MR. JUSTICE BURTON delivered the opinion of the Court.
This suit was brought in the District Court of the United States for the Eastern District of Michigan, by the Administrator of the Wage and Hour Division, United States Department of Labor, to enjoin petitioners from violating the maximum hours provisions
Petitioners are two of four partners doing business as F.J. Boutell Service Company, the other two not being subject to the jurisdiction of the District Court. The four partners are the sole stockholders of the F.J. Boutell Drive-Away Company, a Michigan corporation, engaged in the transportation of automobiles and army equipment in interstate commerce.
The employees of the Service Company involved in this suit are mechanics engaged in greasing, repairing, servicing and maintaining the transportation equipment owned and operated by the Drive-Away Company. The parties have stipulated and the trial court has found that the Service Company is engaged exclusively in rendering such service to the Drive-Away Company and such corporation "is an entity separate and distinct from" the Service Company.
The case presents two questions: (1) whether the employees of the Service Company are "engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce" within the meaning of the exemption clause, § 13 (a) (2);
The amended findings of fact agreed to by the parties include the statement that the petitioners' employees "involved in this proceeding are mechanics engaged in greasing, repairing, servicing and maintaining the transportation equipment owned and operated by the F.J. Boutell Drive-Away Company . . ." No claim is made that these employees are not engaged in interstate commerce within the meaning of § 7 of the Fair Labor Standards Act. They are well within the requirement that they be "actually in or so closely related to the movement of the commerce as to be a part of it." McLeod v. Threlkeld, 319 U.S. 491, 497.
The question whether the employees of the Service Company are to be exempted by virtue of § 13 (b) (1) turns upon whether the Interstate Commerce Commission has the "power to establish" maximum hours of service for them under § 204 (a) (1), (2) or (3) of the Motor Carrier Act, 1935,
The Wage and Hour Division has found to its satisfaction the facts necessary to place these employees of the Service Company under its jurisdiction for the purposes of the Fair Labor Standards Act. The record contains no suggestion that the Interstate Commerce Commission or any other administrative body has found that these employees of the Service Company are or should be treated as employees of the Drive-Away Company for the purposes of the Interstate Commerce Act. This case, therefore, is decided upon the basis that the parties have stipulated and the trial court has found that these employees are employees of the partnership, the Service Company, which is the relationship established for them by the petitioners as their employers. See Schenley Distillers Corp. v. United States, 326 U.S. 432, for a case giving effect to certain other consequences under the Motor Carrier Act of a corporate arrangement chosen by the persons concerned as a means of carrying on their business. See also Higgins v. Smith, 308 U.S. 473, 477, for a different result under other circumstances.
In the absence of power in the Interstate Commerce Commission to establish the maximum hours of service of these employees, the provisions of the Fair Labor Standards Act as to their maximum hours of employment remain applicable to them.
It appears from the face of the Motor Carrier Act that § 204 refers only to the regulation of "carriers." Moreover, Section 226 of the Act (formerly numbered 225, 54 Stat. 929, 49 U.S.C. § 325), which authorizes investigations by the Commission as a basis for the regulation of the maximum hours of service of employees under § 204, refers only to investigations of the "maximum hours of
The Interstate Commerce Commission has written many decisions defining the limits of its authority to prescribe
The Administrator of the Wage and Hour Division of the Department of Labor has interpreted § 13 (b) (1) of the Fair Labor Standards Act consistently with the interpretation given to it by the Interstate Commerce
Throughout the discussion of these sections by this Court in United States v. American Trucking Assns., supra, and in Southland Gasoline Co. v. Bayley, 319 U.S. 44, it is assumed that they refer to employees of "carriers" and of "motor vehicle operators" which are themselves under the jurisdiction of the Interstate Commerce Commission, and there is nothing in either case to indicate an interpretation by this Court that the exemption prescribed in § 13 (b) (1) extends to workers whose services affect the safety of operations of motor vehicle carriers but who are not themselves employees of a carrier.
