BOOTLE, District Judge:
This appeal by the Secretary is from the District Court's dismissal of a petition to have West Florida Natural Gas Company, Inc., Gulf Natural Gas Corporation, and H. M. Lewis, hereafter referred to as Appellees, adjudged in civil contempt for violations of a consent decree entered by the District Court on January 2, 1959.
The original injunction suit was filed on October 6, 1958, against Ocala Gas Company, Inc. (hereafter Ocala) seeking to enjoin violations of Sections 15(a) (2) and 15(a) (5) of the Fair Labor Standards Act. The Secretary alleged that Ocala employed approximately 18 employees in and about its place of business, many of whom were engaged in commerce and in producing goods for commerce; that Ocala had violated, and was violating, Sections 6 and 15(a) (2) of the Act by paying several of these employees less than the minimum wage and had repeatedly violated Sections 7 and 15(a) (2) of the Act by employing several of its employees for workweeks longer than 40 hours, without compensating them for the overtime work; and that Ocala, an employer subject to the Act and record-keeping requirements thereof, violated Sections 11(c) and 15(a) (5) of the Act in that it had failed to make, keep and preserve adequate records of its employees and the wages, hours and other conditions and practices of employment maintained by it as prescribed by the Secretary's regulations. Ocala waived answer and any defense and consented to judgment, which was entered January 2, 1959.
At the time of the entry of the consent decree, and prior thereto, Ocala was engaged in Ocala, Florida, and the surrounding counties in the business of operating a butane-propane air-mixing manufacturing plant, selling butane-propane gas to consumers through a gas distribution pipeline system in the City of Ocala, selling LP (liquid petroleum) gas in tank trucks and containers, and selling gas appliances. Ocala was a wholly-owned subsidiary of West Florida Natural Gas Company, Inc. (hereafter West Florida Gas), which also wholly owned several other subsidiary corporations throughout the State of Florida. Mr. H. M. Lewis was also President of West Florida Gas and his family has always owned a majority of the stock in this parent corporation. As explained by Mr. Lewis, "we control the company."
On June 30, 1959, six months after the consent decree, Ocala was merged into Gulf Natural Gas Corporation (hereafter Gulf).
The parent corporation, West Florida Gas, planned to convert the butane-propane air gas system in Ocala, Florida, to natural gas and also to install a natural gas system in Panama City, Florida. These plans were afoot as far back as the date of the consent decree. This planned expansion involving an extension of the pipeline system in Ocala, Florida, and the construction of a brand new pipeline system in Panama City, Florida, required outside financing, as West Florida Gas had a very thin equity position and was unable on its own to raise the funds necessary to construct the two systems. As a means of facilitating the financing, Ocala was merged into Gulf.
On June 29, 1962, the Secretary filed a petition for adjudication of Appellees, West Florida Gas, the parent corporation, Gulf and Mr. H. M. Lewis, President of both corporations, in civil contempt. This petition for adjudication is concerned only with the employees working in Panama City from January 1, 1960, to May 1, 1961, on Gulf Panama's natural gas system. The Secretary alleges that all three of the respondents, with full knowledge of the consent judgment entered January 2, 1959, have failed to comply with the Act and the consent decree in several particulars: First, in failing to pay some of the employees who were covered by the Act the minimum wage; second, in failing to pay some of the employees who worked more than 40 hours per workweek at the correct overtime rate; and third, in failing to make, keep and preserve adequate and accurate records.
The primary defense urged by the Appellees in their several motions to dismiss and answer to the Secretary's petition is that the consent decree was concerned only with employees working in Ocala, Florida, for Ocala, whereas, the present petition is concerned only with employees working in Panama City, Florida, on Gulf Panama's natural gas system, who have never been adjudicated by a court to be covered by or subject to the Act; and that said employees working in Panama City, Florida, are not covered by the decree. There is no claim by the Secretary of any violations by Gulf Ocala. Appellees did not dispute the Secretary's contention that the employees here involved were not paid in accordance with the Act during the period in question, but assert that these employees were not within the Act's coverage, and even if covered, were exempt under Section 13(a) (2), the retail establishment exemption.
