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HOLMES v. ELIZABETH TRUST CO.

June 16, 1947

HOLMES
v.
ELIZABETH TRUST CO.



The opinion of the court was delivered by: MEANEY

This action is brought under sections 15 and 16 of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. The plaintiff was employed for a period of approximately five years as a building superintendent, with certain claimed additional duties which it is alleged will bring him within the wage requirements of the Act. The defendant, the Elizabeth Trust Company, maintains a branch office in the building owned by it, in which plaintiff is employed.

The matter came on before the Court on plaintiff's motion to strike the answer of the defendant, for a partial summary judgment, to establish issues and for an order for leave to amend the complaint.

 At the hearing on said motion, leave was granted by the Court to plaintiff to amend his complaint to include not only the allegation that the defendant was 'engaged in interstate commerce' but in 'the production of goods for commerce' as well.

 In the course of the oral hearing on the above motion, it quickly became apparent that unless the defendant bank was 'engaged in commerce' or 'in the production of goods for commerce' the plaintiff would have no basis for his claim of himself being engaged in one of the classes above specified. To that end, the court directed counsel to confine their arguments to that limited question.

 The determination herein will be confined to the narrow question immediately at issue and will in no manner be determinative beyond it. In so far as plaintiff's motion is concerned, it will come on for such further hearing, in the light of this determination, as may be necessary under the circumstances.

 The distinction between engaged 'in commerce' and 'in the production of goods for commerce' is a nice one, and important because the Act itself makes a distinction between the two categories. Mennicucci v. F. & P. Brakeline Service, D.C.N.J., 58 F.Supp. 720, 721.

  Thus the Circuit Court for the third circuit in Carrigan v. Provident Trust Co. of Philadelphia, 3 Cir., 153 F.2d 74, 75, has recently stated 'An important distinction between the two definitions is evident. Congress described 'production' to include acts merely necessary to the production of goods. 'Commerce', on the other hand, is so closely circumscribed that acts merely necessary to commerce are not included. The wide variation in the scope of the two terms has been frequently noted.' The distinction between the two definitions appears in two Supreme Court cases and is controlling. *fn1" Thus it must be determined not only whether the defendant bank falls within the broad scope of the Fair Labor Standards Act, but also under precisely which definition it is so found. In so far as this plaintiff is concerned, the distinction may be controlling since in the ultimate determination it is the employee's activities that are determinative. Whether this plaintiff's activities are such as bring him within the provisions of the Act may depend, therefore, under which of the two definitions this defendant bank is found to fall

 At the outset, it may be stated that, for the purposes of this argument only, the defendant admits that it is engaged in interstate commerce. It denies, however, that the bank 'produces' goods for commerce, that any 'goods for commerce' were produced in the building in which plaintiff was employed, that the plaintiff was engaged in interstate commerce or that plaintiff was engaged in the production of goods for commerce.

 The various arguments directed at the particular kind of work performed by this plaintiff need not here be examined. For the purposes of the present argument the Court does not undertake to determine whether the plaintiff's employment brings him within the provisions of the Act, either as engaged in 'the production of goods for commerce' or as 'engaged in commerce.'

 The question presently to be determined is concerned exclusively with the category into which the branch of the defendant bank, located in the building in which this plaintiff is employed, shall fall.

 In insisting that the defendant bank is engaged 'in the production of goods for commerce' the plaintiff relies entirely upon the recent decision handed down by Judge Learned Hand in Bozant v. Bank of New York, 2 Cir., 156 F.2d 787.

 In that case the court had before it a claim for overtime made under the Fair Labor Standards Act, Sec. 216(b) of Title 29 U.S.C.A., by employees who took care of the building which the Bank of New York owned, and in which that Bank occupied about fifty percent of the building. The question before that court was whether the defendant bank and other banks in the building were engaged in 'the production of goods for commerce' under 203(j) of title 29.

 In determining that the defendant bank in that case was engaged in the production of goods for commerce the court concluded as follows (156 F.2d 790): 'In so far as the Bank's business consists of preparing, executing or validating bonds, shares of stock, commercial paper, bills of lading and the like, it is engaged in 'producing goods for commerce'; and included in this are any activities necessary to the effectiveness of the documents even though, as an example, it be no more than registering a share or a series of bonds. On the other hand the mere writing of letters or the drawing of papers, which have no value of their own except as records, are not to be counted.'

 Judge Hand in the Bozant case, in reaching the conclusion noted above, observed that bills of exchange, negotiable notes and most commercial paper are also usually treated as 'specialties' and in that respect assimilated to bonds. For some purposes shares of stock and bills of lading are in the same class. The court then stated further that it by no means unduly strains 203(j) to regard the ...


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