[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR779.21]

[Page 422-423]
 
                             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--Table of Contents
 
                            Subpart A_General
 
Sec. 779.21  Enterprise.

    (a) Section 3(r) of the Act provides, in pertinent part that 
``enterprise'' as used in the Act:

    means the related activities performed (either through unified 
operation or common control) by any person or persons for a common 
business purpose, and includes all such activities whether performed in 
one or more establishments or by one or more corporate or other 
organizational units including departments of an establishment operated 
through leasing arrangements, but shall not include the related 
activities performed for such enterprise by an independent contractor: 
Provided, That, within the meaning of this subsection, a retail or 
service establishment which is under independent ownership shall not be 
deemed to be so operated or controlled as to be other than a separate 
and

[[Page 423]]

distinct enterprise by reason of any arrangement, which includes, but is 
not necessarily limited to, an agreement, (a) that it will sell, or sell 
only, certain goods specified by a particular manufacturer, distributor, 
or advertiser, or (b) that it will join with other such establishments 
in the same industry for the purpose of the collective purchasing, or 
(c) that it will have the exclusive right to sell the goods or use the 
brand name of a manufacturer, distributor, or advertiser within a 
specified area, or by reason of the fact that it occupies premises 
leased to it by a person who also leases premises to other retail or 
service establishments * * *


The scope and application of this definitional language is discussed in 
subpart C of this part.
    (b) The 1966 amendments added two clauses to the above language of 
the definition to make it clear that ``the activities performed by any 
person or persons'' will be regarded as performed for a business purpose 
if they are performed:

    (1) In connection with the operation of a hospital, an institution 
primarily engaged in the care of the sick, the aged, the mentally ill or 
defective who reside on the premises of such institution, a school for 
mentally or physically handicapped or gifted children, an elementary or 
secondary school, or an institution of higher education (regardless of 
whether or not such hospital, institution, or school is public or 
private or operated for profit or not for profit); or
    (2) In connection with the operation of a street, suburban, or 
interurban electric railway, or local trolley or motorbus carrier, if 
the rates and services of such railway or carrier are subject to 
regulation by a State or local agency (regardless of whether or not such 
railway or carrier is public or private or operated for profit or not 
for profit).


A discussion of the scope and application of this added language is 
contained in part 776 of this chapter.