Marshall v. R & M ERECTORS, INC.

• Decision Date: 11 March 1977
• Docket Number: Civ. A. No. 74-57.
• Citation: 429 F. Supp. 771
• Court: U.S. District Court — District of Delaware
• Parties: Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff, v. R & M ERECTORS, INC., and Robert R. Hastings, Sr., Individually and as an Officer of the Corporate Defendant, Defendants.

429 F. Supp. 771

Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff, v. R & M ERECTORS, INC., and Robert R. Hastings, Sr., Individually and as an Officer of the Corporate Defendant, Defendants.

Civ. A. No. 74-57.

United States District Court, D. Delaware.

March 11, 1977.

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W. Laird Stabler, Jr., U. S. Atty., Wilmington, Del., William J. Kilberg, Sol. of Labor, and Robert B. Lagather, Deputy Sol. of Labor, Washington, D. C., Marshall H. Harris, Regional Sol., and Richard D. Soltan, Atty., U. S. Dept. of Labor, Philadelphia, Pa., for plaintiff.

Roy S. Shiels of Brown, Shiels & Barros, Dover, Del., for defendants.

MEMORANDUM OPINION

LATCHUM, Chief Judge.

The Secretary of Labor¹ (the "Secretary") has brought this action against R & M Erectors, Inc. ("R & M") and Robert R. Hastings, Sr. ("Hastings"), former president and co-owner with his former wife of R & M,² (collectively, the "defendants") pursuant to the Fair Labor Standards Act of 1938, as amended, ("FLSA") 29 U.S.C. § 201 et seq., to recover, unpaid overtime wages owed by defendants to several former employees and to enjoin the defendants from violating the FLSA's overtime provisions and record-keeping requirements.³ The case was tried to the Court, without a jury, on October 18, and 19, 1976,⁴ and this memorandum opinion constitutes the findings of fact and conclusions of law required by Rule 52(a), F.R.Civ.P.

I. Background

From October 1972⁵ until December 1973,⁶ the defendants, based in Bridgeville, Delaware,⁷ erected and finished off modular units which had been pre-fabricated in North Carolina⁸ for public schools in Maryland.⁹ During the course of these activities, the defendants employed numerous laborers, and it is on behalf of these employees that the Secretary maintains this action.¹⁰

Overtime compensation is guaranteed to certain employees by section 7(a)(1) of the FLSA, 29 U.S.C. § 207(a)(1), which provides:

"Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise 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."¹¹

The phrase "enterprise engaged in commerce or in the production of goods for commerce" is defined in part as:

". . . an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person, and which —

* * * * * *

(3) is engaged in the business of construction or reconstruction, or both . . .."¹²

The transfer of the pre-fabricated units (which the defendants' employees erected) from North Carolina to Maryland, for example, establishes that materials handled by defendants' employees "moved in commerce." Also, the defendants "engaged in the business of construction or reconstruction".¹³ Thus, the Court finds, and the defendants do not dispute,¹⁴ that defendants' enterprise was subject to the FLSA's overtime pay provisions.

II. Record-keeping

To enable the Secretary to carry out the mandate of the FLSA, Congress empowered him to require employers, covered by the FLSA, to maintain certain employment records. As authorized by section 11(c), 29 U.S.C. § 211(c),¹⁵ the Secretary promulgated regulations¹⁶ which specify the information which certain employers must record for each employee. The Court finds that defendants failed to maintain adequate records, as required by the Secretary, containing the following data on their employees: hours worked on a daily or weekly basis, day and time of day when workweek began, and overtime payments.¹⁷ Accordingly, the Court holds that defendants violated section 11(c) by failing to prepare and preserve appropriate employee records.

