Roland Electrical Co. v. Walling
Annotate this Case
326 U.S. 657 (1946)
U.S. Supreme Court
Roland Electrical Co. v. Walling, 326 U.S. 657 (1946)
Roland Electrical Co. v. Walling
Argued October 8, 1945
Decided January 28, 1946
326 U.S. 657
Petitioner, a Maryland corporation having its principal office, place of business and a manufacturing plant in Baltimore, is engaged there in commercial and industrial wiring, electrical contracting, and dealing in electrical motors and generators for private, commercial, and industrial uses. It had approximately 1,000 active accounts, 99% of which were commercial or industrial firms. Of its 33 larger and most active accounts, one was a telephone company engaged in interstate commerce, four were engaged in the repair of ships, tugs, barges, and other boats intended for movement in interstate commerce, and (with one exception) the remainder were engaged in the production of goods for commerce as defined in § 3 of the Fair Labor Standards Act, shipping at least a substantial portion of their total production out of Maryland. All of petitioner's mechanics worked, in practically every work week, for some of these 33 customers, either in the repair of their motors or generators, the reconstruction of used motors sold to them, or in performing electrical work at their respective establishments. The Wage and our Administrator brought suit to enjoin petitioner from violating the minimum wage, maximum hour, and report-making provisions of the Fair Labor Standards Act.
1. Petitioner's employees are engaged "in the production of goods for [interstate] commerce" so as to bring them within the coverage of §§ 6 and 7 of the Fair Labor Standards Act. P. 326 U. S. 662.
2. They are not exempted from the Act on the ground that petitioner is a "service establishment" within the meaning of § 13(a)(2). P. 326 U. S. 666.
3. Section 6(a) of the Act, when read with the definitions of "commerce," "goods," and "produced" in § 3(b), (i), and (j), requires every employer to pay not less than the required minimum wages to each of his employees who is employed in any process or occupation necessary to the production, in any State, of any part or ingredient of any articles or subjects of trade, commerce or transportation, of any character, for trade, commerce, or transportation among the several States. P. 326 U. S. 663.
(a) This does not require the employee to be directly "engaged in commerce" among the several States. P. 326 U. S. 663.
(b) It does not require the employee to be employed in the production of an article which itself becomes a subject of commerce or transportation among the several States. P. 326 U. S. 663.
(c) It is enough that the employee be employed, for example, in an occupation which is necessary to the production of a part of any other "articles or subjects of commerce of any character" which are produced for trade, commerce, or transportation among the several States. P. 326 U. S. 663.
(d) It does not require an employee to be employed exclusively in the specified occupation. P. 326 U. S. 664.
(e) It does not require the occupation in which he is employed to be indispensable to the production under consideration. P. 326 U. S. 664.
(f) It is enough that his occupation be "necessary to the production." P. 326 U. S. 664.
(g) Even though there may be alternative occupations that could be substituted for it, it is enough that the one at issue is needed in such production and would, if omitted, handicap the production. P. 326 U. S. 664.
4. The work of petitioner's employees has such a close and immediate tie with the process of production for commerce, and was such 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." Kirschbaum Co. v. Walling, 316 U. S. 517. P. 326 U. S. 665.
5. When read in the light of the declared purpose of the Act, its legislative history, and its administrative interpretation, § 13(a)(2), exempting employees "engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce," does not exempt employees "engaged in the production of goods for [interstate] commerce." P. 326 U. S. 666.
(a) When so read, it exempts employees of only such retail or service establishments as are comparable to local merchants, corner grocers, or filling station operators who sell to or serve ultimate consumers. P. 326 U. S. 666.
(b) Its origin has nothing to do with establishments "producing goods for [interstate] commerce." P. 326 U. S. 667.
6. To the extent that sales or services are necessary for the production of goods for interstate commerce, they generally are not sales or services to an ultimate consumer for his personal use, and, accordingly, are neither retail sales nor services of a comparable character within the meaning of § 13(a)(2) . P. 326 U. S. 667.
7. To fail to cover in this Act the multitude of employees who are engaged in establishments which supply the materials and services currently needed for the maintenance of productive machinery used by those who produce goods for interstate commerce would take the heart out of the Act. P. 326 U. S. 668.
8. Its primary purpose is not so much to regulate interstate commerce, as such, as it is to prohibit the shipment in interstate commerce of goods produced under substandard labor conditions, and thus to raise living standards. P. 326 U. S. 669.
9. This purpose will fail of realization unless the Act has sufficiently broad coverage to eliminate in large measure from interstate commerce the competitive advantage accruing from savings in costs based upon substandard labor conditions. P. 326 U. S. 670.
10. In the legislative history of the Act, there never was an intent expressed to exempt retailers other than local merchants of the type dealing with the ultimate consumer. P. 326 U. S. 671.
11. The debates in Congress show an intent to restrict the word "retail" to such transactions with ultimate consumers as are commonly carried on at local dry goods, butchering, or grocery stores. P. 326 U. S. 672.
12. This is confirmed by the general usage of the word "retail," which makes a distinction not merely between the size and volume of sales, but also between types of purchasers. It relates to sales to ultimate consumers, as distinguished from those who buy to resell or to use for business needs. P. 326 U. S. 673.
13. Government usage makes the same distinction on the basis of the use for which the goods are purchased. P. 326 U. S. 674.
14. The word "service" is associated with the word "retail" in this Act so as to restrict its meaning similarly to services to ultimate users of them for personal, rather than commercial, purposes. P. 326 U. S. 675.
15. This interpretation of the term "retail and service establishments" is reinforced by the administrative interpretations of the Wage and Hour Administrator, which are entitled to great weight. P. 326 U. S. 676.
16. Although the motors sold by petitioner were not purchased by its customers for resale or to be processed for resale, and although they were to be used and probably ultimately "consumed" in the hands of petitioner's customers, they remained actively in use in the great field of the production of goods for interstate commerce to which the Act is directed. P. 326 U. S. 678.
17. The record establishes the character of petitioner's customers as "commercial and industrial," and not "retail," customers in the same sense as is the customer of the local merchant, grocer, or filling station operator who buys for his own personal consumption. P. 326 U. S. 678.
18. The Act is concerned with goods in the stream of commerce, but not with those in "the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof." P. 326 U. S. 678.
146 F.2d 745 affirmed.
Certiorari, 325 U.S. 849, to review reversal of an order, 54 F.Supp. 733, dismissing a complaint of the Administrator of the Wage and Hour Division of the Department of Labor seeking to enjoin violations of the Fair Labor Standards Act of 1938.
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