Secretary of Labor v. Crown Central Petroleum Corp.

90 F.R.D. 99, 24 Wage & Hour Cas. (BNA) 1457, 32 Fed. R. Serv. 2d 1146, 1981 U.S. Dist. LEXIS 11851
CourtDistrict Court, E.D. New York
DecidedApril 21, 1981
DocketNo. 80 C 802
StatusPublished

This text of 90 F.R.D. 99 (Secretary of Labor v. Crown Central Petroleum Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Secretary of Labor v. Crown Central Petroleum Corp., 90 F.R.D. 99, 24 Wage & Hour Cas. (BNA) 1457, 32 Fed. R. Serv. 2d 1146, 1981 U.S. Dist. LEXIS 11851 (E.D.N.Y. 1981).

Opinion

MEMORANDUM AND ORDER

NEAHER, District Judge.

In this action under the Fair Labor Standards Act, 29 U.S.C. §§ 201-218, the plaintiff Secretary of Labor has alleged that defendant Crown Central Petroleum Corporation is an “enterprise engaged in commerce or in the production of goods for commerce,” and an “employer” of “employees” as those terms are defined in 29 U.S.C. § 203(b), (d), (i), (j), (r) and (s). Defendant allegedly operates more than twenty retail gasoline service stations in New York’s Nassau and Suffolk counties and in New Jersey, and maintains a district office on Long Island. Defendant is charged under 29 U.S.C. § 215(a)(2) and (5) with willful and repeated violations of the Act’s minimum wage provision, 29 U.S.C. § 206, and with violations of the Act’s maximum hour and recordkeeping provisions, 29 U.S.C. §§ 207 and 211(c), all occurring since October 1, 1976. An injunction is sought restraining defendant from withholding wages properly due its employees and from further violations of the Act.

Before answer, defendant moved to compel the joinder of Mark/Man Services and Marcoin Inc., and their related or subsidiary companies, as defendants. Rules 19, 21, F.R.Civ.P. Defendant alleges these firms undertook responsibility to maintain and operate its payroll operations, and that they, not defendant, are the “employer,” at least for the purpose of the Act’s record-keeping requirements.

Defendant’s motion must be denied because it has not adequately demonstrated that Mark/Man or Marcoin is a “conditionally necessary party” to this litigation as required by Rule 19(a), F.R.Civ.P. See 3A Moore’s Federal Practice, ¶ 19.02 at 19-40 (2d ed. 1980). The gist of defendant’s argument seems to be that the obligations imposed by the Act are severable; that one person can be an “employer” for some purposes, e. g., paying wages, and another the “employer” for other purposes, e. g., record-keeping; and that both must be joined in a lawsuit charging either with violations of responsibilities allegedly belonging to the other.

Defendant has offered no authority that supports this proposition. On the contrary, the language of the statute imposing the recordkeeping requirements clearly requires “[ejvery employer subject to any provision of this chapter ... [to] make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him” as the Administrator shall prescribe. 29 U.S.C. § 211(c) (emphasis added). See Brennan v. Valley Towing Co., 515 F.2d 100, 111 (9th Cir. 1975); Marshall v. R & M Erectors, Inc., 429 F.Supp. 771, 775-76 & n.15 (D.Del.1977). [101]*101The purposeful, close relationship between the minimum wage and maximum hour provisions and the recordkeeping requirements relating thereto hardly demands explanation. Furthermore, it is well-settled law that “it is the employer who has the duty under § 11(c) of the Act to keep proper records of wages, hours and other conditions and practices of employment,” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687, 66 S.Ct. 1187, 1192, 90 L.Ed. 1515 (1945). See, e. g., Wirtz v. Mississippi Publishers Corp., 364 F.2d 603, 607 (5th Cir. 1966) (Burger, J.).

Contrary to the fragmented interpretation of the Act and the term “employer” defendant has proposed, that term has been given an expansive reading in keeping with the remedial purposes of the statute. Indeed, in Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 431, 38 L.Ed.2d 406 (1973), an FLSA action against a provider of maintenance services for buildings owned by others, the Supreme Court recognized that two persons can be considered an employee’s employer simultaneously.

“[I]t is clear that the maintenance workers are employees of the building owners. But we think that the Court of Appeals was unquestionably correct in holding that [the maintenance service] is also an ‘employer’ of the maintenance workers under § 3(d) of the Act, which defines ‘employer’ as ‘any person acting directly or indirectly in the interest of an employer in relation to an employee.’ 29 U.S.C. § 203(d). Section 3(e) defines ‘employee’ to include ‘any individual employed by an employer.’ 29 U.S.C. § 203(e). In view of the expansiveness of the Act’s definition of ‘employer’ and the extent of [the maintenance service’s] managerial responsibilities at each of the buildings, which gave it substantial control of the terms and conditions of the work of these employees, we hold that [the maintenance service] is, under the statutory definition, an ‘employer’ of the maintenance workers.”

See Hodgson v. Arnheim & Neely, Inc., 444 F.2d 609, 611-12 (3d Cir. 1971), rev’d on other grounds, 410 U.S. 512, 93 S.Ct. 1138, 35 L.Ed.2d 463 (1973). Implicit in the Court’s holding in Falk is the requirement that both employers maintain the records required under § 211(c). Similarly, both the local branch office manager and the corporate principal were held criminally liable as “employers” for failing to comply with the Act’s recordkeeping provisions in Hertz Drivurself Stations, Inc. v. United States, 150 F.2d 923, 929 & n.3 (8th Cir. 1945). See Brennan v. Sinor, 391 F.Supp. 681, 684-85 (N.D.Okla.1974).

Because the liability for failing to comply with the Act’s requirements rests upon each employer subject to the Act, the delegation of responsibility to Mark/Man or Marcoin cannot convert them into “conditionally necessary parties.” This lawsuit concerns defendant Crown Central’s responsibilities as an employer allegedly subject to the Act. In the absence of Mark/Man and Marcoin complete relief undoubtedly can be afforded defendant and plaintiff, see Rule 19(a)(1), in relation to the basic question whether defendant is an “employer” subject to the Act’s requirements. If defendant is an employer subject to the Act and it has not complied, it may be found liable. If defendant is not an employer it will be found not liable.

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90 F.R.D. 99, 24 Wage & Hour Cas. (BNA) 1457, 32 Fed. R. Serv. 2d 1146, 1981 U.S. Dist. LEXIS 11851, Counsel Stack Legal Research, https://law.counselstack.com/opinion/secretary-of-labor-v-crown-central-petroleum-corp-nyed-1981.