FLSA-1000

July 1, 1964

This is in reference to the Labor Department's investigation of the Jackson, Mississippi branch of your company under the Fair Labor Standards Act, with particular emphasis on questions arising under the section 13(b)(1) overtime exemption from the Act.

Our investigation indicates that your branch is engaged in the wholesale distribution of magazines, newspapers, paperback books and some phonograph records. The magazines are delivered in Mississippi, with one route making deliveries in Louisiana. The cover is stripped from old magazines and mailed back to publishers out of the State. There are a few publications which are ordered for a specific customer or customers and remain in commerce until delivered to the customer.

The principal issue is application of the 13(b)(1) exemption in the following situation:

(1) Warehousemen place out-of-state goods on the rear of the trucks, the remainder of the loading being performed by the drivers.

(4) Warehousemen who do not regularly load trucks but occasionally load trucks to the extent of placing goods on the rear of trucks, the reminder of the loading being performed by the driver.

I am informed that your company has considered the section 13(b) (1) exemption applicable to the employees engaged in these activities apparently on the basis of your interpretation of a letter addressed to *** by former Administrator Wm. R. McComb under date of January 20, 1950. As you may know, modifications of the Department's positions with respect to application of this exemption have been published in the Federal Register since that letter was written, in order to confirm our position to statutory changes and authoritative judicial decisions. However, nothing stated in the letter to Mr. *** would appear to support a chain of exemption for the employees engaged in the activities described in situations Nos. 1, 3 and 4 above.

No activities comparable to those in situation No. 3 were dealt with in the letter to *** and section 782.7(c) of the interpretative bulletin that was sent with the letter made it abundantly clear that such activities would not constitute interstate commerce within the meaning of the Motor Carrier Act and thus would not be within the exemption. Further the letter expressed the opinion that the employees engaged in the loading activities therein described, which are the only activities mentioned in the letter which are comparable to those set forth above in situations Nos. 1 and 4, were not within the exemption.

Under the Department's present position as set forth in 29 CFR 782.2, amended November 1, 1963, copy enclosed, and under decisions of the courts cited therein, the section 13(b)(1) exemption would not be available to any of the employees engaged in the activities in situations in Nos.1, 3 or 4. You will observe that the advice given your manager, *** , of the Jackson branch, at the conclusion of the investigation, and to you and your attorney in the conference of November 1962, conforms with this position.

With respect to engagement in the activity described in situation No. 2 above, I wish to confirm the advice previously given you that the section 13(b)(1) exemption is not in our opinion applicable under the circumstances stated. The Department's position is that an employee of a private carrier engaged in such activity would not be exempt in any workweek when he is not assigned to perform it (29 CFR 782.2(b)(3)) and, under the de minimis principle expressed in 29 CFR 782.2(b)(2) and cases cited thereto (also Foremost Dairies v. Ivey, 204 F. 2d 186, C.A. 5, 1953) performance of the activity under the described circumstances would not bring the employee within the exemption in any workweek. To the extent that a contrary view may have been supported by the court's construction of the law expressed in the Foremost Dairies case above cited and in the subsequent decision in Opelika Royal Crown Bottling Co. v. Goldberg, 299 F. 2d 37, C.A. 5., 1962. As of November 1, 1963, when CFR 782.2(b)(2) was published in the Federal Register, the Departments adoption generally of the view of the law expressed by the court in the Opelika case was made plain. This, of course, superseded any prior opinions inconsistent with that interpretations.

In determining the application of the section 13(b)(1) exemption to any of your employees in the future, you should also give careful consideration to the revised position of the Department as expressed in 29 CFR 782.7 relating to the interstate commerce requirements of the exemption. Your attention is particularly directed to the differences between the "interstate commerce" which is within the jurisdiction of the Interstate Commerce Commission and the "commerce" to which Fair Labor Standards Act coverage extends, as explained in paragraphs (b)(1) and (b)(2) of the cited section. As there pointed out, the transportation within a single State of goods delivered from other States to a distributor within the State may in some circumstances be "in commerce" within the meaning of the Fair Labor Standards Act but not in "interstate commerce" within the meaning of the Motor Carrier Act and thus not a basis for exemption under section 13(b)(1) of the former Act.

A copy of this letter is being sent to *** . You may expect to hear further from the Regional Office concerning the action necessary to complete the Investigation.

Sincerely yours,

Clarence T. Lundquisit

Administrator

Enclosure