ployer expects to mill before disposing of it, is not performing those operations "for market" (Gaskin v. Clell Coleman and Sons, 2 W.H. Cases 977,980); they would be performed "for milling", and consequently not within the exemption. Although in Tobin v. Flour Mills of America, 185 F. 2d 596, 602, the court concluded that wheat was stored "for market" in a situation where the employer did not know whether it would be sold on the market in the form in which it was stored, or would be milled before it was marketed, this decision does not affect the conclusion that wheat is not stored "for market" if an employer knows or has reason to believe he is going to mill it before he markets it. On the other hand, employees of an independent country grain elevator handling grain intended to be sold to others in the same form in which it is received would be handling it "for market". The same principles apply in the case of country or rural "receiving stations" in which employees are handling or performing other named operations on milk, cream, live poultry, eggs, or other agricultural or horticultural commodities. Where these stations are independently. operated and the commodities they receive are marketed to others in substantially the same form in which they come from the farm, the employees will be performing such operations "for market". However, where the receiving station is operated by an enterprise which processes such commodities at another plant by operations not named in section 13(a) (10), the employees are not handling the commodities "for market" (Mitchell v. Park, 14 WH Cases 43, 36 Lab. Cases 65, 191 (D. Minn.)). They could be considered to do so only if the form in which the commodities are disposed of by the main plant is substantially unchanged from that in which they are left by the operations which qualify for exemption.

Section 780.718 Operations performed for farmers.

Where an employer performs operations named in section 13 (a) (10) for farmers on commodities which are agricultural or horticultural commodities within the meaning of the section, without taking title to the commodities, his employees will be performing such operations "for market" if the employer disposes of the commodities in the form in which the named operations leave them. This would be true of employees of a country grain ele

vator handling and storing grain which the elevator ships and sells for the farmer. In such a case the "for market" requirement is not affected by the fact that the grain is handled and stored under government loan, nor does it matter that a different employer may have cleaned the grain before it goes into storage. Other examples of employees who may be performing operations "for market" are employees engaged in cleaning seeds bought and sold by their employer for farmers or in cleaning seeds belonging to farmers, or in the custom shelling of corn. Employees of an auctioneer who are actually engaged in handling agricultural commodities such as livestock for sale at auction are also performing "for market" activities.

Section 780.719 Performance of more than one of named operations "for market". Notwithstanding the fact that each of the operations listed in section 13 (a) (10) prior to the words "for market" is individually qualified by that phrase, any such operation can be performed "for market" within the meaning of the section either alone or in combination with others of the listed operations. If the commodities will reach market in substantially the form in which the particular operation leaves them, any such operation may be considered to be performed "for market" notwithstanding further operations are to be performed on the same commodities before they are marketed. Thus, where the employees of an employer perform more than one of the named operations on an agricultural or horticultural commodity, all of them will be considered "for market" if the employer disposes of the commodity in the form in which the last of the named operations leaves it. For example, an employer who packs fresh fruit may have employees engaged in several of the enumerated operations "for market." Some may be "handling" it, "storing" it, "preparing" it in its "raw or natural state" in various ways, and finally "packing" it in crates and loading it onto transportation facilities. Since it is then disposed of by the employer in the form in which the exempt "packing" operations left it, all of the employees performing the other enumerated operations would be doing so "for market". It is immaterial whether these operations are performed in one or several establishments or by the same or different employees.

Section 780.720 Operations performed within and outside "area of production". Sometimes an employer may have some employees employed within the "area of production" and others outside the "area of production" who perform operations on the same agricultural or horticultural commodities before the employer disposes of them. If the operations by employees who are not employed within the "area of production" are performed first and do not change the commodities from the form in which they normally come from the farm or are harvested or marketed by farmers, employees of the employer who are employed within the "area of production" will be within the exemption if their operations on the commodities are those named in section 13 (a) (10), provided the employer disposes of the commodities in the form in which the named operations leave them. If, on the other hand, the employees employed within the "area of production" perform the first operations on the agricultural or horticultural commodities, and these are operations named in section 13(a) (10), the performance of subsequent operations on the same commodities by employees of the employer who are not employed within the "area of production" will not cause the prior operations to be viewed as not performed "for market" so long as such subsequent operations do not change the commodities from the form in which they were left by the named operations performed within the "area of production", and the employer disposes of the commodities in such form. For example, employees whose work consists of receiving eggs at first concentration points within the area of production for shipment to another establishment of their employer outside the area of production where the eggs are candled, graded, and packed, are performing such operations "for market" because the subsequent operations in the other establishment do not effect any change in the form of the eggs. In the above situations the operations performed outside the area of production are, of course, not exempt.

