This suit was brought in the District Court of the United States for the Eastern District of Michigan, by the Administrator of the Wage and Hour Division, United States Department of Labor, to enjoin petitioners from violating the maximum hours p ovisions of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C. § 201 et seq., 29 U.S.C.A. § 201 et seq.
Petitioners are two of four partners doing business as F. J. Boutell Service Company, the other two not being subject to the jurisdiction of the District Court. The four partners are the sole stockholders of the F. J. Boutell Drive-Away Company, a Michigan corporation, engaged in the transportation of automobiles and army equipment in interstate commerce.
The employees of the Service Company involved in this suit are mechanics engaged in greasing, repairing, servicing and maintaining the transportation equipment owned and operated by the Drive-Away Company. The parties have stipulated and the trial court has found that the Service Company is engaged exclusively in rendering such service to the Drive-Away Company and such corporation 'is an entity separate and distinct from' the Service Company.
The case presents two questions: (1) Whether the employees of the Service Company are 'engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce' within the meaning of the exemption clause, § 13(a)(2) ; and (2) whether they come within the exemption clause, § 13(b)(1), which exempts from § 7 of the Act 'any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of Section 204 of the Motor Carrier Act, 1935.' 52 Stat. 1068, 29 U.S.C. § 213(b)(1), 29 U.S.C.A. § 213(b)(1). The District Court ruled against petitioners on both questions and granted the injunction sought by the Administrator. The Circuit Court of Appeals affirmed on both grounds. 6 Cir., 148 F.2d 329. We agree with those conclusions.
The amended findings of fact agreed to by the parties include the statement that the petitioners' employees 'involved in this proceeding are mechanics engaged in greasing, repairing, servicing and maintaining the transportation equipment owned and operated by the F. J. Boutell Drive-Away Company. * * *' No claim is made that these employees are not engaged in interstate commerce within the meaning of § 7 of the Fair Labor Standards Act. They are well within the requirement that they be 'actually in or so closely related to the movement of the commerce as to be a part of it.' McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 1251, 87 L.Ed. 1538.
In answer to the first question, the record shows that these employees do not come within the exemption stated in § 13(a)(2). This is so because their employer, the Service Company, supplies its services, including their services, exclusively to the Drive-Away Company which in turn uses those services in interstate commerce. The Drive-Away Company does not use their services for its own purposes as an ultimate consumer, beyond the end of the flow of goods in interstate commerce. Accordingly, the employees of the Service Company are not engaged in a retail or service establishment within the meaning of § 13(a) (2) as interpreted in Roland Electrical Co. v. Walling, 326 U.S. 657, 66 S.Ct. 413, and Martino v. Michigan Window Cleaning Co., 327 U.S. 173, 66 S.Ct. 379. Furthermore, substantially all of the servicing done by the Service Company is thus done in interstate commerce, whereas § 13(a)(2) requires the greater part of it to be done in intrastate commerce if the employees rendering it are to be exempted under that provision.
The question whether the employees of the Service Company are to be exempted by virtue of § 13(b)(1) turns upon whether the Interstate Commerce Commission has the 'power to establish' maximum hours of service for them under § 204(a) (1)(2) or (3) of the Motor Carrier Act, 1935 , now officially cited as Part II of the Interstate Commerce Act, 54 Stat. 919, 49 U.S.C. § 301 et seq., 49 U.S.C.A. § 301 et seq. Whatever may be the precise scope of the Commission's 'power to establish' hours of service, we hold that the Commission does not have that power over the men here concerned because the Commission's jurisdiction is limited to employees of 'carriers' and the record here shows that the men in question are employees of the Service Company, which is not a carrier, rather than of the Drive-Away Company, which is a carrier. This is true although the work these employees do is all supplied to the Drive-Away Company through the Service Company.