10 East 40th Street Building, Inc. v. Callus

Delivered the opinion of the Court.

The Fair Labor Standards Act of 1938 regulates wages and hours not only of employees who are “engaged in commerce” but also those engaged “in the production of goods for commerce.” Sections 6, 7, 52 Stat. 1060, 1062-63, 29 U. S. C. §§ 206, 207. For the purposes of that Act “an employee shall be deemed to have been engaged in the production of goods if such employee was employed . . . in any process or occupation necessary to the production thereof, in any State.” § 3 (j). When these provisions first came here we made it abundantly clear that their enforcement would involve the courts in the empiric process of drawing lines from ease to case, and inevitably nice lines. Kirschbaum Co. v. Walling, 316 U. S. 517. And this for two reasons. In enacting this statute Congress did not see fit, as it did in other regulatory measures, e. g., the Interstate Commerce Act and the National Labor Relations Act, to exhaust its constitutional power over commerce. And “Unlike the Interstate Commerce Act and the National Labor Relations Act and other legislation, the Fair Labor Standards Act puts upon the courts the independent responsibility of applying ad hoc the general terms of the statute to an infinite variety of complicated industrial situations.” Kirschbaum Co. v. Walling, supra, at 523. Thus, Congress withheld from the courts the aid of constitutional criteria, compare, e. g., Currin v. Wallace, 306 U. S. 1; Wickard v. Filburn, 317 U. S. 111; Polish Alliance v. Labor Board, 322 U. S. 643, as well as the benefit of a prior judgment, on vexing and ambiguous facts, by an expert administrative agency. Compare, e. g., Labor Board v. Fruehauf Co., 301 U. S. 49; Gray v. Powell, 314 U. S. 402, 412.

The Act has produced a considerable volume of litigation and has inevitably given rise to judicial conflicts and divisions. The lower courts, and only in a lesser measure this Court, have been plagued with problems in connection with employees of buildings occupied by those having at least some relation to goods that eventually find their way into interstate commerce.

In Kirschbaum Co. v. Walling, supra, we were concerned with maintenance employees of buildings con-cededly devoted to manufacture for commerce. In Borden Co. v. Borella, post, p. 679, the Fair Labor Standards Act was invoked on behalf of maintenance employees of a building owned by an interstate producer and predominantly occupied for its offices. Recognizing that the question in every case is “whether the particular situation is within the regulated area,” we concluded that the employees of the buildings in the Kirschbaum case “had such a close and immediate tie with the process of production” carried on by the lessees as to come within the Act. The Borden case involved Borden employees who, if they had been under the same roof where the physical handling of the goods took place, could hardly, without drawing gossamer and not merely nice lines, be deemed not to be engaged in an “occupation necessary to the production of goods” as described by §3 (j). To differentiate, in the incidence of the Fair Labor Standards Act, between maintenance employees who worked in the building where the business of the manufacture of milk products goes on and employees pursuing the same occupation for the Borden enterprise in an office separate from the manufacturing building, is to make too much turn on the accident of .the division of the whole industrial process. The case immediately before us presents still a third situation differing both from Kirschbaum and Borden.

The facts are these. Petitioner owns and manages a 48-story New York office building. The offices are leased to more than a hundred tenants pursuing a great variety of enterprises including executive and sales offices of manufacturing and mining concerns, sales agencies representing such concerns, engineering and construction firms, advertising and publicity agencies, law firms, investment and credit organizations and the United States Employment Service. The distribution of occupancy in relation to the ultimate enterprises of the different groups of tenants was the subject of conflicting testimony and interpretation, but in our view does not call for particularization. Indisputably, the building is devoted exclusively to offices, and no manufacturing is carried on within it. The respondents are maintenance employees of the building, elevator starters and operators, window cleaners, watchmen and the like. They brought this suit under § 16 (b) of the Pair Labor Standards Act for claims of overtime payment to which they are entitled if their occupations be deemed “necessary to the production” of goods for commerce. Obviously they are not “engaged in commerce.” The District Court dismissed the suit. 51 F. Supp. 528. The Circuit Court of Appeals reversed. 146 F. 2d 438. By a meticulous calculation, it found that the executive offices of manufacturing and mining concerns, sales agencies representing such concerns, and publicity concerns were engaged in the production of goods for interstate commerce, and, since the offices of these concerns occupied 42% of the rentable area and 48% of the rented area, the maintenance employees of the owners of the building are engaged in occupations “necessary to the production” of goods for commerce. Conflict between this result and that reached by other circuits led us to bring the case here. 324 U. S. 833.