In this view of this case, it is not necessary to determine what kind of a carrier the Drive-Away Company is or even whether it is a carrier within the meaning of the Motor Carrier Act because the employees involved in this case are not its employees. Similarly, it is not necessary to determine which of the employees of the Service Company do work which affects the safety of the operation
For these reasons we find that petitioners' employees come within the coverage of the Fair Labor Standards Act of 1938 and not within the exemptions stated in either § 13 (a) (2) or § 13 (b) (1) of that Act, and the judgment of the Circuit Court of Appeals, therefore, is
MR. JUSTICE JACKSON took no part in the consideration or decision of this case.
MR. JUSTICE DOUGLAS, dissenting.
I agree that these employees would be covered by the Fair Labor Standards Act but for the exemption contained in § 13 (b) (1). That subsection exempts from § 7 of the Act "any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935 .. ."
There is no doubt that the Interstate Commerce Commission has the power to establish qualifications and maximum hours for employees of a carrier who are mechanics engaged in greasing, repairing, servicing, and maintaining its transportation equipment. In the Matter of Maximum Hours of Service of Motor Carrier Employees, 28 M.C.C. 125. I think that power would still exist if the carrier separately incorporated its garage. This affiliated garage is not like an independent commercial garage. It is still a part of the carrier's business — no more separate or distinct than any other department. The same people own it, operate it, and manage it. If the Interstate Commerce Commission, acting under § 204 of the Motor Carrier Act of 1935, had undertaken to establish the qualifications
This particular exemption may not be a wise one. But we must take the law as it is written. The policy behind the exemption is defeated, if mere legal forms are allowed to nullify the power of the Interstate Commerce Commission to deal with the problem of safety. As the Commission said, ". . . the carefully supervised work of skilled mechanics is a most important factor in the prevention of accidents, and therefore in the promotion of highway safety." In the Matter of Maximum Hours of Service of Motor Carrier Employees, supra, p. 133. We should refuse to whittle down that jurisdiction, even though we thought that the public interest would be better served by broadening the coverage of the Fair Labor Standards Act.
MR. JUSTICE FRANKFURTER and MR. JUSTICE RUTLEDGE join in this dissent.
unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." 52 Stat. 1063, 29 U.S.C. § 207 (a).
"(1) To regulate common carriers by motor vehicle as provided in this part, and to that end the Commission may establish reasonable requirements with respect to continuous and adequate service, transportation of baggage and express, uniform systems of accounts, records, and reports, preservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment.
"(2) To regulate contract carriers by motor vehicle as provided in this part, and to that end the Commission may establish reasonable requirements with respect to uniform systems of accounts, records, and reports, preservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment.
"(3) To establish for private carriers of property by motor vehicle, if need therefor is found, reasonable requirements to promote safety of operation, and to that end prescribe qualifications and maximum hours of service of employees, and standards of equipment. . . ." (Italics supplied.) 49 Stat. 546, 49 U.S.C. § 304 (a) (1) (2) (3).
In discussing § 204 (a) (1), (2) and (3) and § 225 Senator Wheeler, sponsor of the Bill, said in explanation of it —
In the House of Representatives, Representative Pettengill read the following observation made by Joseph B. Eastman of the Interstate Commerce Commission —
"Findings of fact. — 1. That mechanics employed by common and contract carriers and private carriers of property by motor vehicle, subject to part II of the Interstate Commerce Act, devote a large part of their time to activities which directly affect the safety of operation of motor vehicles in interstate or foreign commerce. . . .
"Conclusions of law. — . . .
"3. That we have power, under section 204 (a) of said part II, to establish qualifications and maximum hours of service for the classes of employees covered by findings of fact numbered 1, 2, and 3 above, [mechanics, loaders and helpers employed by carriers] and that we have no such power over any other classes of employees, except drivers." Ex parte No. MC-2, 28 M.C.C. 125, 138-139. See also Ex parte No. MC-2, 3 M.C.C. 665, 667; 6 M.C.C. 557; 11 M.C.C. 203; Ex parte No. MC-28, Jurisdiction Over Employees of Motor Carriers, 13 M.C.C. 481, 488; Ex parte No. MC-3, Motor Carrier Safety Regulations — Private Carriers, 23 M.C.C. 1, 8.