1. The Fair Labor Standards Act of 1938 held applicable to
employees engaged in the maintenance and operation of a building
whose tenants are engaged principally in the production of goods
for interstate commerce. P.
316 U. S.
524.
2. Such employees are engaged in an "occupation necessary to the
production" of goods in interstate commerce, within the meaning of
§ 3(j) of the Act. P.
316 U. S.
524.
3. The employees here involved cannot be regarded as engaged in
"service establishments" within the exemption of § 13(a)(2) of the
Act. P.
316 U. S.
526.
124 F.2d 567 and 125 F.2d 278, affirmed.
Certiorari, 315 U.S. 792, to review, in No. 910, the affirmance
of a decree enjoining the petitioners from an alleged violation of
the Fair Labor Standards Act,
38 F. Supp.
204; and, in No. 924, the reversal of a decree denying such an
injunction,
38 F. Supp.
207.
Page 316 U. S. 518
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
In
United States v. Darby, 312 U.
S. 100, and
Opp Cotton Mills v. Administrator,
312 U. S. 126, the
constitutionality of the Fair Labor Standards Act of 1938, 52 Stat.
1060, 29 U.S.C. § 201
et seq., was sustained. In the cases
now before us, we are required to consider the scope of the Act in
relation to a particular phase of industrial activity.
Specifically, the problem is this: under § 6 of the Act, an
employer must pay prescribed minimum wages "to each of his
employees who is engaged in commerce or in the production of goods
for commerce," and, under § 7, overtime compensation must be given
"any of his employees who is engaged in commerce or in the
production of goods for commerce." 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."
The employees here are engaged in the operation and maintenance
of a loft building in which large quantities of goods for
interstate commerce are produced. Does the Fair Labor Standards Act
extend to such employees?
The facts in the two cases differ only in minor detail. In No.
910, the petitioner owns and operates a six-story loft building in
Philadelphia. The tenants are, for the most part, manufacturers of
men's and boys' clothing. In No 924, the petitioners own and
operate a twenty-two story building located in the heart of the New
York City clothing manufacturing district. Practically all of
the
Page 316 U. S. 519
tenants manufacture or buy and sell ladies' garments.
Concededly, in both cases, the tenants of the buildings are
principally engaged in the production of goods for interstate
commerce. In No. 910, the petitioner employs an engineer, three
firemen, three elevator operators, two watchmen, a porter, a
carpenter, and a carpenter's helper. In No. 924, the controversy
involves two firemen, an electrician, fourteen elevator operators,
two watchmen, and six porters. These employees perform the
customary duties of persons charged with the effective maintenance
of a loft building. The engineer and the firemen produce heat, hot
water, and steam necessary to the manufacturing operations. They
keep elevators, radiators, and fire sprinkler systems in repair.
The electrician maintains the system which furnishes the tenants
with light and power. The elevator operators run both the freight
elevators which start and finish the interstate journeys of goods
going from and coming to the tenants, and the passenger elevators,
which carry employees, customers, salesmen, and visitors. The
watchmen protect the buildings from fire and theft. The carpenters
repair the halls and stairways and other parts of the buildings
commonly used by the tenants. The porters keep the buildings clean
and habitable.
Deeming these employees within the Act because of their
relationship to the activities of the tenants, the Administrator
brought suits to enjoin the petitioners from violating the Act by
paying wages at lower rates than those fixed by the Act. In No.
910, the District Court granted an injunction,
38 F. Supp.
204, and the Circuit Court of Appeals for the Third Circuit
affirmed. 124 F.2d 567. In No. 924, the District Court denied an
injunction,
38 F. Supp.
207, but the Circuit Court of Appeals for the Second Circuit
reversed. 125 F.2d 278. Despite
Page 316 U. S. 520
this concurrence of views of the two Circuit Courts of Appeals,
[
Footnote 1] we brought the
cases here because of the important questions presented as to the
scope of the Fair Labor Standards Act. 315 U.S. 792.
