tion" as defined by the Secretary of Labor. The exemption does not depend upon the character of the business of the employer nor is it applicable to an employee because the employer performs the named operations in the establishment where the employee is employed, if the employee himself does not perform them. A determination of whether an employee is exempt therefore requires an examination of that employee's duties. Some employees of the employer may be exempt while others may not. These principles have been made clear in pertinent court decisions, such as Puerto Rico Tobacco Marketing Coop. Assn. v. McComb, 181 F.2d 697; Farmers Reservoir Co. v. McComb, 337 U.S. 755; Maneja v. Waialua, 349 U.S. 254; Mitchell v. Stinson, 217 F. 2d 210; Jenkins v. Durkin, 208 F.2d 941; Wyatt v. Holtville Alfalfa Mills, 106 F. Supp. 624; Shain v. Armour & Co., 50 F. Supp. 907 (W.D. Ky.) (see also Walling v. W. D. Haden Co., 153 F. 2d 196, certiorari denied 328 U.S. 866; North Shore Corp. v. Barnett, 143 F. 2d 172; Anderson v. Manhattan Lighterage Corp., 148 F. 2d 971, certiorari denied, 326 U.S. 722; and Walling v. Bridgeman-Russell, 2 W.H. Cases 785 (D. Minn.)). See also section 780.106. Section 780.703 The exemption applies only to those plainly within it.

As previously noted in section 780.2, court decisions have firmly established that any exemption from this Act must be narrowly construed and cannot be extended to other than those "plainly and unmistakably within" its terms and spirit. This principle of strict construction has been consistently applied by the Supreme Court and other courts in cases relating specifically to the group of exemptions under consideration in this part, including the exemption which is discussed in this subpart (Addison v. Holly Hill Co., 322 U.S. 607, 617: Farmers Reservoir Co. v. McComb, 337 U.S. 755, 759-760; 764-766; Maneja v. Waialua, 349 U.S. 254; Mitchell v. Budd, 350 U.S. 473; Bowie v. Gonzalez, 117 F. 2d 11. See also section 780.105). This principle applies even to so broadly phrased an exemption as that for "agriculture" because, as stated by the Supreme Court in the Waialua case, "no matter how broad the exemption, it was meant to apply only to agriculture" (349 U.S. at 260). It applies even more clearly to the exemption in section 13 (a) (10), which is not broadly phrased at all, but very

specifically enumerates each of the separate operations to which it is applicable.

REQUIREMENTS FOR EXEMPTION

Section 780.704 Basic conditions of exemption.

In order to come within the exemption provided by section 13(a) (10) during any particular workweek an individual must (a) be employed "within the area of production" as defined by the Secretary of Labor (see section 780.705) and (b) be engaged either (1) in the performance of one or more of the operations, performed on agricultural or horticultural commodities and performed for market, which are specified in the section, or (2) in "making" dairy products (see section 780.706).

Section 780.705 Employment "within the area of production".

The "area of production", within which an individual must be employed under section 13 (a) (10), is defined in Part 536 of this chapter. The validity of this definition has been upheld by the Supreme Court in Mitchell v. Budd, 350 U.S. 473, rehearing denied, 351 U.S. 934. Without repeating any of the detailed provisions of that definition here, certain of the more basic requirements which govern its applicability will be indicated. Whether an employee is employed "within the area of production" is determined by the location. of the "establishment" where he is employed. That establishment is within the area of production if it is located "in the open country or in a rural community" and within specified mileages from the source of 95 percent of the agricultural and horticultural commodities received there. Location of an establishment "in the open country or in a rural community" is further determined under the definition by its geographical separation from communities of designated populations. The fact that an employee is, under the definition, “employed within the area of production" does not, however, in itself bring him within the exemption from the operation of the wage and hours requirements provided by section 13 (a) (10) of the Act. An employee is within the exemption only if, while thus employed, he is engaged in operations named in that section.

Section 780.706 Engagement in the named operations.

(a) If an individual is employed within the area of production (see section 780.705), the application of the exemption in section 13 (a) (10) to him will depend on his engagement during his workweek in the named operations of "handling, packing, storing, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning agricultural or horticultural commodities for market, or in making cheese or butter or other dairy products." As indicated in section 780.702, whether or not the exemption applies is determined by whether the employee is, as an individual, engaged in these named operations. The operations are described in terms connecting physical contact with, or active work upon, a commodity being prepared for market or processed. The section refers only to employees individually engaged in the operations specified. The Department has, therefore, consistently taken the position that this exemption applies only to those employees who actually engage in the enumerated activities and not to all employees in a plant where named operations are performed. For judicial support of this view, see Farmers Reservoir Co. v. McComb, 337 U.S. 735; Puerto Rico Tobacco Marketing Coop. Assn. v. McComb, 181 F. 2d 697; Jenkins v. Durkin, 206 F. 2d 941; and other cases cited in section 780.702.

