Fifth Circuit Court Cases - Case Law and Opinions from the 5th Circuit Federal Court - Court of Appeals

	ROMINGER LEGAL
		Fifth Circuit Court of Appeals Opinions - 5th Circuit
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -CLICK HERE

This opinion or court case is from the Fifth Circuit Court or Appeals. Search our site for more cases - CLICK HERE

LEGAL RESEARCH

COURT REPORTERS

PRIVATE INVESTIGATORS

PROCESS SERVERS

DOCUMENT RETRIEVERS

EXPERT WITNESSES

Find a Private Investigator

Find an Expert Witness

Find a Process Server

Case Law - save on Lexis / WestLaw.

Legal News - Legal Headlines

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 90-3706
_____________________
LYNN MARTIN, Secretary of Labor,
Plaintiff-Appellant,
versus
LESLIE N. BEDELL and BLUE WATER MARINE,
CATERING, INC.,
Defendants-Appellees.
____________________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
____________________________________________________________
(March 25, 1992)
BEFORE WISDOM, HIGGINBOTHAM, and SMITH, Circuit Judges.
WISDOM, Circuit Judge:
This case presents the question whether the cooks employed
by the defendant/appellee, a caterer to boats providing offshore
support to oil companies in the Gulf of Mexico, are entitled to
overtime pay under the Fair Labor Standards Act (FLSA). Because
the income generated by those cooks must be attributed to their
employer, the employer is bound to comply with the Act's overtime
provisions. Because the district court's factual findings are
insufficient to support its determination that the cooks do not

2
fit within the narrow definition of "seaman" under the FLSA, we
remand for further, limited factual findings. We therefore
REVERSE the decision below as to the employer's exemption from
enterprise coverage, and REMAND as to the cook's status as
nonseaman, so that the district court may make necessary findings
as to the work the cooks perform.
I. BACKGROUND
Blue Water Marine Catering, Inc. ("Blue Water") supplies
cooks for "jack-up boats". Those boats provide offshore
maintenance services for oil companies. Both parties concede
that the oil and gas produced by those companies enter the stream
of interstate commerce.
For the dates pertinent to this appeal, Blue Water paid its
cooks a day rate. The Department of Labor, through its Wage and
Hour Division, investigated Blue Water and determined that this
form of payment violated the FLSA. The Secretary of the
Department of Labor, Elizabeth Dole (now Lynn Martin), brought
this suit to force Blue Water and its president, Leslie N.
Bedell, to comply with the overtime provisions of the FLSA.
Accordingly, we shall refer to the plaintiff/appellant as
"Labor".
The district court held a one-day bench trial limited to
Blue Water's liability. The court decided that neither the cooks
as individuals nor Blue Water as an enterprise was covered by the
FLSA. As to the cooks, it held that their work outside of
Louisiana's territorial waters was outside the jurisdiction of

3
the FLSA. When the cooks did work within those waters, the court
held that the food they cooked (food that was consumed aboard)
was not "goods for commerce"; therefore, their services were not
closely related to or directly essential to the production of
goods for commerce, and were not covered by the Act. The court
also held that Blue Water itself was excused from compliance
because it fitted within the Act's exception for business
establishments employing only immediate members of one family.
Finally, the court held that the cooks, although they worked on
seagoing vessels, did not fit within the FLSA's narrowly
construed exemption of seamen. Labor appeals all but this last
holding, which Blue Water challenges.
II. THE STATUTORY FRAMEWORK
The FLSA guarantees overtime pay to employees engaged "in
the production of goods for commerce" ("individual coverage") or
"employed in an enterprise engaged in commerce or in the
production of goods for commerce" ("enterprise coverage").1
Either individual or enterprise coverage is enough to invoke FLSA
protection.2
1 29 U.S.C. � 207(a)(1) reads:
Except as otherwise provided in this section, no employer shall employ
any of his employees who in any workweek is engaged in commerce or in
the production of goods for commerce, or is employed in an enterprise
engaged in commerce or in the production of goods for commerce, for a
workweek longer than forty hours unless such employee receives
compensation for his employment in excess of the hours above specified at
a rate not less than one and one-half times the regular rate at which he is
employed.
2 Our finding that Blue Water is subject to enterprise
coverage therefore values it unnecessary to consider the district