To search for a dependable touchstone by which to determine
whether employees are "engaged in commerce or in the production of
goods for commerce" is as rewarding as an attempt to square the
circle. The judicial task in marking out the extent to which
Congress has exercised its constitutional power over commerce is
not that of devising an abstract formula. Perhaps in no domain of
public law are general propositions less helpful, and indeed more
mischievous, than where boundaries must be drawn under a federal
enactment between what it has taken over for administration by the
central Government and what it has left to the States. To a
considerable extent, the task is one of accommodation as between
assertions of new federal authority and historic functions of the
individual states. The expansion of our industrial economy has
inevitably been reflected in the extension of federal authority
over economic enterprise and its absorption of authority previously
possessed by the States. Federal legislation of this character
cannot therefore be construed without regard to the implications of
our dual system of government.
The body of Congressional enactments regulating commerce reveals
a process of legislation which is strikingly empiric. The degree of
accommodation made by Congress from time to time in the relations
between federal and state governments has varied with the subject
matter
Page 316 U. S. 521
of the legislation, the history behind the particular field of
regulation, the specific terms in which the new regulatory
legislation has been cast, and the procedures established for its
administration.
See, e.g., Virginian Ry. Co. v.
Federation, 300 U. S. 515.
Thus, while a phase of industrial enterprise may be subject to
control under the National Labor Relations Act, a different phase
of the same enterprise may not come within the "commerce" protected
by the Sherman Law.
Compare, for example, United Leather
Workers v. Herkert, 265 U. S. 457,
and Levering & Garrigues Co. v. Morrin, 289 U.
S. 103,
with Labor Board v. Friedman-Harry Marks
Clothing Co., 301 U. S. 58,
and Labor Board v. Fainblatt, 306 U.
S. 601. Similarly, enterprises subject to federal
industrial regulation may nevertheless be taxed by the States
without putting an unconstitutional burden on interstate commerce.
Compare Heisler v. Thomas Colliery Co., 260 U.
S. 245,
and Oliver Iron Co. v. Lord,
262 U. S. 172,
with Sunshine Anthracite Coal Co. v. Adkins, 310 U.
S. 381.
We cannot, therefore, indulge in the loose assumption that, when
Congress adopts a new scheme for federal industrial regulation, it
thereby deals with all situations falling within the general
mischief which gave rise to the legislation. Such an assumption
might be valid where remedy of the mischief is the concern of only
a single unitary government. It cannot be accepted where the
practicalities of federalism -- or, more precisely, the underlying
assumptions of our dual form of government and the consequent
presuppositions of legislative draftsmanship which are expressive
of our history and habits -- cut across what might otherwise be the
implied range of the legislation. Congress may choose, as it has
chosen frequently in the past, to regulate only part of what it
constitutionally can regulate, leaving to the States activities
which, if isolated, are only local. One need refer only to the
history of Congressional control over the rates of intrastate
carriers
Page 316 U. S. 522
which affect interstate commerce, [
Footnote 2] and the amendment of August 11, 1939, to the
Federal Employers' Liability Act, extending the scope of that Act
to employees who "shall, in any way directly or closely and
substantially, affect" interstate commerce, 53 Stat. 1404.
Compare Federal Trade Commission v. Bunte Bros.,
312 U. S. 349. The
history of Congressional legislation regulating not only interstate
commerce as such, but also activities intertwined with it,
justifies the generalization that, when the federal government
takes over such local radiations in the vast network of our
national economic enterprise, and thereby radically readjusts the
balance of state and national authority, 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.
The Administrator does not contend that the employees in the
cases before us are within the Act because Congress could have
placed them there. The history of the legislation leaves no doubt
that Congress chose not to enter areas which it might have
occupied. As passed by the House, the bill applied to employers
"engaged in commerce in any industry affecting commerce."
See H.Rep. No. 2182, 75th Cong., 3rd Sess., p. 2; 83
Cong.Rec. 7749-7750. But the bill recommended by the conference
applied only to employees "engaged in commerce or in the production
of goods for commerce." H.Rep. No. 2738, 75th Cong., 3rd Sess., pp.
