Boutell v. Walling, 327 U.S. 463 (1946)
Facts: Mechanics employed by Service Company sought injunction to prevent company from violating maximum hours provisions of the FLSA. Employers, who also own a transportation company which has an exclusive relationship with Service Company, contend that the mechanics are exempt from the FLSA because they are engaged soley in intrastate commerce. Alternately the employer argues that the mechanics, as employees of a “carrier,” are subject to the Interstate Commerce Commission’s power to establish working hours rather than the FLSA.
Case History: District Court granted the injunction and the Court of Appeals affirmed that judgment.
Holding and Disposition: Held, Service Company and its employees are subject to the maximum hour provisions of the FLSA. Lower courts affirmed.
Reasoning: To fall under the exemption for intrastate commerce the FLSA requires that the “greater part” of work be accomplished for in state purposes. In this case the transportation company also owned by the employers retained sole use of the mechanic’s services and those services were rendered to continue the flow of interstate commerce—the mechanics serviced the trucks employer used to transport automobiles between states. Furthermore, the employees do not fall under the Interstate Commerce Commissions power to regulate the hours of “carrier” employers because they work for a service company not a carrier company.
Significance and Key Points: Employer may not make an end run around the FLSA by claiming on the one hand that its mechanics are not subject to the FLSA because they are not engaged in interstate commerce and on the other hand that they are not subject to the FLSA because they are employed by a “carrier” and therefore fall under the Interstate Commerce Commission’s powers.
Arnold v. Ben Kanowsky, Inc., 361 U.S. 388 (1960) (retail/service business exemption)
Facts: Production employee of a company claiming to be a interior decorating and custom furniture business sued for overtime pay. The employer claimed that it fell under the retail and service business exemption even though approximately 25% of its revenue came from the production and sale of plastic parts to be used in airplanes manufacture.
Case History: District Court determined that company did not fall under the exemption for retail and service providers of the FLSA and ordered payment of overtime to the employee. Court of Appeals reversed holding that the company did fall within the exception.
Holding and Disposition: Held, the company does not fall within retail/service business exemption and the employee is entitled to overtime pay. The Court of Appeals is reversed and the District Court judgment is reinstated.
Reasoning: In order to meet the “sideline” activity requirements and thus preserve retail and service business exemption, the company must fall into the enumerated list. The employer failed to establish that the burden of its activity is not for “resale” and thus qualifies as retail in the particular industry.
Significance and Key Points: The court will narrowly construe the exemptions such that “their application [is] limited to those establishments plainly and unmistakable within their terms and spirit.”
* Case briefs are summaries of appellate court opinions issued on particular points of law. The case briefs were prepared for illustrative purposes only. Warning: The points of law described herein may no longer be accurate statements of the law.