1. The application of the Fair Labor Standards Act depends upon
the character of the activities of the employee. P.
317 U. S.
90.
2. Employees seeking to recover overtime compensation and
liquidated damages under § 16(b) of the Fair Labor Standards Act
held to have sustained the burden of proving that they
were engaged in the production of goods for interstate commerce
within the meaning of the Act. P.
317 U. S.
90.
3. Members of a rotary drilling crew, engaged within a State, as
employees of an independent contractor, in partially drilling oil
wells
Page 317 U. S. 89
(to a depth short of the oil sand stratum) -- which wells were
later "brought in" by other workmen, and some of the oil and gas
from which, in crude form or as refine product, moved in interstate
commerce -- were engaged in a "process or occupation necessary to
the production" of oil for interstate commerce, and were covered by
the Fair Labor Standards Act. P.
317 U. S.
91.
4. Assuming that this is prerequisite to the application of the
Act in this case, there were reasonable grounds for the employer to
anticipate at the time of drilling that oil when produced by the
wells would move into other States. P.
317 U. S.
92.
5. In the case of an employee who is employed on the basis of an
eight-hour day at a fixed daily wage, and regularly works seven
days a week, the fact that he is paid, and accepts, wages which are
in excess of the statutory minimum, including the minimum for
overtime, does not constitute compliance with the overtime
compensation requirements of the Fair Labor Standards Act.
Overnight Transportation Co. v. Missel, 316 U.
S. 572. P.
317 U. S.
93.
124 F.2d 42 affirmed.
Certiorari, 316 U.S. 660, to review the affirmance of a
judgment, 40 F. Supp. 272, against an employer in an action on
behalf of certain of its employees for unpaid overtime compensation
and liquidated damages under § 1(b) of the Fair Labor Standards
Act.
MR. JUSTICE MURPHY delivered the opinion of the Court.
We are concerned here, as in
Kirschbaum Co. v. Walling,
316 U. S. 517,
with a problem of statutory delineation, not
Page 317 U. S. 90
constitutional power, in the application of the Fair Labor
Standards Act [
Footnote 1] to a
particular situation. This is an action to recover unpaid overtime
compensation and an equal amount as liquidated damages brought by
respondent employees under § 16(b). We must decide whether
respondents are engaged "in the production of goods for commerce"
within the meaning of § 7(a) of the Act. The district court held
that they were so engaged, and, since petitioner had failed to
compensate them for overtime hours as required by § 7(b),
accordingly rendered judgment for each respondent in the
appropriate amount. [
Footnote
2] The Circuit Court of Appeals affirmed with an immaterial
modification, [
Footnote 3] and
the case comes here on certiorari.
The application of the Act depends upon the character of the
employees' activities.
Kirschbaum Co. v. Walling, supra,
p.
316 U. S. 524.
The burden was therefore upon respondents to prove that, in the
course of performing their services for petitioner and without
regard to the nature of its business, they were, as its employees,
engaged in the production of goods within the meaning of the Act,
and that such production was for interstate commerce. We agree with
both courts below that respondents have sustained that burden.
Petitioner is the owner and operator of rotary drilling
equipment and machinery, who contracts with the owners or lessees
of oil lands to drill holes to an agreed-upon depth short of the
oil sand stratum. When that depth is reached, the rotary rig is
removed, and the machinery and crew move on to other locations. For
reasons peculiar to the oil industry, a cable drilling crew then
undertakes with cable tools to "bring in" the well or else
demonstrate that it is a dry hole. Respondents were employed by
petitioner
Page 317 U. S. 91
as members of its rotary drilling crew and worked on
approximately thirty-two wells in the Panhandle Oil Field of Texas;
thirty-one of those wells produced oil, and the other one produced
gas. Petitioner was not the owner or lessee of any of the lands on
which respondents drilled, and was not shown to have any interest
therein or in the oil produced.
In § 3(j), Congress has broadly defined the term, "produced,"
[
Footnote 4] and has provided
that
"an employee shall be deemed to have been engaged in the
production of goods if such employee was employed 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, in any State."
Whether or not respondents, in drilling to a specified depth
short of oil, may be regarded as engaged in producing or mining,
and we certainly are not to be understood as intimating that they
may not, recognition of the obvious requires us to hold that, at
the very least, they were engaged in a "process or occupation
necessary to the production" of oil. Oil is obtained only by
piercing the earth's surface; drilling a well is a necessary part
of the productive process to which it is intimately related. The
connection between respondents' activities in partially drilling
wells and the capture of oil is quite substantial, and those
activities certainly bear as "close and immediate tie" to
production as did the services of the building maintenance workers
held within the Act in
Kirschbaum Co. v. Walling, supra,
p.
316 U. S.
525-526.
The evidence supports the finding that some of the oil produced
ultimately found its way into interstate commerce. All the wells
had pipeline connections, some of them being with petroleum
companies operating on a
Page 317 U. S. 92
national scale, wherein the oil was commingled with the
production of other wells. Officials of the State of Texas
testified that some crude oil is shipped out of the State by these
pipelines and that a large percentage of crude oil sent to
refineries in Texas thereafter passes out of the State in the form
of refined products.