SCOPE OF THE NAMED OPERATIONS Section 780.721 Operations included within the exemption generally.

As previously noted, section 13 (a) (10) does not exempt employees employed within the area of production in every type of operation on agricul

tural or horticultural commodities but exempts only those actually engaged in the specifically enumerated operations. The named operations comprise two general categories. One includes certain specified operations performed "for market" upon "agricultural or horticultural commodities." The other includes the operations involved in making dairy products. In the following discussion, the particular operations in the first group will be considered first. To the extent that milk and cream are "agricultural or horticultural commodities" (see section 780.12), this portion of the discussion will be applicable to them. Reference should, however, be made to the subsequent discussion of "making dairy products" for a considertaion of operations on such commodities which may be a ground for exemption even though not included among the named operations performed for market. The operations named in section 13 (a) (10) may be broadly characterized as of two types: (a) Non-processing operations (handling, packing, storing, compressing and preparing in the raw of natural state) which make no substantial change in the form (physical structure or chemical content) of an agricultural or horticultural commodity, and (b) specifically designated processing operations (pasteurizing, drying, canning, and making cheese or butter or other dairy products) which do make substantial changes in the form of the commodity. Section 780.722 Exemption cannot be ex

tended to processing operations not named. (a) The language of section 13(a) (10), unlike that contained in other provisions of the Act exempting employees from overtime requirements only, does not in terms mention "processing" of agricultural or horticultural commodities. Certain specified processing operations only are included among the listed operations. The section was not intended to provide an exemption with respect to any employee engaged within the area of production in processing operations other than those expressly named. The term "processing operations," as here used, refers to operations which commonly involve the application of heat, cold, or mechanical pressure to such an extent that the natural form of the commodity undergoes substantial change. Examples of processing by means of heat are the drying, the cooking, the roasting, and the canning of commodities. The freezing of commodities is an example of processing by means of

cold. The squeezing, pressing, or crushing, the shelling, and the milling of commodities are examples of processing by means of mechanical pressure. It will be noted that some of these are, and some are not, mentioned in section 13 (a) (10). (b) Section 13(a) (10) specifies very definitely the precise processing operations included within the exemption. This specificity of enumeration has been pointed out by the courts as a reason for restricting such an exemption to the named operations and not extending it to other operations which might be of a somewhat similar nature (see section 780.2). In Bowie v. Gonzales, 117 F. 2d 11, the Court held that the processing of sugar cane is excluded from section 13 (a) (10) because the section exempts only "certain processes which are specifically mentioned and among which the processing of sugar cane into sugar is not found. It cannot be important that sugar processing is similar to those operations included in section 13(a) (10) as section 7 (c) is ample evidence of the fact that Congress had sugar processing in mind and knew how to include it when it so desired." So, too, in Maneja v. Waialua, 349 U.S. 254, the Supreme Court treated sugar milling as a "quasi-industrial processing," analogous to "ginning" (then included in the operations listed in section 13(a) (10) and "canning", and viewed it as excluded from section 13(a)(10) since, unlike those two processing operations, it was not there specifically enumerated. Inclusion in section 7(c) of an operation not mentioned in section 13 (a) (10) would thus, as the Court indicated, mark the "outer limit of Congressional concession to this type of processing." Section 780.723 Illustrations of processing operations not included.

Among the employees excluded from the exemption by the principle stated in section 780.722 are those engaged in such operations as the cracking, grinding, crushing, or milling of grains, sugar crops, and other farm commodities, the extraction from farm commodities of oils, juices, syrups, etc., by the application of pressure, the manufacture from such commodities of flours, feeds, starches, sugars, etc., the processing of cottonseed, flaxseed, etc., the breaking and separating of eggs, the slaughtering and dressing of livestock or poultry and the picking of poultry, the bulking, stemming, and redrying of tobacco, the making of tobacco