Not reaching the coverage or exemption questions and addressing himself to what he described as "an awfully close point," the District Court dismissed the petition on the ground that the Panama City employees of West Florida Gas, Gulf
These Fair Labor Standards Act injunctions are not excessively burdensome as this court has pointed out heretofore. They subject the defendants to no penalty or hardship. They require no more than that the defendants comply with the law. Mitchell v. Pidcock, 299 F.2d 281, 287 (5th Cir. 1962). Their aim is remedial and not punitive. McComb v. Jacksonville Paper Company, 336 U.S. 187, 193, 69 S.Ct. 497, 93 L.Ed. 599, 605 (1949). Inasmuch as they are a means of effecting general compliance with national policy expressed by Congress, they are to be utilized in the light of the purposes of the Act, in aid of the administrative efforts at enforcement, and not grudgingly. Lenroot v. Interstate Bakeries Corporation, 146 F.2d 325, 327 (8th Cir. 1945); Mitchell v. Southwest Engineering Company, 271 F.2d 427, 432 (8th Cir. 1959); Mitchell v. Pidcock, supra. They should be issued in some instances even where the activity which gave rise to the litigation has been completed, where there is a likelihood that the violation will be resumed. Hecht Company v. Bowles, 321 U.S. 321, 327, 64 S.Ct. 587, 88 L.Ed. 759 (1944); McComb v. Wyandotte Furniture Co., 169 F.2d 766, 770 (8th Cir. 1948); Chambers Construction Company v. Mitchell, 233 F.2d 717, 725 (8th Cir. 1956); Mitchell v. Southwest Engineering Company supra. In view of the teaching of the cases that the courts should not be loath to issue these injunctions when needed,
We cannot subscribe to the view that under the facts of this case the decree rendered was geographically confined to the Ocala, Florida area, and was not broad enough to apply to future activities at Panama City, Florida. It expresses no geographical limitations. It refers to "any of its employees engaged in commerce and in the production of goods for commerce." It would be unsound thus to limit the geographical scope of this particular decree. This is so because at the time of its rendition, H. M. Lewis, Ocala and West Florida Gas, all three, to the knowledge of the Secretary, contemplated switching to natural gas at Ocala, Florida,
In the case of Tobin v. Frost-Arnett Co., 34 Labor Cases ¶ 71,220 (W.D.Tenn. 1958), aff'd per curiam, 264 F.2d 246 (6th Cir. 1959) an injunction had issued against further violations when the employer was a Tennessee corporation, having its principal office in Nashville, with a branch office in Memphis. Thereafter, a separate corporation was formed to operate the Memphis office and three additional corporations were formed to operate similar offices opened in Atlanta, Knoxville and New Orleans. In subsequent contempt proceedings, the employer was required to make restitution of underpayments to employees working in all of the locations, thus negativing the idea that the injunction was to be interpreted as limited to the particular employees employed, or particular locations in existence, at the time of its issuance. Employees of four new corporations were made beneficiaries of the decree, although the employees of three of the new corporations were far removed from the locale of the operations as they were carried on at the time the decree was issued.
The fact that Ocala merged into Gulf with Gulf continuing the operation at Ocala, Florida, and instituting the new and similar operation at Panama City, Florida, does not immunize these two operations from the decree. The operative force of the decree is not dependent in all instances upon the preservation of the corporate entity or structure of a defendant. In Walling v. Reuter, Inc., 321 U.S. 671, 674, 64 S.Ct. 826,
In Wiley v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964), the Supreme Court held that a corporate employer must arbitrate with a union under a bargaining agreement between the union and another corporation which had merged with the employer. There the contracting employer had disappeared into another by a merger and the surviving corporation was held under the duty to arbitrate. The Court called attention to the general rule that in the case of a merger, the corporation which survives is liable for the duties and contracts of the one which disappears, citing 15 Fletcher, Private Corporations (1961 rev. ed.), § 7121.
The views we here express are not out of harmony with cases arising under the National Labor Relations Act and holding obligations to bargain and decrees enforcing orders of the National Labor Relations Board binding upon successors in title to the original employers where the employment enterprise remains essentially the same. See N.L.R.B. v. Alamo White Truck Service, Inc., 273 F.2d 238, 239 (5th Cir. 1959); N.L.R.B. v. Auto Ventshade, Inc., 276 F.2d 303 (5th Cir 1960); N.L.R.B. v. Tempest Shirt Manufacturing Company, 285 F.2d 1 (5th Cir. 1960); Reynolds Pallet and Box Company v. N.L.R.B., 324 F.2d 833 (6th Cir. 1963).