4
Many exceptions temper the strictness of this rule.
Relevant to the issue of enterprise coverage in this case is the
"mom and pop" exception. The FLSA defines "enterprise engaged in
commerce or in the production of goods for commerce" to exclude
"any establishment which has as its only regular employees"
members of one immediate family.3 The sales of such an
establishment are not included in determining the minimum amount
of revenues that triggers the Act's application.4 Labor's
interpretive bulletins define an "establishment" to be a
"distinct physical place of business".5 The only employees who
work at the home office establishment of Blue Water are Mr.
Bedell, his wife, and her daughter. Without other "regular
employees" their office in Gretna, Louisiana would be excluded
from the Act as a "mom and pop" establishment.
There are also relevant exemptions from individual coverage.
For example, an employer need not comply with the Act's overtime
court's decision on individual coverage.
3 29 U.S.C. � 203(s)(2) provides:
Any establishment that has as its only regular
employees the owner thereof or the parent, spouse,
child or other member of the immediate family of
such owner shall not be considered to be an
enterprise engaged in commerce or in the
production of goods for commerce or a part of such
an enterprise. The sales of such an establishment
shall not be included for the purposes of
determining the annual gross volume of sales of
any enterprise for the purposes of this
subsection.
4 Id.
5 29 C.F.R. � 779.23 (1990).

5
requirements if its employees are exempt under 29 U.S.C. �
213(b). One of those exemptions, � 213(b)(6), is for "any
employee employed as a seaman".
III. ENTERPRISE COVERAGE AND THE "MOM AND POP" EXCLUSION
Applying the words "employer", "establishment", and
"enterprise" under the FLSA can be confusing. Labor's own
interpretations bravely attempt to define them.6 In general,
"employer" is usually a person; "establishment" is a place of
business; and "enterprise" is the business itself, a number of
related activities done for a common business purpose.
6 29 C.F.R. � 779.203 (1990) provides:
The coverage, exemption and other provisions
of the Act depend, in part, on the scope of the
terms "employer," "establishment," or
"enterprise." As explained more fully in Part 776
of this chapter, these terms are not synonymous.
The term "employer" has been defined in the Act
since its inception and has a well established
meaning. As defined in section 3(d), it includes,
with certain stated exceptions, any person acting
directly or indirectly in the interest of an
employer in relation to an employee. (See �
779.19.) The term "establishment" means a
"distinct physical place of business" rather than
"an entire business or enterprise." (See �
779.23) The term "enterprise" was not used in the
Act prior to the 1961 amendments, but the careful
definition and the legislative history of the 1961
and 1966 amendments provide guidance as to its
meaning and application. As defined in the Act,
the term "enterprise" is roughly descriptive of a
business rather than of an establishment or of an
employer although on occasion the three may
coincide. The enterprise may consist of a single
establishment (see � 779.204(a)) which may be
operated by one or more employers; or it may be
composed of a number of establishments which may
be operated by one or more employers (see �
779.204(b)).

