(a) The statutory provision. An employee is covered by the wage and
hours provisions of the Act if he is engaged in the ``production'' (as
explained in Secs. 776.15 through 776.19) ``for commerce'' (as explained
in Sec. 776.21) of anything defined as ``goods'' in section 3(i) of the
Act. This definition is:
Goods means goods (including ships and marine equipment), wares,
products, commodities, merchandise, or articles or subjects of commerce
of any character, or any part or ingredient thereof, but does not
include goods after their delivery into the actual physical possession
of the ultimate consumer thereof other than a producer, manufacturer, or
processor thereof.
(b) ``Articles or subjects of commerce of any character.'' It will
be observed that ``goods'' as defined in the Act are not limited to
commercial goods or articles of trade, or, indeed, to tangible property,
but include ``articles or subjects of commerce of any character
(emphasis supplied).18 It is well settled that things such as
``ideas, * * * orders, and intelligence'' are ``subjects of commerce.''
Telegraphic messages have, accordingly, been held to be ``goods'' within
the meaning of the Act.19 Other articles or subjects of
commerce which fall within the definition of ``goods'' include written
materials such as newspapers, magazines, brochures, pamphlets,
bulletins, and announcements; 20 written reports, fiscal and
other statements and accounts, correspondence, lawyers' briefs and other
documents; 21 advertising, motion picture, newspaper and
radio copy, artwork and manuscripts for publication; 22
sample books; 23 letterheads, envelopes, shipping tags,
labels, check books, blank books, book covers, advertising circulars and
candy wrappers.24 Insurance policies are ``goods'' within the
meaning of the Act; 25 so are
bonds, stocks, bills of exchange, bills of lading, checks, drafts,
negotiable notes and other commercial paper.26 ``Goods''
includes gold; 27 livestock; 28 poultry and eggs;
29 vessels; 30 vehicles; 31 aircraft;
32 garments being laundered or rented; 33 ice;
34 containers, as, for example, cigar boxes or wrapping paper
and packing materials for other goods shipped in commerce; 35
electrical energy or power, gas, etc.; 36 and by-
products,37 to mention only a few illustrations of the
articles or subjects of ``trade, commerce, transportation, transmission,
or communication among the several States, or between any State and any
place outside thereof'' which the Act refers to as ``goods.'' The Act's
definitions do not, however, include as ``goods'' such things as dams,
river improvements, highways and viaducts, or railroad lines.38
---------------------------------------------------------------------------
18 As pointed out in Lenroot v. Western Union Tel. Co., 141 F.
2d 400 (C.A. 2), the legislative history shows that the definition was
originally narrower, and that subjects of commerce were added by a
Senate amendment.
19 Western Union Tel. Co. v. Lenroot 323 U.S. 490.
20 Mabee v. White Plains Pub. Co., 327 U.S. 178; Yunker
v. Abbye Employment Agency, 32 N.Y.S. 2d 715; Berry v. 34 Irving Place
Corp., 52 F. Supp. 875 (S.D. N.Y.); Ullo v. Smith, 62 F. Supp. 757,
affirmed in 177 F. 2d 101 (C.A. 2); see also opinion of the four
dissenting justices in 10 E. 40th St. Bldg. v. Callus, 325 U.S. at p.
586.
Waste paper collected for shipment in commerce is goods. See Fleming
v. Schiff, 1 W.H. Cases 893 (D. Colo.), 15 Labor Cases (CCH) par.
60,864.
21 Phillips v. Meeker Coop. Light & Power Asso., 63 F.
Supp. 733, affirmed in 158 F. 2d 698 (C.A. 8); Lofther v. First Nat.
Bank of Chicago, 48 F. Supp. 692 (N.D. Ill.) See also Rausch v. Wolf, 72
F. Supp. 658 (N.D. Ill). There are other cases (e.g., Kelly v. Ford,
Bacon & Davis, 162 F. 2d 555 (C.A. 3) and Bozant v. Bank of New York,
156 F. 2d 787 (C.A. 2) which suggest that such things are ``goods'' only
when they are articles of trade. Although the Supreme Court has not
settled the question, such a view appears contrary to the express
statutory definitions of ``goods'' and ``commerce''.
