Kemp v. Day & Zimmerman, Inc.

• Decision Date: 15 June 1948
• Docket Number: 47198.
• Citation: 33 N.W.2d 569,239 Iowa 829
• Court: Iowa Supreme Court
• Parties: KEMP et al. v. DAY & ZIMMERMAN, Inc.

33 N.W.2d 569

239 Iowa 829

KEMP et al. v. DAY & ZIMMERMAN, Inc.

No. 47198.

Supreme Court of Iowa

June 15, 1948

Kuhlemeier, Poor, Fisher & Cray, of Burlington for appellant.

Clark Pryor, Hale & Plock, Hirsch, Riepe & Wright and J. L Thomas, all of Burlington, for appellees.

BLISS Justice.

The defendant during the progress of World War II, under direct orders and supervision of the United States War Department was engaged in the manufacture of shells, etc., at the ordinance plant near Burlington, Iowa, pursuant to a cost-plus-fee contract with the Federal Government. The appellees were foremen assistant foremen and assistant supervisors in the employ of the defendant. On September 13, 1945 the petition of Everett L. Kemp and twenty-six others was filed against defendant for themselves and others similarly situated, alleging that during the employment they and the defendant were engaged in, and producing goods for, commerce within the meaning of the Fair Labor Standards Act, June 25, 1938, C. 676, 52 Stat. 1060, 29 U.S.C.A. §§ 201-219, sometimes referred to as FLSA, and were entitled to the benefits of said Act. The petition, in separate paragraphs, set up the particular claim of each plaintiff, giving the beginning and termination of his employment, his weekly wage, and the amount owing him for overtime employment. The petition alleged that, by reason of the nature of their work, none of the plaintiffs under the orders of the Federal Wage and Hour Administrator were exempted from the benefits of the Act. Each plaintiff prayed for judgment in such amount for unpaid overtime as the court found, and unliquidated damages in an equal amount, and for reasonable attorney fees. Thereafter other employees similarly employed filed petitions of intervention with allegations and prayers in substance, as in the petition, so that on May 6, 1947 the plaintiffs and intervenors numbered approximately one-hundred and twenty-one.

Defendant's answers admitted the employment, alleged payment for all work performed, and denied other allegations. It alleged an affirmative defense that at all times plaintiffs were either paid overtime compensation at time and one-half for all hours in excess of 40 during the workweek, or they were employed in executive or administrative capacities, and as such were exempt from the provisions of FLSA. As an additional affirmative defense, the answer alleged that when plaintiffs were not paid such overtime compensation, they were employed as salaried employees for fluctuating and variable workweek, and their weekly salaries were in full compensation for all hours worked in the workweek regardless of the number thereof. In a counterclaim defendant asked credit for certain bonuses paid plaintiffs on any judgments rendered for them. These credits were allowed.

Replies were filed to the answers denying payment in full for overtime and that any of the plaintiffs were employed in exempted capacities.

In April, 1947 the court assigned the cases for trial on May 6, 1947. On the latter date defendant moved to continue the trial of all actions on the ground that Congress on May 1, 1947, had passed the Portal-to-Portal Act and that it was on the President's desk awaiting his approval or veto, and that it naturally affected the procedure and the powers and jurisdiction of courts in action under FLSA, and that justice would be better served if a continuance were granted pending the President's action. The motion was that day denied. On defendant's motion and by agreement of parties the actions were all consolidated for trial, and trial was begun at 1:50 P.M. on May 6, 1947.

A stipulation, Defendant's Exhibit 'A', but introduced by all parties, was received in evidence. With other matters it provided: '* * * 2. That if any Act or Acts of Congress becoming effective subsequent to May 1st, 1947, change the substantive law or remedy with reference to the Fair Labor Standards Act, under the terms of which plaintiffs are demanding judgment, or change the law relative to the trial, or the powers and jurisdiction of the Court in such matters, each party to any of said suits * * * may amend its, his or their respective pleadings, in order that the amending party may avail itself or himself of the provisions of the law or laws so changed, and may plead and move thereunder, or in respect thereto, and move or plead to any amendment or pleading so filed and each party may offer evidence relative to the issues. Each party shall be allowed a reasonable time so to amend, move or plead.