III. Overtime

The Secretary has petitioned the Court to enjoin the defendants from withholding overtime compensation due defendants' former employees under section 7(a).¹⁸ Initially, the Secretary must prove that defendants violated section 7(a) by allowing their employees to work in excess of forty hours per week without payment of overtime. Then, to establish the liability of defendants for back wages resulting from any failure to pay overtime, the Secretary must identify the employee, the number of hours of overtime worked during a week, the number of weeks which the employee worked for defendants, and the employee's regular salary rate.

The failure of defendants to satisfy the record-keeping requirements of section 11(c) has made resolution of these issues significantly more difficult. Defendants' breach, however, does not inevitably bar recovery by employees who understandably did not document contemporaneously the history of their employment with defendants.¹⁹

"When the employer has kept proper and accurate records, the employee may easily discharge his burden by securing the production of those records. But where the employer's records are inaccurate or inadequate and the employee cannot offer convincing substitutes, a more difficult problem arises. The solution, however, is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such a result would place a premium on an employer's failure to keep proper records in conformity with his statutory duty; it would allow the employer to keep the benefits of an employee's labors without paying due compensation as contemplated by the Fair Labor Standards Act. In such a situation we hold that an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate. . . .

"The employer cannot be heard to complain that the damages lack the exactness and precision of measurement that would be possible had he kept records in accordance with the requirements of § 11(c) of the Act. . . . We are assuming that the employee has proved that he has performed work and has not been paid in accordance with the statute."

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88, 66 S.Ct. 1187, 1192-1193, 90 L.Ed. 1515 (1946) (emphasis added).

The testimony of several employees can often be used to prove a uniform pattern or practice of their working time. Brennan v. General Motors Acceptance Corp., 482 F.2d 825, 829 (C.A. 5, 1973). Specifically, when employees leave a central location together at the beginning of a work day, work together during the day, and report back to the central location at the end of the day, the relatively consistent testimony of several employees can set forth a prima facie case that all employees in the same job classification worked the same number of hours. The burden then shifts to the employer to rebut the prima facie case.

From the testimony of former R & M employees, the following work day pattern emerged. On the typical day, the employees reported to the Bridgeville office at 6:00 A. M.²⁰ Sometimes small tools or supplies were loaded into defendants' vehicles, and perhaps the vehicles were serviced; the employees then learned from Hastings where the day's work would be performed.²¹ Because the job sites were scattered throughout Maryland, an automobile trip averaging 1.5 hours was necessary before the work could begin.²² Once at the job site, the employees worked a daily average of nine hours.²³ Finally, the return trip to Bridgeville consumed another 1.5 hours.²⁴ Thus, the Court finds, on the basis of pattern and practice evidence, that the average work day of defendants' employees, measured from the 6:00 A. M. starting time until the return to Bridgeville in the evening, lasted twelve hours.²⁵ The standard five day week followed by defendants, accordingly, totaled sixty hours.²⁶

Because employees, who are protected by the FLSA, are entitled to overtime compensation for time worked weekly in excess of forty hours, defendants' employees should have been paid at one-and-one-half times their regular hourly rate or its equivalent for the twenty overtime hours that they worked each week. The defendants' employees were paid a flat salary for a week's work²⁷ since the defendants did not pay overtime.²⁸ No adjustment was made in an employee's weekly wage to reflect any fluctuation in the hours worked during the week.²⁹ Therefore, the Court finds that defendants violated section 7(a) of the FLSA.

Next the Court must determine the amount of overtime compensation wrongfully withheld. The Secretary after reviewing the records of defendants and conducting interviews has determined the term of employment and salary of twenty-three employees and has calculated the overtime owed to them.³⁰ The hourly regular rate upon which the overtime figures are based was computed by dividing each employee's weekly salary by the weekly average of sixty hours. Overnight Motor Co. v. Missel, 316 U.S. 572, 580 n.16, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942); Mumbower v. Callicott, 526 F.2d 1183, 1187 (C.A. 8, 1975). Then, the overtime due each week was found by multiplying the hourly rate by one-half of the twenty hours of overtime.³¹ Multiplication of the weekly overtime due by the...