Falk v. Brennan, 414 U.S. 190 (1973)

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Syllabus

Respondent brought this action to enjoin petitioners (hereafter D & F), a fully integrated partnership managing apartment complexes for a fixed percentage of the gross rentals collected from each project, from minimum wage and other violations of the Fair Labor Standards Act. The District Court dismissed the complaint, adopting D & F’s contentions that it does not have a $500,000 "annual gross volume of sales made or business done," and thus does not come within the term "enterprise engaged in commerce" as defined in § 3(s) of the Act, and that it is not an employer, within the meaning of § 3(d), of the maintenance personnel who are paid from the rentals received at the apartment complexes where they work. The Court of Appeals reversed, holding that D & F met the statutory definition of "employer" and that, in determining whether the enterprise satisfies the dollar volume limitation, it is the gross rentals (which exceed $500,000 annually) that D & F collects at all the apartment complexes that must be considered, rather than the gross commissions that D & F receives from the apartment owners.

Held:

1. D & F, whose managerial responsibilities at each of the buildings give it substantial control of the terms and conditions of the work of employees at those buildings, is an "employer" under the expansive definition of the term in § 3(d) of the Act. P. 195.

2. D & F sells only its professional management services, and the gross rentals it collects as part of those services do not represent sales attributable to its enterprise. D & F’s commissions are therefore the relevant measure of its gross sales made or business done for purposes of the dollar volume limitation in § 3(s)(1). Thus, though D & F is an "enterprise" under 3(r), Brennan v. Arnheim & Neely, Inc., 410 U.S. 512, the Act does not apply to D & F, as its commissions are below the § 3(s)(1) limitation. Pp. 195-201.

Vacated and remanded.

STEWART, J., delivered the opinion of the Court, in which BURGER, C.J., and BLACKMUN, POWELL, and REHNQUIST, JJ., joined. BRENNAN, J., filed an opinion concurring in part and dissenting in part, in which DOUGLAS, WHITE, and MARSHALL, JJ., joined, post, p. 202.