6
For the times relevant to this case, no enterprise was
subject to the FLSA unless its annual gross sales volume exceeded
$250,000.7 As we noted above, the Act excludes sales figures for
a "mom and pop" establishment that regularly employs only
immediate family members. The district court found that Blue
Water's home office in Gretna, Louisiana was such an
establishment: its sales figures, all generated from that
establishment, would not count toward a finding of enterprise
coverage. The court found that the jack-up boats on which the
cooks are employed are separate establishments under the Act, but
that the sales volume generated by the cooks' work in those
establishments were attributable to Blue Water's home office.
For that reason, those sales (which the court found to be greater
than $250,000) do not count toward enterprise coverage. In so
ruling, the court weaved two errors together. Unravelling them
reveals two separate holdings by which the district court might
have found, and by which we find as a matter of law, that Blue
Water is subject to enterprise coverage under the FLSA.
The court erred first in the legal finding that, "while the
cooks and galley hands are employees of Blue Water's enterprise,
they are not employees of the Heritage Avenue [Bedell home
office] establishment". The court found that "[n]one of the
other regular employees of Blue Water ever set foot inside this
establishment"; "the only regular employees of that
7 29 U.S.C.A. � 203(s)(1) (1978). In 1989 that figure was
raised to $500,000. 29 U.S.C.A. � 203(s)(1)(A)(ii)(Supp. 1991).

7
establishment" are the three Bedell family members. It is not
necessary, however, for cooks or for others ever to set foot in
Blue Water's Gretna establishment to be its employees. It was
error to deny that they might be employees of Blue Water's Gretna
establishment.
The district court assumed that no one could be a "regular
employee" of an establishment at which he never appears.
Although the Act itself offers little guidance on this issue, we
disagree. The question whether someone is the regular employee
of an establishment is not answered, or not answered solely, by
looking to whether he works at the establishment.8 It is
8 Labor's interpretive bulletins state that employees of an
exempt retail or service establishment can also be exempt even if
they do not work at the establishment. 29 C.F.R. � 779.307 reads
in pertinent part that
such employees as collectors, repair and service
men, outside salesmen, merchandise buyers,
consumer survey and promotion workers, and
delivery men actually employed by an exempt retail
or service establishment are exempt from the
minimum wage and overtime provisions of the Act
although they may perform the work of the
establishment away from the premises.
The bulletins also state that employees of a non-exempt
establishment cannot become exempt simply by visiting exempt
establishments on behalf of their employers. 29 C.F.R. � 779.310
provides that
traveling auditors, manufacturers' demonstrators,
display-window arrangers, sales instructors, etc.,
who are not "employed by" an exempt establishment
in which they work will not be exempt merely
because they happen to be working in such an
exempt establishment, whether or not they work for
the same employer. Mitchell v. Kroger Co., 248
F.2d 935 (8th Cir. 1957).
The mere location of employment is therefore not conclusive. A
court should look to the economic reality, and not the location,
of employment to determine who employs an employee.

8
answered according to economic reality, applied through factors
with which this and other courts have attempted a legal
definition of "employee".9 Blue Water has never contended that
its cooks are actually the employees of any other employer.
Because they could be employees of the Blue Water enterprise
without being employees of the Bedell establishment, however, we
cannot say that they are employees of Blue Water's home office.10
9 See, e.g., Watson v. Graves, 909 F.2d 1549, 1553 (5th
Cir. 1990)(citations omitted):
For purposes of FLSA, determination of employee
status focuses on economic reality and economic
dependence. The "economic reality" test includes
inquiries into:
whether the alleged employer (1) has the
power to hire and fire the employees,
(2) supervised and controlled employee
work schedules or conditions of
employment, (3) determined the rate and
method of payment, and (4) maintained
employment records.

10 Based on the facts before us, we find it unlikely that
the technical, and for obvious reasons necessary, control exerted
over Blue Water's cooks by the masters of the jack-up boats would
be sufficient to destroy the economic reality of their employment
by Blue Water. Yet even if it were the case that the cooks are
employed by the jack-up boat owners as well as by Blue Water, we
note that under the FLSA an individual can be employed by one
employer or by more than one joint employer. Falk v. Brennan,
414 U.S. 190, 195 (1973); Donovan v. Sabine Irrigation Co., Inc.,
695 F.2d 190, 194 (5th Cir. 1983); Hodgson v. Griffin and Brand
of McAllen, Inc., 471 F.2d 235 (5th Cir.), cert. denied, 414 U.S.
819 (1973). 29 C.F.R. � 791.2 (1991) provides:
(a) A single individual may stand in the
relation of an employee to two or more employers
at the same time under the Fair Labor Standards
Act of 1938, since there is nothing in the act
which prevents an individual employed by one
employer. A determination of whether the
employment by the employers is to be considered
joint employment or separate and distinct
employment for purposes of the act depends upon
all the facts in the particular case. . . . [I]f

