Legal Document

383 U.S. 190 86 Supreme Court Reporter 737 15 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 694 IDAHO SHEET METAL WORKS, INC., Petitioner,v.W. Willard WIRTZ, Secretary of Labor. W. Labor, Petitioner, versus STEEPLETON GENERAL TIRE COMPANY, Inc., et al. Nos. 30, 31. Argued Dec. 8, 1965. Decided Feb. 24, 1966. Rehearing Denied March 28, See 963, 1219. [Syllabus from pages 190-191 intentionally omitted] Number 30: Eli Atlantic Weston, Boise, Idaho, for petitioner. Charles Donahue, Washington, D.C., respondent. 31: Bessie Margolin, Lucius E. Burch, Jr., Memphis, Tenn., respondents. Mr. Justice HARLAN delivered the opinion Court. 1 The common question presented by these two cases is meaning phrase 'retail or service establishment' as that language used in exemptive provisions federal wage and hour statute. We first set forth statute describe before us, then examine history content exempting clause, finally apply resulting analysis to facts each case. I. 2 Fair Labor Standards Act 1938 enacted a comprehensive scheme providing minimum wages overtime pay workers 'engaged in' 'in production goods for' interstate foreign commerce.1 Among other exemptions, Congress § 13(a)(2) has excluded statute's protections those employees working certain service' establishments.2 To qualify this exemption its present form, an establishment must meet three tests: first, it make more than 50% annual dollar volume sales services within State;3 second, one four tests designated '(i)—(iv),' chiefly designed prevent most very large employers enjoying exemption;4 third, be establishment.' Regarding third requirement—which focus decision—s states '(a) shall mean 75 per centum whose (or both) not resale recognized retail particular industry.' 3 Of one, stems consolidated actions brought against Idaho Sheet Metal Works, Incorporated (Idaho Sheet). By action sought enjoin future disregard Act's provisions, he collect on behalf employee unpaid compensation period during year 1960. §§ 15—17, 52 Statutes-at-Large 1068—1069, amended, 29 Code KF62 215—217 (1964 ed.). ensuing litigation established operates plant Burley, where employs about 12 fabricate, install, maintain sheet metal products. Many articles are sold individuals, farmers, local merchants, display racks show wares, 60% number said 'the general public' opposed industrial customers. About 83% gross income, however, derived work done equipment five potato processing companies which dehydrate freeze potatoes shipment. 4 For defense, denied were engaged producing commerce. It also claimed exempt establishment, adducing proof over 75% was officials salesmen who sell regarded business retail. District held outside commerce coverage any case exempt. Appeals Ninth Circuit reversed both points favor Secretary. 9 Cir., 335 Federal Reporter, 2nd 952. granted certiorari limited whether Act. 380 905, 85 894, 13 793. 5 In 31, sued Steepleton General Tire Company (Steepleton) president require compliance with wage, pay, record-keeping Steepleton, located Tennessee, 47 workers, franchised tire dealer sale, recapping, repair tires. Some Steepleton's income derives dealings private customers but half comes repairs tires furnished businesses operating heavy construction vehicles fleets trucks; apparently sizable though unspecified portion commercial operated their 6 determined came Act, issue no longer Alleging itself under 13(a)(2), showed industry's predominant longstanding use word applied term all resale, despite character pattern quantity discounts. only explanation offered conformed many state tax statutes. industry sometimes senses did regard purchases transactions. entitled exemption. Sixth affirmed respects, 330 804, we at behest consider qualified establishment. 904, 794. 7 approach Circuit, took usage controlling, rejected sole test, represent irreconcilable interpretations critical statutory language. While support can mustered views, believe correct point follow our earlier decision Mitchell Kentucky Finance Co., 359 290, 79 756, 815. After rejecting face further difficult what criteria do determine when transactions Act; still less easy return clear-cut answer, matter leads us conclude neither nor qualifies II. 8 construe demands knowledge origins. Section appeared enactment, delimit define concept.5 Department Labor's Wage Hour Administrator initially made his interpretation known through Interpretative Bulletin various official statements.6 summarize generally, viewed selling individuals personal family consumption; same agencies remained if normal price charged consumers quantities consumer would buy. Interp.Bull.No.6, 14, 1942 WH Manual, Page 330. However, there deviations consumer-goods standard employers, notable instances being farm implement dealers linen supply firms supplying Statements Administrator, 1944—1945 Pages 469—470. 