Kruger v. Los Angeles Shipbuilding & Drydock Corp.

74 F. Supp. 595, 1947 U.S. Dist. LEXIS 1903
CourtDistrict Court, S.D. California
DecidedMarch 10, 1947
DocketCivil Actions Nos. 5641-C to 5643-C, 5560-C, 5665-C, 5666-C, 5753-C, 5847-C
StatusPublished
Cited by2 cases

This text of 74 F. Supp. 595 (Kruger v. Los Angeles Shipbuilding & Drydock Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kruger v. Los Angeles Shipbuilding & Drydock Corp., 74 F. Supp. 595, 1947 U.S. Dist. LEXIS 1903 (S.D. Cal. 1947).

Opinion

CAVANAH, District Judge.

We have presented for consideration, together, eight cases involving the right of the plaintiffs to recover overtime compensation under the federal Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., which the defendants urge:

In determining the issues, we must bear in mind the particular facts as disclosed by the record here, in each case, and independently apply, for this specific purpose, the general terms of the Act, as there are a variety of complicated situations in the activities of men. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; 10 East 40th Street Building, Inc. v. Callus, et al, 325 U.S. 578, 65 S.Ct. 1227, 89 L.Ed. 1806, 161 A.L.R. 1263.

The questions urged and controlling are:

(A) Whether the plaintiffs were employees of the United States, or employees of the defendants.

(B) Were the plaintiffs and defendants engaged in commerce, or in the production of goods for commerce?

(C) Were the plaintiffs here exempt employees under the Act and the Regulations (sec. 13(a) of the Act and the Regulations) defining “executive employees,” “administrative employees,” “professional employees” (sec. 541, 1, 542, 2, and 541, 3 of Administrator’s Regulations) ?

There are three periods of time to be considered when applying the Fair Labor Standards Act:

First — the period when the defendant, Los Angeles Shipbuilding and Drydock Corporation, was operating the plant up to December. 8th, 1943;

Second — the period when the Government took possession and operated the plant after December 8, 1943, to July 10, 1944, and

Third — the period after July 10, 1944, until the Government surrendered possession in January, 1946.

(A) It is evident that, under the Act, the right of recovery during the period of employment does not exist if the United States was the employer, as the Act is confined to private industry, for the Government is acting as a sovereign.

An analysis of the evidence discloses that, prior to December 8, 1943, the defendant, Los Angeles Shipbuilding and Drydock Corporation, operated a shipyard where the plaintiffs were employed at San Pedro, California. On December 3, 1943, the President of the United States made an executive order authorizing the Secretary of the Navy to take possession and operate the yard, who seized it, and put Rear Admiral Bowen of the United States Navy in charge on December 8, 1943. The Admiral then authorized the defendant, Todd Shipyards Corporation, to operate the yard for the Navy Department. At that time no formal contract was entered into between the United States and Todd Shipyard Corporation for the operation of the plant and the construction of facilities for the United States Navy until July 10, 1944, when Contract Nobs. 1708, a cost plus a fee contract, was executed and was in force during all of the period until January, 1946; under which the plaintiffs were employed, unless the evidence discloses that since July 10, 1944, the situation as to the Government and the defendant, Todd Shipyards Corporation and the plaintiffs was changed so that it can be said that the United States permitted and authorized the Todd Shipyards Corporation to independently, and not as an agent of the United States Government, deal with and employ the plaintiffs, directly and privately.

First: During the period of time when the defendant, Los Angeles Shipbuilding and Drydock Corporation, was operating the plant, it not only was constructing and repairing vessels of war for the Government, but engaged to some extent in commercial industry with private parties, entering into commerce or the production of goods for interstate commerce, thereby making the Fair Labor Standards Act ap[597]*597plicable under the decision of the Ninth Circuit Court of Appeals in the case of Ritch et al. v. Puget Sound Bridge & Dredging Co. et al., 156 F.2d 334, hereinafter referred to, granting to the plaintiffs the right of recovery for overtime work during that period of time.

Second: During the perod of time from December 8, 1943 to July 10, 1944, the Government, under Executive Order, took exclusive possession and management of the plant until July 10, 1944, in the construction and repairing of vessels for the Navy of the United States, as heretofore stated, and not in any way for commercial purposes, and, also, during the period of time from July 10, 1944 until the Government surrendered operations in January, 1946.

We must turn to the contract of July 10, 1944, between the United States and the defendant, Todd Shipyards Corporation, and ascertain what was the intent, the relations of the parties, and the scope of the contract, and we find therein the provisions that:

“Whereas the Secretary, through the Officer in Charge, has determined that the plant shall be operated by the contractor as an independent contractor, and not as agent of the Secretary or of the Depai tment, and has delegated to the Chief of the Bureau of Ships, the authority to execute this contract,” and “Article 1. Scope of Contract, (a) Subject to the terms and conditions hereinafter provided, the contractor shall operate the plant as an independent contractor in accordance with good commercial practices accepted in business of the character engaged in by the Company, and comparable to the practices obtained in other ship repair and ship construction yards operated by the contractor, without limiting the generality of the foregoing. The contractor shall select, employ, and supervise all management and labor personnel, and purchase all materials, services, equipment, and supplies, (including loose and hand tools) necessary for the operation of the plant; shall undertake the construction and completion of such vessels as the Department may specify; shall repair, alter, and convert vessels on the terms and conditions hereinafter specified; shall operate, preserve, protect, maintain, and repair buildings, machinery and equipment; shall acquire, construct and install such additional facilities as the Department may direct; shall, subject to the approval of the Department, determine policies with respect to engineering, layout, and design; shall submit bills and statements and make collections thereon; shall maintain books, records, and inventories at the plant applicable to the possession and operation thereof, and shall prepare and submit appropriate reports to the Department.

“(b) The contractor in the performance of this contract is authorized to use the plant and its facilities and appurtenances,” and “Article 2. Operators, (a) Complete the vessels now in process of construction at the plant in accordance with the approved plans and specifications therefor to the satisfaction of the Department, and in accordance with the provisions of Article 6 hereof, (b) Construct such other vessels as the Company have contracted with the Government to build. Article 3. Commitments. (a) The contractor shall employ all labor and management personnel necessary to the performance of this contract. All such employees shall be employees of the contractor and not the Department. The contractor shall employ such additional personnel, and such overtime and shift work, as may be directed and approved by the Department.”

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74 F. Supp. 595, 1947 U.S. Dist. LEXIS 1903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kruger-v-los-angeles-shipbuilding-drydock-corp-casd-1947.