Brennan v. Arnheim & Neely, Inc.

RESPONDENT: Arnheim & Neely, Inc.
LOCATION: Frontiero's Residence

DOCKET NO.: 71-1598
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 410 US 512 (1973)
ARGUED: Jan 16, 1973
DECIDED: Feb 28, 1973

Mr. Andrew L. Frey - for petitioner
Eugene B. Strassburger, Jr. - for the respondent Arnheim and Neely, Inc
Frank L. Seamans - for the respondent Institute of Real Estate Management

Facts of the case


Media for Brennan v. Arnheim & Neely, Inc.

Audio Transcription for Oral Argument - January 16, 1973 in Brennan v. Arnheim & Neely, Inc.

Warren E. Burger:

We’ll hear arguments next in number 71-1598 Hudson against Arnheim.

Mr. Frey, you may proceed whenever you are ready.

Mr. Andrew L. Frey:

Mr. Chief Justice and may it please the Court.

This case is here on writ of certiorari to review a judgment of the United States Court of Appeals for the Third Circuit holding an elevator operators, cleaning ladies, and other operating maintenance and personnel at eight office buildings and one apartment complex in the Pittsburgh area, managed by respondent Arnheim and Neely, are not entitled to the protection of the Fair Labor Standards Act’ minimum wage and overtime provisions.

The decision below conflicts with the decision of the Fourth Circuit involving identical issues and holding that the employees were covered.

Arnheim is a real estate firm engaged among other activities in the management of office buildings and apartment houses as agents for the owners of such buildings.

At the time this suit was brought, it managed a total of nine such buildings for various unrelated owners.

Arnheim’s management activities are carried out under basically identical contracts with each of the building owners.

Under which Arnheim assumes all of the functions of managing and operating the buildings including the procurement of tenants and negotiation and enforcement of leases, the collection of rents, arrangement for utilities and other services, in short all aspects of the operation of the buildings.

Now Arnheim’s business is conducted from its central office and managed by supervisory management personnel operating out of that central office.

With respect to each building, Arnheim collects the rents, deposits them in separate bank accounts and uses the funds to pay the operating expenses of the buildings to pay its commissions and to remit the balance to the owners.

Now, Arnheim has extensive responsibilities in connection with personnel employed at the various buildings and I am talking about such personnel as elevator operators, cleaning ladies, watchmen, building engineers and so on.

Functions and responsibilities of Arnheim with respect to these personnel are spelled out in detail in the stipulation that was filed in the District Court and that’s in the appendix and also at pages 5 and 6 of our brief.

Now briefly summarized, these functions involved hiring, promotion, and firing of all personnel; supervision of their performance of their employment, making work assignments and scheduling the time of work, negotiating union contracts, determining rates of pay and benefits, preparing payroll and maintenance of other employee records and payment of salaries.

In short, every conceivable incident of the employer-employee relationship is encompassed in Arnheim’s responsibility, although the owners are consulted and enjoy of veto with respect to certain matters such as the rates of pay and promotions.

Are these personnel ever shifted from building to building?

Mr. Andrew L. Frey:

I don’t believe that in this -- that the record reflects that they are shifted.

They are employed for a particular building.

Or it’s every conceivable relationship except that an employer and employee, isn’t it?

Mr. Andrew L. Frey:

Well, I would say that it is a relationship of employer and employee.

Our position is and I think this Court has clearly held certainly in the context of the Fair Labor Standards Act that in determining the employer-employee relationship, you don’t look solely at the common law concepts and you don’t -- and in any event even if you did the right to hire, the right to fire even if it is a shared responsibility with another person gives you a status as an employer.

As I understand it, for each building there is a separate bank account?

Mr. Andrew L. Frey:

There is a separate bank account.

And the employees in that building are paid from that account?

Mr. Andrew L. Frey:

That’s correct.

And are those checks drawn by --

Mr. Andrew L. Frey:

By Arnheim and Neely.

But they are both what --

Mr. Andrew L. Frey:

Yes, it isn’t Arnheim and Neely account, it would be labeled Arnheim and Neely clock building accounts.

Suppose there are insufficient funds at a rent or something to pay the current salary bill, whatever it is, who pays?