(1) Wright was employed as a watchman to guard against fire and trespassers, and to prevent damage to or stealing of anything valuable on the site, including tools, machinery, scrap metal, copper, wiring, lumber, brick, etc.
(2) The government failed to prove@ beyond a reasonable doubt that any of the scrap metal, copper, wiring, or lumber watched by Wright found its way into interstate commerce.
(3) The government failed to prove beyond a reasonable doubt that any of the brick cleaned by Wright for which he was paid were sold into interstate commerce. Moreover, the amount of brick cleaned, 6,000, and the total amount Wright received for labor, $ 36 for the entire year, was so negligible as to merit little or no consideration.
(4) The government has proved beyond a reasonable doubt that not only was Wright employed, among other things, to watch or guard brick, but that a substantial quantity of brick worth $ 2,183.10 was sold in interstate commerce.
(5) The contract between defendant corporation and the owner of the Brill Site required a watchman, and the presence of a watchman helped lower defendants' insurance rates.
In the light of the foregoing findings of fact, we must now determine whether Wright is covered by the Act. The introductory clause of Section 206(a) (minimum wage provision) and Section 207(a) (overtime pay) (29 U.S.C.A. §§ 206 and 207) limits coverage to 'employees who (are) engaged in commerce or in the production of goods for commerce.' Thus, plaintiff must prove four things in order to establish that Wright is subject to the Act: (1) that Wright was an 'employee'; (2) that Wright was either engaged 'in' commerce or in 'production' of goods for commerce; (3) that there were 'goods'; and (4) that there was 'commerce' -- all within the meaning of the Act. It was stipulated that Wright was an 'employee' of defendants and it is uncontested that the scrap and used brick are 'goods' within the meaning of 29 U.S.C.A. § 203(i). See Mitchell v. Jaffe, 5 Cir., 1958, 261 F.2d 883, 886; Sams v. Beckworth, 5 cir., 1958, 261 F.2d 889, 891. We need not determine whether Wright was engaged 'in' commerce or was a 'producer of goods for commerce' in his capacity as a brick cleaner because there was insufficient proof that the brick he cleaned entered into 'commerce', as defined in 29 U.S.C.A. § 203(b) ('trade (or) transportation * * * between any state and any place outside thereof').
However, Wright in his capacity as a watchman may have been in 'production of goods for commerce.' Here it was adequately established that the brick Wright watched did enter 'commerce.'
In a 1949 amendment to the Act, Congress attempted to make clearer what employees are covered by the phrase 'production of goods.' 29 U.S.C.A. § 203(j) states:
'* * * an employee shall be deemed to have been engaged in the production of goods if such employee was employed * * * in any closely related process or occupation directly essential to the production thereof * * *.' (Emphasis supplied.)
The scope of this definition in Section 203(j) has been a source of much litigation. Congress intended it to mark the outer limit of coverage under the Act. Mitchell v. H. B. Zachry Co., 1960, 362 U.S. 310, 316-317, 80 S. Ct. 739, 4 L. Ed. 2d 753. However, it is apparent from legislative history that the scope of the Act is not coextensive with the limits of the constitutional power of Congress to regulate commerce under the commerce clause. See the detailed analysis of legislative history in Kirschbaum v. Walling, 1942, 316 U.S. 517, 522-525. 62 S. Ct. 1116, 86 L. Ed. 1638, Mitchell v. H. B. Zachry Co., 1960, 362 U.S. 310, 316-318, 80 S. Ct. 739, 4 L. Ed. 2d 753, Mitchell v. Dooley Bros., Inc., 1 Cir., 1960, 286 F.2d 40, 42-44. Congress has impliedly left a domain for regulation by the states. '.congress may choose, as it has chosen frequently in the past, to regulate only a part of what it constitutionally can regulate, leaving to the States activities which, if isolated, are only local.' Kirschbaum v. Walling, 1942, 316 U.S. 517, 521, 62 S. Ct. 1116, 1119, 86 L. Ed. 1638. The problem, then, is to draw a line between those activities which Congress left to the states and those which were intended to come within the Act.
To satisfy Section 203(j), as amended in 1949, Wright's activities as a watchman must not only be 'directly essential' but also 'closely related' to the production of used brick (see the italicized portion of Section 203(j) quoted supra). Defendants urge that these standards in the 1949 amendment were intended to restrict the coverage of watchmen under the Act. To support this contention, defendants have quoted extensively in their brief from the recent Supreme Court decision, Mitchell v. H. B. Zachry Co., 1960, 362 U.S. 310, 80 S. Ct. 739, 4 L. Ed. 2d 753. This case, however, damages more than it helps defendants. Zachry concerned coverage of construction workers (not watchmen) on a dam that impounded water for a local water distribution system in Texas. Some of the water eventually was utilized by industries producing goods for commerce. The Court held that these construction workers were outside the scope of Section 203(j) because their activities were not 'closely related' to the production of goods. But in reaching this result, the Court made a careful distinction between these construction workers, who were not covered, and maintenance workers, such as watchmen, whom it assumed, arguendo, would have been covered. 362 U.S. at pages 319-321, 80 S. Ct. at pages 745-746. It is true that the 1949 amendment to Section 203(j) narrowed coverage of the Act. It is not true, as defendants urge, that coverage of watchmen and other maintenance employees was necessarily affected. The assumption of Zachry is that maintenance workers such as watchmen would have been subject to the Act under the facts of that case. Defendants' contention is further weakened by the fact that the leading case dealing with coverage of maintenance workers, Kirschbaum v. Walling, 1942, 316 U.S. 517, 62 S. Ct. 1116, 86 L. Ed. 1638, was expressly approved by Congress in 1949. Report of the Majority of Senate Conferees, 95 Cong.Rec. 14875 (1949); H.R.Rep. No. 1453, 81st Cong.1st Sess. 14 (1949). See also Mitchell v. Dooley Bros., Inc., 1 Cir., 1960, 286 F.2d 40, 42.