1946 decided Roland Electrical company Walling, 326 657, 66 413, 90 L.Ed. 383, holding inter alia wiring, electrical contracting industry, replacement electric motors generators constitute considerable suggesting sale article profit-making consumption could position supported result went far beyond necessary holding. U.S., 673—677, 420—422. This case, several others vein,7 prompted report hitherto classes endangered—notably dealers—and recommend amending legislation. 1948 Division, Annual Report, 120—121. 10 proposed, so immediately relevant, deriving consumption, items customer similar type quantity, farmers ordinary farm. When convened 1949, bills introduced amend respects. bill reported out House committee substitute measure debated adopted Administrator's basic proposal, backed opposing coalition amendment debates prevailed sent Senate.8 passed contained definition establishments became law 1949 remains today.9 Senate debate own committee-reported bill, exemption, amended conform House's revision 13(a)(2).10 Thus, House-Senate conference met iron differences respective versions legislation, uniformity already existed. substantial legislative documents section.11 11 light history, faced requires treat customarily described labeled transaction acting course good faith. If answer yes, deserve exemptions without ado, since admittedly questioned sales. should reading support. Most importantly, appear literal statute; 'recognized * industry' well lends inquiry into how businessmen concerned dealings. statements explicitly foster reading, example, comment Senator Holland sponsored approach, 'for different commodities have find understood people dealing 95 Cong.Rec. 12519.12 agree Government necessarily infirm because courts may seek among uses extant industry. Certainly suggestion give self-determination applies; incompetent distinguish between legitimized fixed practice recently instituted aim avoiding law. On balance, arguments persuasive. At start, such attribute purpose going reiterated overturn sweeping principle replete evidence target Roland's proposition purchaser condemned comparing status gave batch towels housewife hotelkeeper. 12494.13 Further, every intended wholly revamp substituting overriding industry-usage direction. observed undo commonly view discount prices generally nonretail.14 'recognizing' merchant, 12510 (remarks Holland), due weight given 'actual practice' Conf. Majority Statement, 14877, 'well-settled habits business,' Holland). lists potentially include almost services. Conf.Rep., 25 (quoted 203, infra); 11003—11004 Lucas); 12502 There denials industries' will decisive.15 conclusive consideration test compel results flatly inconsistent contemplated might indeed major revolution acknowledged statement us. prime example threatened inconsistency problem 1959 815, making small loans purchasing conditional contracts retailers Although persuasive retail, indicating containing express '(t)he does banks, insurance companies, building loan associations, credit newspapers, telephone gas utility telegraph etc., concept servicing industries.' 25—26. 14877. nonretail discounts, see n. supra, congressional intent similarly frustrated truck designation great discount. industries, hardly surprising newspaper, telephone, label Yet extension provide final argument adopting dictate result. 14 Since reject single touchstone, arises approaching helpful ask ever whatever terms sale; affirmative circumstances sale. Plainly typical involving frequently acquired use. As examples Conference Report 'by grocery store, hardware coal dealer, automobile passenger cars trucks, clothing dry department paint furniture drug shoe stationer, lumber etc. *' (sale machinery another given). Congress' conceded overrule means 'whether householders users,' 25, listed nearly share characteristic they often purchased householders. recital electric, along 202, demonstrates everything services, breadth qualification need here explored. 16 What important extend some embrace products never noncommercial An indisputable implements. 25. Another instance least varieties, 'retailability' assumed e.g., 12497 confirmed presence otherwise understand.16 12495 Holland) (retailability modest office desk). cannot draw precise line like 26, few characteristics trucks implements offer guidance: employment widespread goods; distributed stores showrooms dissimilar perhaps activities scope. list strictly deemed presumably small, existence precludes uncomplicated 'consumer goods' proposed 1949. 197—198, supra. 