Court Opinion

ID: 9458630
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:57:15.49421+00
Date Added: 2024-06-11T17:35:50.066161
License: Public Domain

RONEY, Circuit Judge
(dissenting):
I think the majority is wrong to hold that defendant’s office employees are engaged in commerce and the production of goods for commerce, within the meaning of the Fair Labor Standards Act, *1055solely by virtue of the fact that they prepare and mail operating reports of a purely local business to out-of-town directors and officers.
The Secretary argues that the reports which these employees mail across state lines are “goods” under § 3(s) of the Act, so that the office workers are engaged in the “production of goods for commerce.” Alternatively, he asserts that the office employees are “engaged in commerce” under § 3(s).
In certain circumstances we have held that documents and written materials can be “goods” as the Act uses that term,1 or that office workers who mail such materials can be “engaged in commerce.”2 But those cases cannot be used as authority for a decision in this case. In those cases, as in every other case cited to us by the Secretary 3 where such documents and reports were determined to provide the basis for § 3 (s) coverage, the employer transacted some portion of its business in interstate commerce. The employees who were found to be covered performed “an essential and integral part of [the employer’s] interstate business.” Wirtz v. Wohl Shoe Co., 382 F.2d 848, 851 (5th Cir. 1967). In the case before us, since the employer’s business activity has no direct connection with interstate commerce at all, it cannot be found that Travis Edwards’ office employees perform duties which support or aid in any interstate business.
The holding of the Court converts an otherwise local business into an interstate business merely because its corporate directors and president live outside of the state. If they lived in the state, there is little doubt that the operation of the Beck Building would be held to be a local business.4 The majority concedes that the coverage cannot here be derived from the interstate activities of the Beck Building tenants, and that this does not fall within the Public Building Authority of Birmingham and Allen line of eases. See notes 1 and 2 supra.
The very argument presented by the Secretary here was before the Third Circuit in the case of Stevens v. Welcome Wagon International, Inc., 390 F.2d 75 (3rd Cir. 1968). The plaintiff in that case was a Pennsylvania resident who operated a Welcome Wagon service which was entirely local in its scope of operation. She was, however, required to submit daily, weekly, and monthly re*1056ports to company offices in Tennessee and New York. The Court, in analyzing plaintiff’s connection with “commerce,” found it appropriate to quote the following language from Mitchell v. Welcome Wagon, Inc., 139 F.Supp. 674 (W.D.Tenn.1954), aff’d 232 F.2d 892 (6th Cir. 1956):
“The communications with Defendant’s divisional offices, including the rare transmittal of the executory service contracts, are purely internal, and like the confidential daily reports sent to the subscribers, are incidental to the local services performed by the employee. The records, reports and the service contract have no value of their own. They are not Defendant’s objective and Defendant does not sell them as goods. Their preparation and transmission incident to a business whose purpose does not comprise the production of goods at all, do not constitute engaging in the production of ‘goods.’” 390 F.2d at 77, 78 [citations omitted].
The Court then concluded:
“We realize that the Fair Labor Standards Act is to be given a liberal interpretation in favor of finding coverage and that the issue of whether an employee is engaged in commerce should be decided by applying practical rather than technical standards, Mitchell v. C. W. Yollmer & Co., 349 U.S. 427, 429, 75 S.Ct. 860, 99 L.Ed. 1196 (1954), but it is self evident on the record before us that appellant’s activities were local in nature regardless of her postal communications with appellee’s New York City and Memphis offices. Nor can we accept appellant’s contention that she was engaged in the production of goods for commerce. See, Mitchell v. Welcome Wagon, Inc., supra, 139 F.Supp. at page 679 and cases cited therein.”
I think that the reasoning of the Third Circuit in Stevens applies with equal force to the situation presented here.5
Finding that no other employee group of defendant is engaged in commerce or in the production of goods for commerce within the meaning of the Act,6 I would affirm the decision of the District Court.

. Wirtz v. A. S. Giometti & Associates, Inc., 399 F.2d 738 (5th Cir. 1968); Public Bldg. Authority of Birmingham v. Goldberg, 298 F.2d 367 (5th Cir. 1962).

