(a) As stated in section 3(r) of the enterprise includes
``departments of an establishment operated through leasing
arrangements.'' This statutory provision is based on the fact that
ordinarily the activities of such leased departments are related to the
activities of the establishment in which they are located, and they are
performed for a common business purpose either through ``unified
operation'' or ``common control.'' A general discussion will be found in
part 776 of this chapter.
(b) In the ordinary case, a retail or service establishment may
control many of the operations of a leased department therein and unify
its operation with its own. Thus, they may operate under a common trade
name: The host establishment may determine, or have the power to
determine, the leased department's space location, the type of
merchandise it will sell, its pricing policy, its hours of operation and
some or all of its hiring, firing and other personnel policies;
advertising, adjustment and credit operations, may be unified, and
insurance, taxes, and other matters may be included as a part of the
total operations of the establishment. Some or all of these and other
functions, which are the normal prerogatives of an independent
businessman, may be controlled or unified with the store's other
activities in such a way as to constitute a single enterprise under the
Act.
(c) Since the definition specifically includes in the
``enterprise,'' for the purpose of this Act, ``departments of an
establishment operated through leasing arrangements,'' any such
department will be considered a part of the host establishment's
enterprise in the absence of special facts and circumstances warranting
a different conclusion.
(d) Whether, in a particular case, the relationship is such as to
constitute the lessee's operation to be a separate establishment of a
different enterprise rather than a ``leased department'' of the host
establishment as described in the definition, will depend upon all the
facts including the agreements and arrangements between the parties as
well as the manner in which the operations are conducted. If, for
example, the facts show that the lessee occupies a physically separate
space with (or even without) a separate entrance, and operates under a
separate name, with his own separate employees and records, and in other
respects conducts his business independently of the lessor's, the lessee
may be operating a separate establishment or place of business of his
own and the relationship of the parties may be only that of landlord and
tenant. In such a case, the lessee's operation will not be regarded as a
``leased department'' and will not be included in the same enterprise
with the lessor.
(e) The employees of a leased department would not be covered on an
enterprise basis if such leased department is located in an
establishment which is not itself a covered enterprise or part of a
covered enterprise. Likewise, the applicability of exemptions for
certain
retail or service establishments from the Act's minimum wage or overtime
pay provisions, or both, to employees of a leased department would
depend upon the character of the establishment in which the leased
department is located. Other sections of this subpart discuss the
coverage of leased retail and service departments in more detail while
subpart D of this part explains how exemptions for certain retail and
service establishments apply to leased department employees.
