9. In the event that the shoppers purchase any merchandise at the retail establishment, such items are placed in the car of the supervisor who delivers them to defendant's place of business in Pittsburgh. The defendant thereafter packages said items and returns them to the customers by parcel post.
10. After the last survey is completed on a particular trip and the shoppers have completed their reports and delivered them to the supervisor, the supervisor returns to defendant's office in Pittsburgh.
11. Defendant's customers are predominantly located in Pennsylvania so that most of the trips taken by the crews are through Allegheny County and the western part of Pennsylvania. The out of state customers require a monthly trip through Ohio, three trips per year through West Virginia and one trip per year through Kentucky. The income received from out of state customers for the period from 1956 to the present time constitutes between 20 per cent and 25 per cent of defendant's gross annual volume of business. During the period from 1956 to the present time, more than 50 per cent of defendant's annual volume of business was received from customers located in Pennsylvania.
12. The defendant operates his business as a sole proprietorship and is not a subsidiary of or associated with any of the other Merit Protective System companies in other parts of the country. These firms or corporations are owned and operated as sole proprietorships, corporations or are operating under franchises from the original Merit Protective Corporation which is located in New York.
13. Some of the defendant's customers are referred to him by other Merit Protective System organizations. In the event that another corporation signs up a subscriber with stores in territories surveyed by the defendant, the other organization will refer those stores to the defendant. Defendant will shop and survey said stores and will enter into a fee-splitting arrangement with the forwarding organization. In general, whatever fees are received are split on a 90 per cent -- 10 per cent basis, 90 per cent being paid to the defendant and 10 per cent being retained by the forwarding organization. Clients which are handled on this basis constitute approximately 10 per cent of defendant's gross volume of sales for the period from 1956 to the present time.
14. According to the testimony of the defendant who has conferred with other persons in the shopping service industry, the type of service which he performs on behalf of retain establishments is considered to be retail or service in the shopping service industry.
15. According to George Krohe, Vice President of Isaly Dairy Company, one of the clients of defendant, the type of service performed by defendant on behalf of retail establishments is considered in the shopping service industry as retail or service. This witness had experience with two other shopping service companies performing similar services and was qualified, therefore, to testify as to how the particular services were considered in the shopping service industry.
16. The Government produced as its witness to prove the nature of defendant's business Dr. Entenberg of the University of Pittsburgh. The Professor indicated that he had not considered this matter with any representatives of the industry and was therefore testifying only as to his discussions and conclusions reached with other professors who were teaching in the retail field.
Conclusions of Law
1. Jurisdiction of this cause of action and of the parties herein is conferred upon the Court by Section 17 of the Fair Labor Standards Act of 1938, as amended (29 U.S.C.A. § 201 et seq.) and by Section 41(8) of the Judicial Code, Revised, effective September 1, 1948 (28 U.S.C.A. § 1337).
2. Defendant is engaged in commerce or the production of goods for commerce.
3. Defendant's sales are recognized as retail sales of services in the shopping service industry.
4. Defendant's business, as a retail and service establishment, is exempt from the provisions of the Fair Labor Standards Act of 1938, as amended.
An appropriate order is entered.