FW Stock & Sons v. Thompson

• Decision Date: 07 February 1952
• Docket Number: No. 11340.,11340.
• Citation: 194 F.2d 493
• Parties: F. W. STOCK & SONS, Inc. v. THOMPSON.
• Court: U.S. Court of Appeals — Sixth Circuit

194 F.2d 493 (1952)

F. W. STOCK & SONS, Inc. v. THOMPSON.

No. 11340.

United States Court of Appeals Sixth Circuit.

February 7, 1952.

George C. Tilley, Detroit, Mich. (William J. Shaw, George C. Tilley, Detroit, Mich., on the brief; Miller, Canfield, Paddock & Stone, Detroit, Mich., of counsel), for appellant.

Major Bird, Adrian, Mich. (Major Bird, Adrian, Mich., on the brief; Bourns & Bird, Adrian, Mich., of counsel), for appellees.

Before HICKS, Chief Judge, and SIMONS and MARTIN, Circuit Judges.

MARTIN, Circuit Judge.

This action was brought nearly eleven years ago by the appellee, Blair Thompson, on behalf of himself and as representative of "other similarly situated employees or former employees" of the appellant corporation. The complaint sought recovery of unpaid minimum wages and unpaid overtime compensation in the amount of $28,000, plus an additional equal amount as liquidated damages, pursuant to the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 201-216. The action was not brought to trial until nearly four years after its institution; and, unfortunately, the District Judge who tried it died before pronouncing judgment.

By agreement of the parties several years later, the determination of the case was submitted to a successor District Judge, Honorable Theodore Levin, to be tried by him upon the record made before his deceased predecessor. After obviously painstaking study of the record and careful consideration of the briefs and arguments of the attorneys, Judge Levin filed an opinion, 93 F.Supp. 213, embracing findings of fact and conclusions of law, and entered judgment in favor of 28 employees in varying amounts for overtime and straight time for work under minimum hours. He also allowed one employee an agreed amount of damages and awarded $1,250 in fees to attorneys for appellee. The claims of appellees for liquidated damages were denied, for the reason that appellant had shown "to the satisfaction of the court that the act or omission" giving rise to the cause of action was in good faith; and that, in view of all existing facts at the time of the violations found, the appellant had reasonable grounds for believing that its conduct was not in violation of the Fair Labor Standards Act. See section 11 of the Portal-to-Portal Act of 1947, 29 U.S.C.A. § 260.

During the period of time involved from October 24, 1938, to February 1, 1941, the appellant employed some one hundred persons, of whom 28 were plaintiffs in the instant action and may be classified as two engineers, ten millers and oilers, and sixteen flour and feed packers: all concededly engaged in the production of goods for interstate commerce.

There are two issues in the case: (1) whether periods allotted for lunch were free periods or working time; and (2) if the periods are found to be working time, are the claims of the 28 employees barred by the Portal-to-Portal Act of 1947, 29 U.S.C.A. § 251, et seq.

Briefly stated, prior to the effective date of the Fair Labor Standards Act in October 1938 appellant operated its mill twenty-four hours a day, six days a week. Its employees worked in three eight-hour shifts, being paid on an hourly basis which gave them compensation for a forty-eight-hour week. The time consumed in eating lunch was not deducted from the hours worked by the employees in computing their pay. As found by the District Court on substantial credible evidence, when the Fair Labor Standards Act became effective in October of 1938 making the statutory maximum workweek forty-four hours, an understanding was reached between appellant and its employees that, in order to continue the operation of the mill on a twenty-four-hour day basis with the same three shifts, there would be deducted from the time of the employees during the first year of the coverage of the Act a lunch period fixed at forty minutes. A compensatory increase was made in the hourly rate of pay to the employees, "so that their take-home pay would not be reduced." The actual starting and quitting time for the employees remained the same; and the forty-minute lunch period reduced the workweek to the exact statutory maximum. In short, these employees were merely credited with a forty-four-hour week instead of the previously credited forty-eight-hour week, although they put in the same hours of work. The change was merely a bookkeeping transaction.