The court here finds that Wright's activities were 'directly essential' to the production of used brick. His presence on the site was required in the contact between United Wrecking Corp. and the owner of the Brill Site. Wright safeguarded the property from fires which might have interfered with production. In addition, Wright's presence helped reduce defendants' insurance rates. This last fact alone was evidence that his activity was 'directly essential' within the meaning of Section 203(j). See Walton v. Southern Package Corp., 1944, 320 U.S. 540, 542, 64 S. Ct. 320, 88 L. Ed. 298; Armour & Co. v. Wantock, 1944, 323 U.S. 126, 131, 65 S. Ct. 165, 89 L. Ed. 118.
The court also finds that Wright's activity as a watchman was 'closely related' to the production of used brick and is well within the rule of kirschbaum v. Walling, 1942, 316 U.S. 517, 62 S. Ct. 1116, 86 L. Ed. 1638 (watchmen in the building where dresses were manufactured for commerce held covered by the Act). See also Borden Co. v. Borella, 1945, 325 U.S. 679, 65 S. Ct. 1223, 89 L. Ed. 1865 (watchmen in central administrative office building of a large corporation held covered even though no goods actually manufactured in the building). Compare 10 East 40th St. Bldg. v. Callus, 1945, 325 U.S. 578, 65 S. Ct. 1227, 89 L. Ed. 1806 (activities of watchmen in a general office building where no actual manufacturing took place, and with numerous and constantly changing tenants, not covered). For a useful analysis of the meaning of 'closely related', see Mitchell v. H. B. Zachry Co., 1960, 362 U.S. 310, 319-321, 80 S. Ct. 739, 4 L. Ed. 2d 753. Wright's activities as a watchman took place where the used brick were physically produced, as in Kirschbaum. The brick were transported directly from the Brill Site by Della Vecchia's trucks into a neighboring state. There were no intermediate processes or places separating the activity of the watchman and the physical production of the goods which entered commerce. The activities of the watchman, Wright, were thus 'closely related' to the production of goods and fall within Section 203(j). From this it follows that Wright is covered by the Act.
This conclusion is entirely consistent with the holding in Sams v. Beckworth, D.C.E.D.Tex., 168 F.Supp. 686, affirmed 5 Cir., 1958, 261 F.2d 889, another case relied on by defendant. There a watchman in a junkyard was held not covered by the Act. But in Sams, the scrap guarded by the watchman was first sold to local junk dealers who in turn sold a substantial amount of scrap to certain steel foundries, also located in the same state. The foundries processed the scrap into steel products and only thereafter did any of the scrap enter into the channels of interstate commerce. 168 F.Supp. at pages 687-688. The court held, and correctly so, that the activities of the watchman were not an occupation 'closely related' to the production of goods for commerce. There were too many steps intervening between the watching activity in the junkyard and the production in the foundries of the steel products that entered commerce. Comparable distinguishing features are present in another case relied upon by defendant, Mitchell v. Jaffe, 5 Cir., 1958, 261 F.2d 883.
Since Wright, in his capacity as a watchman, is covered by the Act, and since defendants have wilfully failed to pay him the minimum wage required by Section 206 and overtime required by Section 207, it follows that defendants are guilty under Counts I and II as charged. Defendants have admitted wilful failure to keep any records of employment as required by Section 211(c) of the Act. Thus, they are guilty as charged under Count IV, as well.
We now return to the other employee at issue: Horace Spikes. Spikes was employed by the United Wrecking Corporation at the Brill Site for 28 to 30 weeks between June and December, 1958. He had first been hired at the site as a 'burner.' A 'burner' uses an acetylene torch to cut scrap steel into pieces so that it can be handled and loaded onto trucks. For this work Spikes was paid $ 1.50 an hour, but after six weeks he was transferred to work as a truck driver. At the same time, he received a 15-cent raise to $ 1.65 an hour. Thereafter, he drove a truck whenever he wasn't 'burning.' Spikes' normal working hours were from 8:00 in the morning until 5:30 or 6:00, sometimes 7:00, in the evening. Spikes also worked on several weeks ends. He worked eight to ten Sundays and an unknown number of Saturdays -- but at any rate, more Saturdays than Sundays. When Spikes worked on a Saturday, he received his usual weekly wage of $ 1.65 an hour. On Sundays, he received $ 2. He received his pay at all times in an envelope which he picked up at the office of the United Wrecking Corporation.
Since it was stipulated that Spikes is covered by the Act, we need only determine whether the facts, as found above, show defendants are guilty of wilful failure to pay Spikes overtime wages. The court finds defendants guilty under Count II as to Spikes because the facts show he worked more than 40 hours a week and defendants failed to pay him time and a half over time as required by 29 U.S.C.A. § 207. On review of the entire record, the court concludes that this failure on the part of defendants was deliberate and wilful.
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