22 Robert v. Henry Phipps Estate, 156 F. 2d 958 (C.A. 2);
Baldwin v. Emigrant Industrial Sav. Bank, 150 F. 2d 524 (C.A. 2),
certiorari denied 326 U.S. 757; Bittner v. Chicago Daily News Ptg. Co.,
4 W.H. Cases 837 (N.D. Ill.), 29 Labor Cases (CCH) par. 62,479; Schinck
v. 386 Fourth Ave. Corp., 49 N.Y.S. 2d 872.
23 Walling v. Higgins, 47 F. Supp. 856 (E.D. Pa.).
24 McAdams v. Connelly, 8 W.H. Cases 498 (W.D. Ark.), 16
Labor Cases (CCH) par. 64,963; Walling v. Lacy, 51 F. Supp. 1002 (D.
Colo.); Tobin v. Grant 8 W.H. Cases 361 (N.D. Calif.). See also Walling
v. Sieving, 5 W.H. Cases 1009 (N.D. Ill.), 11 Labor Cases (CCH) par.
63,098.
25 Darr v. Mutual Life Ins. Co., 169 F. 2d 262 (C.A. 2),
certiorari denied 335 U.S. 871.
26 Bozant v. Bank of New York, 156 F. 2d 787 (C.A. 2).
27 Walling v. Haile Gold Mines, 136 F. 2d 102 (C.A. 4);
Fox v. Summit King Mines, 143 F. 2d 926 (C.A. 9).
28 Walling v. Friend, 156 F. 2d 429 (C.A. 8).
29 Walling v. DeSoto Creamery & Produce Co., 51 F. Supp.
938 (D. Minn).
30 Slover v. Wathen, 140 F. 2d 258 (C.A. 4).
31 Hertz Drivurself Stations v. United States, 150 F. 2d
923 (C.A. 8).
32 Jackson v. Northwest Airlines, 75 F. Supp. 32 (D.
Minn.).
33 Phillips v. Star Overall Dry Cleaning Laundry Co., 149
F. 2d 416 (C.A. 2).
34 Hamlet Ice Co. v. Fleming, 127 F. 2d 165 (C.A. 4);
Atlantic Co. v. Walling, 131 F. 2d 518 (C.A. 5).
35 Enterprise Box Co. v. Fleming, 125 F. 2d 897 (C.A. 5),
certiorari denied, 316 U.S. 704; Fleming v. Schiff, 1 W.H. Cases 883 (D.
Colo.), 5 Labor Cases (CCH) par. 60,864.
36 Walling v. Connecticut Co.; 62 F. Supp. 733 (D.
Conn.), affirmed 154 F. 2d 552 (C.A. 2).
37 Walling v. Peoples Packing Co., 132 F. 2d 236 (C.A.
10), certiorari denied 318 U.S. 774.
38 Engebretsen v. Albrecht, 150 F. 2d 602 (C.A. 7); Kenny
v. Wigton-Abbott Corp., 80 F. Supp. 489 (D. N.J.).
---------------------------------------------------------------------------
(c) ``Any part or ingredient.'' Section 3(i) draws no distinction
between goods and their ingredients and in fact defines goods to mean
``goods'' * * * or any part or ingredient thereof.'' The fact that goods
are processed or changed in form by several employers before going into
interstate or foreign commerce does not affect the character of the
original product as ``goods'' produced for commerce. Thus, if a garment
manufacturer sends goods to an independent contractor within the State
to have them sewn, after which he further processes and ships them in
interstate commerce, the division of the production functions between
the two employees does not alter the fact that the employees of the
independent contractor are actually producing (``working on'') the
``goods'' (parts or ingredients of goods) which enter the channels of
commerce.39
---------------------------------------------------------------------------
39 Schulte Co. v. Gangi, 328 U.S. 108.
Similarly, if a manufacturer of buttons sells his products within the
State to a manufacturer of shirts, who ships the shirts in interstate
commerce, the employees of the button manufacturer would be engaged in
the production of goods for commerce; or, if a lumber manufacturer sells
his lumber locally to a furniture manufacturer who sells furniture in
interstate commerce, the employees of the lumber manufacturer would
likewise come within the scope of the Act. Any employee who is engaged
in the ``production'' (as explained in Sec. 776.15) of any part or
ingredient of goods produced for trade, commerce, transportation,
transmission, or communication among the several States or between any
State and any place outside thereof is engaged in the production of
``goods'' for commerce within the meaning of the Act.40
---------------------------------------------------------------------------
40 Roland Electrical Co. v. Walling, 326 U.S. 657; Bracy v.
Luray, 138 F. 2d 8 (C.A. 4); Walling v. W. J. Haden Co., 153 F. 2d 196
(C.A. 5); Mid-Continent Pipe Line Co. v. Hargrave, 129 F. 2d 655 (C.A.
