207, 211, 213, 79 S.Ct. 260, 264, 3 L.Ed.2d 243 (1959), the nature of the work done by the employees here involved and its direct relation to the production of gas is critical. The District Court found that employees Schweinsburg, Shaffer, Osloskey and Creighton regularly, on an hourly basis, checked and recorded the readings on various metering gauges on Sloan's pumps and performed routine maintenance services on the machinery, specifically the adding of oil to the pump engines. These activities consumed only a small portion of each work-hour of the employees; but they were performed on a regular and recurring basis. The regularity of these gas-producing activities was viewed as a key factor by the District Court, and it said:
"* * * in my opinion the de minimis doctrine does not apply to regular and recurring work, and such need not be substantial timewise." (citing Wirtz v. Durham Sandwich Company, 367 F. 2d 810 (4 Cir. 1966).) 285 F.Supp. at 672.
We agree with the District Court's holding at 285 F.Supp. 673 that "Under the facts disclosed, * * * it is immaterial that defendant sold its gas to Peoples instead of directly to the steel mills."
"Mere separation of the economic processes of production for commerce between different industrial units, even without any degree of common ownership, does not destroy the continuity of production for commerce. Producers may be held to know the usual routes for distribution of their products." 328 U.S. 121, 66 S.Ct. 931. (emphasis supplied).
There remains Sloan's contention that the District Court erred in ruling that Sloan could not, seven months after trial, for the first time, claim the exemption for forestry operations provided by Section 13(a) (15) of the Act (29 U.S. C.A. § 213(a) (15)6.) The contention is without merit. Systems Incorporated v. Bridge Electronics Company, 335 F.2d 465, 466 (3 Cir. 1964).
Moreover, we cannot say that the District Court erred in its holding that "* * even if we assume that the affirmative defense has been raised properly, the evidence brought out on cross-examination was insufficient to prove that defendant's employees were exempt under the operative specifications of section 13 (a) (15)", and, "The defendant failed to sustain its burden in this respect." (285 F.Supp. 675).
Prior to the amendment of the Act in 1949 (63 Stat. 910, 911) this section read: "* * * if such employee was employed in * * * any process or occupation necessary to the production thereof, * * *." It is generally acknowledged that the purpose of the amendment was to restrict the scope of coverage of the Act as to "fringe" activities and to make it clear that the Act was not intended to reach as far as the constitutional limits of Congress' commerce power. Mitchell v. H. B. Zachry Co., 362 U.S. 310, 312-313, 80 S.Ct. 739, 4 L.Ed. 2d 753 (1960); Kaferle v. Frederick, 360 F.2d 536, 538 (3 Cir. 1966); Mitchell v. Jaffe, 261 F.2d 883, 886 (5 Cir. 1958)
For the above work, these four employees were paid $1.00 per hour with no additional pay for overtime work, at a time when the Act prescribed a minimum regular wage of $1.25 per hour with 1½ pay for work in excess of forty hours per week. 29 U.S.C.A. § 206(a) (1), as amended 1961, Pub.L. 87-30, § 5(a) (2), 75 Stat. 65, and § 207(a) (1). The court also found that Hugh Torrance, the fifth employee in question, acted as the foreman or supervisor of the other employees mentioned and that he was paid for this a salary of $425 per month, an amount which fell below minimum wage levels when his normal work-hours per week were considered