1. A manufacturing corporation owned and operated an office
building in which 58% of the rentable space was used for its
central offices, where its production of goods for interstate
commerce was administered, managed and controlled, although the
goods were actually produced at plants located elsewhere.
that maintenance employees of the building were
engaged in an "occupation necessary to the production" of goods for
interstate commerce within the meaning of § 3(j) of the Fair Labor
Standards Act, and were therefore covered by the Act. Pp.
325 U. S. 680
325 U. S.
2. In an economic sense, executive officers and administrative
employees working in the central office building of an industrial
organization are actually engaged in the production of goods, and
the maintenance employees working in such a building are engaged in
occupations necessary to that production. P. 325 U. S.
3. In the absence of any contrary evidence, it cannot be assumed
that Congress in the Fair Labor Standards Act referred to
production in other than its ordinary and comprehensive economic
sense. P. 325 U. S.
145 F.2d 63 affirmed.
Certiorari, 323 U.S. 706, to review the reversal of a judgment
for the defendant, 52 F. Supp. 952, in a suit to recover overtime
compensation and liquidated damages under the Fair Labor Standards
Page 325 U. S. 680
MR. JUSTICE MURPHY delivered the opinion of the Court.
Once again, as in Kirschbaum v. Walling, 316 U.
, we are required to consider the application of
the Fair Labor Standards Act of 1938 [Footnote 1
] to employees engaged in activities relating to
the maintenance and operation of a building.
In the Kirschbaum
case, we held that the Act does apply
to such employees working in a loft building in which large
quantities of goods for interstate commerce are physically
produced. In the instant case, the porters, elevator operators, and
night watchmen in question work in a 24-story office building in
the business district of New York City. The building is owned and
operated by the petitioner, the Borden Company, which is a New
Jersey corporation engaged in the business of manufacturing milk
products and other food products. Petitioner occupies approximately
17 of the 24 floors and 58% of the total rentable area. The
remainder of the office space is leased to various tenants, none of
which was found by the District Court to produce, manufacture,
handle, process, or in any other manner work on any goods in the
building. [Footnote 2
Petitioner has manufacturing plants and factories in both the
United States and Canada, and its products are sold in large
volumes throughout this and other countries. These establishments
are admittedly engaged in the production of goods for interstate
commerce. The heart of
Page 325 U. S. 681
this industrial empire, however, lies in the central office
building in New York City. Here, the entire enterprise is
supervised, managed, and controlled.
In this building, the directors meet and the corporate officers
conceive and direct the policies of the company. Although
geographically divorced from the manufacturing plants, employees
working in this building dictate, control, and coordinate every
step of the manufacturing processes in the individual factories. By
means of direct teletype wires, they maintain detailed and
meticulous supervision of the plants, the local superintendents
exercising discretion only in the conduct of routine matters. While
no products are actually processed or sold in the building, the
purchase of raw materials and supplies, the methods of production,
the amounts to be produced, the quantity and character of the
labor, the safety measures, the budgeting and financing, the legal
matters, the labor policies, and the maintenance of the plants and
equipment are all directed from this building. Such are the
activities of petitioner's central office which is maintained,
serviced, and guarded by the respondent employees.
The respondents brought this suit against petitioner to recover
overtime compensation and liquidated damages, plus reasonable
counsel fees. The District Court denied relief, holding that they
were not entitled to the benefits of the Act under the rule of the
] 52 F. Supp. 952. The Second Circuit Court of Appeals
reversed the judgment. 145 F.2d 63. We took the case because
Page 325 U. S. 682
of the asserted conflict with the decision of the Tenth Circuit
Court of Appeals in Rucker v. First National Bank,
F.2d 699, and because of the importance of the issue as to the
application of the Kirschbaum
doctrine to such facts as
are here presented.
Under Section 7(a) of the Act, overtime compensation must be
paid to all employees "engaged in commerce or in the production of
goods for commerce." As to the latter category of employees, it is
unnecessary that they directly participate in the actual process of
producing goods, inasmuch as Section 3(j) provides that,
"for the purposes of this Act, an employee shall be deemed to
have been engaged in the production of goods if such employee was
employed . . . in any process or occupation necessary to the
production thereof, in any State."
Our problem thus is to determine whether the respondent
maintenance employees are engaged in a process or occupation
necessary to the production of goods for commerce, so as to come
within the ambit of Section 7(a).
case made it clear that the work of
maintenance employees in a building where goods were physically
manufactured or processed had
"such a close and immediate tie with the process of production
for commerce, and was therefore so much an essential part of it,
that the employees are to be regarded as engaged in an occupation
'necessary to the production of goods for commerce.'"
316 U.S. at 316 U. S.
-526. The maintenance of a safe, habitable building,
with adequate light, heat and power, was deemed necessary to the
production of goods for commerce. See also Walton v. Southern
Package Corp., 320 U. S. 540
Armour & Co. v. Wantock, 323 U.
. The only distinction between this and the
case lies in the fact that here, the employees
work in a building where production of goods is administered,
managed, and controlled, rather than carried on physically. We
hold, however, that this distinction is without economic
Page 325 U. S. 683
or statutory significance, and that it cannot form the basis for
concluding that the respondent employees are engaged in occupations
unnecessary to the production of goods for commerce.
In an economic sense, production includes all activity directed
to increasing the number of scarce economic goods. It is not simply
the manual physical labor involved in changing the form or utility
of a tangible article. Such labor is but an integral part of the
coordinated productive pattern of modern industrial organizations.
