Alstate Construction Co. v. Durkin

Background

Alstate Construction Company is a Pennsylvania road contractor that also makes a road surfacing mix called amesite at three Pennsylvania plants from local materials. The Wage and Hour Administrator sued to stop Alstate from violating the federal overtime and record-keeping rules. The trial court found that most of Alstate’s work served interstate roads, railroads, or companies producing goods for interstate commerce, that Alstate did not separate pay for interstate versus local work, and it enjoined the company. The Court of Appeals affirmed, and the Supreme Court agreed to resolve whether off-the-road plant workers are covered under the law.

Reasoning

The central question was whether making road materials used on interstate highways counts as producing goods “for commerce.” The Court rejected Alstate’s narrow view that “for commerce” means only goods meant to cross state lines. Relying on earlier decisions, the Court said roads and railroads are indispensable parts of interstate commerce, so producing materials for them is producing for commerce. The Court also relied on the Labor Department’s changed interpretation and Congress’s 1949 amendment that left prior administrative interpretations in effect, and therefore held the plant employees covered by the law. The injunction was affirmed.

Real world impact

The ruling means manufacturers of materials used on interstate transportation facilities must follow federal overtime pay and record-keeping rules when their products serve interstate commerce. Employers can no longer avoid coverage merely because materials are made and used within one State. The decision affects construction supply plants and similar producers who supply interstate road and railroad projects.

Dissents or concurrances

Justice Douglas, joined by Justice Frankfurter, dissented, warning that the Court’s test stretches coverage too far and could sweep many indirectly related producers into federal wage rules, suggesting that a change in the law by Congress would be more appropriate.