Petitioner contests the applicability of the Act on the ground
that it, as an independent contractor not financially interested in
the wells, had no intention, expectation, or belief that any oil
produced would be shipped in interstate commerce, and cites as
support
United States v. Darby, 312 U.
S. 100,
312 U. S. 118,
where it was said that the "production for commerce" intended by
Congress includes
"at least production of goods which, at the time of production,
the employer, according to the normal course of his business,
intends or expects to move in interstate commerce, although,
through the exigencies of the business, all of the goods may not
thereafter actually enter interstate commerce."
Respondents counter with the proposition that it is enough that
the owners of the oil wells expected the oil produced to move
across state lines, but the Government does not ask, [
Footnote 5] and there is no need for, us to
pass upon that proposition. The Act extends at least to the
employer who expects goods to move in interstate commerce.
United States v. Darby, supra. Assuming that such
expectation, or a reasonable basis therefor, was necessary on
petitioner's part before the application of the Act to petitioner,
it is here present. The record contains ample indication that there
were reasonable grounds for petitioner to anticipate, at the time
of drilling, that oil produced by the wells drilled would move into
other states. Petitioner, closely identified as it is with
Page 317 U. S. 93
the business of oil production, cannot escape the impact of the
Act by a transparent claim of ignorance of the interstate character
of the Texas oil industry.
St. John v.
Brown, 38 F. Supp.
385, 388;
cf. Fleming v. Enterprise Box
Co., 37 F. Supp.
331, 334, 335,
aff'd, 125 F.2d 897.
One final contention merits but slight consideration.
Respondents were employed on the basis of an eight-hour day and
regularly worked seven days a week, receiving fixed wages ranging
from $6.50 to $11 per day. There was no agreement providing for an
hourly rate of pay or that the weekly salary included additional
compensation for overtime hours. Petitioner urges that it complied
with the overtime compensation requirements of the Act because
respondents received wages in excess of the statutory minimum wage,
including time and one-half of that minimum wage for all overtime
hours, which wages respondents impliedly agreed included overtime
compensation by accepting them. A similar argument was squarely
rejected in
Overnight Motor Transp. Co. v. Missel,
316 U. S. 572.
Affirmed.
[
Footnote 1]
52 Stat. 1060, 29 U.S.C. § 201
et seq.
[
Footnote 2]
40 F. Supp. 272.
[
Footnote 3]
124 F.2d 42.
[
Footnote 4]
"
Produced' means produced, manufactured, mined, handled, or
in any other manner worked on in any State;"
[
Footnote 5]
The Solicitor General submitted a brief on behalf of the
Administrator of the Wage and Hour Division, United States
Department of Labor, as
amicus curiae.
MR. JUSTICE ROBERTS.
I dissent, as I did in
Kirschbaum v. Walling,
316 U. S. 517, and
for the same reason. But I think the present a more extravagant
application of the statute than that there approved. We may assume
that Congress, in drafting the Act, had in mind the practical, as
distinguished from a theoretical, distinction between what is
national and what is local -- between what, in fact, touches
interstate commerce and what, in truth, is intrastate.
The phrases on which respondents rely are these: an employee
"who is engaged in [interstate] commerce or in the production of
goods for [interstate] commerce," § 7(a), and
"'produced' means produced, manufactured,
Page 317 U. S. 94
mined, handled, or in any other manner worked on in any State,
and 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 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, in
any State."
§ 3(j).
The opinion disavows any thought that the respondents may be
classed as those who mine the oil which passes into commerce, but
this seems to be a reservation intended not to preclude such a
holding. The Court relies, rather, on the Act's inclusion of anyone
employed "in any process or occupation necessary to the production"
of goods for commerce.
The reasoning seems to be as follows. The oil will pass into
commerce if it is mined. But it cannot be mined unless somebody
drills a well. An independent contractor's men do part of the
drilling. Their work is "necessary" to the mining and the
transportation of the oil. So they fall within the Act.
This is to ignore all practical distinction between what is
parochial and what is national. It is but the application to the
practical affairs of life of a philosophic and impractical test. It
is but to repeat, in another form, the old story of the pebble
thrown into the pool, and the theoretically infinite extent of the
resulting waves, albeit too tiny to be seen or felt by the exercise
of one's senses.
The labor of the man who made the tools which drilled the well,
that of the sawyer who cut the wood incidentally used, that of him
who mined the iron of which the tools were made, are all just as
necessary to the ultimate extraction of oil as the labor of
respondents. Each is an antecedent of the consequent -- the
production of the goods for commerce. Indeed, if respondents were
not fed, they could not have drilled the well, and the oil would
not have
Page 317 U. S. 95
gone into commerce. Is the cook's work "necessary" to the
production of the oil, and within the Act?
I think Congress could not and did not intend to exert its
granted power over interstate commerce upon what, in practice and
common understanding, is purely local activity on the pretext that
everything everybody does is a contributing cause to the existence
of commerce between the states, and in that sense necessary to its
existence.