## Facts

- The Secretary of Labor sued a real estate management company for alleged violations of the Fair Labor Standards Act (FLSA) minimum wage, overtime, and recordkeeping requirements, seeking injunctive relief and back wages.
- The company centrally managed nine separately owned buildings in the Pittsburgh area (eight office buildings and one apartment complex) under management contracts and generally did not own the properties.
- From a central office, the company obtained tenants, negotiated and signed leases, initiated legal actions regarding leases, and managed and maintained the properties.
- The company collected rents for each building, deposited funds into separate accounts for each property, paid expenses, and remitted net amounts to owners after deducting expenses and management fees.
- The company hired, fired, supervised, and negotiated wages for building employees.
- FLSA coverage depended in part on whether employees were employed by an “enterprise engaged in commerce or in the production of goods for commerce.”
- The dispute centered on whether the management company qualified as an “enterprise” under FLSA § 3(r), defined as “related activities” performed through “unified operation or common control” for a “common business purpose.”

## Issues

1. Whether a real estate management company that centrally runs operations at multiple separately owned buildings constitutes an “enterprise” under FLSA § 3(r) when the property owners have no relationship or shared business purpose.

## Decision

- The Supreme Court reversed the judgment of the Third Circuit and remanded.
- The Court held that the management company was an “enterprise” within the meaning of FLSA § 3(r).
- The Court ruled it was irrelevant, for defining the management company’s enterprise, that the separate building owners lacked any relationship or common business purpose.

## Legal Principles

- The FLSA § 3(r) “enterprise” inquiry focuses on the defendant’s own activities and organization, not on whether the defendant’s clients or the beneficial owners of managed assets share a common business purpose.
- “Related activities” and “unified operation or common control” are satisfied where a single company directs interrelated functions (leasing, staffing, supervision, maintenance) for multiple worksites from a central office.
- A “common business purpose” exists when one entity conducts integrated operations for a single profit-oriented objective, even if those operations serve multiple unrelated owners.
- A defendant’s status as an “enterprise” under § 3(r) can establish enterprise-based coverage under the FLSA if other statutory coverage elements are also met.

## Conclusion

The Court held that a centralized real estate management company operating multiple properties can be a single FLSA “enterprise” because its own integrated, commonly controlled activities pursue one business purpose, regardless of the lack of unity among the separate property owners.


Brennan v. Arnheim & Neely, Inc., 410 U.S. 512 (1973)