In October, 1939, the maximum workweek as fixed by the Fair Labor Standards Act was reduced to forty-two hours and, a year later, to forty hours. So, in October, 1939, the appellant fixed the workweek at forty hours, but did so by allotting eighty minutes as a lunch period for millers and oilers, and forty minutes as a lunch period for packers and feeders whose shifts, however, were shortened by forty minutes by using relief packers obtained from the loading gang. The hourly rates of pay were increased so as to maintain the same take-home pay. Again, the transaction was merely one of bookkeeping.

We think the succinct fact findings of the trial judge are well supported by the evidence found in the record as a whole. Inasmuch as he did not see or hear the witnesses, but tried the case on the record made before his predecessor, we think, as appellant contends, that his findings do not have the same binding effect upon an appellate court as if made by a trier of facts who had the superior opportunity of judging the credibility of the witnesses by personal observation of them while they were on the witness stand. See Equitable Life Assur. Soc. v. Irelan, 9 Cir., 123 F.2d 462, 464, and cases there cited.

We agree with the trial judge that the evidence shows that the two engineers as a matter of fact worked forty minutes each day, during the respective periods of time in issue, for which they were not paid. The engineers were not expected to leave their engines unattended at any time during their shifts, because the engines had to be constantly observed to assure safe and efficient operation. One engineer, Burlew, testified that the chief engineer ordered him not to leave the engine room during the so-called lunch period; and this supervisory official was not introduced by appellant to deny the statement. The other engineer, Stubberfield, testified that he usually ate his lunch as he sat watching the gauge while the tank was filling, so as to see that it did not run over. Testimony of both engineers showed that their actual working time during the first year of the operation of the Act was eight hours daily, and from the second year of its operation on was seven hours and twenty minutes daily. These working hours were for a full six-day week.

As pointed out by the District Judge in his opinion, the duties of the millers and oilers and the flour and feed packers were all related to the operation of the mill machinery, which was not stopped at any time during a twenty-four-hour period except as the result of a serious break-down. Frequent chokeups in the operation of the machinery required constant attention; and all these employees were required to stand by on the alert. Their lunch periods were often interrupted by emergencies requiring immediate attention. Upon the whole record, we think it has been shown that all these employees were honestly of the opinion that their superior did not desire them to leave the premises during lunch periods, but expected them to eat lunches in the immediate vicinity of their work and to resume work as soon as they had finished eating. At least they pursued this course. Many testified that they were ordered by their superiors to remain on the company premises during their entire shifts.

So it seems to have been proven adequately that the employees did not have a free lunch period during which they could serve their own interest and do as they pleased, but that their duties and responsibilities to their employer were continued during the lunch periods. As the District Judge well said during a colloquy with counsel: "A man who has to oil machinery with a sandwich in his hand is not having a free lunch period." He made the further appropriate comment that a man who has to have his eyes glued upon the watching of grain coming down from floors above and be careful that there is no stoppage during the entire eight hours of his shift, including his lunch period, does not have a free lunch period.

The plan of operation evolved by the president of the appellant company was, as stated by him, to go down to a seven-hour and twenty-minute workday after October, 1938, and then to drop to a six-and-two-thirds-hour day, or six hours and forty minutes, in October, 1939, anticipating 1940, so that the company would not have to be "confused" again. This plan was worked out by President Stock while under the impression that his company did not have to pay for so-called lunch periods. As stated by the District Judge, there was undoubtedly an agreement on the part of the employer to pay for services performed by its employees and the fact that part of the working time was designated as a lunch period does not change the fact that work was actually done during that time, and that the agreement was to pay the employees for work done over the statutory maximum; and, inasmuch as the lunch periods were actually periods in which work was done, the appellant is liable also for the regular straight-time rate for such hours worked.

We concur in the conclusion of the District Judge: "Time spent predominantly for the employer's benefit during a period, although designated as a lunch period or under any other designation, nevertheless constitutes working time compensable under the provisions of the Fair Labor Standards Act." 93 F.Supp. 216.

This conclusion is supported by Armour & Co. v. Wantock, 323 U.S. 126, 65...