9
The Blue Water enterprise, however, is not exempt from FLSA
coverage merely because the Bedell home office might be a
statutory "mom and pop" establishment. The trial court's second
error was its unsupported holding that, because the cooks are not
employed at Blue Water's one establishment, then the revenues
generated by their work in the jack-up boats must be attributed
to that home office establishment. The court found,
inconsistently, that Blue Water's only establishment is its home
office, yet it also found that the cooks are employed at each
jack-up boat. We find that if the cooks are not employed at the
Bedell home office establishment, then the jack-up boats must
constitute distinct establishments in the Blue Water enterprise.
It would be inconsistent with the remedial purposes of the
FLSA to attribute the income generated by the work of the cooks
on jack-up boats to the Bedell home and not to those
establishments and the larger Blue Water enterprise. Otherwise,
any business controlled by immediate family members could exclude
its employees from FLSA coverage by segregating them, even though
their labors were the employer's only source of income, from the
home office. We read the "mom and pop" exclusion to exclude from
the facts establish that the employee is employed
jointly by two or more employers, i.e., that
employment by one employer is not completely
disassociated from employment by the other
employer(s), all of the employee's work for all of
the joint employers during the workweek is
considered as one employment for purposes of the
Act.

10
coverage only "Mom", "Pop", their immediate relatives, and the
revenues their work generates. An enterprise that otherwise
meets the prerequisites of FLSA coverage (i.e., has gross annual
sales greater than the statutory minimum) cannot avoid that
coverage by employing only immediate family members at its home
base, when a large pool of non-family employees generate the bulk
of its income. In declaring that Blue Water's cooks worked at as
many establishments as there are jack-up boats, the district
court then erred by attributing the income earned by working on
those establishments not to the Blue Water enterprise but to the
one establishment in Gretna.
The appellee cannot have it both ways. Either Blue Water
has one establishment that regularly employs a large number of
unrelated employees, or it is an enterprise with many
establishments; one of those establishments is exempt, but the
income generated by work performed at its many other
establishments should be attributed to the entire enterprise, and
therefore count toward the dollar volume requirements of the
FLSA. It is irrelevant which of these scenarios is true.
Because the factual resolution of these issues would have no
effect on the outcome, and because it is established that the
revenues generated by the cooks' work are greater than the
statutory minimum for enterprise coverage, we hold that Blue
Water is subject to enterprise coverage as a matter of law.
IV. THE SEAMAN EXEMPTION
This Court has long been accustomed to a very broad

11
definition of the word "seaman" for purposes of the Jones Act.
This case reminds us, however, that the definition of seaman
under the Jones Act is limited to that Act and its remedial
goals.11 In contrast, the remedial goals of the Fair Labor
Standards Act lead us to read narrowly its exemptions, including
the definition of "seaman".12 A "seaman" is removed entirely
from the Act's overtime provisions. An employer has the burden
of proving that its employees stand outside of this Act's very
broad protection.13
Because employment solely on seagoing vessels does not
necessarily make one a "seaman" under the FLSA, a court must look
to the actual work performed. Our review of a district court's
investigation of this question is limited to its findings of
fact, which we accept unless they are clearly erroneous.14 We
review de novo the application of those facts to the law.15
In this case the district court found that Blue Water's
cooks perform work essential to the operation of seagoing vessels
traveling between Louisiana and the outer Continental Shelf. It
11 This Court has already decided that a seaman under the
Jones Act is not a seaman under the FLSA. Dole v. Petroleum
Treaters, Inc., 876 F.2d 518 (5th Cir. 1989).
12 Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960).
13 Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190,
206 (1966).
14 Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714
(1986).
15 Id.

