Court Opinion

ID: 9471576
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:35:56.528058+00
Date Added: 2024-06-11T17:42:28.465613
License: Public Domain

McMILLIAN, Circuit Judge,
dissenting.
As noted by the majority, the facts in this case are substantially undisputed. At issue is the interpretation and application of the definition of “enterprise” in the administration of the Fair Labor Standards Act (FLSA). Because I believe that the White House Cafeteria constitutes a “leased department” of the White Drug Store, 29 U.S.C. § 203(r); 29 C.F.R. § 779.225 (1982), I would hold that the White House Cafeteria is subject to the provisions of the FLSA and therefore respectfully dissent.
Review of the “enterprise” cases reveals that similar business arrangements have not produced similar decisions. Compare Dunlop v. Ashy, 555 F.2d 1228 (5th Cir.1977) (motel and restaurant operations held not to constitute a “single enterprise”), with Usery v. Mohs Realty Corp., 424 F.Supp. 20 (W.D.Wis.1976) (motel and restaurant operations held to constitute a “single enterprise”). Case law is in agreement, however, about the elements of the “single enterprise” definition: (1) related activities, (2) common business purpose, and (3) unified operation or common control. E.g., Brennan v. Plaza Shoe Store, Inc., 522 F.2d 843, 846 (8th Cir.1975); see 29 U.S.C. § 203(r). Unfortunately, these terms are used in the statutory definition but are not themselves defined in the statute; the regulations describe the terms in some detail but in reality provide little guidance. See 29 C.F.R. § 779, Subpart C.
I would hold that the cafeteria and the drug store are r.elated activities because each provides auxiliary services to the other. The cafeteria sells food; the drug store sells a great variety of items and provides pharmacy services. They are both retail sales operations. See Usery v. Mohs Realty Corp., 424 F.Supp. at 27; see also 29 C.F.R. § 779.208(i) (including “recreational ... facilities for customers ... including eating and drinking facilities” as an example of auxiliary activities which are “related activities”). I would also hold that the cafeteria and the drug store have a common business purpose to the extent that each is part of a “business system” which is directed to a single business objective, that is, the operation of a traditional drug store. See 29 C.F.R. § 779.213; Usery v. Mohs Realty Corp., 424 F.Supp. at 28.
Finally, I would hold that the “related activities” of the cafeteria and the drug store, although separately owned and separately controlled, are performed through a “unified operation,” see 29 C.F.R. § 779.-215-.220, and therefore the cafeteria constitutes a leased department of the drug store. Id. § 779.225. The cafeteria and the drug store share a common trade name, are lo*1394cated in the same building, share a common public entrance, have similar hours of operation (the cafeteria’s hours are limited to those of the drug store), appear to be one business operation to persons using the services, and coordinate advertising and promotions to some degree. I realize that the cafeteria occupies a physically distinct space within the drug store, the cafeteria personnel decisions are separate from those of the drug store, and the cafeteria maintains its own set of records. In my opinion, however, these factors do not overcome those factors which are consistent with unified operation. Accordingly, I would reverse the judgment of the district court.