29-30; 83 Cong.Rec. 9158, 9266-67. Moreover, in one of
Page 316 U. S. 523
its intermediate stages, the measure incorporated the
Shreveport doctrine,
Houston, E. & W. T. Ry. Co.
v. United States, supra, in that it was specifically made
applicable to intrastate production which competed with goods
produced in another state. S. 2475, 75th Cong. 3rd Sess., as
recommitted December 17, 1937, § 8(a). But, as reported by the
House Committee on Labor, this provision was deleted. S. 2475,
supra, as reported April 21, 1938;
see H.Rep.
2182,
supra.
Since the scope of the Act is not coextensive with the limits of
the power of Congress over commerce, the question remains whether
these employees fall within the statutory definition of employees
"engaged in commerce or in the production of goods for commerce,"
construed as the provision must be in the context of the history of
federal absorption of governmental authority over industrial
enterprise. In this task of construction, we are without the aid
afforded by a preliminary administrative process for determining
whether the particular situation is within the regulated area.
Unlike the Interstate Commerce Act and the National Labor Relations
Act and other legislation, the Fair Labor Standards Act puts upon
the courts the independent responsibility of applying
ad
hoc the general terms of the statute to an infinite variety of
complicated industrial situations. Our problem is, of course, one
of drawing lines. But it is not at all a problem in mensuration.
There are no fixed points, though lines are to be drawn. The real
question is how the lines are to be drawn -- what are the relevant
considerations in placing the line here, rather than there. To that
end, we have tried to state with candor the larger considerations
of national policy, legislative history, and administrative
practicalities that underlie the variations in the terms of
Congressional commercial regulatory measures and which therefore
should govern their judicial construction.
Page 316 U. S. 524
We start with the weighty opinions of the two Circuit Courts of
Appeals that the employees here are within the Act because they
were engaged in occupations "necessary to the production" of goods
for commerce by the tenants. Without light and heat and power, the
tenants could not engage, as they do, in the production of goods
for interstate commerce. The maintenance of a safe, habitable
building is indispensable to that activity. The normal and
spontaneous meaning of the language by which Congress defined in §
3(j) the class of persons within the benefits of the Act, to-wit,
employees engaged
"in producing, manufacturing, mining, handling, transporting, or
in any other manner working on such goods, or in any process or
occupation necessary to the production thereof,"
encompasses these employees, in view of their relation to the
conceded production of goods for commerce by the tenants. The
petitioners assert, however, that the building industry of which
they are part is purely local in nature, and that the Act does not
apply where the employer is not himself engaged in an industry
partaking of interstate commerce. But the provisions of the Act
expressly make its application dependent upon the character of the
employees' activities. And, in any event, to the extent that his
employees are "engaged in commerce or in the production of goods
for commerce," the employer is himself so engaged. [
Footnote 3] Nor can we find in the Act, as do
the petitioners, any requirement that employees must themselves
participate in the physical process of the making of the goods
before they can be regarded as engaged in their production. Such a
construction erases the final clause of § 3(j) which includes
employees engaged "in any process or occupation
Page 316 U. S. 525
necessary to the production," and thereby does not limit the
scope of the statute to the preceding clause, which deals with
employees "in any other manner working on such goods."
But the petitioners urge that § 3(j) cannot be construed
literally, that Congress surely did not design the Act to apply to
every employee who happens to perform services that are essential
to the production of goods for commerce. But because some employees
may not be within the Act even though their activities are in an
ultimate sense "necessary" to the production of goods for commerce,
it does not follow that no employees whose activities are
"necessary" are entitled to the benefits of the Act. Section 3(j)
cannot thus be read out of the Act. The lower court in No. 924 met
the petitioners' argument by finding the Act applicable to these
employees because their work was "in kind substantially the same as
it would be if the manufacturers employed them directly." In the
immediate situation, the answer may be adequate; but, as a guiding
criterion, it may prove too much. "Necessary" is colored by the
context not only of the terms of this legislation, but of its
implications in the relation between state and national authority.
We cannot, in construing the word "necessary," escape an inquiry
into the relationship of the particular employees to the production
of goods for commerce. If the work of the employees has only the
most tenuous relation to, and is not in any fitting sense
"necessary" to, the production, it is immaterial that their
activities would be substantially the same if the employees worked
directly for the producers of goods for commerce.
