The opinion of the court was delivered by: SNYDER
The Secretary of Labor, pursuant to the provisions of Section 17 of the Fair Labor Standards Act, Act of June 25, 1938, C. 676, 52 Stat. 1060, as amended, 29 U.S.C. Section 201 et seq., seeks to enjoin defendant from violating the overtime provisions of the Act, from continuing withholding of overtime compensation due employees, from violating the provisions of the Act relating to record keeping, and to enjoin defendant from violating the child labor provision of the Act.
After careful consideration of all the testimony adduced during the hearing in this matter, the Court makes the following:
1. The defendant, Robert Parnham, resides at Sheridan Terrace, Irwin, Westmoreland County, Commonwealth of Pennsylvania, and operates an auto body repair service at two locations, one located in the Borough of Irwin and the other in the Borough of North Irwin, in Westmoreland County, Pennsylvania, all within the jurisdiction of this Court.
2. Defendant's employees, as listed on the attached Schedule A, operate tow trucks, receive emergency service calls, strip abandoned automobiles preparatory to salvage, in accordance with a contract with the Pennsylvania Turnpike Commission granting Robert Parnham exclusive status as the authorized service agent in District No. 3, between Mileage Posts 50 and 75, on the Pennsylvania Turnpike. Also, a portion of the defendant's business was attributable to customers who sought out defendant's garage apart from those encountering difficulties on the Turnpike.
3. Defendant had a fleet account arrangement with approximately ten major carriers which provided that accidents or mechanical breakdowns occurring within Turnpike District No. 3 would be serviced by the defendant and such services would be charged directly to the home offices of the carriers.
4. Defendant also services automobiles whose owners were members of the American Automobile Association (hereinafter referred to as A.A.A.). Half the towing costs and all the service charges in such cases were charged directly to A.A.A., the automobile owner paying the portion of the charge not covered. Defendant similarly performed services not charged to the motorist for vehicles under lease from rental agencies such as Hertz, Avis, U-Haul, etc.
5. Defendant also did substantial repairs to a fleet of cabs owned by Underhill Taxi Cab, Inc., a wholly owned corporation of the defendant, Robert Parnham. Such repairs were rendered on a daily basis and the value of such repairs was not included in the annual dollar volume of business of Bob's Auto Repair.
6. Part of the contract with the Pennsylvania Turnpike Commission required defendant to remove abandoned vehicles from the Turnpike and these abandoned vehicles were towed to the defendant's garage where they would be stripped by defendant's employees for usable parts. The usable parts were used to repair either cars towed from the Turnpike or defendant's taxis. After the abandoned automobiles were stripped, defendant would secure title to the automobiles and then sold the auto bodies to junk men where they would be compacted and transferred to a processing facility owned by, among others, United States Steel to be reclaimed as salvaged iron.
7. The defendant also sold truck tires to motor carriers.
8. The employees, as listed on the attached schedule, except Albert Booth and Arthur Stout, regularly and recurringly during each week for which violations of the Act have been alleged, engaged in one or more of the above activities.
9. Each of defendant's employees worked in excess of forty hours during each and every workweek that they were employed with the defendant.
10. Defendant failed to pay any employee time and one-half of the regular rate for hours worked in excess of forty hours in any workweek.
11. The defendant's employees who were engaged in towing wrecked and disabled vehicles from the Pennsylvania Turnpike, were essentially engaged in removal of obstructions to the flow of interstate traffic and/or engaged in commerce within the meaning of the Act.
12. Although the employees' work was not exclusively devoted to the towing of vehicles from interstate highways, the towing activities were part of an industry whose cumulative effect upon interstate commerce was substantial.
14. John Kamarinski devoted, at most, 10 percent of his time to managerial duties and the defendant has thus failed to show that he is entitled to an exemption as an executive employee.
15. Defendant employed one William Lehman as a tow truck operator before Lehman's eighteenth birthday.
16. Defendant failed to maintain adequate, accurate records as required by Section 11(c) of the Act and the regulations published pursuant thereto as found at 29 C.F.R. 516.
17. The sum of $7,667.00 as computed by the Secretary represents a conservative estimate of overtime due to unknown employees.
It seems very clear since the Supreme Court case of Overstreet v. Northshore Corp., 318 U.S. 125, 128-129, 63 S. Ct. 494, 87 L. Ed. 656 (1943), that we are involved in the application of the "practical test" as to that which is indispensable to interstate movement. In the Overstreet case, the Supreme Court was required to consider the application of the Fair Labor Standards Act to persons employed in the operations of a toll bridge over which persons and goods passed in interstate commerce. In an opinion by Mr. Justice Murphy, the Court set forth as follows:
"Our starting point is respondent's concession that no question of constitutional power is involved, but only the ascertainment of Congressional intent, that is, did Congress mean to include employees such as petitioners within the Act. In arriving at that intent it must be remembered that Congress did not choose to exert its power to the full by regulating industries and occupations which affect interstate commerce. See A.B. Kirschbaum Co. v. Walling, 316 U.S. 517, 522, 523, 86 L. Ed. 1638, 1646, 1647, 62 S. Ct. 1116; Walling v. Jacksonville Paper Co., 317 U.S. 564, 87 L. Ed. 460, 63 S. Ct. 332, ante, 460, 63 S. Ct. 332 (decided January 18, 1943). Respondent contends that petitioners are in this category, that their activities are local and at most only affect commerce. But the policy of Congressional abnegation with respect to occupations affecting commerce is no reason for narrowly circumscribing the phrase 'engaged in commerce.' We said in the Jacksonville Paper Co. Case, supra, 'It is clear that the purpose of the Act was to extend federal control in this field throughout the farthest reaches of the channels of interstate commerce.' And in determining what constitutes 'commerce' or 'engaged in commerce' we are guided by practical considerations. Jacksonville Paper Co. Case, supra, and see also Shanks v. Delaware, L. & W.R. Co., 239 U.S. 556, 558, 60 L. Ed. 436, 36 S. Ct. 188, LRA 1916C 797, dealing with what will shortly be pointed out as a similar question in the coverage of the Federal Employers' Liability Act.
A practical test of what 'engaged in interstate commerce' means has been evolved in cases arising under the Federal Employers' Liability Act (45 USCA §§ 51 et seq.) which, before the [August 11] 1939 amendment (see 53 Stat 1404, c 685), applied only where injury was suffered while the carrier was engaging in interstate or foreign commerce and the injured employee was employed by the carrier 'in such commerce.' 35 Stat 65, c 149. In determining the reach of that phrase, the case of Pedersen v. Delaware, L. & W.R. Co., 229 U.S. 146, 57 L. Ed. 1125, 33 S. Ct. 648, Ann Cas 1914C 153, 3 NCCA779, held that an employee who was injured while carrying bolts to be used in repairing a railroad bridge over which interstate trains passed was engaged in interstate commerce within the meaning of the Liability Act. It was pointed out that tracks and bridges were indispensable to interstate commerce and 'that the work of keeping such instrumentalities in a proper state of repair while thus used is so closely related to such commerce as to be in practice and in legal contemplation a part of it.'
We think that practical test should govern here. Vehicular roads and bridges are as indispensable to the interstate movement of persons and goods as railroad tracks and bridges are to interstate transportation by rail. If they are used by persons and goods passing between the various States, they are instrumentalities of interstate commerce. Cf. Covington & C. Bridge Co. v. Kentucky, 154 U.S. 204, 218, 38 L. Ed. 962, 14 S. Ct. 1087, 4 Inters Com Rep 649. Those persons who are engaged in maintaining and repairing such facilities should be considered as 'engaged in commerce' even as was the bolt carrying employee in the Pedersen Case, 229 U.S. 146, 57 L. Ed. 1125, 33 S. Ct. 648, Ann. Cas. 1914C 153, 3 NCCA779, supra, because without their services these instrumentalities would not be open to the passage of goods and persons across state lines. And the same is true of operational employees whose work is just as closely related to the interstate movement."
In Gray v. Swanney-McDonald, Inc., 436 F.2d 652 (9th Cir. 1971) cert. den. 402 U.S. 995, 29 L. Ed. 2d 161, 91 S. Ct. 2173, tow truck drivers appealed from the dismissal of their action against Swanney-McDonald, Inc. seeking to recover overtime compensation under the Fair Labor Standards Act. In an opinion by Circuit Judge Hufstedler the following is set forth (at page 653):
"We first take up appellee's contention that the appellants were not engaged in interstate commerce and thus were not subject to the Act. Swanney-McDonald, Inc., is a California corporation having its principal place of business in Los Angeles where it operates an automotive tow service garage providing tow service and emergency road service for disabled motor vehicles in the greater Los Angeles area. Appellants were the drivers who did the actual towing and road servicing. Among the areas they serviced were a number of Interstate and U.S. Highways making up the freeway system of Los Angeles. On rare occasions calls were made out ...