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DURKIN v. EDWARD S. WAGNER CO.

September 10, 1953

DURKIN, Secretary of Labor,
v.
EDWARD S. WAGNER CO., Inc.



The opinion of the court was delivered by: GALSTON

This is an action to enjoin the defendant, a distributor of infants' knitted wear, from violating the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., and regulations issued by the Administrator of the Wage and Hour Division, Department of Labor, pursuant to the Act.

The action was originally tried before Judge Kennedy on a complaint alleging violations of the provisions of Sections 6 and 15(a)(1) of the Act by the defendant, in paying to many of their homeworkers, for their employment in the production of goods for interstate commerce, wages at rates less than the minimum wage rate established by the pertinent regulations; and for violations of the applicable regulations requiring the obtaining of special homework certificates and the submission by the employer of records and reports with respect to the employment of homeworkers. The defendant conceded, at the first trial, that the goods were produced for interstate commerce, that no records had been kept, and that the homeworkers were employed without certificates. The question put in issue before Judge Kennedy was whether the homeworkers were employees within the meaning of the Act and of the pertinent regulations.

 Judge Kennedy concluded that the homeworkers were employees within the meaning of the Act. McComb v. Edward S. Wagner Co., D.C., 89 F.Supp. 304.

 On appeal, the defendant contended for the first time that the homeworkers involved were not within the scope of the applicable regulation. The regulations contained this definition:

 'As used in these regulations, the term 'industrial homework', means the production of any person in or about a home, apartment, tenement or room, in a residential establishment, for an employer of goods from material furnished directly by or in directly for such employer.' 7 F.R. 2593, 29 C.F.R. 617.101.

 Since there was no evidence to show that the material was thus furnished by the defendant, the court reversed the decision of the district court. Tobin v. Edward S. Wagner Co., 2 Cir., 187 F.2d 977. In reversing, however, the court took the view that the Act was sufficiently broad,

 '* * * to authorize an administrative order or regulation including homeworkers engaged in activities such as those who dealt with the defendant here. * * * Were there no more to the case, we would affirm.' Tobin v. Edward S. Wagner Co., supra, 187 F.2d at page 978.

 The plaintiff contended, before the Court of Appeals, that the public hearings which preceded the issuance of the regulations disclose that the regulations were meant to cover homeworkers, regardless of the source of the materials used by the homeworkers. In the absence of any published administrative interpretive rulings giving such an interpretation to the regulations, however, the court concluded that the definition contained therein could not be given the construction for which the plaintiff contended. Therefore, it remanded the case to afford the plaintiff the opportunity to offer further evidence showing that the workers fell within the definition.

 Subsequent to the decision of the Court of Appeals the Administrator of the Wage and Hour Division issued an amendment to the homework regulation, published in the Federal Register on April 16, 1951, as well as an amendment to the record-keeping regulations, published in the Federal Register on May 3, 1951, which read as follows:

 "Industrial homeworker' and 'homeworker', as used in this part (section) mean any employee employed or suffered or permitted to perform industrial home work for an employer.

 "Industrial home work,' as used in this part (section), means the production by any person in or about a home, apartment, tenement, or room in a residential establishment of goods for an employer who suffers or permits such production, regardless of the source (whether obtained from an employer or elsewhere) of the materials used by the homeworker in such production.'

 On September 7, 1951, the plaintiff filed, with leave of the court and with the consent of the defendant, a supplemental complaint, setting forth the new regulations and their continued violations by the defendant. It is also alleged therein that:

 'Said amendment sets forth in express terms the interpretation always given to the original regulation by the plaintiff and the Administrator of the Wage and Hour Division, United States Department of Labor which interpretation was at all times known to the defendants.'

 The defendant answered, denying the due promulgation of the amended regulations and asserting that they were made 'without right, power or authority and without observance of the procedure required by the Administrative Procedure Act. 5 U.S.C. § ...


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