Citations
- 172 F.2d 751
Full opinion text
MINTON, Circuit Judge.
This is an appeal from á decree enjoining the defendant-appellant from violating the Fair Labor Standards Act by failure to pay .certain employees, known as senior inspectors, for overtime in' excess of forty hours per week at a rate not less than one and one-half times the regular 'rate. The defendant claims first, that the employees concerned are not engaged in the production .of goods fqr.commerce; secondly, that in any event, the employees -are exempt as administrative employees under Section 13 (a) (1) of the Act; and third, that the District Court erred in excluding evidence that in not paying overtime, the defendant acted in good faith in reliance upon .orders of the Bureau of Internal Revenue under the Stabilization Act of 1942 prohibiting such payments, and .that such evidence constitutes a defense under. 29 U.S.C.A. § 258, known as Section 9. of the Portal-to-Portal Act of: 1947. The District Court made findings of fact and stated .its conclusions of law thereon. From these .findings these undisputed facts appear.
The defendant’s employees here involved, senior inspectors, receive over $200 per month salary, together with traveling expenses, meals, and lodging. They are sent all over the United States. They are specialists whose qualifications are those of technicians who have a specialist’s training, although the educational standards vary all the way from the eighth grade to graduates of engineering schools. The inspectors are not supervised in their work and come and go as their duties require. These inspectors render “an engineering inspection and-testing service of structural steel, cement and concrete, rail and fastenings and track materials, and general engineering materials and equipment, including bridges, railroad cars,, other vehicles, engines, boilers, machines, etc.”
The services of these inspectors, who are employed and paid only by the defendant, are furnished for a fee exclusively to purchasers of materials and equipment. After inspection is made, the inspector writes and sends his report to one of the offices of the defendant where it is typed and edited but never revised. The reports are always accepted by the defendant as made by the inspector. The report is then sent to the client' or customer who may or may not accept and act upon this report and purchase the goods concerned. The defendant’s ‘ clients are chiefly utilities, large building projects, municipalities, states, the federal government, and foreign countries. The defendant also maintains and operates laboratories as a part of its testing services.
When the defendant receives an order, it selects an inspector and assigns him to the job. The inspector, with his credentials, instructions, and applicable specifications and'blueprints; reports to the manufacturer’s plant. Although the manufacturer may have made his own tests and inspection, the defendant’s inspector makes his tests and inspection in his own way but in accordance with the data furnished him, which may be incorpbrated in the instructions -and specifications. The specifications are sometimes taken from the contract between the manüfacturer and the prospective purchaser or from standard specifications printed in some technical reference work. When there are no written specifications, the inspector is furnished with a copy of the purchase order describing the articles to be inspected. These are sometimes brief, sometimes extensive. The specifications state precisely some of the requirements and also generally contain broad language, involving unexpressed details, such as the materials or equipment shall be suitable for the specified purpose, free from injurious defects, of best quality, of good workmanship, according to best standards, capable of certain degrees of operating efficiency, possessed of certain characteristics, and the like. The specifications generally require that 'as to certain other factors, the inspector’s, approval ■ is a prerequisite to the purchaser’s obligation to accept the goods. In many cases, the specifications give only approximate dimensions.
The court specifically found:
“A substantial amount of goods inspected by the inspectors is used as instrumentalities of commerce by the defendant’s customers or clients. After inspection, a substantial portion of the goods so inspected is shipped by the sellers thereof in interstate commerce and a substantial amount is used by defendant’s customers or clients in the production of other goods for interstate commerce.”
This part of the court’s finding is not challenged by the defendant. The court then found:
“The inspectors ate engaged in processes and occupations necessary to the production of goods for interstate commerce.”
This last finding the defendant claims is unwarranted. It is, however, the ultimate finding of fact upon which the conclusion of law is based that the defendant’s inspectors were engaged in the production of goods for commerce. We think the other subsidiary findings, which are unchallenged, abundantly support the ultimate finding th