(a) A restaurant may qualify as an exempt retail or service
establishment under section 13(a)(2) of the Act. However, the
establishment must meet all of the requirements of section 13(a)(2) (see
Sec. 779.337). It should be noted that a separate exemption from the
overtime pay provisions of the Act only is provided in section 13(b)(18)
for certain food service employees employed by establishments other than
restaurants if the establishment meets the definition of a retail or
service establishment as defined in the last sentence of section
13(a)(2). Privately owned and operated restaurants conducted as separate
and independent business establishments in industrial plants, office
buildings, government installations, hospitals, or colleges, such as
were involved in McComb v. Factory Stores, 81 F. Supp. 403 (N.D. Ohio)
continue to be exempt under section 13(a)(2) where the tests of the
exemption are met (S. Rept. 145, 87th Cong., first session, p. 28; H.
Rept. 75, 87th Cong., first session, p. 10). However, they would not be
met if the food service is carried on as an activity of the larger,
nonretail establishment in which the facility is located and there is no
independent, separate and distinct place of business offering the
restaurant service to individual customers from the general public, who
purchase the meals selected by them directly from the establishment
which serves them. An establishment serving meals to individuals,
pursuant to a contract with an organization or person paying for such
meals because the latter has assumed a contractual obligation to
furnish them to the individuals concerned, is selling to such
organization or firm, and the sales are for resale within the meaning of
section 13(a)(2). See also Sec. 779.387.
