The opinion of the court was delivered by: FORMAN
The plaintiff, William R. McComb, Administrator of the Wage and Hour Division, United States Department of Labor, brought this action under the Fair Labor Standards Act of 1938, Act of June 25, 1938, c. 676, 29 U.S.C.A. § 201 et seq., to enjoin defendants, LaMont Voorhies Trimmer and Donald R. Trimmer, individually and as copartners doing business under the name and style of Trimmer Stone Company, from violating the provisions of §§ 15(a)(2) and 15(a)(5) of the Act, 29 U.S.C.A. § 215(a)(2, 5).
Following a pretrial conference pursuant to Rule 16 of the Federal Rules of Civil Procedure, 28 U.S.C.A. an order was entered upon the stipulation of the parties in which the following facts were admitted as to the issue framed by the complaint and answer in this case:
'Defendants, LaMont Voorhies Trimmer and Donald R. Trimmer, are now, and at all times hereinafter mentioned were, co-partners doing business under the firm name and style of Trimmer Stone Company, having their principal office located in Flemington, in the County of Hunterdon, State of New Jersey, and having their plant, stone quarry and shale pit located in the County of Hunterdon, State of New Jersey. The defendant, LaMont Voorhies Trimmer resides in the Town of Clinton, County of Hunterdon, State of New Jersey, and defendant Donald R. Trimmer resides in Pattenburg, Hunterdon County, State of New Jersey, and defendants are now, and at all times hereinafter mentioned were, engaged at the said plant and place of business in the County of Hunterdon, State of New Jersey, in the quarry industry, and in the mining, crushing and sale of stone, shale, gravel and sand.
'Defendants employed and are employing approximately seven employees in and about the said plant, quarry, pit and place of business, located in the County of Hunterdon, State of New Jersey, and said employees are engaged in the production of crushed stone, shale, gravel and sand, and in processes and occupations necessary thereto. Substantial quantities of the aforementioned goods produced by the said employees have been and are being used for building, repairing and maintaining roads and the activities and operations of the said employees are performed as follows:
'A portion of the side of the mountain in said stone quarry is lined with dynamite and exploded. When the portion has collapsed and settled, defendants' employees use a crane shovel to lift the stone and load the company trucks to carry the stones to the crushers, which crushers are located within the quarry. The stone is there dumped into the crushers which crush and break up the huge stones and direct and eject the broken stones across screens which filter and collect the stones according to size. The stones fall down chutes into bins which are higher than truck level and a truck owned by the county pulls up under a bin where a trap door arrangement at the bottom of the bin releases the stone and loads the truck. Defendants' trucks do not deliver the stone to the job site of roads; they only haul the blasted stone to the crusher. The stone is sold by the ton, and is picked up, as aforesaid, by trucks owned by Hunterdon County and delivered to the maintenance site of roads. The stone is used in the maintenance, repair and reconstruction of highways carrying interstate trade and commerce.
'Defendants also operate a sale pit near Clinton, New Jersey and defendants' employees at this site are engaged in the following activity:
'The shale is picked up by a crane shovel and loosened; then loaded into a truck. The shale is sold by the truck load and trucks owned by the county haul the same to the job sites where it is used primarily for the maintenance of shoulders along highways and roads carrying interstate trade and commerce.
'None of defendants' aforementioned goods is sold directly out of the state.
'The defendants' employees employed in and about the said quarry and pit have been employed since May 26, 1946, and are presently employed for workweeks longer than forty (40) hours and these said employees are not compensated for their employment in excess of forty (40) hours in said workweeks at rates not less than one and one-half times the regular rates at which they are employed.
'On October 21, 1938, the Administrator of the Wage and Hour Division, United States Department of Labor, pursuant to the authority conferred upon him by Section 11(c) of the Act (29 U.S.C.A. § 211(c)), duly issued and promulgated regulations prescribing the records of persons employed and of wages, hours and other conditions and practices of employment to be made, kept, and preserved by every employer subject to any provision of the Act. The said regulations, and amendments thereto, were published in the Federal Register and are known as Title 29, Chapter V, Code of Federal Regulations, Part 516.
'Defendants since May 26, 1945, have failed to make, keep and preserve adequate and accurate records of their employees and the wages, hours and other conditions and practices of employment maintained by them as prescribed by the Regulations set forth in paragraph VII above, in that the records which are kept by the defendants failed to show adequately and accurately the hours worked each workday and each workweek, the regular rate of pay, the basis on which wages are paid, the total straight time earnings for each workweek and the total weekly overtime excess compensation with respect to their said employees.'
It was further stipulated between the parties that the issue of law for determination is as follows:
'Plaintiff contends that defendants' employees who are engaged in producing gravel and shale for use on instrumentalities of interstate commerce, and employees engaged in any process or occupation necessary to such production, are covered by the Act because they are engaged in the production of goods for commerce within the meaning of Section 7 and 3(j) of the Act. (29 U.S.C.A. §§ 207, 203(j)).
'Defendants maintain that the goods produced by the said employees have not been, nor are they being produced for interstate commerce since the operations of the defendants' business are conducted wholly within the state and are not in any ...