Nunn's Battery & Electric Co. v. Goldberg

• Decision Date: 18 January 1962
• Docket Number: No. 19083.,19083.
• Citation: 298 F.2d 516
• Parties: NUNN'S BATTERY & ELECTRIC CO., Inc., Appellant, v. Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

298 F.2d 516 (1962)

NUNN'S BATTERY & ELECTRIC CO., Inc., Appellant, v. Arthur J. GOLDBERG, Secretary of Labor, United States Department of Labor, Appellee.

No. 19083.

United States Court of Appeals Fifth Circuit.

January 18, 1962.

Jack Crenshaw, Montgomery, Ala., for appellant.

Miss Beate Bloch, Atty., D. of L., Miss Bessie Margolin, Asst. Sol., D. of L., Washington, D. C., for appellee.

Before RIVES and WISDOM, Circuit Judges, and CARSWELL, District Judge.

WISDOM, Circuit Judge.

This action is brought under the Fair Labor Standards Act, 29 U.S.C.A. §§ 206, 207, and 211. The Secretary of Labor asks for an injunction against Nunn's Battery & Electric Co., Inc. and two of its officers to enforce compliance with the minimum hourly wage, overtime wage, and record keeping requirements of the Act. The district court found that Nunn's Battery had violated the Act and issued an injunction against it. On appeal, Nunn's Battery makes two chief contentions: (1) its agreements for a regular weekly salary to cover the regular and overtime hours usually worked comply with the Act; (2) three of its employees whom the district court found were covered by the Act are not engaged in interstate commerce and therefore are not within the statute's coverage. We hold for the appellee on both questions.

Nunn's Battery operates a wholesale business with an office and warehouses in Montgomery, Alabama. Its sales are split about evenly between the sale of automotive parts and supplies and the sale of oxygen, acetylene and welding supplies. It purchases the major portion of its supplies from out-of-state sellers; approximately three to five per cent of its sales are to customers outside the state. It stores large quantities of supplies at its warehouses and usually fills orders from those stocks. Occasionally, however, it has to send to a local or out-of-state supplier for items to fill a special order. Sometimes Nunn's Battery sends automotive parts that its customers have turned in to its suppliers for repair or credit. In its welding supply business Nunn's Battery sells gas cylinders and refills them when they are empty. It picks up the cylinders from its customers and once or twice a week sends them to Albany, Georgia for refilling.

The company's employees work a regular, scheduled workweek that in most cases is 50½ hours. The general manager at one time instructed certain employees to report for work fifteen minutes earlier each morning, and until this practice was discontinued, shortly before the trial, these employees worked 52 hours a week. On occasions, the employees worked or attended sales meetings outside the regular scheduled hours. They were paid a regular weekly salary, and were not paid more when they put in extra hours or less when they were sick or missed time for some other reason. The lowest paid workers received $55.75 a week. According to the president, this amount represented payment at a dollar an hour for the first forty hours and time and a half for the remainder of the scheduled work week. The employees testified, however, that when they were hired there was no mention of an hourly rate. There were no written contracts of employment until just prior to the trial when the appellant drew up written contracts specifying that the employees were to be paid at an hourly rate and that they would receive time-and-a-half pay for all overtime work. Nunn's Battery did not keep any records of hours worked by certain employees. It kept some records for others, but the employees testified that they had worked extra hours on many occasions, and the records do not indicate any of these additional hours.

The three employees whose coverage under the Act is contested by the appellant are James P. Elliott, Billy Mack Ledbetter, and Mrs. Geraldine Fielder. Each has different duties and therefore presents an individual question. James P. Elliott works primarily on painting the company's cylinders. Usually he paints ones that are filled and ready to be sent to customers, but he also paints empties to be sent back to Albany, Georgia. Three or four times a week he makes deliveries of cylinders to local customers and brings back their empties, and he also regularly helps load and unload the truck that brings the refilled cylinders back from Albany.

Billy Mack Ledbetter works for Nunn's Battery as a counter salesman. Most of his work involves selling goods in stock to local customers. Occasionally, however, the customers bring in items to be returned to out-of-state suppliers or order an item that is not in stock and must be obtained from out of state. He answers the telephone when he is closest to it and transfers the call to someone else or talks to the customer himself. While these calls generally are local a few come from other states. He also works as a replacement shipping clerk: when the regular shipping clerk is sick or on vacation he performs the duties of sending out orders to local and out-of-state customers.

Mrs. Geraldine Fielder is a clerical worker whose job is to post the sales and the shipments of goods coming in and to keep a running inventory of stock on hand.

I.

Nunn's Battery argues that the injunction against it is improper since it goes beyond the violations that were committed. The appellant does not dispute the finding that it violated the record-keeping requirements. Nor does it dispute the fact that some of its employees have worked extra hours for which they have not been paid, and that the employees' regular weekly salary is not sufficient under any analysis to cover all the hours worked at the statutory minimum rates when the employees worked extra hours. But the appellant protests against the court's finding that the weekly wage rate is improper even in situations when the employees do not work extra hours. The point disputed is whether the arrangement satisfies the requirements for overtime pay at time and a half the regular wage rate.

The pertinent statutory provision, 29 U.S.C.A. § 207(a), declares: "no employer shall employ any of his employees who is engaged in commerce or in the production of goods for commerce for a workweek longer than forty hours, 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." The "regular rate" is "the hourly rate actually paid for the normal, non-overtime workweek." Walling v. Helmerich & Payne, Inc., 1944, 323 U.S. 37, 40, 65 S.Ct. 11, 13, 89 L.Ed. 29. This is "an `actual fact,' and in testing the validity of a wage agreement under the Act the courts are required to look beyond that which the parties have purported to do." 149 Madison Ave. Corp. v. Asselta, 1947, 331 U.S. 199, 204, 67 S.Ct. 1178, 1181, 91 L. Ed. 1432. When employees regularly work more than forty hours a week and receive a standard wage each week the question arises whether the weekly payment genuinely represents payment at a regular rate for the first forty hours plus time and a half for the excess hours or, instead, represents a single wage rate applied to the first forty hours and the excess hours uniformly. Courts have often disregarded an employer's assertions of an overtime payment system and have found that a fixed weekly wage covered all working hours indiscriminately. Walling v. Helmerich & Payne, Inc., supra; Overnight Motor Transp. Co. v. Missel, 1942, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682; Beechwood Lumber Co. v. Tobin, 5 Cir., 1952, 199 F.2d 878; Bibb Mfg. Co. v. Walling, 5 Cir., 1947, 164 F.2d 179, cert. denied, 333 U.S. 836, 68 S.Ct. 607, 92 L.Ed. 1121. 29 U.S.C.A. § 207(a) is more than a repetition of the minimum wage provisions. It has the separate and particular purpose of discouraging the employment of workers for more than forty hours a week. Compliance with the section requires employers to establish a regular hourly wage and to pay one and one-half times that wage for each hour an employee works over forty hours within one week. The operative mechanism of the statute is the differential between the regular rate of pay and the overtime rate, since that is what compensates the employees for their having to work extra hours and that is what penalizes the employer for calling upon them to do...