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CFR  

Code of Federal Regulations Pertaining to ESA

Title 29  

Labor

 

Chapter V  

Wage and Hour Division, Department of Labor

 

 

Part 779  

The Fair Labor Standards Act As Applied to Retailers of Goods or Services

 

 

 

Subpart C  

Employment to Which the Act May Apply; Enterprise Coverage


29 CFR 779.222 - Ownership as factor.

  • Section Number: 779.222
  • Section Name: Ownership as factor.

    As pointed out in Sec. 779.215 ``unified operation'' and ``common 
control'' do not refer to the ownership of the described activities but 
only to their performance. It is clear, however, that ownership may be 
an important factor in determining whether the activities are performed 
through ``unified operation or common control.'' Thus common control may 
exist where there is common ownership. Where the right to control, one 
of the prerogatives of ownership, exists, there may be sufficient 
``control'' to meet the requirements of the statute. Ownership, or 
sufficient ownership to exercise control, will be regarded as sufficient 
to meet the requirement of ``common control.'' Where there is such 
ownership, it is immaterial that some segments of the related activities 
may operate on a semiautonomous basis, superficially free of actual 
control, so long as the power to exercise control exists through such 
ownership. (See Wirtz v. Barnes Grocer Co., 398 F. 2d 718 (C.A. 8).) For 
example, a parent corporation may operate a chain of retail or service 
establishments which, for business reasons, may be divided into several 
geographic units. These units may have certain autonomy as to 
purchasing, marketing, labor relations, and other matters. They may be 
separately incorporated, and each unit may maintain its own records, 
including records of its profits or losses. All the units together, in 
such a case, will constitute a single enterprise with the parent 
corporation. They would constitute a single business organization under 
the ``common control'' of the parent corporation so long as they are 
related activities performed for a common business purpose. The common 
ownership in such cases provides the power to exercise the ``control'' 
referred to in the definition. It is clear from the Act and the 
legislative history that the Congress did not intend that such a chain 
organization should escape the effects of the law with respect to any 
segment of its business merely by separately incorporating or otherwise 
dividing the related activities performed for a common business purpose.
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