The series of cases in which we have had to decide when employees are engaged in an “occupation necessary to the production” of goods for commerce has settled at least some matters. Merely because an occupation involves a function not indispensable to the production of goods, in the sense that it can be done without, does not exclude it from the scope of the Fair Labor Standards Act. Conversely, merely because an occupation is indispensable, in the sense of being included in the long chain of causation which brings about so complicated a result as finished goods, does not bring it within the scope of the Fair Labor Standards Act. See Walling v. Jacksonville Paper Co., 317 U. S. 564; Walton v. Southern Package Corp., 320 U. S. 540; Armour & Co. v. Wantock, 323 U. S. 126; Skidmore v. Swift & Co., 323 U. S. 134. In giving a fair application to § 3 (j), courts must remember that the “necessary” in the phrase “necessary to the production” of goods for commerce “is colored by the context not only of the terms of this legislation but of its implications in the relation between state and national authority.” Kirschbaum Co. v. Walling, supra, at 525. For as was pointed out in Walling v. Jacksonville Paper Co., supra, at 570, we cannot “be unmindful that Congress in enacting this statute plainly indicated its purpose to leave local business to the protection of the states.” We must be alert, therefore, not to absorb by adjudication essentially local activities that Congress did not see fit to take over by legislation.

Renting office space in a building exclusively set aside for an unrestricted variety of office work spontaneously satisfies the common understanding of what is local business and makes the employees of such a building engaged in local business. Mere separation of an occupation from the physical process of production does not preclude application of the Fair Labor Standards Act. But remoteness of a particular occupation from the physical process is a relevant factor in drawing the line. Running an office building as an entirely independent enterprise is too many steps removed from the physical process of the production of goods. Such remoteness is insulated from the Fair Labor Standards Act by those considerations pertinent to the federal system which led' Congress not to sweep predominantly local situations within the confines of the Act. To assign the maintenance men of such an office building to the productive process because some proportion of the offices in the building may, for the time being, be offices of manufacturing enterprises is to indulge in an analysis too attenuated for appropriate regard to the regulatory power of the States which Congress saw fit to reserve to them. Dialectic inconsistencies do not weaken the validity of practical adjustments, as between the State and federal authority, when Congress has cast the duty of making them upon the courts. Our problem is not an exercise in scholastic logic.

The differences between employees of a building owned by occupants producing therein goods for commerce, and the employees of a building intended for tenants who produce such goods therein, and the employees of the office building of a large interstate producer, are too thin for the practicalities of adjudication. But an office building exclusively devoted to the purpose of housing all the usual miscellany of offices has many differences in the practical affairs of life from a manufacturing building, or the office building of a manufacturer. And the differences are too important in the setting of the Fair Labor Standards Act not to be recognized by the courts.

We have heretofore tried to indicate the nature of the nexus between employees who, though not themselves engaged in commerce, are engaged in occupations necessary for the production of goods for commerce by describing the necessary work that brings the occupation within the scope of the Act as work that had “a close and immediate tie with the process of production.” Kirschbaum Co. v. Walling, supra, at 525. Doubtless more felicitous adjectives could be chosen, but the attempt to achieve a form of words that could avoid an exercise of judgment that a particular occupation is more in the nature of local business than not, is merely to be content with formulas of illusory certainty.

On the terms in which Congress drew the legislation we cannot escape the duty of drawing lines. And when lines have to be drawn they are bound to appear arbitrary when judged solely by bordering cases. To speak of drawing lines in adjudication is to express figuratively the task of keeping in mind the considerations relevant to a problem and the duty of coming down on the side of the considerations having controlling weight. Lines are not the worse for being narrow if they are drawn on rational considerations. It is a distinction appropriate to the subject matter to hold that where occupations form part of a distinctive enterprise, such as the enterprise of running an office building, they are properly to be treated as distinct from those necessary parts of a commercial process which alone, with due regard to local regulations, Congress dealt with in the Fair Labor Standards Act. Of course an argument can be made on the other side. That is what is meant by a question of degree, as is the question before us. But for drawing the figurative line the basis must be something practically relevant to the problem in hand. We believe that is true of the line drawn in this case.

Judgment reversed.

See, e. g., Johnson v. Dallas Downtown Development Co., 132 F. 2d 287; Cochran v. Florida Nat. Bldg. Corp., 134 F. 2d 615; Tate v. Empire Bldg. Corp., 135 F. 2d 743; Johnson v. Masonic Bldg. Corp., 138 F. 2d 817.