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The Fair Labor Standards Act § 3(g), defines "employ" as including to suffer or permit to work and the Fair Labor Standards Act § 3(e) defines "employee" as any individual employed by an employer. The definition "suffer or permit to work" was obviously not intended to stamp all persons as employees who, without any express or implied compensation agreement, might work for their own advantage on the premises of another. Otherwise, all students would be employees of the school or college they attended, and as such entitled to receive minimum wages. So also, such a construction would sweep under the Act each person who, without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit. But there is no indication that Congress intended to outlaw such relationships as these. The Act's purpose as to wages was to insure that every person whose employment contemplated compensation should not be compelled to sell his services for less than the prescribed minimum wage. The definitions of "employ" and of "employee" are broad enough to accomplish this. But, broad as they are, they cannot be interpreted so as to make a person whose work serves only his own interest an employee of another person who gives him aid and instruction.
For many years Portland Terminal has given to prospective yard brakemen a practical course of training lasting seven or eight days. Under the supervision of a yard crew, each trainee first learns routine activities by observation and is then gradually permitted to do actual work under close scrutiny. His activities do not displace any of the regular employees, who do most of the work themselves and must stand immediately by to supervise what the trainee does. The trainee's work does not expedite the railroad's business, but may, and sometimes does, actually impede and retard it. Trainees who complete the course satisfactorily and are certified as competent are listed as eligible for employment when needed. Prior to October 1, 1943, trainees received no pay or allowance of any kind; but, since that date, those who prove their competency and are listed as eligible for employment are given a retroactive allowance of $ 4 per day for their training period. Petitioner Walling filed a suit against Portland Terminal to enjoin an alleged violation of §§ 15 (a) (2) and 15 (a) (5) of the Fair Labor Standards Act, 52 Stat. 1060, 1068, which requires as to the employees covered by the Act the maintenance of records concerning their wages and the payment to them of minimum wages. The District Court denied the injunction on the ground that the particular persons involved were not employees, and the Circuit Court of Appeals affirmed on the same ground.
Are the railroad trainees considered “employees” within the meaning of the Fair Labor Standards Act?
Had these trainees taken courses in railroading in a public or private vocational school, wholly disassociated from the railroad, it could not reasonably be suggested that they were employees of the school within the meaning of the Act. Nor could they, in that situation, have been considered as employees of the railroad merely because the school's graduates would constitute a labor pool from which the railroad could later draw its employees. The Fair Labor Standards Act was not intended to penalize railroads for providing, free of charge, the same kind of instruction at a place and in a manner which would most greatly benefit the trainees. Accepting the unchallenged findings from the lower courts that the railroads receive no "immediate advantage" from any work done by the trainees, they are not employees within the Act's meaning.