We agree, however, with the conclusion of the courts below. In
our judgment, the work of the employees in these cases had such a
close and immediate tie with the process of production for
commerce, and was therefore
Page 316 U. S. 526
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." What was said about a related problem is
not inapposite here:
"Whatever terminology is used, the criterion is necessarily one
of degree, and must be so defined. This does not satisfy those who
seek for mathematical or rigid formulas. But such formulas are not
provided by the great concepts of the Constitution such as
'interstate commerce,' 'due process,' 'equal protection.' In
maintaining the balance of the constitutional grants and
limitations, it is inevitable that we should define their
applications in the gradual process of inclusion and exclusion.
There is thus no point in the instant case in a demand for the
drawing of a mathematical line. And what is reasonably clear in a
particular application is not to be overborne by the simple and
familiar dialectic of suggesting doubtful and extreme cases."
Santa Cruz Fruit Packing Co. v. Labor Board,
303 U. S. 453,
303 U. S.
467.
"What is needed is something of that common sense accommodation
of judgment to kaleidoscopic situations which characterizes the law
in its treatment of problems of causation."
Gully v. First National Bank, 299 U.
S. 109,
299 U. S.
117.
A final objection to the decisions below need not detain us
long. The petitioners' buildings cannot be regarded as "service
establishments" within the exemption of § 13(a)(2). Selling space
in a loft building is not the equivalent of selling services to
consumers, and, in any event, the "greater part" of the "servicing"
done by the petitioners here is not in intrastate commerce. The
suggestion that the Act, if applied to these employees, goes beyond
the bounds of the commerce power is without merit.
Labor Board
Cases, 301 U. S. 1;
United States v. Darby, supra; Opp Cotton Mills v.
Administrator, supra.
In both cases, the judgment is
Affirmed.
Page 316 U. S. 527
* Together with No. 924,
Arsenal Building Corp. et al. v.
Walling, Administrator of the Wage & Hour Division, U.S.
Department of Labor, on writ of certiorari, 315 U.S. 792, to the
Circuit Court of Appeals for the Second Circuit. -- Argued April
29, 1942.
[
Footnote 1]
Compare Warren-Bradshaw Drilling Co. v. Hall, 124 F.2d
42;
Killing-beck v. Garment Center Capitol, Inc., 259
App.Div. 691, 20 N.Y.S.2d 521;
Robinson v. Massachusetts Mut.
Life Ins. Co., 158 S.W.2d 441;
Cecil v. Gradison, 40
N.E.2d 958;
Pedersen v. Fitzgerald Construction Co., 262
App.Div. 665, 30 N.Y.S.2d 989.
[
Footnote 2]
For the gradual development of this extension of federal
authority,
see Shepard v. Northern Pac. Ry. Co., 184 F.
765,
reversed sub nom. Minnesota Rate Cases, 230 U.
S. 352;
Houston, E. & W. T. Ry. Co. v. United
States, 234 U. S. 342, as
applied in
Illinois Cent. R. Co. v. Public Utilities
Comm'n, 245 U. S. 493, and
as confirmed by § 416 of the Transportation Act of 1920, 41 Stat.
456, 484, and as extended by § 13(4) of the Interstate Commerce
Act,
Wisconsin Railroad Comm'n v. Chicago, B. & Q. R.
Co., 257 U. S. 563.
[
Footnote 3]
The exact scope of the provisions of the Act dealing with the
composition, authority, and procedure of advisory committees is not
now before us. But, in any event, we do not find in them any
limitation upon the area of regulation outlined by §§ 6 and 7.
MR. JUSTICE ROBERTS.
I dissent. I think the power of Congress does not reach the
purely local activities in question. If it did, the commerce power
alone would support regulation of any local action, since it is
conceivable that such activity, however remotely, "affects"
commerce or is "necessary" to the production of goods for
commerce.
But I am convinced that Congress never intended by the statute
to reach the employees of the petitioners. Neither the words of the
Act nor its legislative history nor the purpose to be served
requires the application of the statute in these cases.