Mt. Clemens Pottery Co. v. Anderson, 9924.

• Decision Date: 21 May 1945
• Docket Number: No. 9924.,9924.
• Citation: 149 F.2d 461
• Parties: MT. CLEMENS POTTERY CO. v. ANDERSON et al.
• Court: U.S. Court of Appeals — Sixth Circuit

149 F.2d 461 (1945)

MT. CLEMENS POTTERY CO. v. ANDERSON et al.

No. 9924.

Circuit Court of Appeals, Sixth Circuit.

May 21, 1945.

Frank E. Cooper, of Detroit, Mich., and Bert V. Nunneley, of Mt. Clemens, Mich. (Beaumont, Smith & Harris and Frank E. Cooper, all of Detroit, Mich., and Bert V. Nunneley, of Mt. Clemens, Mich., on the brief), for appellant.

Edward Lamb, of Toledo, Ohio, for appellee.

Before HICKS, HAMILTON, and MARTIN, Circuit Judges.

MARTIN, Circuit Judge.

A local CIO union and seven of its members, suing on behalf of all similarly situated employees, brought this action against the appellant employer, charging violations of the Fair Labor Standards Act (52 Stat. 1060, 29 U.S.C.A. §§ 201-219) in numerous respects. Approximately 300 employees or ex-employees of appellant were permitted, by order of the district court, to sign and file designations authorizing the plaintiffs to represent them.

The appellant corporation for twenty-eight years has operated a pottery plant at Mt. Clemens, Michigan; and during the period with which we are concerned, employed some 1,000 to 1,200 individuals. The original complaint, which was filed a few days after an organizational strike had been instituted by the union at the pottery plant, charged among other things that the time clocks of the company had been so rigged or "doctored" that the figures punched on the cards failed to reflect correctly the actual time at which the card was punched. This charge was abandoned and, in lieu, the charge was made that the employer did not compute the working time of the employees, or pay them, in accordance with the time-card records. The complaint further charged that the employees were worked by the company 45 hours a week from late in October, 1938, until the action was filed. There was no proof made to support the charges of the complaint that certain employees performed homework without compensation or that certain employees earned less than thirty cents an hour. Numerous motions were made and other preliminary steps taken, resulting in the filing by plaintiffs of two bills of particulars.

It was charged by plaintiffs that the company had credited employees with working time only from the succeeding quarter hour when an employee checked in to the preceding quarter hour when he checked out; and that under this practice the company "has deducted from the time worked, as shown on said time cards, a period of as much as 56 minutes each day."

Numerous new charges were made and dropped and numerous motions were made and acted upon which it is immaterial to detail.

The district judge finally referred the cause to a special master to hear the parties, to take testimony with respect to the issues as framed by the pleadings, and to report his findings of fact and conclusions of law.

The lengthy proceedings before the master were recorded in a typewritten transcript comprising more than 3500 pages. During the course of the procedure before the master charges not set up in the pleadings were made by the plaintiffs, including claims that office workers were not compensated in accordance with the Act, that the company had violated the child labor provisions thereof, and that company meetings were held without crediting the employees with the time spent in attendance. The master held that, in the absence of amendment of the pleadings, testimony would not be received upon such issues.

The evidence adduced before the master consisted largely of testimony of eight union employees or former employees of the company on behalf of the plaintiffs, while the testimony offered by the pottery company was primarily that of its foremen and managerial representatives. Each side introduced expert testimony as to industrial customs and practices; and an inspector of the Wage and Hour Division of the United States Department of Labor testified for the plaintiffs.

The special master reported that the employees involved in the case were engaged in the production of goods for commerce within the meaning of the Fair Labor Standards Act; that the plaintiffs were not estopped to maintain the action by reason of acquiescence for a long time in the practices of the company with respect to the computation of time; that the prior inspection of the plant by the Wage and Hour Division was irrelevant upon the issues in suit; and that the defense of lack of authority of the union to sue was invalid. He recognized that employees subject to the provisions of the Fair Labor Standards Act are entitled to receive full payment for the time they have worked in excess of its limited statutory period at a rate not less than time and one-half for the extra time worked.

The master stated that, while legal questions as to what constitutes working time were involved, the principle issue is factual. He found that the pottery company employs an average of approximately 1200 persons in ten or twelve departments, of which only four, the clay shop, brushing and dipping, glost belt and decorating departments, were directly represented by the witnesses who had testified for the plaintiffs. He found further that more than 95% of the employees in the plant, who are engaged in production work, are compensated upon a piece work basis; that the rate of pay is generally based upon the output of a group or a crew, but in departments where employees work individually the rate is based upon the output of the individual; and that the pottery company operates generally on a five-day week, the departments variously operating from one to three shifts per day, with shifts in the different departments beginning at different times during the morning, although the established starting time was always on an even quarter hour. The bisque and glost kiln departments operated on a three-shift seven-day basis.

The pottery plant covers more than eight acres of ground, the employees' entrance being at the northeast corner immediately adjacent to which are cloak and toilet rooms for men and women. Upon entering the production part of the plant, an employee must pass and punch a time clock. There were two time clocks placed at different locations in the plant, a third one having been added shortly before the commencement of this action. In checking in and out at the clocks, the employee removes his card from the rack, places it in a slot, pushes down a hand lever, and removes the card with the time recorded on it. He then places the card in another rack. An average of 25 employees a minute can check in and out in this manner. After punching the time clock, the employees proceed by somewhat defined aisles to their particular places of work. The distance from the time clock to the place of work varies from 130 to 325 feet in the glost kilns to 820 or 890 feet in the mold department.

The master found further that the time clock system was first installed by the company in 1933; and that employees are not permitted to punch their cards more than fourteen minutes prior to the time which the company designates as starting time. For computation of time worked by the employees, the time cards are removed from the racks and the time is calculated from the succeeding even quarter hour after employees ring in, to the quarter hour immediately preceding the time when they punch out. For example, an employee whose card is punched in at 6:46 A. M., punched out at 12:03 P. M., punched in at 12:50 P. M., and punched out again at 4:07 P. M., is credited with 8 hours' working time. The resultant figure is entered on the card in the righthand column and the card is returned to the rack. In computing overtime pay under the Fair Labor Standards Act the method employed by the company is to divide the gross pay received by the employee in each work week by the number of hours credited to him, and the resultant average hourly rate is multiplied by time and half for the overtime hours. This method conforms to the system prescribed by the Wage and Hour Division of the Department of Labor.

Because the shifts in the different departments commenced at different times in the morning, no whistle signalized the commencement of work on most shifts, but clocks belonging to the company or to employees were distributed freely throughout the plant. Whistles were blown, however, at 6:55 and 7 A. M., as the most commonly established starting time in the morning. Whistles were also blown at several other times during the day.

The policy of the company, put into effect through the operation of the Fair Labor Standards Act, was to keep the working hours of its employees below the statutory limitation for payment of straight time as far as possible. Before the passage of the Act, the company had been officially on a forty-five hour week, but lay-offs during that period had reduced the working hours of employees to less than forty-five.

The matter of compliance with the Act was frequently discussed at weekly meetings of foremen; and employees were informed of the policy adopted by the company and were instructed, when possible, to...