Such factors may prove decisive in particular situations where the employee's work, although "directly essential" to the production of goods by someone other than his employer, is not far from the borderline between those activities which are "directly essential" and those which are not. In such a situation, it may appear that his performance of the work is so much a part of an essentially local business carried on by his employer without any intent or purpose of aiding production of goods for commerce by others that the work, as thus performed, may not reasonably be considered "closely related" to such production. In other situations, however, where the degree to which the work is directly essential to production by the producer is greater the fact that the independent employer is engaged in a business having local aspects may not be sufficient to negate a close relationship between his employees' work and such production. And it seems clear that where the independent employer operates a business which, unlike that of the ordinary local merchant, is directed to providing producers with materials or services directly essential to the production of their goods for commerce, the activities of such a business may be found to be "closely related" to such production. In such event, all the employees of the independent employer whose work is part of his integrated effort to meet such needs of producers are covered as engaged in work closely related and directly essential to production of goods for commerce.
Where such a merchant's business is essentially local in nature, selling its goods to the usual miscellany of local customers without any particular intent or purpose of aiding production of other goods for commerce by such customers, the local merchant's employees are not doing work both "closely related" and "directly essential" to production, so as to bring them within the reach of the Act, merely "because some of the customers * * * are producing goods for interstate [or foreign] commerce." Therefore, if they do not otherwise engage "in commerce" (see §§ 776.8 to 776.13 ) or in the "production" of goods for commerce, they are not covered by the Act.
In such a situation, moreover, even where the work done by the employees is "directly essential" to such production by their employer's customers, it may not meet the "closely related" test. But the more directly essential to the production of goods for commerce such work is, the more likely it is that a close and immediate tie between it and such production exists which will be sufficient, notwithstanding the local aspect of the employer's business, to bring the employees within the coverage of the Act on the ground that their work is "closely related" as well as "directly essential" to production by the employer's customers.
Such a close and immediate tie with production exists, for example, where the independent employer, through his employees, supplies producers of goods for commerce with things as directly essential to production as electric motors or machinery or machinery parts for use in producing the goods of a manufacturer, for mining operations, or for production of oil, or for other production operations or the power, water, or fuel required in such production operations, to mention a few typical examples. The fact that these needs of producers are supplied through the agency of businesses having certain local aspects cannot alter the obvious fact that the employees of such businesses who supply these needs are doing work both "closely related" and "directly essential" to production by the employer's customers. As the United States Supreme Court has stated: "Such sales and services must be immediately available to * * * [the customers] or their production will stop."
It should be noted that employees of independent employers providing such essential goods and services to producers will not be removed from coverage because an unsegregated portion of their work is performed for customers other than producers of goods for commerce. For example, employees of public utilities, furnishing gas, electricity or water to firms within the State engaged in manufacturing, mining, or otherwise producing goods for commerce, are subject to the Act notwithstanding such gas, electricity or water is also furnished to consumers who do not produce goods for commerce.
On the other hand, the legislative history makes it clear that employees of a "local architectural firm" are not brought within the coverage of the Act by reason of the fact that their activities "include the preparation of plans for the alteration of buildings within the State which are used to produce goods for interstate commerce." Such activities are not "directly essential" enough to the production of goods in the buildings to establish the required close relationship between their performance and such production when they are performed by employees of such a "local" firm. Of course, this result is even more apparent where the activities of the employees of such a "local" business may not be viewed as "directly essential" to production. It is clear, for example, that Congress did not believe "employees of an independently owned and operated restaurant" should be brought under the coverage of the Act because the restaurant is "located in a factory." To establish coverage on "production" grounds, an employee must be "shown to have a closer and more direct relationship to the producing * * * activity" than this.
Typical of the employees in this covered group are those repairing or maintaining the machinery or buildings used by the producer in his production of goods for commerce and employees of a watchman or guard or patrol or burglar alarm service protecting the producer's premises. On the other hand, the House managers of the bill made it clear that employees engaged in cleaning windows or cutting grass at the plant of a producer of goods for commerce were not intended to be included as employees doing work "closely related" to production on "on behalf of" the producer where they were employed by a "local window-cleaning company" or a "local independent nursery concern," merely because the customers of the employer happen to include producers of goods for commerce.17 A similar view was expressed with respect to employees of a "local exterminator service firm" working wholly within the State exterminating pests in private homes, in a variety of local establishments, "and also in buildings within the State used to produce goods for interstate commerce."
In H. Mgrs. St., 1949, p. 14 it is said, "Employees engaged in such maintenance, custodial and clerical work will remain subject to the Act, notwithstanding they are employed by an independent employer performing such work on behalf of the manufacturer, mining company, or other producer for commerce. All such employees perform activities that are closely related and directly essential to the production of goods for commerce."
Reference should be made to section 13 (a) (6) of the Act providing an exemption from the wage and hours provisions for employees employed in agriculture and for certain employees of nonprofit and sharecrop irrigation companies.
29 C.F.R. §776.19