47 F. Supp. 298 | N.D. Ga. | 1942
Plaintiff filed suit seeking to recover from defendant unpaid minimum wages and overtime compensation alleged to be due under the provisions of Sections 6 and 7 of the Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 206, 207. The case has been submitted on a motion for a summary judgment and stipulation of facts.
From the facts stipulated it appears that the sole business of the defendant is the ownership and operation of eighteen retail drug stores in Fulton County, Georgia, from which all' of its sales are made; that in the operation of its eighteen retail drug stores defendant maintains its general offices and a warehouse in a four story building in the City of Atlanta, which building is physically separated from the eighteen retail stores. The office and warehouse serve no purpose or function except to carry on and assist in carrying on all of the defendant’s retail stores, which obtain practically all of their merchandise from the warehouse as needed; delivery being made by the warehouse trucks. Merchandise is ordered both from within and without the State and is received principally at the warehouse opened and stored there, and distributed from time to time to the retail stores. Separate accounts and books are kept for each individual store, including inventory records. All merchandise delivered to a particular store is charged to it and separate monthly profit and loss reports are made for each retail store. All sales on credit are charged to individual stores and the office and warehouse expenses are based upon the volume of sales to each individual store and pro-rated accordingly. Approximately forty-four per cent, of the merchandise handled by the defendant involves in some aspect interstate business either in purchase or delivery. Approximately sixty-six per cent, of the goods involves exclusively intrastate transactions.
The general buying public does not come to the building housing the warehouse and office to make purchases, and there are no show windows or displays of merchandise in this building which are intended for the public. Employees in this building include nine office employees and six warehouse employees.
The duties of plaintiff included work in both the office and the warehouse, assist-' ing in the ordering of merchandise both from within and without the State, check-' ing the merchandise so ordered upon its receipt, assisting in the handling of consigned merchandise, both within and without the State, and including the return of consigned merchandise to points without the State.
The defenses of defendant asserted by its motion for summary judgment are: One, that the plaintiff was not engaged in commerce or for the production of goods for commerce, and two, that even if so engaged, plaintiff was exempt by the terms of Section 13(a) (1) and 13(a) (2), 29 U.S.C.A. § 213(a) (1,2).
The facts stipulated clearly show that the plaintiff is engaged in commerce and her employment subject to the provisions of Sections 6 and 7 of the Fair Labor Standards Act, supra, unless her employment falls within the exemption provided by Sections 13(a) (1) or (a) (2). In the view entertained it is unnecessary to consider the exemption provided for in Section 13(a) (1) for it is clear to the Court that under the expressed terms of Section 13(a) (2) the provisions of Sections 6 and 7 are not applicable. It is there provided: “Section 13(a). The provisions of sections 6 and 7 [sections 206 and 207 of this title] shall not apply with respect to * * * any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce.” Plaintiff contends, as does the Administrator of the Wage and Hour Division of the United States Department of Labor, who was granted leave to file a brief as amicus curiae, that the defendant’s complete business is not a “retail or service establishment”, and that the exemption applies only to defendant’s retail stores separately and does not apply to the defendant’s warehouse and office. It is the defendant’s contention that its entire organization, which in fact sells only at retail in intrastate commerce is a “retail establishment” within the terms of the exemption provided.
It may be stated at the outset that while in applying the provisions of Sections 6 and 7 of the Fair Labor Standards Act the test of coverage related to the nature of the employment of the particular employee (Fleming v. A. B. Kirschbaum, 3 Cir., 124 F.2d 567), as concerns exemptions “the criterion used in Section 13(a) (2), on the other hand is based upon the nature of the business conducted
Furthermore, as the present case is viewed the office and warehouse do not sell anything. While there may be books and inventories in separate branches or departments of a business for the purpose of its more efficient conduct, one cannot sell to oneself and from the standpoint of determining the question of a retail establishment the situation is no different than if a warehouse across the street from a single store was used by the proprietor as a storage place and in which was his office wherefrom was conducted the purchasing and the keeping of records of his business. It appears so unreasonable to determine the character of an establishment, singly owned and engaged only in intrastate retail sales, upon the basis of physical location of its buildings, that such intention should not be imputed to the
Plaintiff relies chiefly upon the cases of Fleming v. American Stores Company, D.C., 42 F.Supp. 511; and Walling v. Goldblatt Bros., Inc., 7 Cir., 128 F.2d 778, 784. In the Goldblatt case it is expressly stated that the ruling should “not prejudice in any manner defendant’s right to prove any of the statutory exemptions.” The point now under consideration was not- passed upon. In the American Stores Company case, supra, Judge Kalodner very carefully pointed out with reference to the exemption for retail establishments the immense volume of varied business done by the American Stores Company, including manufacturing, printing and transporting in interstate commerce, as well as the fact that sales were made to subsidiary corporations whose operations were separate and distinct and who made separate tax returns, and to the further fact that a principal'part of the business of each of the subsidiaries was primarily in interstate commerce. The American Stores Company case dealt with a parent organization and its subsidiaries having business ramifications in several states and as to which it was sought to relate each activity whether of manufacture or wholesale sales to the ultimate of retail sales. In the present case the whole business of the defendant is retail sales and such participation in commerce as is shown is purely incidental to its retail sales. If the defendant was engaged in any other business or made any substantial wholesale sales to other parties the exemption claimed would be unavailable, for it would not then be a retail establishment.
Of necessity each case must be governed by its facts and as recognized in Kirschbaum v. Walling, June 1, 1942, 316 U.S. 517, 62 S.Ct. 1116, 1118, 86 L.Ed. 1638, to search for a “dependable touchstone” by which to determine the questions arising under the statute from varying facts and situations “is as rewarding as an attempt to square the circle.” To appropriate further thought there expressed, it may be said that when the question of determination of whether a particular business or portion thereof is or is not a “retail establishment” is sought to be made solely upon the physical location of its component parts, we are justified in the generalization that in such an instance “those charged with the duty of legislating are reasonably explicit and do not entrust its attainment to that retrospective expansion of meaning which properly deserves the stigma of judicial legislation.” Kirschbaum v. Walling, supra. Being unable to read into the words of the statute that a retail establishment whose sales are solely in intrastate commerce is removed from the exemption provided in Section 13(a) (2) of the Act solely because its office and warehouse is physically detached from the location where its sales are actually consummated, it is concluded that the defendant is exempt from the provisions of Sections 6 and 7 of the Fair Labor Standards Act, supra, and the defendant’s motion for summary judgment in its favor is therefore granted and the plaintiff’s complaint ordered dismissed.