June 25, 1962, after entering into a written contract. Her duties involved (1) offering a local customer service to local business establishments in Hazleton, Pennsylvania; (2) performing that service by contacting families in the Hazleton area to induce them to patronize the local merchants.
After ten days training at a school operated by the defendant in New York City, plaintiff returned to her home in Hazleton to undertake her hostess duties. Initially, she obtained service contracts from ten local business sponsors or subscribers, who agreed to utilize the Welcome Wagon service. Thereafter she contacted local families to publicize the local sponsors' business, with an ultimate goal of generating new business for the local retailers.
Additionally, plaintiff maintained daily, weekly and monthly reports of her activities, which she transmitted to the defendant in New York City and Memphis, Tennessee. The service contracts obtained by plaintiff, which she also sent to defendant, were not intended for resale, nor were they, in fact, sold by the defendant.
The "hostess" contract provided that plaintiff was to receive, as compensation for her services, 50 per cent of the gross receipts generating from calls made in her Hazleton territory. After the plaintiff made a "Welcome Wagon" call, the defendant would bill the local sponsor. Thereafter, Welcome Wagon remitted to the hostess one half of the amount paid by the local sponsor.
The plaintiff resigned her employment with defendant on January 4, 1963, and the defendant tendered $33.39 to her as full compensation for her services.
Essentially, the plaintiff claims that (1) in performing her duties she was engaged in interstate commerce and is entitled to benefits under §§ 206 and 207 of the Fair Labor Standards Act; or, alternatively, (2) by reason of the "enterprise" amendments to the Act, enacted in 1961, she is entitled to receive benefits because of the extension of the Act's coverage to service establishments.
In Mitchell v. Welcome Wagon, Inc., 139 F. Supp. 674 (W.D. Tenn. 1954)
, aff'd per curiam 232 F.2d 892 (6th Cir. 1956), the Court held that Welcome Wagon hostesses are neither engaged in commerce nor in the production of goods for commerce within the meaning of the Act.
At the trial the parties herein entered into a stipulation of pertinent facts (n. t. 63-68), which we adopt as findings. Many of the stipulated facts are taken verbatim from Mitchell v. Welcome Wagon, Inc., supra.
After careful consideration of the entire record, exhibits and the applicable law, we conclude that, as a matter of law, the plaintiff's activities were local in nature and were neither in commerce nor in the production of goods for commerce.
We now direct our attention to the plaintiff's alternative contention that the 1961 "enterprise" amendments to the Act afford her coverage. Specifically, the plaintiff relies on 29 U.S.C.A. § 203(s) (3) which now provides coverage for all employees of
"(3) any establishment of any such enterprise, except establishments and enterprises referred to in other paragraphs of this subsection, which has employees engaged in commerce or in the production of goods for commerce if the annual gross volume of sales of such enterprise is not less than $1,000,000;"
The parties have stipulated that the defendant's annual gross volume of sales was not less than $1,000,000 during the years 1962 and 1963. It was also stipulated that the defendant's service is utilized by 40,000 local business establishments located in 1300 communities, which are serviced by 4000 hostesses.
An explanation of the terms enterprise and establishment as used in the Act, is essential to an understanding of their applicability to the facts of the instant case. Enterprise, as defined and applied in subsections (r)
of 29 U.S.C.A. § 203 means, subject to specified limitations, "the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units, including departments of an establishment operated through leasing arrangements. "Legislative History, U.S. Code Cong. and Adm. News " pp. 1659, 1660 (1961).
Establishment is not defined in the Act, but is explained and distinguished from enterprise in 29 C.F.R. § 779.203
"Distinction between 'enterprise,' and 'establishment' and 'employer' ".