Day & Zimmermann v. Reid

• Decision Date: 25 May 1948
• Docket Number: No. 13669.,13669.
• Citation: 168 F.2d 356
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: DAY & ZIMMERMANN, Inc. v. REID.

168 F.2d 356 (1948)

DAY & ZIMMERMANN, Inc. v. REID.

No. 13669.

Circuit Court of Appeals, Eighth Circuit.

May 25, 1948.

Ben P. Poor of Burlington, Iowa (H. F. Kuhlemeier and Carl M. Fischer, both of Burlington, Iowa, on the brief), for appellant.

John Hale of Burlington, Iowa (Joseph G. Page of Janesville, Wis., and Don K. Walter, of Burlington, Iowa, on the brief), for appellee.

Before SANBORN, JOHNSEN, and COLLET, Circuit Judges.

COLLET, Circuit Judge.

This is an appeal from a judgment for overtime wages, liquidated damages and the allowance of an attorney fee in an action brought under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. The parties will be referred to as they were designated in the trial court.

The defendant was engaged in the operation of a large munitions plant in Iowa as an independent contractor on a cost-plus-a-fixed-fee basis under contract with the War Department under supervision of the Ordnance Department. Plaintiff was employed by defendant from August, 1941, to June, 1944. He was classified on defendant's records as an Assistant Storekeeper from August to December, 1941, and as Storekeeper from December, 1941, to June, 1944. As such an employee he was treated as exempt from the application of the Fair Labor Standards Act on the theory that his duties were executive and administrative. The defendant's original answer set up the defense that plaintiff was an executive or administrative employee and for that reason exempt from the application of the Act. Prior to the trial, however, the parties entered into a stipulation by which it was agreed that plaintiff was employed by defendant for a stated weekly salary intended by defendant to be exempt from overtime compensation and was so classified upon defendant's records and so paid without regard to the number of hours worked, that plaintiff agreed to work as many hours as were required to discharge the responsibility of his position, but that during the period from August 21, 1941, until October 17, 1943, he was not actually an executive or administrative employee. The amount of overtime which plaintiff was entitled to recover for that period, if the defenses later interposed and hereafter discussed were not sustained, was agreed to be $1227.01. Subsequent to the passage of the so-called Portal-to-Portal Act, 29 U.S.C.A. § 251 et seq., the answer was amended setting up Section 9 of that Act as a complete defense to plaintiff's claim for both overtime, liquidated damages, and attorney fees and, in the alternative, pleading Section 11 of that Act as a defense to the claim for liquidated damages and attorney fees should the defense predicated upon Section 9 not be sustained.

Section 9 of the Act entitled "Relief from certain existing claims under the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act, and the Bacon-Davis Act" which will be referred to as the Portal-to-Portal Act, is as follows (29 U.S.C.A. § 258):

"In any action or proceeding commenced prior to or on or after May 14, 1947 based on any act or omission prior to May 14, 1947, no employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act, or the Bacon-Davis Act, if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any administrative regulation, order, ruling, approval, or interpretation, of any agency of the United States, or any administrative practice or enforcement policy of any such agency with respect to the class of employers to which he belonged. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that after such act or omission, such administrative regulation, order, ruling, approval, interpretation, practice, or enforcement policy is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect." May 14, 1947, c. 52, § 9, 61 Stat. 88.

Section 11 of the Portal-to-Portal Act is as follows (29 U.S.C.A. § 260):

"In any action commenced prior to or on or after May 14, 1947 to recover unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of 1938, as amended, if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act of 1938, as amended, the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216(b) of this title." May 14, 1947, c. 52, § 11, 61 Stat. 89.

The defense pleaded and which defendant sought to sustain was, stated in general terms, that defendant had acted in good faith in conformity with and in reliance on an administrative regulation, order, ruling, approval or interpretation of an agency of the United States in classifying and paying plaintiff upon the theory that he was exempt and hence that defendant was relieved by Section 9, supra of any liability for overtime under the Fair Labor Standards Act. The alternative defense predicated upon Section 11, supra, also stated in very general terms, was that defendant's action in classifying plaintiff and paying him on the hypothesis that he was exempt from the application of the Fair Labor Standards Act was in good faith and based upon reasonable grounds for believing that its action was not a violation of the Fair Labor Standards Act. The cause was submitted to the court without a jury. The trial court made findings of fact, stated its conclusions of law, and filed an opinion explanatory of both (73 F.Supp. 892). That court reached the conclusion that the evidence did not sustain either defense. Consistent with such findings, it entered judgment for $1227.01 for the overtime stipulated to be due plaintiff under those circumstances, for a like amount as liquidated damages, and allowed plaintiff attorney fees in the amount of $300.00. It is now contended on this appeal that the court's findings were unsupported by the evidence.¹

As heretofore stated, defendant was engaged in the operation of a large ordnance plant in the manufacture of munitions on a cost-plus-a-fixed-fee basis. Several thousand were employed in the plant. Under defendant's contract with the War Department, which was acting on behalf of the United States, the defendant was to carry on the operation as an independent contractor with all expenses of operation paid by the United States. The Government was also to indemnify defendant against any loss, including expenses of litigation, of any kind arising out of or connected with the performance of the work unless such loss or expense should be shown by the Government to have been caused directly by bad faith or willful misconduct on the part of some officer or officers of the defendant acting within the scope of his or their authority. The contract provided for an opportunity at all times for the Government representatives to make any and all inspections necessary to insure the proper production of the munitions and to protect the Government against unwarranted expenditures. The Ordnance Department of the War Department was assigned the duty of inspection. Early in the beginning of the operation of the plant defendant's comptroller had a conference with the Major representing the Ordnance Department at the plant at which the general classifications of the employees were discussed. Defendant's comptroller testified that the primary object of the Ordnance Department at that conference was to see that the proper balance was established and maintained between the supervisory employees and the production employees. There appears to have been no mention whatever of plaintiff's prospective duties at that conference other than a possible reference to the office he held. Defendant's comptroller made up the classification of jobs and classified the positions of Assistant Storekeeper and Storekeeper as executive or administrative, and hence exempt from the application of the Fair Labor Standards Act. A copy of this classification was given to the Ordnance Department representatives at the plant. It contained the name of plaintiff as Assistant Storekeeper and showed the exempt status of the position he held...