Brennan v. Arnheim & Neely, Inc.

Arnheim & Neely, Inc. (Arnheim) (defendant) managed eight office buildings and an apartment complex in Pittsburgh. Under Arnheim’s contracts with the buildings’ various owners, Arnheim was responsible for obtaining tenants, negotiating leases, collecting rents, and generally managing and maintaining the properties. As part of those general management services, Arnheim handled the hiring, firing, supervision, and payroll for supervisory, maintenance, and janitorial staffs at the properties. Arnheim scheduled the workers, set compensation and fringe benefits, and engaged in collective bargaining with unionized employees, all subject to approval from the property owners. Arnheim maintained a separate bank account for each property but managed all the operations from a single office. Peter Brennan, United States secretary of labor (secretary) (plaintiff), brought an action against Arnheim alleging violations of the minimum-wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (FLSA) with respect to maintenance, custodial, and operational workers at the properties. The district court found, among other things, that Arnheim’s aggregate activities at all nine locations were an enterprise for purposes of the FLSA. The appellate court reversed, finding that the building owners were unrelated and had no common business purpose. The United States Supreme Court granted the secretary’s petition for certiorari.