(b) An employee is engaged in the named operations only if (1) he is actually individually engaged in the performance of (i) operations expressly named in section 13 (a) (10) (other than the making of dairy products), (ii) which are performed on "agricultural or horticultural commodities", and (iii) which are so performed "for market”, or if (2) he is actually individually engaged in "making" dairy products. Accordingly, for the exemption to apply there must actually be individual engagement by the employee in activities that are themselves an integral part of a named operation, as distinguished from activities that are not a part of the operation itself but are only a necessary incident, or closely related and directly essential, to it. Activities which are closely related and directly essential to a named operation by which goods are produced for commerce will bring the employee performing them within the coverage of this Act but not within the

section 13 (a) (10) exemption unless the activities are part of the named operation itself. See, in this connection, Farmers Reservoir Co. v. McComb, 337 U.S. 775, and Mitchell v. Stinson, 217 F. 2d 210. Section 780.707 Employees not exempt be

cause not engaged in named operations. It follows from the principles discussed in section 780.706 that the exemption provided by section 13(a) (10), like other exemptions in the Act which depend on engagement by employees in specified activities, does not apply to employees whose individual duties do not bring them within the statutory language, such as employees during the dead season; bookkeepers, clerks, stenographers, and other office employees; guards and watchmen; janitors and charwomen; and other maintenance, service, and miscellaneous employees who do not engage directly in any of the operations named, which are performed by their employer upon the commodities prepared or processed in the establishment where they are employed. Similarly, since the operations described do not include the manufacture of packages or containers used in the shipment of agricultural or horticultural commodities or dairy products, employees engaged therein are not within the exemption. (See Mitchell v. Stinson, 217 F. 2d 210; Phillips v. Meeker Cooperative Light & Power Assn. 63 F. Supp. 743, affirmed on other grounds, 158 F. 2d 698; Abram v. San Joaquin Cotton Oil Co., 46 Supp. 969 (S.D. Calif.); Heaburg v. Independent Oil Mill, 46 F. Supp. 751 (W.D. Tenn.); Colbeck v. Dairyland Creamery Co., 70 S.D. 283, 17 N.W. 2d 262; Damutz v. Wm. Pinchbeck, Inc., 66 F. Supp. 667, 670, Aff'd 158 F. 2d 882; Jenkins v. Durkin, 208 F. 2d 941; Maneja v. Waialua, 349 U.S. 254, 271; cf. Maisonet v. Central Coloso, Inc. (D.P.R.) 2 W.H. Cases 753).

OPERATIONS ON "AGRICULTURAL OR HORTICULTURAL COMMODITIES"

Section 780.708 Performing operations on “agricultural or horticultural commodities" as a condition of exemption.

An employee performing the specified operations of handling, packing, storing, compressing, pasteurizing, drying, preparing in the raw or natural state, or canning of commodities must be engaged in performing such operations on "agricul

tural or horticultural commodities" if the performance of these operations is to qualify him for exemption. In addition, as explained in section 780.715, even if such cperations are performed on agricultural or horticultural commodities their performance by an employee will not qualify him for exemption unless they are performed "for market". An employee employed within the area of production and engaged in performing the named operations on agricultural or horticultural commodities for market will come within the exemption even though the commodities are used in dairy products; it does not matter whether such operations also qualify the employee for exemption under section 13 (a) (10) as an individual engaged in “making * * * dairy products".

Section 780.709 The "agricultural or horticultural commodities" referred to in the exemption.

The "agricultural or horticultural commodities" referred to in section 13(a) (10) are, in general, those cultivated, raised, and harvested by farmers which are referred to in section 3 (f) and which are discussed in sections 780.121-780.125 in Subpart B of this Part 780. The legislative history of this exemption (see Maneja v. Waialua, 349 U.S. 254) and the requirement of the statute that the operations on the commodities be performed "for market" further indicate that the exemption has reference to such farm commodities as are produced and delivered to others by farmers. Accordingly, it is the view of the Department of Labor that the "agricultural or horticultural commodities" to which section 13(a) (10) has reference are commodities which (a) have resulted from the use of agricultural or horticultural techniques and (b) are, at the commencement of the named operations, in the form in which they are customarily harvested or marketed by farmers or in which they normally come from the farm and before their natural state has been substantially changed or destroyed.

