MILLER HATCHERIES v. BOYER, 131 F.2d 283 (8th Cir. 1942)

No. 12263.Circuit Court of Appeals, Eighth Circuit.
November 3, 1942.

Appeal from the District Court of the United States for the Southern District of Iowa; Charles A. Dewey, Judge.

Action by I.A. Boyer against Miller Hatcheries, Inc., to recover the difference

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between the wages paid to him and those provided by the Fair Labor Standards Act of 1938, § 1 et seq., 29 U.S.C.A. § 201 et seq., together with an equal amount as liquidated damages and a reasonable attorney’s fee. From a judgment for the plaintiff, 42 F. Supp. 135, the defendant appeals.

Reversed and remanded with directions.

John B. Gage, of Kansas City, Mo. (John E. Park and Gage, Hillix, Hodges Cowherd, all of Kansas City, Mo., on the brief), for appellant.

James F. Hudson and Mr. Frank W. Oertel, both of Keokuk, Iowa, for appellee.

Warner W. Gardner, Sol., and Mortimer B. Wolf, Asst. Sol., both of Washington, D.C., Kenneth P. Montgomery, Regional Atty., of Kansas City, Mo., and Peter Seitz, Atty., United States Department of Labor, of Washington, D.C., for Administrator of the Wage and Hour Division, amicus curiae.

Before SANBORN, THOMAS, and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The crucial question is whether a commercial chicken hatchery, located in a city and selling its baby chicks to farmers and poultry-raisers, is exempt from the wage and hour provisions of the Fair Labor Standards Act of 1938,[1] on the ground that its employees are “employed in agriculture”, within the meaning of section 13(a) of the Act.[2]

The Administrator of the Wage and Hour Division, during the four years that the Act has been in effect, has consistently made the interpretation that the operations of such a hatchery constitute “the raising of * * * poultry” within the definition of “agriculture” contained in section 3(f) of the Act,[3] and that employees engaged in the necessary incidents of these operations are therefore “employed in agriculture”.[4]

The action here was one brought by an employee of such a hatchery, under section 16(b) of the Act, 29 U.S.C.A. § 216(b), to recover from his employer the difference between the wages paid him and those prescribed by section 6 of the Act, 29 U.S.C.A. § 206, together with an equal amount as liquidated damages and a reasonable attorney’s fee. The hatchery involved was located in the city of Keokuk, Iowa, and was engaged in hatching, selling and distributing in commerce approximately 1,000,000 baby chicks a year to farmers and poultry-raisers in Iowa, Illinois and Missouri. It was the employee’s contention that the conduct of these commercial activities by an urban hatchery did not constitute “the raising of * * * poultry” within the intendment of the Act, and that he could not therefore properly be classified as

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“employed in agriculture”, so as to exclude him from the benefits of the wage and hour provisions of the statute.

The District Court rejected the interpretation which had been made by the Administrator and, in sustaining the contention of the employee, declared: “I cannot convince myself that the operation of these large commercial hatcheries are enterprises engaged in raising poultry within the ordinary and common meaning of the term. To say that the commercial processing or incubating of a chicken from the egg is raising poultry gives a forced and unnatural meaning to the words employed.”[5]

In the brief filed here by the Administrator as amicus curiae, he has attempted to set out, frankly and succinctly, both the considerations which appear to him to support his previous interpretation and those which support the position of the District Court. Briefly, the general considerations upon which the Administrator’s interpretation is declared to rest are that the legislative history of the Act indicates that the term “agriculture” was used in a broad and general sense and its definition was intended to be “all-inclusive”;[6] that “the raising of poultry” necessarily includes the “breeding” of it, and “hatching” is merely part of the process of “breeding”;[7]
that hatching chicks is an integral part of agriculture, in that it is a necessary link between the production of the two important agricultural commodities, poultry and eggs; that hatching is admittedly agricultural when performed on a farm, and that the incidents of such work, when done in a commercial hatchery for the purpose of supplying farmers with baby chicks, under the now common practice of utilizing this more efficient instrumentality as a step in the agricultural processes, are so closely and directly related to the modern conduct of farming that they ought not to be regarded as having changed the fundamental aspect of the work involved, but as having merely altered the surroundings in which the work is being performed.

