334 U.S. 446 (1948), 366, Bay Ridge Operating Co., Inc. v. Aaron

Docket Nº:No. 366
Citation:334 U.S. 446, 68 S.Ct. 1186, 92 L.Ed. 1502
Party Name:Bay Ridge Operating Co., Inc. v. Aaron
Case Date:June 07, 1948
Court:United States Supreme Court
 
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Page 446

334 U.S. 446 (1948)

68 S.Ct. 1186, 92 L.Ed. 1502

Bay Ridge Operating Co., Inc.

v.

Aaron

No. 366

United States Supreme Court

June 7, 1948

Argued January 12, 1948

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

A collective bargaining agreement between a longshoremen's union and employers, affecting employment in interstate and foreign commerce, provided for "straight time" hourly rates for work done during certain daytime hours on weekdays and "overtime rates," approximately 150% of "straight time" rates, for work done during all other hours and on Sundays and holidays. It made no provision for a differential in pay for work in excess of 40 hours per week. Longshoremen work irregular hours, and frequently work for several different employers during a single week. Respondent longshoremen, some of whom had worked only outside "straight time" periods and had been paid "overtime rates," sued to recover additional overtime compensation allegedly due them under the Fair Labor Standards Act for work in excess of 40 hours per week.

Held:

1. The "straight time" rate provided for by the agreement does not constitute the "regular rate" which § 7(a) of the Fair Labor Standards Act requires to be used in computing the statutory minimum payment ("not less than one and one-half times the regular rate") for work in excess of 40 hours. Pp. 459-477.

2. Walling v. Belo Corp., 316 U.S. 624, distinguished. Pp. 462-463.

3. Contract declarations, even though the result of collective bargaining, are not conclusive as to what is the "regular rate" within the meaning of § 7(a). Pp. 463-464.

4. Determination of the "regular rate" for each individual must be drawn from what happens under the employment contract. P. 464.

5. The "regular rate" is to be found by dividing the number of hours worked into the total weekly compensation received, less the amount of any "overtime premium." Pp. 464-465.

6. "Overtime premium," deductible from total compensation received in computing the "regular rate," is any additional sum

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received by an employee for work because of previous work for a specified number of hours in the workweek or workday, whether the hours are specified by contract or statute. Pp. 450, n. 3, 465-471.

7. Where an employee receives a higher wage or rate because of undesirable hours or disagreeable work, such wage represents a shift differential, rather than an overtime premium, and must enter into the determination of the "regular rate" of pay. The extra pay provided in "overtime" rates under the agreement in this case represents a shift differential, and not an overtime premium. Pp. 466-471.

8. The fact tat the contract "overtime" rates were designed to concentrate the work of the longshoremen in the straight time hours is irrelevant to the determination of the respondents' "regular rate" of pay. P. 470.

9. The purpose of the overtime compensation requirement of § 7(a) is not only to spread employment, but also to compensate an employee in a specific manner for the strain of working longer than 40 hours. P. 470.

10. It is unnecessary in this case to determine what were respondents' "regular working hours," since regular working hours under a contract, even for an individual, have no significance in determining the rate of pay under the statute. Pp. 471-474.

11. Since the so-called "overtime" rates paid under the contract in this case actually represented a shift differential, and had no relation to the number of hours previously worked during the week, their payment did not meet the requirements of § 7 of the Fair Labor Standards Act. Pp. 474-476.

12. Each respondent is entitled to receive compensation for his hours worked in excess of 40 at 1 1/2 times his regular rate, computed as the weighted average of the rates worked during the week. P. 476.

13. In computing the amount to be paid, the employer may credit against the obligation to pay statutory excess compensation the amount already paid to each respondent which is allocable to work in those excess hours. The precise method of computing this credit and finding the exact amount due respondents is left to the District Court on remand. Pp. 476-477.

14. On remand, the District Court may consider any defense which the employers may have under the Portal-to-Portal Act, and may allow any amendments to the complaint or answer or any further evidence which the court may deem just. P. 477.

