Source: https://law.justia.com/cases/federal/appellate-courts/F2/192/241/210629/
Timestamp: 2020-03-30 21:10:55
Document Index: 375021497

Matched Legal Cases: ['§ 203', '§ 631', '§ 304', '§ 2581', '§ 260', '§ 1001', '§ 258']

Fruco Const. Co. v. Mcclelland et al, 192 F.2d 241 (8th Cir. 1951) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Eighth Circuit › 1951 › Fruco Const. Co. v. Mcclelland et al
Fruco Const. Co. v. Mcclelland et al, 192 F.2d 241 (8th Cir. 1951)
US Court of Appeals for the Eighth Circuit - 192 F.2d 241 (8th Cir. 1951) November 8, 1951
Section 3 of the Fair Labor Standards Act, 52 Stat. 1060, 29 U.S.C.A. § 203, provides: "As used in sections 201-219 of this title — * * *
In Bartels v. Birmingham, Collector, 332 U.S. 126, 130, 67 S. Ct. 1547, 1550, 91 L. Ed. 1947, the Supreme Court say: "Obviously control is characteristically associated with the employer-employee relationship but in the application of social legislation employees are those who as a matter of economic reality are dependent upon the business to which they render service." In this instance the service rendered by the guards was the protection of government property.
Applying these tests to the facts here, the construction guards were employees of the government within the meaning of the Fair Labor Standards Act. See, also, Lewis v. Virginia Engineering Co., Inc., D.C., 80 F. Supp. 886. When the contract with the Burns Agency was cancelled in 1941, the Constructing Quartermaster's office assumed complete charge of the construction guards. All the guards made application for employment on forms headed: "War Department, Office of the Constructing Quartermaster, Application for Employment As a Member of the Guard." They were employed by the Quartermaster and controlled by the government officers in every particular. The appellant could neither direct, nor hire, nor fire them.
On this point the case differs from the situation presented in the case of Powell v. United States Cartridge Co., 339 U.S. 497, 70 S. Ct. 755, 758, 94 L. Ed. 1017. In the Powell case it was admitted that the petitioners employed in the safety department of the ammunition factory were employees of the Cartridge Company. In that case the evidence showed that they were to be hired, assigned, directed, supervised, paid and discharged by the company. There the contract between the government and the company provided that all persons engaged in the work "shall be subject to the control and constitute employees of the Contractor." The opposite of all these conditions existed in the present case.
But it is said the arrangement by which the appellant paid the guards compels the conclusion that they were employees of the appellant. Here the Quartermaster's office made out a time card for each guard and delivered it to the appellant. The appellant paid the guard and was reimbursed by the government. All the orders and directives made it clear that the guards were employees of the government and not of the appellant. See Cosmopolitan Shipping Co. v. McAllister, 337 U.S. 783, 800, 69 S. Ct. 1317, 93 L. Ed. 1692. Further, the evidence discloses that the arrangement for payment of the guards through the office of the appellant was made for the convenience of the government. Had such an arrangement for payment of the wages of the guards been made with a bank it could not be said that the bank was the employer.
In giving consideration to such "admission" the Special Master and the court erred. The controlling rule in such a case is tersely stated in 20 Am.Jur., Evidence, § 631, page 534, as follows: "An abandoned or superseded pleading is out of the case, so far as admissions by rule of pleading are concerned, and therefore, admissions therein may be taken advantage of, according to the majority rule, only by introducing the pleading, or so much of it as contains the admission, in evidence." And see, Wahl v. Cunningham, 332 Mo. 21, 56 S.W.2d 1052, 1059. See, also, 31 C.J.S. Evidence, § 304, p. 1079, et seq.; Kunglig Jarnvagsstyrelsen v. Dexter & Carpenter, Inc., 2 Cir., 32 F.2d 195, certiorari denied, 280 U.S. 579, 50 S. Ct. 32, 74 L. Ed. 629; Basconi v. Delli, Ohio App., 100 N.E.2d 866.
The Special Master based his finding that appellees were employees of the appellant in part upon the fact that the checks issued in payment of their wages showed that social security taxes were deducted. This fact is not conclusive, however, Brown v. Minngas Co., D.C.Minn., 51 F. Supp. 363, 368, and in view of the evidence heretofore referred to does not change the result. By every legal test the evidence conclusively demonstrates that the construction guards were the employees of the government.
The Special Master concluded "That the duties of the Plaintiffs [appellees] as guards was to guard and protect the entire plant area or site so that they were engaged in activities necessary throughout this period to the production that was in progress and being carried forward by * * * the operating companies." It is well settled that laborers engaged in construction work solely are not engaged in the "production of goods for commerce." Reed v. Murphey, 5 Cir., 168 F.2d 257, 261; and see same case, 335 U.S. 865, 69 S. Ct. 105, 93 L. Ed. 410; Noonan v. Fruco Const. Co., 8 Cir., 140 F.2d 633; Cooper v. Rust Engineering Co., 6 Cir., 181 F.2d 107, certiorari denied, 340 U.S. 879, 71 S. Ct. 116, 95 L. Ed. 639; Kirschbaum Co. v. Walling, 316 U.S. 517, 525, 62 S. Ct. 1116, 86 L. Ed. 1638.
