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MITCHELL v. S.A. HEALLY COMPANY

June 23, 1959

JAMES P. MITCHELL, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
S.A. HEALY COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Robson, District Judge.

The United States of America seeks to enjoin defendant from paying less than the statutory overtime wages to its employees*fn1 for hours over forty in a work week, pursuant to the requirements of the Federal Fair Labor Standards Act (29 U.S.C.A. § 201 et seq.). The defendant is a general contractor engaged in the construction of a new tunnel, which is to be a part of the Chicago Waterworks System. The parties have stipulated the facts and the cause is submitted for decision on briefs. The Court hereby adopts the stipulation of facts as its special findings of fact required by Rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S.C.

The stipulation of facts reveals that the 79th Street tunnel, which defendant by contract of July 8, 1956, undertook to construct for the sum of $7,852,050, is to be 4.6 miles in length; that it is to be a 16-foot tunnel to extend from the filter plant reservoir in Lake Michigan at 79th Street in Chicago to connections with the existing State Street and Stewart Avenue tunnels; that the tunnel is being constructed to provide greater amounts of water for the City's increased population and for industrial use, the industrial use being 30% of the daily average pumpage; that the defendant's employees worked on the tunnel from July 16, 1956, and will continue to work on it until at least December, 1959.

The complaint is predicated on the allegation that

    "A substantial portion of the water supplied by
  the * * * water supply systems of the city of
  Chicago, has been and is being sold to and used by
  instrumentalities of interstate commerce, to
  facilitate such commerce, and has been and is being
  sold to and used by persons and firms engaged in the
  production of goods for interstate commerce, to
  facilitate such production of goods for interstate
  commerce."

The Fair Labor Standards Act prescribes rates of pay applicable to

    "* * * employees * * * engaged in commerce or in
  the production of goods for commerce * * *." 29
  U.S.C.A. § 206.

It defines "commerce" to mean

    "* * * trade, commerce, transportation,
  transmission or communication among the several
  States or between any State and any place outside
  thereof." Sec. 203(b).

It defines "produced" thus:

    "`Produced' means produced, manufactured, mined,
  handled, or in any other manner worked on in any
  State; and for the purposes of this chapter an
  employee shall be deemed to have been engaged in the
  production of goods if such employee was employed in
  producing, manufacturing, mining, handling,
  transporting, or in any other manner working on such
  goods, or in any closely related process or
  occupation directly essential to the production
  thereof, in any State." Sec. 203(j).

The wording of this last quoted provision was changed in 1949 by adding the words "closely related" and substituting the words "directly essential" for the word "necessary."

The Government quotes from the Report of the Majority of Senate Conferees at 95 Cong.Rec. 14875, indicative of Congressional intent, thus:

    "* * * employees repairing, maintaining, improving
  or enlarging the buildings, equipment, or facilities
  of producers of goods are within the coverage of the
  Act whether they are employed by the producer of
  goods or by someone else who has undertaken the
  ...

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