DocketNumber: 60
Judges: Warren, Whittaker
Filed Date: 4/4/1960
Status: Precedential
Modified Date: 10/19/2024
delivered the opinion of the Court.
This case concerns the provisions of the Fair Labor Standards Act of 1938 exempting from wages-and-hours coverage certain retail sales and service establishments.
Respondent conducts an interior decorating and custom furniture business in Dallas, Texas. On the same premises he fabricates aircraft parts from phenolic, a-cloth-impregnated phenol resin. This plastic is widely used in aircraft and automotive parts and can be machined on the woodworking equipment respondent has available in his furniture shop. Petitioner was employed by respondent from October 17, 1954, through September 2, 1955, primarily in the fabrication of phenolic parts.
At the trial, a representative of Chance Vought Aircraft, Inc., ■ testified tha,t his company purchased over $34,000 worth of phenolic parts from respondent in 1955, and that .these part's were used in aircraft and missiles sold to the United States Navy. A representative of Temco Aircraft Company testified that it purchased about $2,000 worth of phenolic parts annually from Kanowsky for use in manufacturing aircraft subassem-blies for the Air Force or for prime contractors, many of whom were located outside the State. Respondent also shipped a small amount of sheet phenolic directly outside the State.
During the year beginning October 1, 1954, respondent’s sales totaled $99,117.52, and its sales of phenolic and phenolic parts were $39,751.71, or almost exactly' 40% of its total sales. Its secretary-treasurer admitted that phenolic aircraft parts alone accounted for at least 25% of the company’s total sales. Respondent introduced no evidence concerning the amount or nature of sales of phenolic in forms other than aircraft parts. Notwithstanding the. admitted percentage of its total sales attributable to phenolic parts, respondent claimed exemption from the provisions of the Fair Labor Standards Act because of the retail character of its business.
We believe that the Court of Appeals was in error and must be reversed. The wording of the statute, the clear legislative history, and the decisions of this Court require this conclusion.
Petitioner? admittedly is engaged in the manufacture of phenolic parts for commerce. That this activity may be considered a “sideline” from respondent’s viewpoint does not remove petitioner from coverage under the Fair Labor Standards Act unless the respondent’s activities fall within the specific exemptions enumerated in § 13 of the Act. As originally passed in 1938, the Fair Labor Standards Act exempted from coverage “any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce.”
This Court had occasion at the last Term to point out that the 1949 revision does not represent a general broad
We have held that these exemptions .are to be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.
While § 13 (a) (2) contains the requirements every retail establishment must satisfy to qualify for exemp- i tion, a retailer-manufacturer must satisfy the additional. requirements of § 13 (a) (4) since it “makes or processes” the goods it sells.
First, sales of phenolic parts account for more than* 25% of the respondent’s annual sales volume. The court below assumed that respondent’s sales were recog-. nized in the community as retail sales without any evidence to support the fact. This' conclusion was not justified, since it is clear that Congress intended that “any employer who asserts that his ^establishment is exempt must assume the burden of proving that at least 75 percent of his sales are recognized in his industry as retail.”
Since respondent has not sustained its burden of proving that 75% of its annual sales volume is not for resale and is recognized as being retail in the particular industry, we need not reach the question whether the additional standards of § 13 (a) (4) itself are met.
We hold that respondent has not satisfied the requirements of § 13 and is not entitled to exemption thereunder. The judgment of the Court of Appeals is reversed; the judgment of the District Court is reinstated; and the cause is remanded to that court for consideration of the prayer of petitioner for further counsel fees in accordance with the provision of the Act.
It is so ordered.
The decision of the Court of Appeals is reported at 250 F. 2d 47. Denial of rehearing is reported at 252 F. 2d 787.
52 Stat. 1060, 1067.
Mitchell v. Kentucky Finance Co., 359 U. S. 290, 294.
Id., at 293. See also the statement made by Senator Holland, manager of the amendment, during the debate in the Senate, 95 Cong. Rec. 12491; and the remarks of Representative Lucas, who introduced the amendment in the House, 95 Cong. Rec. 11116.
Mitchell v. Kentucky Finance Co., 359 U. S. 290, 295.
Such cases as White Motor Co. v. Littleton, 124 F. 2d 92 (C. A. 5th Cir. 1941), relied upon by the Fifth Circuit in its opinion in this case and decided at a time when there was no statutory definition of “retail, or service establishment,” no longer can have any vitality in view of the 1949 amendments. The extent to which the White Motor Co. decision rests on the absence of a statutory definition of “retail” is shown in 124 F. 2d, at 93.
Prior to the 1949 amendments to the Act, the whole area of manufacturing, was excluded from the retail exemption. It had been repeatedly held that establishments engaged to any extent in manufacturing or processing activities could not qualify for. exemption under former §13 (a)(2). E. g., Grant v. Bergdorf & Goodman Co., 172 F. 2d 109 (C. A. 2d Cir. 1949); Fred Wolferman, Inc., v. Gus-
The legislative history of the amendments, as. reflected by statements of the sponsors and Committee Reports, clearly evideneés that § 13 (a) (2) as amended “does not apply to any manufacturing activities since any such activities, when conducted by a retail establishment, if exempt, are intended to be exempt under section 13 (a) (4).” Statement of the House Conferees, 95 Cong. Rec. 14932; see also the statements on the floor of.Congress by the managers for the amendment in each House, Senator Holland and Representatives Lesinski and Lucas, 95 Cong. Rec. 12495, 14942, 11216.
Remarks of Senator Holland, 95 Cong. Rec. 12502; remarks of Representative Lucas, 95 Cong. Rec. 11004, 11116; see also the
See statement of the House Conferees, 95 Cong. Rec. 14932; statement of majority of Senate Conferees, 95 Cong. Rec. 14877; 29 CFR § 779.15 (c) (Supp. 1959); cf. Mitchell v. Sherry Corine Corp., 264 F. 2d 831, 834 (C. A. 4th Cir. 1959). As the cited legislative materials indicate, the exemption from the general “resale” rule for residence and farm construction repair and maintenance under § 3 (n), 29 U. S. C. § 203 (n), evinces an intent to classify other sales for use in articles to be sold as “resale.”
The employee having shown that the nature of his employment brings him within the coverage of the Act, the nature of the “establishment” in which he is employed will be drawn into litigation only if the employer seeks an exemption under § 13, in which event the burden of proving the nature of the establishment is' on the employer.