Opinion
No. 221.
March 29, 1946.
Appeal from the District Court of the United States for the District of Connecticut.
Action by L. Metcalfe Walling, Administrator of the Wage and Hour Division, United States Department of Labor, against the Connecticut Company to enjoin the defendant from failing to pay the employees in its power house time and one-half for hours worked over 40 a week. From a judgment for the plaintiff, 62 F. Supp. 733, the defendant appeals.
Affirmed.
Defendant operates electric trolley cars in New Haven, Connecticut, and its immediate vicinity, and motor bus lines in and between several Connecticut cities. It also operates a power plant in New Haven, at which it engages in the production and sale of electric power. The offices used by the company in its transportation activities are located at 129 and 185 Church Street in New Haven. Its power plant is located on Grand Avenue in Mill River, New Haven. Defendant employs 40 to 45 men at the powerhouse who work only at the powerhouse and who are on a separate payroll from that kept for defendant's local trolley and motor bus employees.
While some of the power is used by defendant in the operation of its electric trolley cars, defendant sells between twenty and thirty percent of the total power it produces to the New York, New Haven and Hartford Railroad which owns all of defendant's stock. The railroad employs this electrical energy to supply a power circuit running from New Haven to Wood-lawn Junction, New York, which furnishes electric power for the operation of interstate trains of all types moving between New Haven and New York City. It also uses the power to operate switch compressors in its freight yards, to operate locomotives which switch freight cars to the railroad spur tracks alongside factories, to operate elevators in the railroad's general office building in New Haven and for various other miscellaneous uses.
Defendant's power plant includes a motor generator set, installed in 1926, which is owned by the railroad but maintained and operated by the defendant's employees. Employees of the railroad assist in the annual cleaning of the generator, which requires a period of about two weeks. At least half of the power taken by the railroad is for the purpose of operating the motor generator. The defendant also sells small amounts of electric power to the City of New Haven for the operation of drawbridges, to Savin Rock Amusement Park and Lighthouse Point Amusement Park for the operation of carousels, to American Steel and Wire Company for the operation of a switching locomotive in its yard, and to Atlantic Bonded Warehouse Company for the operation of elevators. All these concerns pay the defendant for the power purchased in accordance with the rate schedules of the local power utility. Originally the power plant was used to furnish power exclusively for defendant's electric trolley cars. In 1915 it began to sell electric power to the other consumers previously described. In 1917 it erected a new and larger plant adjacent to the first plant and in 1924 built an addition to the plant which more than doubled the plant's installed capacity. These facilities, together with the motor generator set, comprise the Grand Avenue power plant. In 1921 defendant began operating motor buses in substitution for street railway operation and has continued this substitution until the present time. In 1944 motor bus operations accounted for almost 80 percent of the revenue received from street cars and buses. During the period of this substitution defendant has produced increasing amounts of electric power for sale to other consumers. When an engineering investigation in 1926 disclosed that the power plant would be operated more efficiently if more load could be imposed to keep the plant running above the minimum operation, the New York, New Haven and Hartford Railroad agreed to buy power so that the load could be increased. The power-house employees involved in this suit regularly work 48 hours each week on three rotating shifts. Approximately half are paid straight weekly salaries and the remainder are paid straight time hourly rates for all 48 hours. None of the employees is paid overtime compensation for hours in the workweek in excess of 40 hours.
Plaintiff, the Administrator of the Fair Labor Standards Act, brought this suit to enjoin defendant from failing to pay the employees in its power-house time and one-half for hours worked over forty a week.
The district court held that defendant's power plant employees were engaged in commerce and in the production of goods for commerce within the meaning of the Act. It also held that they were not exempt by virtue of the provisions of § 13(a)(9), 29 U.S.C.A. § 213(a)(9), which provides an exemption for local trolley or motor bus carriers, and enjoined violations of the Act.
The district court's opinion is reported in 62 F. Supp. 733.
Thomas J. O'Sullivan, of New Haven, for appellant.
William S. Tyson, of Washington, D.C. (Bessie Margolin, of Washington, D.C., George H. Foley, of Boston, Mass., and Morton Liftin and Frederick U. Reel, both of Washington, D.C., of counsel), for appellee.
Before L. HAND, CLARK and FRANK, Circuit Judges.
There is little to add to what was said in the opinion below. Aside from § 13(a)(9), the employees are obviously within the Act, without regard to the percentage of power sold for use in interstate commerce. Defendant's contention comes to this: Since it is a "local trolley carrier," none of its employees is covered by the Act because § 13(a)(9) expressly exempts "any employee" of such a carrier. Literally, that contention is correct. But it would mean that, no matter in what business, however extraneous to its functioning as a "local trolley carrier," defendant engaged, those employed in that extraneous business would be exempt. The policy of the Act, disclosed in its history, precludes the acceptance of such a literal construction.
Mabee v. White Plains Publishing Co. Inc., 66 S.Ct. 511.
Markham v. Cabell, 66 S.Ct. 193; A.H. Phillips, Inc., v. Walling, 324 U.S. 490, 493, 497, 498, 65 S.Ct. 807, 157 A.L.R. 876; Walling v. Jacksonville Paper Co., 317 U.S. 564, 571, 63 S.Ct. 332, 87 L.Ed. 460; Roland Electrical Co. v. Walling, 66 S.Ct. 413; Phillips v. Star Overall Co., 2 Cir., 149 F.2d 416, 420; Collins v. Kidd Dairy Ice Co., 5 Cir., 132 F.2d 79, 80; Davis v. Goodman Lumber Co., 4 Cir., 133 F.2d 52, 54; Walling v. Peoples Packing Co., 10 Cir., 132 F.2d 236.
Affirmed.