products (cigars, cigarettes, chewing and pipe tobaccos, etc.), the shelling of dried coffee seed, or nuts, the peeling or cutting of fruits or vegetables or the extracting of fruit and vegetable juices and oils (where not an integral part of canning the agricultural or horticultural commodity), the brining of cherries, the freezing of fruits, vegetables, eggs, etc., the roasting of coffee or nuts, the decortication of fibre crops, the manufacture of preserves from fruits, and other similar processing operations, not expressly mentioned in section 13(a)(10), which involve changing the form of the agricultural or horticultural commodity from the natural state in which it normally leaves the farm. These processing operations, like the processing of sugar cane, are not a ground for exemption under section 13 (a) (10) because they are not specifically mentioned. These are only illustrative and not exhaustive of operations to which the exemption does not apply. In addition to the cases cited in section 780.722, the following cases are illustrative of the judicial consideration that has been given to operations such as those described above: Stratton v. Farmers Produce Co., 134 F. 2d 825 (where the court contrasted section 7(c) and 13(a) (10), and excluded from section 13(a) (10) operations not there enumerated but expressly mentioned in section 7(c)); Mitchell v. Idle-Wild Farm, Inc., 13 W.H. Cases 315 (D. Conn.); Fleming v. Farmers Peanut Co., 128 F.2d 404; Abram v. San Joaquin Cotton Oil Co., 46 F. Supp. 969 (S.D. Calif.); Mitchell v. Budd, 350 U.S. 473; McComb v. Puerto Rico Tobacco Marketing Coop. Assn, 80 F. Supp. 953, 181, F. 2d 697. Section 780.724 Activities incidental to named operations.

An activity which is incidental to an enumerated operation is not by reason of that fact brought within the scope of the named operation. However, an activity which is incidental to a named operation may in itself be a named operation. When that is the case, it will be exempt if the other conditions of the exemption are met. Handling, for example, may be incidental in some manner to the performance of every operation listed. If it is to be exempt, however, it must be because it is the type of handling, namely, the handling of an agricultural commodity for market, which in itself is an exempt operation.

NAMED OPERATIONS PERFORMABLE ON THE
SPECIFIED COMMODITIES FOR MARKET

Section 780.725 General statement on performance of named operations.

Separately considered in the following sections are the particular operations named in section 13(a) (10) of the Act which, if performed on agricultural or horticultural commodities for market, will exempt an employee engaged in them from the operation of the wage and hours provisions if he is an individual employed "within the area of production" (as defined by the Secretary of Labor). If an employee spends his entire workweek in such operations and satisfies the "area of production" requirement he is exempt regardless of whether he engages in a single one of such operations or in several. Apart from the making of dairy products, discussed in sections 780.765 et seq., these are the only operations in which an employee may engage that can bring him within the terms of this exemption. No employee is exempted by virtue of this section in any workweek in which, while engaged in otherwise covered employment, he spends any portion of his time in operations other than those named, even though they are performed on agricultural or horticultural commodities for market. This is true irrespective of whether agricultural or horticultural commodities subjected to such operations remain agricultural or horticultural commodities after performance of the operations. The fact that an employee does not normally engage in any of the specific operations named in the statute will not, of course, preclude application of the exemption to him in any workweek in which he does actually and physically engage in such operations.

"HANDLING"

Section 780.726 Exempt "handling".

Neither the minimum wage nor the maximum hours provisions of the Act apply with respect to an individual employed within the area of production (as defined by the Secretary of Labor), who is engaged in the "handling" of agricultural or horticultural commodities for market. It is clear from what has already been said that an employee is, for purposes of the exemption, so engaged only if he himself is actually and physically engaged in "handling" commodities, and

then only if the commodities he handles are "agricultural or horticultural commodities" within the meaning of the Act and are being handled "for market." Although exemption of employees engaged in making dairy products is expressly provided for by another clause, employees of receiving stations who do not engage in such operations may be exempt if they are engaged in handling of milk or cream within the area of production and for market. It should be remembered that the performance of further operations on the commodities handled by an employee may defeat the exemption for "handling" if such operations are performed by his employer and if they change the form of the commodities so that, when he disposes of them, they are no longer "agricultural or horticultural commodities." In such event, the employee cannot be said to be engaged in handling them "for market." The fact that the "handling *** of livestock" is an operation specifically mentioned in section 7(c) (providing a partial exemption from the overtime provisions of the Act) does not indicate that section 13 (a) (10) is inapplicable to this operation. Livestock, until slaughtered, is an agricultural commodity and the specification of the term "handling" in this section as well as in section 7 (c) indicates the intention of Congress to grant the total exemption to such operations where the "area of production" and "for market" requirements are satisfied. (Compare Maneja v. Waialua, 349 U.S. 254, with Stratton v. Farmers Produce Co., 134 F. 2d 825.) Section 780.727 Activities included in “handling".

The term "handling," as applied to agricultural or horticultural commodities, connotes physical contact with the commodities themselves, but does not embrace "processing" operations (see section 780.729). The term has reference to those physical operations customarily performed in obtaining agricultural or horticultural commodities from producers' farms, transporting them to market or to an establishment where further operations are to be performed in preparation for market, receiving and unloading them at such an establishment, weighing or counting them or otherwise determining upon what basis the producer is to be paid, placing them within the establishment, moving them from one place to another therein, delivering them to warehouses or to conveyances

for their transportation away from the establishment, and transporting them away from the establishment (Tobin v. Flour Mills of America, 185 F. 2d 596; Holt v. Barnesville Farmers Elevator Co., 145 F. 2d 250). "Handling" includes the loading of the commodities on trucks, wagons, etc. in the producers' fields or at concentration points. It also includes transportation of the agricultural commodities from farm to concentration points or to establishments where further operations are to be performed, between such establishments, and away from such establishments. Employees delivering farm products to market who, because they are not employed by a farmer, are not within the agricultural exemption provided by section 13(a) (6), may nevertheless be exempt under section 13(a) (10) if they are employed "within the area of production" and the commodities they transport are "agricultural or horticultural commodities." In establishments where the commodities are prepared for market, the assembling, sorting, binning, piling, or stacking of the commodities are typical "handling" operations. In the case of livestock temporarily held at pens pending sale or shipment, the penning, feeding, watering, and bedding down of the animals would be additional examples. Where the agricultural or horticultural commodities are packed (see sections 780.730 et seq.) for market without changing their natural form, "handling" includes moving the bags, boxes, cases, barrels, bales, coops, and other loaded containers to wagons, trucks, railroad cars or other conveyances.

Section 780.728 Activities not included in "handling".

Activities that change the natural form of agricultural or horticultural commodities are not "handling" the commodities within the meaning of the Act. Also, activities that are not a part of the actual handling of the commodities are not "handling" merely because they are necessary to the handling operations. For example, the repair and upkeep of facilities used in handling agricultural or horticultural commodities, the icing of trucks and refrigerated cars used in transporting them (Gordon v. Paducah Ice Mfg. Co., 41 F. Supp. 980 (W.D. Ky.)), or contracting activities in connection with the acquisition of them do not constitute "handling" within the meaning of the exemption. Further, it is clear that the clerical

work necessary to maintain accounts regarding the commodities handled or payrolls for the employees who handle them is not the "handling" of the commodities.

Section 780.729 Handling as a part of processing.

Although "handling", within the meaning of section 13(a) (10), does not include processing operations (see Abram v. San Joaquin Cotton Oil Co., 46 F. Supp. 969 (S.D. Calif.)), in some cases handling may be an integral part of a processing operation, in which case the applicability of the exemption would depend upon whether or not that processing operation is a named operation. For example, moving fruits or vegetables from one operation to another in the course of canning is exempt not as "handling" as named in section 13(a) (10) but because it is considered an integral part of canning operations. In other situations handling may itself constitute a processing operation, as in the piling of tobacco in the course of bulking. Bulking, like slaughtering, results in a substantial change in the natural form of the commodity and since it is not a named processing operation, the exemption is not applicable. (See Mitchell v. Budd, 350 U.S. 473, Puerto Rico Tobacco Marketing Coop. Assn. v. McComb, 181 F.2d 697 (C.A. 1) and Subpart D of this Part 780.)

"PACKING"

Section 780.730 Exempt "packing”.

Neither the minimum wage nor the maximum hours provisions of the Act apply with respect to an individual employed within the area of production (as defined by the Secretary of Labor), who is engaged in the "packing" of agricultural or horticultural commodities for market. It is clear from what has previously been said that an employee is, for purposes of the exemption, engaged in the named operations only if he himself is actually and physically engaged in "packing" commodities, and then only if the commodities he is engaged in packing are “agricultural or horticultural commodities" within the meaning of the Act and are being packed "for market." Section 780.731 Activities included and excluded.

The term "packing" refers generally to the physical operations involved in placing agricul