The Eleventh Circuit Court of Appeals recently handed down a decision, Polycarpe v. E&S Landscaping Services, Inc., which rejected the argument by several employers that they were not a covered by the Fair Labor Standards Act (FLSA) as an enterprise because their business were local in nature. The businesses at issue performed landscaping, construction work, alarm system installation, or shutter installation.  The Polycarpe decision reversed a number of trial courts that had erroneously restricted FLSA coverage.  It essentially put the Eleventh Circuit in line with all the other federal circuits that have squarely addressed the enterprise coverage issue, including the Third, Fourth Ninth, and Tenth Circuits (e.g., Marshall v. Brunner; Dole v. Odd Fellows Home Endowment Board; Brock v. Hamad; Donovan v. Scoles; and, Donovan v. Pointon).  It also put the Eleventh Circuit in line with its prior interpretations of enterprise coverage; namely, Dunlop v. Indus. Am. Corp., which had noted that the FLSA reached retail and service establishments that were otherwise local in nature; and, and Green v. Propane Gas Serv. Inc., which held that the FLSA was “designed to regulate enterprises dealing in articles acquired intrastate after travel in interstate commerce.” 

The Polycarpe decision corrected the decisions of some trial courts in Florida which had erroneously held that a business was not covered by the FLSA if it made its purchases locally and served only local customers. These trial courts failed to look at whether the articles used in the particular business had been manufactured out-of-state.  These trial courts had applied the “come to rest doctrine” which the Polycarpe court determined was at odds with the statutory text of the FLSA.  Indeed, the Polycarpe court stated that the “plain language of the statute” compelled its conclusion. 

The Polycarpe court also addressed the difference between “goods” and “materials” with respect to the application of the “ultimate consumer” defense.   The “ultimate consumer” defense applies only to goods, but does not apply to materials.  To determine whether items in a particular case constitute “materials” depends on (1) whether they are tools or other articles necessary for doing or making something, and (2) whether the items are being used commercially in the employer’s business.

The Polycarpe decision was a victory for employees’ rights to payment of minimum wages and overtime.