As supporting the position of the District Court, the Administrator points out that it may reasonably be contended that the hatching of baby chicks by a commercial hatchery is an industrialized and highly specialized activity which does not itself have any direct connection with “farming operations”; that the economic function of such an urban establishment is completely disassociated from the agricultural activities of producing and hatching eggs and feeding, tending and otherwise “raising” poultry for market; that when the hatching of chicks is thus transposed from the farm to a commercial establishment it ceases to be a technical farming activity and is outside the purpose and intention of Congress in excepting agricultural employment; that the attributes of farm labor which justify its exclusion from the coverage of the Act ought not to be regarded as extending to services performed for such a commercial hatchery; and that the careful enumeration of the operations included within the agricultural exception, viewed in the light of the intention evidenced by the last clause of section 3(f), 29 U.S.C.A. § 203(f), points to the conclusion that, while a broad conception of “agriculture” was intended in relation to “farming operations”, a more narrow construction was intended with respect to “the raising of livestock, bees, fur-bearing animals, or poultry.”

We have previously declared that an exemption to remedial legislation, such as the Fair Labor Standards Act of 1938, “creates an exception to the general scope of the Act, and hence is subject to strict

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construction.”[8] Such an exemption should be extended only to those who are “plainly within its terms”.[9]

But, in the circumstances of the present situation, there is another principle that also soundly must be taken into account. We are dealing with a situation where there has been “a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are yet untried and new.”[10] The practical interpretations which the Administrator and his staff have been required to make in applying and placing the provisions of the Act in social and industrial operation should be recognized as having peculiar persuasiveness[11] and weight.[12] Unless such a construction is one which could not reasonably or soundly be made under the terms of the statute, it should ordinarily be accepted by the courts. Especially is this true where its rejection will result in an economic dislocation in the industry involved, by virtue of its previous reliance upon the Administrator’s interpretation, as well as a general inequity against the class to which it is to be applied, under the circumstances in which the changed construction is being made.

So far as the present situation is concerned, it appears that at the time the Fair Labor Standards Act went into effect the commercial hatcheries sought to have their status defined by the Administrator. The Administrator and his legal staff immediately[13] took the position that the operations of hatcheries engaged in selling baby chicks to farmers were within the agricultural exemptions of the Act. This interpretation has been consistently adhered to and specifically repeated in hundreds of letters since sent out by the Administrator in response to inquiries from hatcheries throughout the country. The industry has manifestly proceeded in reliance upon its exemption from the Act, in its relations with employees and in its sales to farmer-customers, during the four-year period that the Act has been in effect. The employees of the industry have apparently also generally accepted the Administrator’s interpretation, since the present action appears to be the only judicial challenge that has been made to the Administrator’s construction during the several years that have now elapsed.[14]

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If the interpretation of the Administrator is to be rejected at this late date, it necessarily will occasion a serious economic dislocation in the hatching industry, by reason of the accumulated liability against the hundreds of commercial hatcheries in the country for unpaid compensation and “double damages” dating back to October 24, 1938.

Without attempting to resolve the construction of the statute as a matter of original impression, it is sufficient to say that, from a careful consideration of the statute and the existing situation, we have no omniscient conviction that the Administrator’s contemporaneous interpretation here has been so unreasonable and unsound that it could not fairly have been made, within the spirit and language of the Act. Congress may well have intended that hatchery operations, in their now common relationship to poultry raising by farmers, should be treated as so intimately and directly connected with farming activities as to constitute one of the exempt processes of agriculture. If it did not, the way is open to it to change the situation by a more specific legislative definition. In the absence of any such action, we feel that the Administrator’s initial and four-year-continued, liberal interpretation of the all-inclusive scope of the agricultural exemption should not be disturbed.

The judgment of the District Court will accordingly be reversed and the cause remanded with directions to dismiss plaintiff’s complaint.

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