In support of his conclusion, supra, the Special Master relied upon Walton v. Southern Package Corporation, 320 U.S. 540, 64 S. Ct. 320, 88 L. Ed. 298, and Roland Electrical Company v. Walling, 326 U.S. 657, 66 S. Ct. 413, 90 L. Ed. 383. Walton was a night watchman at a plant producing goods for commerce and his duties were held to be necessary to the production of goods by the plant. The employees of the Electrical Company were engaged in repairing and rebuilding electrical motors and in installing electrical wiring for the company's customers who were producing goods for interstate commerce. They were held to be engaged in an activity necessary to the production of goods for commerce and entitled to the benefits of the Act.
The court erred in adopting the Special Master's conclusion on this point. Here the duties of the appellees had only the most tenuous relation to the production of munitions. Their duties as construction guards were purely incidental to the protection of the manufacturing in progress. The operating guards were the only guards whose duties related directly to the production of munitions in the buildings constructed by the appellant. The character of any employee's work within the meaning of the Act is determined by what the laborer does and not by some remote and contingent incidental effect of it. See the authorities cited supra, and Simmons v. Friday, 8 Cir., 190 F.2d 849, 851; 42 C.J.S., Incidental, p. 520. To determine whether or not a laborer is engaged in the production of goods for commerce, it must be found that a substantial part of his labor is necessary to the production of such goods, not merely an incidental part. Walling v. Goldblatt Bros., Inc., 7 Cir., 128 F.2d 778, 784, certiorari denied 318 U.S. 757, 63 S. Ct. 528, 87 L. Ed. 1130.
In its Amended Answer to the Second Amended Complaint the appellant alleged (1) as a complete defense that in good faith and in reliance upon administrative regulations, orders and instructions issued to defendant by an agent or agencies of the United States Government it failed to pay plaintiffs the so-called premium overtime alleged to be due them and that this action is therefore barred by Part IV, Section 9 of the Portal-to-Portal Act of 1947, 29 U.S.C. A. § 2581 ; and (2) that in not paying the plaintiffs the amounts claimed the defendant was acting in good faith and that it had reasonable grounds for believing that its omissions were not violations of the Fair Labor Standards Act of 1938, as amended by Section 11 of the Portal-to-Portal Act of 1947, 29 U.S.C.A. § 260, and that, therefore, plaintiffs are not entitled to liquidated damages in this action.
His first reason, it will be observed, is based upon his conclusion that the Army or one of its divisions was a party to the contract with appellant and that its directions "could not constitute administrative action of any Agency as contemplated by Section 9 of the Portal to Portal Act." In reaching this conclusion the Special Master relied upon the decision of the District Court of Minnesota in Jackson v. Northwest Airlines, 76 F. Supp. 121, 129. That decision, however, was reversed by this court in Northwest Airlines, Inc., v. Jackson, 8 Cir., 185 F.2d 74, 82, certiorari denied 72 S. Ct. 26. The point was ruled to the contrary also in Lassiter v. Guy F. Atkinson Co., 9 Cir., 176 F.2d 984, 991, wherein it is said: "It cannot well be urged that the War Department and its subdivisions issuing the various communications, the Corps of Engineers, the Contracting Officers and the War Department Wage Administration Agency, were not `agencies of the United States' within the meaning of the Portal-to-Portal Act. The authority to act with the sanction of government behind it determines whether or not a governmental agency exists." And see Kam Koon Wan v. Black, D.C., 75 F. Supp. 553, affirmed 9 Cir., 188 F.2d 558; Posadas v. National City Bank, 296 U.S. 497, 56 S. Ct. 349, 80 L. Ed. 351; Standard Oil Co. of California v. Johnson, 316 U.S. 481, 62 S. Ct. 1168, 86 L. Ed. 1611; Byrne v. Metcalfe Constr. Co., D.C.Neb., 99 F. Supp. 635; Administrative Procedure Act, 5 U.S.C.A. § 1001(a).
Section 9 of the Portal-to-Portal Act, 29 U.S.C.A. § 258, is as follows: "In any action or proceeding commenced prior to or on or after May 14, 1947 based on any act or omission prior to May 14, 1947, no employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act, or the Bacon-Davis Act, if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any administrative regulation, order, ruling, approval, or interpretation, of any agency of the United States, or any administrative practice or enforcement policy of any such agency with respect to the class of employers to which he belonged. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that after such act or omission, such administrative regulation, order, ruling, approval, interpretation, practice, or enforcement policy is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect."