Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Appellant, v. BEREUTER‘S, INC., Appellee.
No. 82-1711.
United States Court of Appeals, Eighth Circuit.
Decided April 13, 1983.
Rehearing Denied June 22, 1983.
704 F.2d 1034
Because of this square conflict between the majority‘s permission to plead anew and the policy of Rule 11 that (B) pleas cannot be withdrawn, I would interpret “shall” in Rule 11(e)(2) as directory rather than mandatory,12 and conclude that the sentencing judge‘s failure to remind the defendant of this characteristic of its class (B) plea was harmless error, not affecting the defendant‘s substantial rights, and should be disregarded. Hence, the sentence as pronounced should stand. I therefore respectfully dissent.
plea is the appropriate remedy for any deviation from the procedures prescribed by Rule 11. In the case at bar, however, such a consequence clearly conflicts with the policy which characterizes a (B) plea as one which cannot be withdrawn because of rejection by the Court of the sentencing recommendation contained in the type (B) plea.
T. Timothy Ryan, Jr., Sol. of Labor, Beate Bloch, Associate Sol., Joseph M. Woodward, Deputy Associate Sol., Gregory O‘Duden, Atty., U.S. Dept. of Labor, Washington, D.C., for appellant.
Nelson & Harding, William A. Harding, Lincoln, Neb., for appellee.
Before LAY, Chief Judge, and BRIGHT and ROSS, Circuit Judges.
BRIGHT, Circuit Judge.
The Secretary of Labor brought suit under the Fair Labor Standards Act of 1938,
I. Background.
The facts, as stipulated to by the parties, disclose that Bereuter‘s failed to pay Bert Barnes, a partsman, and Ricky Hans and Robert Peeks, service mechanics, the statutory overtime premium for hours worked in excess of forty hours per work week as provided for in
[A]ny salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers[.] [
29 U.S.C. § 213(b)(10)(A) (emphasis added).]
Bereuter‘s engages in a number of business activities including the retail sale of cars and trucks; the leasing of cars; the sale of hardware, tires, gasoline, parts, and batteries; and the wholesale sale of cars, trucks, gasoline and petroleum products. Bereuter‘s asserts that its main or “primary” business activity is the retail sale of automobiles and trucks and, therefore, maintains that it meets the requirements set forth in the exemption. Bereuter‘s contention rests on the fact that its annual sales in 1978 and 1979, the years in issue, disclose that more of its receipts came from the retail sales of automobiles and trucks than from any other of its business activities. According to the stipulation, a detailed analysis of the total volume of business done in 1978 and 1979 discloses the following:
| 1978 | 1979 | |
|---|---|---|
| Retail New and Used Car & Truck Sales | $229,412.00 | $227,601.50 |
| Wholesale Sales of Cars, Trucks, Gasoline & Petroleum Products | $72,016.82 | $138,002.26 |
| Other Retail Sales of Hardware, Tires, Batteries, Parts, Labor & Misc. | $179,279.00 | $209,879.24 |
The Secretary, on the other hand, asserts that Bereuter‘s does not qualify for the exemption because less than one-half of that establishment‘s annual dollar volume of sales and business receipts comes from the retail sale of automobiles and trucks. The Secretary relies on a regulation,
(d) Primarily engaged. As used in section 13(b)(10), primarily engaged means the major part or over 50 percent of the salesman‘s, partsman‘s, or mechanic‘s time must be spent in selling or servicing the enumerated vehicles. As applied to the establishment, primarily engaged means that over half of the establishments annual dollar volume of sales made or business done must come from sales of the enumerated vehicles. [
29 C.F.R. § 779.372(d) .]
The district court rejected the Secretary‘s application of the regulation to Bereuter‘s. The district court noted that while the over-fifty-percent requirement is a feasible means of determining the primary business activity of a business engaged in only two lines, “the regulation is ill-adapted to the situation involving a business engaged in more than two lines of business activity.” The district court observed that under the interpretation proposed by the Secretary, the business activity responsible for generating the greatest percentage of the total annual dollar volume of business done, although not fifty percent of that total, could not, under the definitional activity test of
II. Discussion.
The Fair Labor Standards Act exemptions are to be narrowly construed against the employer asserting them, and ought to be applied only in those circumstances which plainly and unmistakably come within their terms and spirit. See Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960); Hodgson v. Jones, 453 F.2d 515, 519 (8th Cir. 1971). Moreover, the Secretary‘s interpretations are entitled to considerable weight. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944); Hodgson v. Jones, supra, 453 F.2d at 518-19.
Our examination of the sparse legislative history indicates Congress’ intention to exempt only those businesses which have as their essential nature the retail sales of automobiles, trucks or farm implements. The forerunner of the exemption here at issue was formulated in 1960 when Congress first considered the wide-ranging FLSA amendments enacted in 1961.1 In an amendment adopted by the Senate, Senator Anderson proposed to exempt those establishments which sold automobiles or trucks from the FLSA‘s wage and hour requirements. 106 Cong.Rec. 16691 (1960). The Senator explained that the purpose of the amendment was to exempt only “regular, ordinary automobile dealers * * * “; it was not intended to cover atypical, hybrid dealers such as those “who handled automobiles and who also handled gasoline, for example * * *.” Id. at 16693.
The exemption, as ultimately enacted in the 1961 amendments, covered establishments “primarily engaged” in the business
The 1966 amendments to the FLSA, which provide the most current version of the exemption here at issue, narrowed even further what Congress intended to be a circumscribed exemption. Prior to 1966, the Act exempted from both the minimum wage and overtime provisions all employees of automobile, truck, and farm implement dealers. The 1966 amendments had an overall limiting effect on the exemption by restricting it to the specific employee categories of “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, * * * trucks, [or] farm implements * * *.” See 80 Stat. 830, 836; Schultz v. Louisiana Trailer Sales, Inc., 428 F.2d 61, 66 (5th Cir.), cert. denied, 400 U.S. 902 (1970).
We think that in order to determine whether the employer establishment is primarily engaged in the business of selling automobiles, trucks, or farm implements to ultimate purchasers or whether the primary business activities of the establishment are in other lines of endeavor, courts must put retail automobile and truck business on one side of the equation and the other business activities of the establishment on the other side. A company will qualify for the exemption in
It cannot be disputed that Bereuter‘s received more gross income in each year in question from its retail sales of automobiles and trucks than from either the wholesale sale of automobiles, trucks, gasoline and petroleum products or its retail sales such as hardware, tires, batteries and parts. Nevertheless, the combination of gross revenue from the other lines of business exceeded, in each year, the gross revenue from the retail sale of automobiles and trucks.2
Accordingly, we hold the Secretary‘s application of the regulation to Bereuter is valid and determine that Bereuter‘s does not qualify for the exemption because more than one-half of its gross proceeds do not emanate from the retail sales of automobiles, trucks, or farm implements.
We reverse and remand for further proceedings and the entry of a judgment for the Secretary consistent with this opinion.
BRIGHT, Circuit Judge.
ROSS, Circuit Judge, dissenting.
I do not agree with the reasoning of the majority and I would affirm this case on the basis of Judge Urbom‘s well-reasoned opinion.
ROSS, Circuit Judge.