Before KNOCH, SWYGERT and MAJOR, Circuit Judges.
MAJOR, C. J.: Plaintiff brought this action to enjoin defendants from violating certain provisions of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. 201-219.The District Court, after hearing, made its findings of fact, about which there is little if any dispute, its conclusions of law and on June 25, 1964, entered judgment from which the appeal comes to this Court. The District Court concluded that defendants had violated Sec. 15(a)(2) (wages and hours) and Sec. 15(a)(5) (recordkeeping requirements) of the Act embodied such conclusions in its judgment and permanently enjoined and restrained defendants from future violations.
The contested issues are aptly stated in plaintiff's brief. They are (1) whether employees in the branch office of a nationwide small loan organization who are continuously engaged in such activities as the collection of funds and preparation of reports, documents and correspondence for out-of-state transmission, all of which are vital to the organization's nationwide operations, are engaged "in commerce" and in the "production of goods for commerce" within the meaning of the Fair Labor Standards Act, and (2) whether it was an abuse of discretion for the District Court to grant injunctive relief, and to include within its scope all of the organization's branch office employees.
Beneficial Finance Company is a holding company with headquarters at Wilmington, Delaware. Its holdings consist of subsidiary corporations which are engaged, throughout the United States and in certain foreign countries, in the business of making installment loans. At the close of 1957, these subsidiaries operated a total of 1,089 small loan offices.
Defendant Beneficial Management Corporation of America (hereafter called Beneficial Management) is a subsidiary of Beneficial Finance Company, with offices located at Morristown, New Jersey. Defendant Beneficial Finance Company of Wisconsin is one of the operating subsidiary corporations and maintains a number of loan offices in that State. At all times material to this action it operated a loan office at 152 West Wisconsin Avenue, Milwaukee, Wisconsin (hereafter called 152 Wisconsin-Beneficial). This is the only office at which violations of the Act were alleged in the complaint and the only office discussed in the evidence.
Defendant Edwin F. Koetsch was the manager at 152 Wisconsin-Beneficial. During the course of the proceeding it was stipulated that he was an office manager and exempt as an executive and administrative employee under Sec. 13(a)(1) of the Act. The action was dismissed as to him.
The defendant corporations are components of the widely advertised "Beneficial Loan System," one of the nation's two largest chain organizations engaged in the making of installment loans, insuring borrowers and performing attendant collection and credit investigation activities. The System makes annually over 1,783,000 loans, totaling more than $630,000,000, and as of the close of 1957 employed 6,200 persons.
Beneficial Management of New Jersey provides management services for the System, including audit and personnel supervision, setting up policy, controlling of office supplies and maintenance of statistics. Through its branch loan offices, the Beneficial System offers its customers nationwide and foreign services, including a "Beneficial Cash-Credit Account" evidenced by a Nationwide Cash Credit Card which enables a borrower to "get cash in a hurry at home or wherever you may be," once a borrower has a loan approved by one of the System's offices. Through these offices, the Beneficial System also offers its customers the convenience of accommodation payments, whereby they "may make a payment at any office from coast to coast," as well as the opportunity to buy insurance written by an out-of-state insurance company at the time a loan is made by the local office personnel.
From the supervisory offices to the loan offices there flows a constant stream of communications, documents, and materials. These include training courses required of all personnel; office supplies, advertising matter and forms; service staff bulletins containing instructions and uniform procedures to be followed which must be read and initialed by all employees and then bound and used as a constant source of information, and ledgers which reflect information received from loan office reports, with notation of errors to be corrected and charges made against the account of the loan office.
Regular transmission and communication between the various loan offices also occurs because of the services they are required to perform for one another by honoring the Nationwide Cash Credit Cards, transferring accounts of customers who move, tracing delinquent customers referred by other Beneficial offices and other finance companies, and accepting accommodation payments. There is also regular interstate transmission and communication between the loan offices and various companies performing business services for all the affiliated loan offices of the Beneficial System, including the regional depository banks, companies carrying life insurance on Beneficial borrowers and the System's advertising representative.
The magnitude of the operation is evidenced by the fact that prior to December 31, 1956, it had loaned $462,492,129, of which amount approximately $305,540,000 was capital borrowed in large cities in the United States and Canada. Funds needed for loans and operations are funneled to the affiliated loan offices through regional depositories, each of which services offices in a number of states. Each loan office not only obtains funds from such depository but transfers funds back to it whenever its own local banking account exceeds a fixed amount.
We need not dwell further on the facts bearing on the diversified activities of the far-flung operation of the System because it is not open to doubt but that it was engaged in interstate commerce and in the production of goods for commerce. This includes its engagement with 152 Wisconsin-Beneficial, abount which the dispute centers.
Even so, defendants contend here, as they did in the District Court, that the employees at its Wisconsin office are not engaged in commerce or in the production of goods for commerce and, therefore, are not covered by the Act. Defendants, in reliance upon their belief of non-coverage, admit that they have not at any time complied with the provisions of the Act which they are now alleged to have violated.
No good purpose could be served in relating in detail the duties of the employees and the work performed by them, as found by the Court. These findings, which in the main are not challenged, cover some fifteen pages of the Appendix. We think it is sufficient to note that their work required them to do any and all things essential to the operation of the Wisconsin office, including its interstate business. They prepared papers such as checks, contracts for insurance and reports for use in the operation of the business, which were transmitted to the managing office as well as to other offices included in the System. They followed ...