Arnold v. Ben Kanowsky, Inc./Dissent Whittaker

Mr. Justice WHITTAKER (dissenting).

Section 13(a) of the Fair Labor Standards Act exempts from the wage-and-hour provisions of that Act employees of 'any retail or service establishment,' as there defined. See note 1 of the Court's opinion. Therefore, the entity to be considered is the 'establishment.' A single employer may conduct two (or more) 'establishments,' side by side or even under the same roof, one of which could be a 'retail or service establishment,' as defined in and exempted by § 13(a), and the other not. Here, respondent appears to have been separately engaged in three activities: (1) the manufacture and sale of phenolic, in which enterprise several persons-the number is not stated in the record-were employed, (2) an interior decorating business, commonly employing five persons, and (3) the custom manufacture and sale of furniture, employing a small, but varying, number of employees. During petitioner's employment by respondent-from October 17, 1954, through September 2, 1955-he worked for a period in one of these enterprises and then in another, but, as the Court says, he worked primarily in the fabrication of phenolic parts. Upon respondent's admission at the trial, that petitioner had been paid for overtime hours worked only at straight time rates, the District Court, without any evidence showing the number of hours worked in the one as distinguished from the other of these enterprises, entered judgment for petitioner for overtime compensation for all overtime hours worked by petitioner, and an attorney's fee.

Although, as the Court correctly says, respondent, in its phenolic enterprise, was engaged in the production of goods for commerce and a major part of that production was sold for resale and, hence, that enterprise was not a 'retail or service establishment,' as defined in § 13(a), it appears that all of respondent's interior decorating services were rendered locally, and that all of the custom furniture manufacturing was done and the furniture sold locally and not for resale. And, therefore, it would appear-at least there is room for a finding-that respondent's interior decorating and custom furniture manufacturing and selling enterprises were 'retail or service establishment,' as defined in § 13(a). But, there is no finding by the District Court that these three enterprises were conducted by respondent in three 'establishments' or in only one 'establishment'; nor is there any finding as to what percentage of the interior decorating services were rendered locally, or what percentage of the custom furniture manufacturing and selling was done locally and not for resale.

Only if respondent's three enterprises constituted one 'establishment' would there be support in the record for the judgment, and, as stated, there is no finding to that effect. The only oral argument made here was by counsel for the Department of Labor, as amicus curiae. Its position is that, as a matter of law, respondent operated no more than two 'establishments'; that the phenolic enterprise might be one 'establishment,' and it clearly was not a 'retail or service establishment' as defined in § 13(a) (I agree that this is so); that the interior decorating and custom furniture manufacturing and sales enterprises might be another 'establishment'-why these two enterprises might not be two 'establishments' was not explicated. Its counsel then argues that, because some custom manufacturing of furniture was done in the latter 'establishment,' it could not, as a matter of law, be a 'retail or service establishment' as defined in § 13(a). That argument would have had some force prior to the 1949 amendment to § 13(a) (63 Stat. 917), but it is in the teeth of that amendment, as clause 4 of the section, as then amended, provides that the wage-and-hour provisions (§§ 6 and 7) of the Act do not apply with respect to a 'retail or service establishment' as defined 'notwithstanding that such establishment makes or processes at the retail establishment the goods that it sells * *  * .' (Emphasis added.) In the absence, as here, of essential evidence (showing the overtime hours worked in each of the several 'establishments'-if more than one) and findings, I think the record does not support the judgment nor disclose the matters requisite to a decision of the question sought to be presented. I would, therefore, dismiss the writ as improvidently granted, or, at the very least, remand the case to the District Court for a new trial and for proper findings of fact on the determinative issues.