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STEVENS v. WELCOME WAGON INTL.

December 14, 1966

Diane Stevens, Plaintiff
v.
Welcome Wagon International, Inc., Defendant


Kraft, D. J.


The opinion of the court was delivered by: KRAFT

In this action the plaintiff claims to recover certain minimum wages and overtime benefits under the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. §§ 201-219.

 This case was tried to the court on October 11, 1966, pursuant to a waiver of jury trial and a waiver of extensive*findings of fact and conclusions of law by the parties.

 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) *fn1" , 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 ...

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