We hold that in this group of family controlled corporations, having the same officers, the merger of the decree-named defendant Ocala, one wholly-owned subsidiary, into Gulf, another wholly-owned subsidiary, practically without assets except the franchise, which the record indicates derived from the parent corporation, brings Gulf within the operative force of the decree with respect to its conduct of the gas business, whether butane-propane or natural, and with respect to the handling of LP gas and appliances, both at Ocala, Florida, and at Panama City, Florida. We hold further that Mr. H. M. Lewis, President of all corporations here concerned, having full knowledge of the decree, and West Florida Gas, likewise having full knowledge of the decree, and having actually participated in the alleged violation thereof by serving as employer of Gulf Panama's employees, are answerable for contempt, if contempt be proved, under the familiar principle of law stated in Wilson v. U. S., 221 U.S. 361, 376, 31 S.Ct. 538, 543, 55 L.Ed. 771, 776, as follows:
We reject Appellees' contention that inasmuch as the decree refers to employees engaged in commerce "and" in the production of goods for commerce, there can be no contempt except with respect to an employee who happens to be engaged both in commerce and in the production of goods for commerce. Obviously, the use of the conjunctive in the complaint and in the decree simply reflect the Secretary's contention that Ocala had some employees engaged in commerce and some employees engaged in the production of goods for commerce. Since engagement in either type activity is sufficient to invoke the Act's coverage, there could be no purpose in restricting the force of the injunction to employees engaged in both activities. In this decree the word "and" has the same meaning as if it were "or." In so construing this conjunctive once before, this court said: "[T]he word `and' is not a word with a single meaning, for chameleonlike, it takes its color from its surroundings." Peacock v. Lubbock Compress Company, 252 F.2d 892, 893 (5th Cir. 1958).
We follow the District Court in its rejection of Appellees' contention that they cannot be called to account in this civil contempt proceedings for violations occurring more than two years prior to the filing of the contempt petition. Section 6 of the Portal-to-Portal Act of 1947, 29 U.S.C.A. § 255, does not apply to this proceeding. In Tobin v. Frost-Arnett, supra, the District Court said:
The filing of a civil contempt petition is not to be regarded as the institution of an independent proceeding but as a part of the original cause. See Leman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 452, 52 S.Ct. 238, 76 L.Ed. 389, 394 (1932); Gompers v. Buck's Stove & R. Co., 221 U.S. 418, 444-445, 31 S.Ct. 492, 55 L.Ed. 797, 807 (1911); McComb v. Jacksonville Paper Company, supra, 336 U.S. at 192, 69 S.Ct. 497, 93 L.Ed. 599.
Accordingly, we reverse and remand for the determination of coverage and applicability of any exemption claimed and for the determination of other issues left open by this appeal.
Reversed and remanded.
"Ordered, Adjudged and Decreed that the defendant, its agents, servants, employees and all persons acting, or claiming to act, in its behalf and interest, be, and they hereby are, permanently enjoined and restrained from violating the provisions of Sections 15(a) (2) and 15 (a) (5) of the Fair Labor Standards Act of 1938, as amended (52 Stat. 1060, as amended, 29 U.S.C., 201, et seq.), hereinafter referred to as the Act, in any of the following respects:
"(1) The defendant shall not, contrary to Section 6 of the Act, pay any of its employees engaged in commerce and in the production of goods for commerce, as defined by the Act, wages at rates less than one dollar ($1.00) an hour, or any wages at rates less than those which may hereafter be established as the applicable minimum by any amendment of the Act.
"(2) The defendant shall not, contrary to Section 7 of the Act, employ any of its employees engaged in commerce and in the production of goods for commerce, as defined by the Act, for a workweek longer than forty (40) hours unless the employee receives compensation for his employment in excess of forty (40) hours at a rate not less than one and one-half times the regular rate at which he is employed.
"(3) The defendant shall not fail to make, keep and preserve records of its employees and of the wages, hours and other conditions and practices of employment maintained by it, as prescribed by the regulations of the Administrator issued, and from time to time amended, pursuant to Section 11(c) of the Act and found in Title 29, Chapter V, Code of Federal Regulations, Part 516."