12
also found that, "[w]hile aboard the vessel, the cooks are
subject to the authority, direction, and control of the master of
the vessel". Yet from these facts the district court found that
the cooks are not seaman because their services are not "rendered
primarily as an aid in the operation of a vessel as a means of
transportation".16
This Court has decided two cases involving the "seaman"
exemption.17 Although neither case offers us much help here, our
more recent case directs us to the interpretive bulletins of the
Wage and Hour Division of the Department of Labor, which, in
turn, rely heavily on our earlier case; those bulletins also
provide an answer in this case. We give great weight to the
consistent interpretations of those bulletins.18 They allow the
holding that in some cases a seagoing cook may not be a seaman.
The regulations state that a "seaman" is an employee who
"performs, as master or subject to the authority, direction, and
control of the master aboard a vessel, service which is rendered
primarily as an aid in the operation of [a] vessel as a means of
16 Quoting 29 C.F.R. � 783.31; Petroleum Treaters, 876 F.2d
at 521.
17 Petroleum Treaters, 876 F.2d 518; Walling v. W. D. Haden
Co., 153 F.2d 196 (5th Cir.), cert. denied, 328 U.S. 866 (1946).
18 Tony & Susan Alamo Found. v. Secretary of Labor, 471
U.S. 290, 297 (1985); Petroleum Treaters, 876 F.2d at 521-22)
("The fact that the interpretation has not varied since the
FLSA's enactment also entitles it to 'great respect'. Chemehuevi
Tribe of Indians v. Federal Power Comm'n, 420 U.S. 395 (1975).")

13
transportation".19 They also state that "[w]hether an employee
is 'employed as a seaman', within the meaning of the Act, depends
upon the character of the work he actually performs and not on
what it is called or the place where it is performed".20 When a
worker performs both seaman's work and nonseaman's work, he is a
seaman unless his nonseaman's work is substantial in amount.21
Labor defines "substantial" as work that "occupies more than 20
percent of the time worked by the employee during the
workweek".22
The regulations also provide:
The term "seaman" includes members of the
crew such as sailors, engineers, radio operators,
foremen, pursers, surgeons, cooks, and stewards
if, as is the usual case, their service is of the
type described in � 783.31. In some cases it may
not be of that type, in which even the special
provisions relating to seaman will not be
applicable.23
A cook is usually a seaman because he usually cooks for
seamen. In this case that commonplace may well be untrue. It
would appear that Blue Water's cooks primarily feed workers who
are not involved in the navigation of the boat on which they live
and from which they work.24 Even though the district court was
19 29 C.F.R. � 783.31 (1991), citing (among other cases)
Walling v. W.D. Haden Co.
20 29 C.F.R. � 783.33 (1991), again citing W.D. Haden Co.
21 29 C.F.R. � 783.37 (1991).
22 Id.
23 29 C.F.R. � 783.32 (1990) (emphasis added).
24
For example, in W.D. Haden, 153 F.2d at 199, we
emphasized that the Act does not exempt seaman, but those
"employed as seaman", a distinction we found more than

14
correct to look to whether the cooks' services do in fact aid the
operation of vessels as means of transportation, it did not state
its findings in terms sufficient to satisfy the standards of
Labor's interpretive bulletins, to which we defer. We remand so
that the district court may determine if the cooks spend more
than 20% of their time preparing food for non-crew members. If
they do, they are not seamen under the FLSA.

VI. CONCLUSION
For the reasons stated above, we REVERSE in part, and REMAND
to the district court for the limited factual findings made
necessary by this opinion.
tautological. We found that shell miners employed on a seagoing
vessel "are employed more in industry than in shipwork". In this
case, similarly, it seems likely that Blue Water's cooks are
employed more in feeding industrial workers than in feeding ship
workers. If more than 20% of their time is spent in the former,
then they are intended beneficiaries of the FLSA. As we wrote in
W.D. Haden, "[t]he entire Act is pervaded by the idea that what
each employee actually does determines its application to him".
Id.