Opinion ID: 495848
Heading Depth: 1
Heading Rank: 1

Heading: The Three Businesses Are An 'Enterprise'

Text: 6 The three tests used to establish that businesses are an 'enterprise' within the meaning of Sec. 203(r) of the Act are: (1) common control or unified operation; (2) related activities; and (3) a common business purpose. Brennan v. Arnheim & Neely, Inc., 410 U.S. 512, 518 (1973). Appellants conceded that the first test is met, as David Grodman controls Grand Security Guard Company, Grand Money Order Company, and Grand Patent Medicine. 7 The activities of Grodman's three businesses were 'related.' When the concept of 'enterprise' coverage was introduced into the Fair Labor Standards Act in 1961, the report of the Senate Committee on Labor and Public Welfare, prepared in connection with the amendments stated that activities are 'related' when they are 'the same or similar' or when they are 'auxiliary and service activities.' S. Rep. No. 145, 87th Cong., 1st Sess. 41 (1961), reprinted in 1961 U.S. Code Cong. & Admin. News pp. 1620, 1660. In this case, all three of the businesses have operations in the same building. The employees of the businesses were at least partially interchangeable. Appellee McKissick worked as a security guard in the Grand Patent Medicine store, but he also carried out functions for both Grand Patent Medicine and Grand Money order which were unrelated to his role as a security guard. Additionally, Grand Security Guard Service provided all of Grand Patent Medicine's security, and Grand Patent Medicine was an agent for Grand Money order. It is thus clear from the record that the three businesses performed related activities. 8 It is also evident from the record that a common business purpose existed. What is a 'common business purpose' in any particular case involves a practical judgment based on the facts in light of the statutory provisions and the legislative intent. 29 C.F.R. Sec. 779.213 (1986). In this case, that the three businesses were operated so as to form a part of a unified business system is readily apparent from the facts. Employees performed services for more than one of the companies. All three of the companies operated out of the Grand Patent Medicine store. The record indicates that even the employees sometimes had difficulty keeping the three companies separate in their minds. Therefore, because the businesses had common ownership, engaged in related activities, and had a common business purpose, we hold that they are an 'enterprise' within the meaning of Sec. 203(r) of the Act.