162 F.2d 665 modified and affirmed.

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Respondents sued petitioners to recover unpaid overtime compensation allegedly due under the Fair Labor Standards Act. To the extent that the judgment of the District Court was adverse, 69 F.Supp. 956, respondents appealed, and the Circuit Court of Appeals reversed. 162 F.2d 665. This Court granted certiorari. 332 U.S. 814. Modified and affirmed, p. 477.

REED, J., lead opinion

MR. JUSTICE REED delivered the opinion of the Court.

These cases present another aspect of the perplexing problem of what constitutes the regular rate of pay which the Fair Labor Standards Act requires to be used in computing the proper payment for work in excess of forty hours. The applicable provisions read as follows:

Sec. 7. (a) No employer shall, except as otherwise provided in this section, employ any of his

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employees who is engaged in commerce or in the production of goods for commerce --

* * * *

(3) for a workweek longer than forty hours after the expiration of the second year from such date,

unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.1

The problem posed is the method of computing the regular rate of pay for longshoremen who work in foreign and interstate commerce varying and irregular hours throughout the workweek under a collective bargaining agreement for handling cargo which provides contract straight time hourly rates for work done within a prescribed 44-hour time schedule and contract overtime rates for all work done outside the straight time hours.2

These two suits were brought as class actions on behalf of all longshoremen employed by two stevedoring companies, Bay Ridge Operating Co., and Huron Stevedoring

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Corp., to recover unpaid statutory excess compensation3 in accordance with § 16(b) of the Fair Labor Standards Act.4 By stipulation, the claims of ten specific longshoremen in each case were severed and the two suits were consolidated for trial, leaving the claims of the other plaintiffs pending on the docket. The claims of the plaintiffs here are for the period October 1, 1943, to September 30, 1945.

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The terms of employment for the respondents, longshoremen working in the Port of New York, were fixed for the period in question by the collective bargaining agreement between the International Longshoremens Association and the New York Shipping Association, together with certain steamship and stevedore companies. It was applicable to the two petitioners. The agreement established a "basic working day" of eight hours and a "basic working week," that is, workweek, of forty-four hours; hourly rates for different types of cargo were specified for work between 8 a.m. and 12 noon and between 1 p.m. and 5 p.m. during five working days of the week, Monday through Friday, and from 8 a.m. to 12 noon on Saturday, and a different schedule of rates for work during all other hours in the workweek. The first schedule was called "straight time" rates, and the second schedule was entitled "overtime" rates. This opinion designates these rates as contract straight time and contract overtime. For four types of cargo, the overtime rates were exactly one and a half times the straight time rates; for four other types, the overtime rates were slightly less than one and a half times the straight time rates. The contract straight time rates ranged from $1.25 to $2.50 an hour. The contract overtime rates were paid for all work on Sundays and legal holidays. The contract provided for no differential for work in excess of forty hours in a week.5

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[68 S.Ct. 1191] Respondents claim that their regular rate of pay under the contract for any workweek within the meaning of

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§ 7(a), is the average hourly rate computed by dividing the total number of hours worked in any workweek for any single employer into the total compensation received from that employer during that week, and that, in those workweeks in which they worked more than forty hours for any one employer, they were entitled by § 7(a) to statutory excess compensation for all such excess hours computed on the basis of that rate. The petitioners claim that the straight time rates are the regular rates, and that they have therefore, with minor exceptions not presented by this review, complied with the requirements of § 7(a). That is, no rates except straight time rates are to be taken into consideration in computing the regular rate. The petitioners contend that the contract overtime rates were intended to cover any earned statutory excess compensation, and did cover it, because they were substantially in an amount of one and one-half times the straight time rates. The District Court held that the contract straight time rates were the regular rates, but the Circuit Court of Appeals for the Second Circuit held otherwise.6

Throughout all these proceedings, the petitioners have been represented by the Department of Justice, since the United States, under its cost-plus contracts with the petitioners, is the real party in interest. Substantially all stevedoring during the war years was performed for the account of the United States. The Solicitor General notes that, prior to the decision in the Circuit Court of Appeals, 118 suits had been instituted on behalf of longshoremen, and, since that time, approximately 100 new...

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