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Timestamp: 2019-08-26 04:29:59
Document Index: 30434334

Matched Legal Cases: ['§ 3', '§ 203', '§ 203', '§ 3', '§ 3', '§ 203', '§ 201', '§ 203']

BRENNAN V. ARNHEIM & NEELY, INC., 410 U. S. 512 (1973) - US SUPREME COURT DECISIONS ON-LINE
US Supreme Court Decisions On-Line> Volume 410 > BRENNAN V. ARNHEIM & NEELY, INC., 410 U. S. 512 (1973)
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STEWART, J., delivered the opinion of the Court, in which BURGER, C.J.,and Douglas, BRENNAN, MARSHALL, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. WHITE, J., filed a dissenting opinion, post, p. 410 U. S. 521. chanroblesvirtualawlibrary
The respondent's services with respect to the supervisory, maintenance, and janitorial staffs of the buildings are similarly extensive. The respondent conducts the hiring, firing, payroll operations, and job supervision of chanroblesvirtualawlibrary
The District Court held that the maintenance, custodial, and operational workers at the buildings managed by the respondent were "employees," and that the respondent was an "employer," within the meaning of §§ 3(d) and 3(e) of the Act, 29 U.S.C. §§ 203(d), (e). 324 F.Supp. at 992-993. The District Court also held that gross rentals, rather than commissions obtained, were the proper measure of "annual gross volume of sales made or business done" for purposes of the dollar volume portion of the statutory definition of an "enterprise engaged in commerce." Id. at 993-994. [Footnote 1] Though it rejected the claim that the respondent was sufficiently engaged in commerce for its employees to be covered for chanroblesvirtualawlibrary
On cross appeals, the Court of Appeals for the Third Circuit affirmed the District Court's determination that the respondent is an "employer" of the building "employees," and also affirmed the use of gross rentals of the buildings as the proper measure of "gross sales." 444 F.2d 609, 611-612. The Court of Appeals held that the District Court erred, however, in aggregating the gross rentals of the nine properties to determine the "gross sales" of the respondent's "enterprise." Recognizing that its decision conflicted with a substantially identical case in the Fourth Circuit, Shultz v. Falk, 439 F.2d 340, the Court of Appeals held that, before separate establishments could be deemed part of a single enterprise, chanroblesvirtualawlibrary
a showing of common business purpose was required. 444 F.2d 613.
The concept of "enterprise" under the Fair Labor Standards Act came into being with the 1961 amendments, which substantially broadened the coverage of chanroblesvirtualawlibrary
29 U.S.C. § 203(r) (emphasis added). Specific exemptions are noted, making clear that exclusive dealership arrangements, collective purchasing pools, franchises, and leases of business premises from large chanroblesvirtualawlibrary
In its analysis of this problem, the Court of Appeals placed great weight on the fact that the building owners have no relationship with one another, and have no common business purpose. This is true, but beside the point, chanroblesvirtualawlibrary
Shultz v. Falk, 439 F.2d 346. In the present case, the respondent's activities at the several locations are tied together by the common business purpose of managing commercial properties for profit. The fact that the buildings are separate establishments is specifically made irrelevant by § 3(r).
S.Rep. No. 145, 87th Cong., 1st Sess., 41. The Court of Appeals went on to stress that the building owners should not be brought under the Act simply be chanroblesvirtualawlibrary
It is argued that such a straightforward application of the statutory criteria to the respondent's business ignores the significance of the dollar volume limitation included in the § 3(s) definition of "[e]nterprise engaged in commerce or in the production of goods for commerce." The Court of Appeals cited evidence in the legislative history of the 1961 amendments that indicates a purpose to exempt small businesses from the obligations of the Act. 444 F.2d 613; S.Rep. No. 145, 87th Cong., 1st Sess., 5. If the individual building owners are engaged in enterprises too small to come within the reach of the Fair Labor Standards Act, reasoned the Court of Appeals, it would be "anomalous" to treat them as a single enterprise subject to the Act "merely because they hire a rental agent who manages other buildings." 444 chanroblesvirtualawlibrary
As both the District Court and the Court of Appeals noted, the statutory concept of "employer" is "any person acting directly or indirectly in the interest of an employer in relation to an employee. . . ." 29 U.S.C. § 203(d). This definition was held to be broad enough that there might be "several simultaneous employers.'" 444 F.2d 611-612. See also 324 F.Supp. 987, 992; Wirtz v. Hebert, 368 F.2d 139; Mid-Continent Pipe Line Co. v. Hargrave, 129 F.2d 655.
It is undisputed that, for the minimum wage and maximum hour requirements of the Fair Labor Standards Act, 52 Stat. 1060, as amended, 29 U.S.C. § 201 et seq., to apply, to all the employees involved in this case, they must be employed in an "enterprise engaged in commerce chanroblesvirtualawlibrary
But, for an "enterprise" to be "engaged in commerce or in the production of goods for commerce," the enterprise must have an "annual gross volume of sales made or business done" in an amount not less than the specified statutory minimum. Id. § 203(s)(1). Congress did not intend to cover all establishments by expanding the coverage of the Act through the enterprise approach. Instead, it drew an economic line. "It is the line which the Congress must draw in determining who shall and who shall not be covered by a minimum wage." S.Rep. No. 145, 87th Cong., 1st Sess., 5. Nor was the definition of enterprise intended to swallow up the exclusion of small businesses. Related activities conducted by separate businesses would be considered a part of an enterprise only "where they are joined either through unified operation chanroblesvirtualawlibrary
There is no connection between these separately owned buildings other than the fact that they employ the same management company to represent them. They have a common managing agent, but that agent is separately accountable to, and must follow the perhaps diverse directions of, each of its principals. They have no unified operation, do not constitute a unified business system or an economic unit, and surely do not serve a common chanroblesvirtualawlibrary
Under this standard, there can be no question that the buildings are separate economic units, and should be treated as such. The manager receives merely a commission for his services. The managing agent manages, but is subject to direction by his principal. The income and expenses for each building are accounted for separately. The owner of each building receives the profits and suffers the losses, if any. Each owner sets the wages and working conditions for each building in the sense that, although the manager negotiates such matters, he negotiates under instructions, and it is each owner who chanroblesvirtualawlibrary