[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: 29CFR789.3]

[Page 663-664]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 789_GENERAL STATEMENT ON THE PROVISIONS OF SECTION 12(a) AND 
 
Sec. 789.3  ``* * * goods were produced in compliance with'' * * * 
the requirements referred to.

    It is apparent from the language of the statute and the statement 
appended to the Conference Report \5\ that

[[Page 664]]

the written assurance referred to is one with respect to specific goods 
in being, assuring the purchaser that the ``goods in question were 
produced in compliance'' with the requirements referred to in sections 
12(a) and 15(a) (1). A written statement made prior to production of the 
particular goods is not the type of assurance contemplated by the 
statute.
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    \5\ H. Rept. No. 1453, 81st Cong., 1st sess., p. 31.


A so-called ``general and continuing'' assurance or ``blanket 
guarantee'' stating, for instance, that all goods to be shipped to the 
purchaser during a twelve-month period following a certain date ``will 
be or were produced'' in compliance with applicable provisions of the 
Act would not afford the purchaser the statutory protection with respect 
to any production of such goods after the assurance is given. This type 
of assurance attempts to assure the purchaser concerning the future 
production of goods. With respect to any production of goods after the 
assurance is given, this ``general and continuing'' assurance would, at 
most, be an assurance that the goods will be produced in compliance with 
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the Act.

The definitions of the terms ``goods'' and ``produced'' in sections 3(i) 
and 3(j) of the Act \6\ respectively, should be considered in 
interpreting the requirement that the written assurance must relate to 
goods which were produced in compliance with applicable provisions of 
the Act. These definitions make it apparent, for instance that the raw 
materials from which a machine has been made retain their identity as 
``goods'' even though these raw materials have been converted into an 
entirely different finished product in which the raw materials are 
merely a part.
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    \6\ Section 3(i) defines ``goods'' to mean ``goods (including ships 
and marine equipment), wares, products, commodities, merchandise, or 
articles or subjects of commerce of any character, or any part or 
ingredient thereof, but does not include goods after their delivery into 
the actual physical possession of the ultimate consumer thereof other 
than a producer, manufacturer, or processor thereof.''
    Section 3(j) defines ``produced'' to mean ``produced, manufactured, 
mined, handled, or in any other manner worked on in any state; and for 
the purposes of this Act an employee shall be deemed to have been 
engaged in the production of goods if such employee was employed in 
producing, manufacturing, mining, handling, transporting, or in any 
other manner working on such goods, or in any closely related process or 
occupation directly essential to the production thereof, in any State.''


Since ``goods,'' as defined in the Act, ``does not include goods after 
their delivery into the actual physical possession of the ultimate 
consumer thereof other than a producer, manufacturing, or processor 
thereof,'' the ``hot goods'' restrictions of section 12(a) and section 
15(a)(1) do not apply to such ultimate consumers. There appears to be no 
need, therefore, for such consumers to secure these written assurances 
from their suppliers.