10); Boiling v. Allison, 4 W. H. Cases 500 (N.D. Okla.); Hanson v.
Lagerstrom, 133 F. 2d 120 (C.A. 8); Walling v. Comet Carriers, 151 F. 2d
107 (C.A. 2); Walling v. Griffin Cartage Co., 62 F. Supp. 396, affirmed
in 153 F. 2d 587 (C.A. 6); Walling v. Kerr, 47 F. Supp. 852 (E.D. Pa.).
---------------------------------------------------------------------------
(d) Effect of the exclusionary clause. The exclusionary clause in
the definition that excepts ``goods after their delivery into the actual
physical possession of the ultimate consumer thereof other than a
producer, manufacturer, or processor thereof,'' is intended to protect
ultimate consumers other than
producers, manufacturers, or processors of the goods in question 41
from the ``hot goods'' provisions of section 15(a)(1) of the Act.42
Section 15(a)(1) makes it unlawful for any person ``to transport * * *
(or * * * ship * * * in commerce * * * any goods'' produced in violation
of the wage and hours standards established by the Act. (Exceptions are
made subject to specified conditions for common carriers and for certain
purchasers acting in good faith reliance on written statements of
compliance. See footnote 53 to Sec. 776.15(a).) By defining ``goods'' in
section 3(i) so as to exclude goods after their delivery into the actual
physical possession of the ultimate consumer (other than a producer,
manufacturer, or processor thereof) Congress made it clear that it did
not intend to hold the ultimate consumer as a violator of section
15(a)(1) if he should transport ``hot goods'' across a State
line.43 Thus, if a person purchases a pair of shoes for
himself from a retail store 44 and carries the shoes across a
State line, the purchaser is not guilty of a violation of section
15(a)(1) if the shoes were produced in violation of the wage or hours
provisions of the statute. But the fact that goods produced for commerce
lose their character as ``goods'' after they come into the actual
physical possession of an ultimate consumer who does not further process
or work on them, does not affect their character as ``goods'' while they
are still in the actual physical possession of the producer,
manufacturer or processor who is handling or working on them with the
intent or expectation that they will subsequently enter interstate or
foreign commerce.45 Congress clearly did not intend to permit
an employer to avoid the minimum wage and maximum hours standards of the
Act by making delivery within the State into the actual physical
possession of the ultimate consumer who transports or ships the goods
outside of the State. Thus, employees engaged in building a boat for
delivery to the purchaser at the boatyard are considered within the
coverage of the Act if the employer, at the time the boat is being
built, intends, hopes, or has reason to believe that the purchase will
sail it outside the State.46
---------------------------------------------------------------------------
41 Southern Advance Bag & Paper Co. v. United States, 183 F.
2d 449 (C.A. 5); Phillips v. Star Overall Dry Cleaning Laundry Co, 149
F. 2d 485 (C.A. 2), certiorari denied 327 U.S. 780.
42 Jackson v. Northwest Airlines, 70 F. Supp. 501.
43 Hamlet Ice Co. v. Fleming, 127 F. 2d 165 (C.A. 4),
certiorari denied 317 U.S. 634.
44 Note that the retail or service establishment
exemption in section 13(a)(2) does not protect the retail store from a
violation of the ``hot goods'' provision if it sells in interstate
commerce goods produced in violation of section 6 or 7.
45 See cases cited above in footnotes 41, 42, 43, this
section.
46 Walling v. Lowe, 5 W.H. Cases (S.D. Fla.), 10 Labor
Cases (CCH) 63,033. See also Walling v. Armbruster, 51 F. Supp. 166
(W.D. Ark.); Joshua Hendy Corp. v. Mills, 169 F. 2d 898 (C.A. 9); St.
Johns River Shipbuilding Co. v. Adams, 164 F. 2d 1012 S. (C.A. 5).
---------------------------------------------------------------------------