Section 780.710 Commodities produced by ag

ricultural or horticultural techniques. Commodities resulting from the use of "agricultural or horticulture techniques", in the case of products of the soil, are those commodities that are planted and cultivated by man. Among such commodities are the following: grains, forage

crops, seeds, fruits, vegetables, nuts, sugar cane, fibre crops, tobacco, mushrooms, and nursery products, including those transplanted from a wild state, but not forest seedlings. In addition to such products of the soil, commodities produced by agricultural techniques include live domesticated animals such as cattle, sheep, goats, and poultry and their recurring products such as milk, eggs, wool, and mohair (see colloquy among Congressmen Lucas, Lea, and Keller, 82 Cong. Rec. 1783-1784, as to "ordinary agricultural commodities of the farm"; see also sections 780.121-780.124. See, however, Stratton v. Farmers Produce Co., 134 F. 2d 825, holding the exemption inapplicable to the handling of livestock and poultry). Furs procured from fur-bearing animals raised by man are included, whereas furs from animals of the same kind that have remained in their natural habitat until trapped or killed for their fur are not. Section 780.711 Commodities not included.

The term "agricultural or horticultural commodities" as used in section 13 (a) (10) does not have reference to commodities produced by industrial techniques, by exploitation of mineral wealth or other natural resources, or by uncultivated natural growth. Consequently, commodities such as meats and meat products, breakfast cereals, flour, sugar, peat and other uncultivated mosses, minerals, wild rice, wild animals, wild fruits and wild plants are not considered agricultural or horticultural commodities within the meaning of the exemption. Trees and timber products are also not considered agricultural or horticultural commodities even when grown in managed forests. Support for this position is found in the fact that a separate exemption is provided in section 13(a) (15) for certain logging operations and in the fact that sections 3(f) and 13 (a) (6) do not include forestry operations in general, but are limited to situations where they are incidental to farming operations. Therefore, employees who perform any of the enumerated operations upon any of these commodities, or upon others similarly derived from industrial or nonagricultural processes, are not within the exemption.

Section 780.712 Exemption relates to "farmmarket" commodities.

Generally, as previously indicated in section 780.709, to be an agricultural or horticultural com

modity within the meaning of section 13(a) (10) the commodity must be in the form in which it normally comes from the farm and before any substantial change in its natural form has taken place or in a form in which it is customarily harvested or marketed by farmers. Typical of such commodities are eggs and nuts in the shell, honey, fruits, vegetables, hops, sugar cane and sugar beets, as they come from the farm; nursery products as they normally come from the greenhouse or field; live animals and poultry; and unpasteurized fluid milk or cream. Hides are to be distinguished from furs of fur-bearing animals raised by the farmer. Hides are normally by-products of slaughtering operations which customarily are performed off the farm by others than the farmer, whereas fur farmers customarily skin the animals on the farm and market the furs rather than the whole animals. Mohair and wool which have not been processed or mixed with other commodities are "agricultural commodities" within the meaning of section 13 (a) (10). For purposes of the section threshed grain, shelled corn, cured sweet potatoes, dry edible beans removed from the pod, cream separated from milk, ginned cotton, cottonseed, cotton linters, and unstemmed farm-cured tobacco are considered agricultural or horticultural commodities since they are in the form customarily marketed by farmers. Consequently the performance of the enumerated operations on these commodities is within the exemption. The fact that such commodities may have been in storage before operations are performed on them does not change their character as agricultural or horticultural commodities. Section 780.713 Operations on processed commodities not included.

As indicated in section 780.712, the threshing of grain, the shucking of corn, and other operations normally performed on farm commodities before they leave the farm do not destroy their character as "agricultural or horticultural commodities." On the other hand, such commodities as grease, tallow, tankage, hides, cereals, manufactured feeds, citrus waste, bagasse, beet pulp, flour, raw sugar, alfalfa meal, shelled nuts, milled rice, stemmed, redried, fermented or bulked tobacco, slaughtered animals or poultry, meat products, butter, cheese, dried or evaporated milk, casein, ice cream, dried or frozen fruits, brined cherries, sauerkraut, cider, vinegar, wine or beer, pickled vegetables, and a

