## Facts

- R. A. Peacock, M. L. Coffer, and H. J. Wilson worked as night watchmen for Lubbock Compress Company.
- The watchmen worked 84 hours per week and were paid above the minimum hourly rate but received no overtime premium.
- Lubbock Compress Company was engaged exclusively in compressing cotton and did not gin cotton.
- The watchmen sued under the Fair Labor Standards Act (FLSA) for unpaid overtime under § 7(a).
- The employer conceded FLSA coverage but asserted the overtime exemption in FLSA § 7(c) for an employer engaged in “the ginning and compressing of cotton.”
- The district court applied the § 7(c) exemption and denied overtime; the watchmen appealed.

## Issues

1. Whether the FLSA § 7(c) exemption for an employer engaged in “the ginning and compressing of cotton” applies to an employer engaged solely in compressing cotton.
2. If the exemption applies to the establishment, whether it covers night watchmen employed at that place of employment.

## Decision

- The Fifth Circuit affirmed the judgment for Lubbock Compress Company.
- The court held that § 7(c)’s reference to “ginning and compressing of cotton” covers compressing operations even when the employer does not gin cotton.
- Because the employer’s establishment fell within § 7(c), the watchmen were exempt from § 7(a)’s overtime requirements for work performed there.

## Legal Principles

- Statutory terms such as “and” may be construed in context to effectuate legislative intent; “and” may be read disjunctively where a strictly conjunctive reading would defeat the statute’s operation.
- An interpretation that would make an exemption effectively inapplicable in light of undisputed industry practice should be avoided when inconsistent with the evident statutory purpose.
- Under FLSA § 7(c), employees “in any place of employment where” the employer is engaged in the specified first-processing activity are exempt from § 7(a) overtime requirements.

## Conclusion

The court held that FLSA § 7(c)’s exemption for “the ginning and compressing of cotton” applies to a business that only compresses cotton, and therefore employees working at that compress establishment, including night watchmen, are not entitled to overtime under § 7(a).


Peacock v. Lubbock Compress Co., 252 F.2d 892 (5th Cir. 1958)