[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR789.2]

[Page 707-708]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 789_GENERAL STATEMENT ON THE PROVISIONS OF SECTION 12(a) AND SECTION 
 
Sec. 789.2  `` * * * in reliance on written assurance from the 
producer * * *.''

    In order for a purchaser to be protected under these provisions of 
the Act, he must acquire the goods ``in reliance on written assurance * 
* *.'' The written assurance specified in section 15(a)(1) is one from 
the ``producer'' and in section 12(a) it is one from the ``producer, 
manufacturer or dealer.''

Since the acquisition of the goods by the purchaser must be ``in 
reliance'' upon such written assurance it is obvious that the Act 
contemplates a written assurance given to the purchaser as a part of the 
transaction by which the goods are acquired and on which he can rely at 
the time of their acquisition. Thus, where the purchaser does not 
receive a written assurance at the time he acquires particular goods, he 
cannot be said to have acquired the goods ``in reliance on'' the 
specified written assurance merely because the producer later furnishes 
an assurance that all goods which the purchaser has previously acquired 
from him were produced in compliance with the Fair Labor Standards Act.

The assurances described in the Act are assurances in writing ``from'' 
the producer or ``from'' the producer, manufacturer, or dealer, as the 
case may be. It is therefore clear that the following procedures will 
not amount to ``written assurance from the producer'' within the meaning 
of the Act:
    (a) The purchaser stamps his purchase order with the statement that 
the order is valid only for goods produced in compliance with the 
requirements of the Fair Labor Standards Act.

[[Page 708]]

No written statement concerning the production of the goods is made to 
the purchaser by the producer. The producer ships the goods which the 
purchaser has ordered.
    (b) The purchaser stamps the above statement on his purchase order 
and in addition notifies the producer that shipment of the goods so 
ordered will be construed by the purchaser as a guarantee by the 
producer that the goods were produced in compliance with the Act. The 
producer ships the goods to the purchaser.

In neither of these situations can the purchase order be deemed to 
contain a written assurance from the producer to the purchaser. A 
statement concerning the circumstances under which the order will be 
valid is sent to the producer, but no written instrument at all is given 
the purchaser by the producer. Although, in these situations, the 
shipment of the goods by the producer may establish a contractual 
relationship between the parties, the conditions of the statute are not 
satisfied because there is in neither situation any written assurance 
from the producer to the purchaser that the goods were produced in 
compliance with applicable provisions of the Act referred to in sections 
12(a) and 15(a)(1).