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LENCA v. LARAN ENTERPRISES

December 13, 1974

STANLEY LENCA AND BEULAH LENCA, PLAINTIFFS,
v.
LARAN ENTERPRISES, INC., DEFENDANT.



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

MEMORANDUM OPINION AND ORDER

This cause comes before the Court on the motion of defendant to dismiss the complaint for want of jurisdiction.

This action was brought pursuant to the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq., which guarantees certain rights to employees engaged in interstate commerce.*fn1 The complaint specifically alleges that:

    "At all times material herein Defendant was part of an
  enterprise engaged in commerce or in the production of goods
  for commerce within the meaning of Section 3(s) of the Act.
    Defendant has violated the provisions of Section 7(a)(1) of
  the Act by employing Plaintiff Stanley Lenca for workweeks
  longer than forty hours without compensating him for his
  employment in excess of forty hours a week at rates not less
  than one and one-half times the regular rate of pay at which
  he was employed.
    Defendant has violated the provisions of Sections 6(a)(1) of
  the Act by failing to compensate Plaintiff Beulah Lenca for
  her hours worked and Section 7(a)(1) of the Act by employing
  her for workweeks longer than forty hours a week at rates not
  less than one and one-half times the legal minimum wage of
  $1.60 an hour.
    Under Plaintiff Stanley Lenca's agreement with Defendant he
  was compensated during the period August 1972 through June
  1973 at an average monthly salary of $866.00 plus free rental
  of an apartment at an estimated value of $150.00 per month,
  or total compensation of $1016.00 per month, for all hours
  worked.
    During the period August 1972 through June 1973 Plaintiff
  Stanley Lenca worked in the Defendant's employ a total of
  5,280 hours and received total compensation of $11,176.00.
  Mr. Lenca received no overtime pay during this period.
    During the period August 1972 through June 1973 Plaintiff
  Stanley Lenca had a regular straight-time rate of pay of
  $2.11 per hour ($11,176 divided by 5,280 hours). During this
  period he worked a total of 3,400 overtime hours for which he
  should have received an additional one-half time pay, or
  $1.055 per hour, for a total of $3,587.00.
    During the period August 1972 through June 1973, Plaintiff
  Beuhla Lenca worked in Defendant's employ a total of 3,960
  hours of which 1,880 hours were straight time and 2,080 hours
  were overtime. She received no compensation for any of these
  hours. The then federal minimum wage under Section 6(a)(1) of
  the Act was $1.60 per hour. As a result Plaintiff Beulah
  Lenca was entitled to $3,008.00 in straight time pay (1,880
  hours x $1.60) and $4,992.00 in overtime pay (2,080 hours x
  $2.40) or a total of $8,000.00.

Essentially the issue for consideration before the Court is whether a residential janitor is engaged in commerce or in the production of goods for commerce within the coverage of the Fair Labor Standards Act.

At the outset certain basic principles must be acknowledged. As stated by the Court of Appeals for the Tenth Circuit:

  ". . . The Act was passed for humanitarian and remedial
  purposes, A. H. Phillips, Inc. v. Walling, 324 U.S. 490, 493,
  65 S.Ct. 807, 89 L.Ed. 1095; it must be liberally construed `to
  apply to the furthest reaches consistent with direction,'
  Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207, 211,
  79 S.Ct. 260, 264, 3 L. Ed.2d 243; and breadth of coverage is
  vital to the Act's mission, Powell v. United States Cartridge
  Co., 339 U.S. 497, 516, 70 S.Ct. 755, 94 L.Ed. 1017." Hodgson
  v. University Club Tower, Inc., 466 F.2d 745 (10th Cir. 1972).

Despite liberal treatment of the Act's coverage this Court is of the opinion that plaintiffs under the facts of this case do not enjoy its benefits. Defendant is not an "enterprise" engaged in interstate commerce within the meaning of the Act which provides at Section 203(s)(1) that such an enterprise exists when there is a $250,000 annual gross volume of sales. As evidenced by the affidavit executed by the president of the defendant corporation, during each of the years of plaintiff Stanley and Beulah Lenca's employment, there was less than $100,000 of gross sales or business. On the other hand, as individual employees plaintiffs are entitled to coverage under 203(j) only if their work is "in producing, manufacturing, mining, ...


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