17 Within category naturally classified. excludes that, references parlance certainly suggest becomes apt increase transaction. Again, force. comments discounting just cited contrary; easily read control after deciding item fact quite properly looked carefully taking position, Regulations 779.323 (1965), hamstrung terminology trade. diversity structure marketing practices flexibility appropriate, attempt adduce rules. note discretion possessed responsible actual administration understressed. Boutell 327 463, 471, 631, 635, 786; American Trucking Assns., 310 534, 549, 60 1059, 1067, 84 1345. III. 18 premises now established, resolution accomplished readily. Turning disqualified 80% relating equipment. stressed wide public serves, facilities building, irregular intervals performed, company's lineage tracing back 'tin shops' yesterday. All factors bear upon classification sales, three-quarters But explicit treatment variegated: characterized 25% derive loss 2, terms. 19 last conclusion follows admitted facts. pretrial order fabricated maintained vats, storage tanks, hoods, elevator buckets, chutes. Hoods trial 'five feet square bottom high go vent stacks.' He testified tanks much '5,000 pounds peeled potatoes,' chutes long. testimony fairly representative nature scrutiny, indication Sheet, lies burden establishing requisite Arnold Ben Kanowsky, 361 388, 80 453, 393. plainly appears utility. Nor resemblance named Unlike equipment, market highly limited, stock off shelf, individual specifications.17 seems distinguishable 'an manufacturing goods,' stated 26. subject occasion claim pricing standards. 20 second business, respects intricate. alleged, deny, better earth-moving Government's ground withholding intrinsically analogizes trucks. And stresses ties 21 Admitting force, accept it. pretty retailable shown. No reason why distinguished allowed items. strength readiness separate big little Secretary, seemingly chosen classify basis instead treats capable retail.18 A kind, doubt turning part problems facets practice, clearly implicates Secretary's discretion, cause disturb exercise 22 is, nevertheless, deprived because—as alternatively contended—it failed them guidelines. guidelines class 'wholesale prices,' wholesale defined 10-vehicle fleets. 18, These guidelines, reportedly practices, evidently aimed excluding significant discounts quantity. Given conception sustain guidelines; indeed, even discuss them, save implicit claims correspond 23 concluding proved exempt, indefiniteness record noted. fleets, purchasers received grant fleet pursuant bids agencies, pointed directed showing nonexemption Despite evidence, unclarity percentages attributable nonretail. respecting company, indicated, uphold been met. had alleged appeal standards prevailed, hesitate remand outset. events, 24 judgment 30 affirmed; 31 reversed. ordered. Judgment 1060, 201—219 Sections 6, 7, codified 206, 207, respectively cover pay. special 'production,' drawn generous 3(j), 203(j). 213(a)(2) section provides to: '(2) employed 50 establishment's State located, establishment— '* (meets tests, '(i)—(iv)' framed reference Act). 'A requirement 13(a)(4) added 63 917, 213(a)(4) ed.), makes processes sells meets 'is 85% State. So process sell, satisfied requirements unwilling rely them. 1961 71. suggested disqualify either version read: sections respect (2) greater intrastate commerce.' 1067. Bulletin, editions BNA Manual (hereafter Manual), edition. views 779—779.515 (1965). Martino Michigan Window Cleaning 173, 379, 603; 786. McComb Factory Stores 81 F.Supp. 403; Diebert, Commerce Clearing Cas. 64,982. H.R. 3190, 81st Cong., 1st Sess., accompanied H.R.Rep. 267. 5856, H.Res. 183. final, successful retained 5856 5894. Lab.Rel.Rep., 90:459 (1961). difference current section, relevant 4, accompanying text. S. 653, S.Rep. 640, U.S.Code Congressional Administrative News 2241. 12491 12520. principal 11002—11203 (House), 12490—12520 (Senate). initial reports ultimately pertinent members H.R.Conf.Rep. 1453, 24—26 Conf.Rep.), 2251. authoritative majority conferees Statement) appearing Other favoring assuming understanding 12516 Taft); seem equate retail' 'regarded retail,' 11003 Lucas, sponsor prevailing House), Holland); Lucas), 11199 McConnell). ('This clarification (the 13(a)(2)) needed obviate ruling Walling *.'); 11203 Celler). 'Of (a 'made allowed') sales.' 12501. Perhaps ambiguousy, stated: 'If sufficient lose exemption.' 12497. 12505. cf. Lucas). 'MR. DOUGLAS. & N Immigration Nationality Decisions understand sale' trade association. 'Mr. HOLLAND. That criterion, course; Illinois, Florida, wish delegate full authority association interested group.' 13(a)(19), 73, 213(a)(19) exempts 'any primarily automobiles, implements' regardless notably 1961, Quite contemplates relies Wirtz Modern Trashmoval, 323 451, Fourth alternative trash collection say distinguishable; removal world required families. 779.373 (1965) relevantly purposes 13(a) 'all tires, tubes, accessories including retreading recapping' classified series exceptions including: '(d) Sales accounts prices: 'fleet account' automobiles purposes. Wholesale equivalent to, than, typically resale. (is) vehicles, (it is) area (such) *.'

Classification Label: 6