Brennan v. Heard
| Decision Date | 14 March 1974 |
| Docket Number | No. 73-1228.,73-1228. |
| Citation | 491 F.2d 1 |
| Parties | Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant-Cross Appellee, v. Mark HEARD, Jr., Individually, et al., Defendants-Appellees-Cross Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Donald S. Shire, U. S. Dept. of Labor, Richard F. Schubert, Sol. of Labor, U. S. Dept. of Labor, Carin Ann Clauss, Associate Sol., Washington, D. C., Beverley R. Worrell, Regional Sol., U. S. Dept. of Labor, James H. Woodson, Atty., Stephen J. Simko, Atlanta, Ga., Jacob I. Karro, U. S. Dept. of Labor, Office of the Sol., Washington, D. C., for appellant.
W. Woodrow Stewart, Gainesville, Ga., Leon Boling, Cumming, Ga., for appellees.
Before BROWN, Chief Judge, and GEWIN and GOLDBERG, Circuit Judges.
This action was initiated by the Secretary of Labor to enjoin defendants, Mark Heard, Jr. and Mark Heard Fuel Company, from violating the Fair Labor Standards Act (FLSA)1 in the operation of their poultry and gas producing enterprises by withholding from their employees sums due under the minimum wage and overtime provisions of the Act. The district court found willful violations of the FLSA in defendants' wage and bookkeeping practices in the poultry business and entered an order enjoining future violations and directing the payment of back wages. The trial court, however, reduced the back pay awards by amounts owed the defendants by employees and their spouses and refused to tax certain witness fees against defendants as part of the costs.
The Secretary appeals from the allowance of set-offs and from the restrictions on witness fees. Defendants appeal from the finding of willful violation of the Act and the consequent application of the three year limitations period on back pay. We affirm the district court in its finding of willfulness, but reverse the judgment below insofar as it permitted set-offs and denied witness fees.
29 U.S.C. § 255, as amended in 1966, provides that "any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages . . . shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued." The district court found that defendants had willfully violated the FLSA wage and overtime requirements. Defendants do not contest the correctness of the underlying decision on liability, but rather argue vigorously that Heard's unlawful conduct was a consequence of ignorance and inadvertence, and that back pay should therefore be awarded only for the two year period prior to the filing of suit.
Defendants contend that in order for a violation of the FLSA to be willful, the employer must have proceeded with knowledge that his actions were contrary to the requirements of the Act. This statutory interpretation cannot withstand the decisions of this Court in Coleman v. Jiffy June Farms, Inc., 5 Cir. 1972, 458 F.2d 1139, and Brennan v. J. M. Fields, Inc., 5 Cir. 1973, 488 F.2d 443. Those cases establish that neither a good faith belief in the lawfulness of his wage and overtime regulations nor complete ignorance of their invalidity shields the employer from the additional year of liability. Such nescience and naivete are not determinative on the question of willfulness under this Act. An employer acts willfully and subjects himself to the three year liability provision if he knows, or has reason to know, that his conduct is governed by the Fair Labor Standards Act.
Coleman v. Jiffy June Farms, Inc., 458 F.2d at 1142.
The record amply supports, indeed it compels, a finding of willfulness in this case. The individual defendant, Heard, president of defendant Fuel Company, testified that he knew of the existence of the Fair Labor Standards Act and had "heard talk" that recent amendments had extended coverage to those in the position of his employees. Defendant's unwillingness to make further inquiries and to determine the exact parameters of his statutory obligation affords him no protection. An ostrichlike cultivation of ignorance has never been considered a defense to liability for willful violation of the Act. See Mitchell v. Hausman, 5 Cir. 1958, 261 F.2d 778, 780.
The district court permitted set-offs against the amount due in back pay for the value of goods, including gas and supplies from the company store, furnished by Heard to his employees. As a result of these deductions the final awards to many of defendants' workers dropped below the minimum payments required by the Act. In Brennan v. Veterans Cleaning Service, Inc., 5 Cir. 1973, 482 F.2d 1362, this Court held that payroll deductions to compensate for debts owed by an employee to his employer were impermissible if they operated to reduce income below the wage floor prescribed by the FLSA. Congress' express purpose in passing the Act had been to enable a substantial portion of the American work force to maintain a minimum standard of living, see Brooklyn Savings Bank v. O'Neil, 1945, 324 U.S. 697, 706-707, 65 S.Ct. 895, 89 L.Ed. 1296; and we recognized in Veterans Cleaning that to accomplish this end, "the minimum wage required must normally be paid `free and clear' . . . ." 482 F.2d at 1369.2
Congress has determined that the individual worker should have both the freedom and the responsibility to allocate his minimum wage among competing economic and personal interests. Defendants succeeded below in preventing the full exercise of that employee discretion, which has been mandated by the FLSA and specifically recognized by this Court. Brennan v. Veterans Cleaning Service, Inc., supra, at 1369. The FLSA decrees a minimum unconditional payment and the commands of that Act are not to be vitiated by an employer, either acting alone or through the agency of a federal court. The federal courts were not designated by the FLSA to be either collection agents or arbitrators for an employee's creditors. Their sole function and duty...
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