variety of other processed commodities which have been cut, cracked, sliced, peeled, heated, frozen, or subjected through industrial processes to other changes are no longer in a form in which they are customarily marketed by farmers, and have therefore lost their character as agricultural or horticultural commodities of the kind to which section 13(a) (10) refers. Operations on them thereafter, even if of the types enumerated in that section, will not come within the exemption because not performed on the "agricultural or horticultural commodities" to which the section has reference. Exemption of operations performed on commodities changed in form and no longer in their natural state cannot reasonably be said to have been contemplated under section 13 (a) (10), which provides no such exemption for most of the operations by which such change in form may be effected. Neither the language nor the purpose of this provision justifies the view that an exemption inapplicable to all but a few processing operations is nevertheless applicable to subsequent operations relating to the processed commodity, which operations are a further step removed from the farm. Certain processed commodities, such as flour, raw sugar, dried or frozen fruits, dressed meats or poultry, etc. may be characterized as agricultural or horticultural commodities for purposes of some statutes, but cannot be considered as agricultural or horticultural commodities within the meaning of section 13 (a) (10). In this connection, see Bowie v. Gonzales, 117 F. 2d 11; Lewis v. Nailling, 36 F. Supp. 187 (W.D. Tenn.). Section 780.714 Ownership of commodities.

For purposes of section 13(a) (10) ownership of the commodities is not a determinative factor in the applicability of the exemption. The exemption is applicable to an employee engaged in the named operations whether or not the commodities are owned by his employer. For example, employees of brokers, commission houses and farmers may come within the exemption upon meeting its requirements.

OPERATIONS ON COMMODITIES "FOR MARKET" Section 780.715 Performance of operations "for market".

The requirement that the operations be performed on agricultural or horticultural commodi

ties "for market" is applicable to all of the named operations in section 13 (a) (10) except the making of dairy products. Unless done "for market" no handling, packing, storing, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning of agricultural or horticultural commodities constitutes a ground for exemption of an employee engaged in these operations. Where the named operations are performed on the commodities to prepare them for a market in which the employer expects to dispose of them as thus prepared, without any substantial subsequent change in their form, the operations are considered to be performed "for market". Such a "market" may be either a purchaser of the commodities or a purchaser of the services performed on them, such as a farmer on whose commodities the named operations are performed. On the other hand, the named operations are not performed "for market" if they are performed, not to prepare the commodities for disposal by the employer in the form in which they are left by the named operations but to prepare them instead for other operations of the employer by which the commodities will be further processed or converted into different products. The exemption does not apply to employees performing the named operations on commodities as a preparation for further processing rather than for market.

Section 780.716 Form in which commodities

are marketed as a factor.

Where the employer receives agricultural or horticultural commodities in the natural form in which they normally come from the farm, and disposes of them in substantially the same form after his employees perform such named operations on them as handling, packing, storing, or preparing in the raw and natural state, the operations are considered as performed "for market". Certain of the named operations, however, such as canning, and in most instances drying, effect a change in the natural form of agricultural or horticultural commodities and destroy their character as such. Such operations are also considered to be performed "for market" so long as the employer will dispose of the commodities in substantially the form in which they are left by the named operations, but not where he will process them further and market only the product of the subsequent operations. It should be remem

bered, of course, that performance "for market" of a listed operation is no ground for exemption unless, when it commences, the operation is performed upon "agricultural or horticultural commodities." Thus, while the exemption may apply to employees engaged in each of several such operations performed on such commodities if the commodities reach market in their natural form, and while it may apply to employees engaged in such operations as canning or drying of agricultural or horticultural commodities even though the canned or dried commodities are to be further prepared for market by handling, packing, or storing operations, it cannot apply to employees engaged in the handling, packing, or storing for market of the canned or dried commodities because such commodities are no longer "agricultural or horticultural commodities."

Section 780.717 Change in form of commodities after performing named operations. In an employer disposes of a commodity in a form other than that in which the operations named in section 13 (a) (10) leave it, operations performed on it by his employees prior to its change of form will not be "for market" but for the subsequent nonexempt operation which changes its form. Thus, employees of poultry or meat packers, or of other employers who slaughter poultry or livestock which they receive, are typically not within the exemption when such employees pick up, receive, transport, or otherwise handle or prepare such poultry or livestock for their employer's subsequent operations. Their handling of the poultry or livestock is not "for market" because the commodities will not be disposed of in the form in which the named operation leaves them (Bush v. Wilson, 157 Kan. 82, 138 F.2d 457). Employees of a sugar mill operator who transport sugar cane to the mill, where it is to be processed, are not engaged in handling the cane "for market," and are not within the section 13 (a) (10) exemption. See Bowie v. Gonzalez, 117 F. 2d 11. Similarly, the packing of vegetables in cartons for freezing, before the employer markets them as frozen products, or the canning of agricultural or horticultural commodities which the employer intends to re-can, would not meet the "for market" requirement. An employee "handling" and "storing", at a country grain elevator or at a mill, wheat which his em