'It is further stipulated * * * (a) That the jury will be waived, and the issues of fact and law submitted to the Court for determination. (b) That the plaintiff was employed by the defendant for a stated weekly salary intended by the defendant to be exempt from overtime compensation, and was so classified upon the records of the defendant and so paid without regard to the number of hours worked, in the various job classifications in which he worked during his employment and that he orally or in writing, agreed to work as many hours as were required to discharge the responsibilities of his position or positions. * * * 7. That during his entire employment the plaintiff (2) Had as his primary duty the management of a recognized department or subdivision of defendant, and (b) Customarily and regularly directed the work of other employees therein, and (c) That his suggestions and recommendations as to hiring or firing, and as to advancement and promotion, or other change of status of employees under him, were not given particular weight by the defendant prior to October, 17th, 1943, but were thereafter, (d) He customarily and regularly exercised discretionary powers, and (e) He was compensated for his services on a salary basis, by payments in excess of $30 per week.

'8. That prior to October 17th, 1943, the hours of work of the plaintiff, of the same nature as that performed by nonexempt employees, exceeded twenty per cent (20%) of the number of hours worked in the work-week by the nonexempt employees under his discretion.'

'* * * 14. Attorney fees * * * will be fixed by the Court with right in to present objections thereto.'

Defendant then placed in the record its employee record of each plaintiff and intervenor, giving beginning and termination of employment, rate of pay, nature of work, advancements, and weekly amounts paid, and the amount due at the hourly rate of pay for 40 hours in the week and time and one-half for hours in excess of 40 per week on the basis of a variable work-week. All parties accepted this record as the correct amount claimed by each plaintiff and intervenor. This same procedure was followed as to each claimant. Evidence was introduced as to four claims on the afternoon of May 6, 1947, eleven claims on May 7, twelve claims on May 8, thirteen claims on May 9, seven claims on May 10, eight claims on May 12, and fifteen claims on May 13. On the day following the establishment of any claim the court entered judgment as to each such claimant on the next day of court following the proof, that is on May 7, 8, 9, 10, 11, 12, 13 and 14, 1947.

On each claim the court made findings of fact and conclusions of law that no claimant had been employed in an administrative or executive capacity which exempted him from the benefits of the FLSA.

The following is but a sampling from the detailed schedule of the seventy judgments entered for the appellees, set out as illustrative only:

Plaintiff Overtime Offset Liq. Dam. Att'y Costs Total

Compensation Fees

G. C. Davis $263.44 $263.44 $200 $9.46 $736.34

W. Jarman 700.72 $72.00 628.72 300 10.97 1568.41

H. E Henderson 246.44 50.00 196.44 175 139.35 707.23

G. D. Swinford 422.69 240.00 162.69 100 8.86 474.24

M. E. Parrott 446.90 140.00 306.90 200 10.97 824.77

R. D. Armstrong 79.95 79.95 100 10.97 270.87

G. H. Dailey 161.54 161.54 100 8.86 431.94

R. F. Nelson 750.98 72.00 678.98 300 9.46 1667.42

On May 14, 1947 after the entry of the fifteen judgments which had been established by the evidence of the day before, the attorneys came into court and announced that the President had that day signed the Portal-to-Portal Act of 1947, chap. 52, Public Law 49, 80th Congress, 1st Session, 29 U.S.C.A. §§ 251-262, which had been referred to and discussed in defendant's motion for continuance of May 6, 1947. The trial of the remainder of the consolidated cases was then discontinued.

On May 21 1947, defendant filed motions for new trial and vacation of judgments in all of the actions in which judgments had been entered, and as grounds therefor materially affecting its substantial rights, alleged: '(1) Accident or surprise which ordinary prudence could not have guarded against. (2) Error in fixing the amount of recovery. (3) That the judgment is not sustained by sufficient evidence, and is contrary to law. (4) Material evidence, newly discovered which could not with reasonable diligence have been discovered and produced at the trial. (5) Errors of law occurring in the proceedings, and mistakes of fact by the Court.' As additional grounds defendant referred to the stipulation, Ex. 'A', and particularly paragraph 2 thereof: the fact that the Portal-to-Portal Act was not effective until May 14, 1947; that no judgment entered had become final because the time for appeal had not expired; that the attorney fees fixed by the court were excessive; that the court erred in entering judgment after the passage of the Act; that the services involved in the overtime of each plaintiff was not compensable under the Act by an express provision of a contract, or by custom or practice, in effect at the times of such activities; that defendant, due to the taking effect of the Act has newly discovered...