Arnold v. Ben Kanowsky, Inc.

PETITIONER: Arnold
RESPONDENT: Ben Kanowsky, Inc.
LOCATION: Approximately half-way between Santa Marta, Colombia and Miami. Florida (by water)

DOCKET NO.: 60
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 361 US 388 (1960)
ARGUED: Jan 11, 1960
DECIDED: Feb 23, 1960

Facts of the case

Question

Media for Arnold v. Ben Kanowsky, Inc.

Audio Transcription for Oral Argument - January 11, 1960 in Arnold v. Ben Kanowsky, Inc.

Earl Warren:

Number 60, John W. Arnold, Petitioner, versus Ben Kanowsky.

Ms. Margolin.

Bessie Margolin:

Mr. Chief Justice and may it please the Court.

This action was brought by an employee under Section 16 (b) of the Fair Labor Standards Act to recover claimed unpaid overtime compensation against the respondent.

The Secretary of Labor was not a party in the case and entered the case only after the -- the Court of Appeals had reversed a judgment in favor of the employee.

The Secretary of Labor entered as amicus curiae to support a petition for rehearing on the ground that the Fifth Circuit had misinterpreted the retail establishment exemption.

The specific issue involved in the case is whether a -- an establishment that is engaged both in an interior decorating and furniture -- custom furniture business, as well as in fabricating or manufacturing airplane -- aircraft parts out of phenolic to the plastic --

Charles E. Whittaker:

May I ask you, going on that question, please, to us, the one question in this case for me.

Does the Government flatly say that this is one and not two boat establishments?

I understand the Court of Appeals to say that this was -- that the interior decorating and custom furniture manufacturing business was a separate establishment --

Bessie Margolin:

Your --

Charles E. Whittaker:

-- and so treated, rested its decision on that fact.

Bessie Margolin:

No.

I don't think -- I don't think that is what the Court said, Your Honor.

They said that basically, the basic nature of this business was interior decorating and therefore, the exemption applied regardless of what else was carried on, what other kind of business was carried on in the establishment.

Now, as a matter of fact, this particular employee was -- the evidence shows, was engaged virtually exclusively in the fabricating of the phenolic parts.

There were some dispute in the evidence, but the trial court apparently accepted his evidence and -- which was that he was engaged exclusively in the fabrication of these aircraft parts.

Charles E. Whittaker:

Is it true that the term “establishment” is the crucial thing here, that one owner might have, even under one roof, several establishments, activities in one be covered and in the other not covered by the Fair Labor Standards Act?

Bessie Margolin:

It could be that if these two businesses were segregable with different employees, we would recognize them as separate establishments.

Of course, this Court has already decided that there must be a physical establishment that it's the single physical establishment and not the enterprise as a whole that determines whether the exemption applies.

When you have the mix, as you have them here, the question depends upon whether they are segregable.

Now, if, in this case, they have been segregable, the exemption might apply to the retail part of it.

As a matter of fact, the -- there was no evident here even that the custom furniture business was retail but assuming it was retail and for the purposes of this case, I think we can assume that it was, although there -- there's evidence here that might indicate it was not -- even that part of the business might not have been a retail establishment.

But what the Court did here was to say that we -- we look at this business and from our general feeling about it, we think this is basic -- the basic nature of interior decorating as retail and the fact that more than 25% of the -- of the sales are of aircraft parts is immaterial because we're looking just at the basic nature of the establishment.

We are interested in this case, of course, for substantial reasons beyond the facts of this particular case.

We supported the petition for certiorari because it was a closely related question to the question decided in the Kentucky Finance case which was -- how far did Congress intend to expand the retail establishment exemption in the 1949 amendment.

Now, the Fifth Circuit has had a whole series of cases.

I think this is about the Fifth in which it's very broad -- has been very broadly interpreting this exemption.

As a matter of fact, the Sixth Circuit in the Kentucky Finance case was relying upon what we consider erroneous decisions of the Fifth Circuit under this Act, the Taylor Fertilizer case and the Boisseau case.

And of course, this Court reversed the Sixth Circuit in the Kentucky Finance case.