. Montalvo v. Tower Life Bldg., 426 F.2d 1135 (5th Cir. 1970); Allen v. Atlantic Realty Co., 384 F.2d 527 (5th Cir. 1967), cert. denied, 390 U.S. 989, 88 S.Ct. 1185, 19 L.Ed.2d 1294 (1968).

. Wirtz v. Valco, Inc., 407 F.2d 1322 (5th Cir. 1969), aff’g 280 F.Supp. 449 (S.D.Tex.1968) (small loan company operated with funds supplied by out-of-state lender); Wirtz v. Wohl Shoe Co., 382 F.2d 848 (5th Cir. 1967) (employer operated retail shoe outlets in 42 states); Credit Serv., Inc. v. Fleming, 372 F.2d 143 (5th Cir. 1967) (11% of employer’s business was with out-of-state customers); Beneficial Fin. Co. of Wisconsin v. Wirtz, 346 F.2d 340 (7th Cir. 1965) (employer was branch office of interstate consumer finance system); Wirtz v. Wardlaw, 339 F.2d 785 (4th Cir. 1964) (employees mailed cards and clippings to out-of-state business prospects, with aim of obtaining these prospects as customer); Wirtz v. C&P Shoe Corp., 336 F.2d 21 (5th Cir. 1964) (substantially all the shoes sold by employer came from out-of-state suppliers and manufacturer’s); Mitchell v. Kroger Co., 248 F.2d 935 (8th Cir. 1957) (employer operates interstate grocery chain); Union Nat’l Bank of Little Rock, Ark. v. Durkin, 207 F.2d 848 (8th Cir. 1953) (bank handled “large quantities” of stocks, bonds, checks, and commercial paper shipped to and from points out of state); Meeker Cooperative Light and Power Ass’n v. Phillips, 158 F.2d 698 (8th Cir. 1946) (electric cooperative provided power upon which interstate businesses depended).

. 10 East 40th Street Bldg., Inc. v. Callus, 325 U.S. 578, 583, 65 S.Ct. 1227, 1229, 89 L.Ed. 1806 (1945) (“Renting office space in a building exclusively set aside for an unrestricted variety of office work spontaneously satisfies the common understanding of what is local business and makes the employees of such a building engaged in local business.”).

. Shultz v. Falk, 439 F.2d 340 (4th Cir. 1971), upon which the majority relies, is not in point here. There the reports were not mailed to owners of the business, but to third party customers of the business. Part of the purpose of the business was to engage in these interstate communications.

. The employer is the consumer of the soap, wax, paper towels, light bulbs, and other repair and maintenance items manufactured outside of the state which are “handled” by the maintenance employees, thus making applicable the “ultimate consumer” exception, contained in § 3(i) of the Act, and the cases of Shultz v. Wilson Bldg., Inc., 320 F.Supp. 664 (S.D.Tex.1970); Shultz v. Arnheim & Neely, Inc., 324 F.Supp. 987 (W.D.Pa.1969); cf. Mitchell v. Sherry Corine Corp., 264 F.2d 831 (4th Cir. 1959), and distinguishing this ease from the facts of the following cases relied on by the Secretary: Shultz v. Falk, 439 F.2d 340 (4th Cir. 1970); Wirtz v. Melos Constr. Corp., 408 F.2d 626 (2nd Cir. 1969); Shultz v. Union Trust Bank of St. Petersburg, 297 F.Supp. 1274 (M.D.Fla.1969); Irby v. Davis, 311 F.Supp. 577 (E.D.Ark.1970); Wirtz v. Mayer Constr. Co., 291 F.Supp. 514 (D.N.J.1968).
The Secretary cites no cases to support the argument concerning the parlcing lot attendants and the contention that the automobiles are “goods” handled by these employees reaches far beyond any reasonable interpretation of the Statute.
As to the employees of the concession stand, they bear no such relationship to the defendant’s building operation business as was found in Wirtz v. Savannah Bank & Trust Co., 362 F.2d 857 (5th Cir. 1966); Wirtz v. Columbian Mut. Life Ins. Co., 380 F.2d 903 (6th Cir. 1967); Wirtz v. First Nat’l Bank & Trust Co., 365 F.2d 641 (10th Cir. 1966). At best, the concession stand was a small convenience to the customers of the building and was not a related activity within the meaning of § 3(r). See 29 C.F.R. § 779.211.
The maid-elevator operator could not alone impart “enterprise” coverage of the business.