Equally a part of that pattern are the administration, management,
and control of the various physical processes, together with the
accompanying accounting and clerical activities. Economic
production, in other words, requires planning and control as well
as manual labor. [Footnote 4
He who conceives or directs a productive activity is as essential
to that activity as the one who physically performs it. From a
productive standpoint, therefore, petitioner's executive officers
and administrative employees working in the central office building
are actually engaged in the production of goods for commerce just
as much as are those who process and work on the tangible products
in the various manufacturing plants. And since the respondent
maintenance employees stand in the same relation to this production
as did the maintenance workers in the Kirschbaum
follows that they are engaged in occupations "necessary" to such
production, thereby qualifying for the benefits of the Fair Labor
Page 325 U. S. 684
We find nothing in the Act militating against this conclusion.
Sections 7(a) and 3(j) both speak of production without attempting
to limit its meaning to physical labor. Section 3(j), in
particular, defines the term "produced" not only in the physical
sense of manufacturing, mining, and handling, but also in the more
general sense of producing or "in any other manner" working on
goods. In the absence of any contrary evidence, we are unable to
assume that Congress used the term in other than its ordinary and
comprehensive economic sense. Indeed, the fact that Section
13(a)(1) specifically excludes from the provisions of Sections 6
and 7 those employees employed in a bona fide
administrative or professional capacity is clearly consistent with
the conclusion that these activities are included within the
concept of production as that term is used in the Act, and that
full effect should be given that fact unless otherwise provided.
Thus, where, as here, the work of employees is essential or
necessary to such executive, administrative, or professional
activities of a productive nature, the employees fall within the
purview of Section 7(a) even though those directly engaged in such
activities are, by express exemption, precluded from sharing in its
Nor do we find in the interpretative principles laid down in the
case any basis for holding that the respondent
employees are not "necessary" to petitioner's production. Since
they bear the same relation to production as did the maintenance
employees in that case, they cannot be considered any less
essential to production; nor can this conclusion have any different
"implications in the relation between state and national
authority." 316 U.S. at 316 U. S. 525
Petitioner's industrial organization is such that the operation and
maintenance of a central office building is essential to the
economy, efficiency, and continuity of production. In short, this
office is "part of an integrated effort for the production of
goods," Armour & Co. v.
Page 325 U. S. 685
Wantock, supra, 323 U. S. 130
and the statutory consequences that flow from that fact cannot be
The judgment below is
MR. JUSTICE FRANKFURTER concurs in the result.
52 Stat. 1060, 29 U.S.C. § 201 et seq.
The leasing of space to these tenants is incidental to the use
of the building by the Borden Company, and we need not consider
whether the activities of the tenants are such as to constitute
production of goods for commerce.
The District Court also ruled that the preparation and drafting
of labels, photostat, and advertising material in petitioner's
central office did not constitute "production of goods" within the
meaning of the Act, and that the case in this respect was
controlled by McLeod v. Threlkeld, 319 U.
, and Stoike v. First National Bank,
N.Y. 195, 48 N.E.2d 482. The Circuit Court of Appeals, however,
found it unnecessary to pass upon this phase of the case. We
likewise have no occasion to express our views on this matter,
since the determination of the main issue is sufficient to dispose
of this case.
In the words of the court below,
"As was observed over a century ago, every process of
manufacture (indeed, for that matter, every process by which men
can affect the outside world at all) may be resolved into the
movement of things in space, and it would be absurd to say that,
although what the artisans do in the factory, or the dispatching
clerks do upon the shipping platforms, is 'necessary' to
'production,' the directions they receive that govern all the
movements they impart are not 'necessary.'"
145 F.2d at 65.
MR. CHIEF JUSTICE STONE, dissenting.
No doubt there are philosophers who would argue what is implicit
in the decision now rendered -- that, in a complex modern society,
there is such interdependence of its members that the activities of
most of them are necessary to the activities of most others. But I
think that Congress did not make that philosophy the basis of the
coverage of the Fair Labor Standards Act. It did not, by a "house
that Jack built" chain of causation bring within the sweep of the
statute the ultimate causa causarum
which result in the
production of goods for commerce. Instead, it defined production as
a physical process. It said in § 3(j), "[p]roduced' means
produced, manufactured, mined, handled, or in any other manner
worked on," and declared that those who participate in any of these
processes "or in any process or occupation necessary to" them are
engaged in production and subject to the Act.
In Kirschbaum v. Walling, 316 U.
, after pointing out that Congress did not
undertake to make the Act applicable to all occupations which
affect commerce, we held that the services of elevator men and
other service employees in a manufacturing loft building, where
those services contributed to and assisted the manufacturing
process carried on there, were within the Act. But nothing then
decided or said seems to me to justify our saying that the elevator
men and other maintenance employees in an office building in which
no manufacturing is done either participate in or are necessary to
the manufacturing process because tenants of its building are
Page 325 U. S. 686
or administrative officers of a company which does manufacturing
The fact that it is convenient or even necessary for the
president of the company to ride in an elevator does not seem to me
to meet the requirement of the statute that the occupation must be
one necessary to the physical process of production. The statute
includes those who are necessary to that process, but it does not
also include those who are necessary to them. The manufacturing
process could proceed without many activities which are necessary
or convenient to the executive officers of a manufacturing company,
but which do not in any direct or immediate manner contribute to
the manufacturing process as did the services rendered in
Kirschbaum v. Walling, supra.
The services rendered in this case would seem to be no more
related, and no more necessary, to the processes of production than
the services of the cook who prepares the meals of the president of
the company or the chauffeur who drives him to his office.
Compare McLeod v. Threlkeld, 319 U.
. All are too remote from the physical process of
production to be said to be, in any practical sense, a part of or
necessary to it.
I would reverse the judgment.
MR. JUSTICE ROBERTS joins in this opinion.