Boutell v. Walling

Background

The Wage and Hour Administrator, representing the U.S. Department of Labor, sued two partners who ran a service company that maintained vehicles for an affiliated Drive-Away transportation company. The workers at issue were mechanics who greased, repaired, serviced, and maintained transport vehicles used in interstate commerce. The parties agreed the service firm dealt exclusively with the Drive-Away Company, and lower courts found for the Administrator and issued an injunction.

Reasoning

The Court considered two exemption questions. First, whether the mechanics worked in a "retail or service establishment" largely serving in state commerce; the Court said no, because the service company provided its work only to the carrier and the work was part of interstate commerce, not intrastate retail servicing. Second, whether the mechanics fell under the provision that removes employees from the overtime law when the Interstate Commerce Commission (ICC) has power to set hours for them. The Court held the ICC’s power applies to employees of carriers, and the record showed these mechanics were employees of the non‑carrier service firm. Because the ICC had not asserted jurisdiction over them, the Fair Labor Standards Act’s maximum-hours rules still applied.

Real world impact

The decision means mechanics employed by separate service companies that exclusively serve carriers are covered by federal maximum-hours and overtime rules. Employers who try to avoid the Fair Labor Standards Act by placing maintenance work in an affiliated non‑carrier company cannot automatically rely on the ICC exemption. The injunction against the petitioners was therefore affirmed.

Dissents or concurrances

Justice Douglas, joined by Justices Frankfurter and Rutledge, dissented, arguing that an affiliated garage should be treated as part of the carrier and thus within the ICC’s power to set hours.