Addison v. Huron Stevedoring Corp.

• Decision Date: 14 December 1950
• Citation: 96 F. Supp. 142
• Parties: ADDISON et al. v. HURON STEVEDORING CORP. AARON et al. v. BAY BRIDGE OPERATING CO., Inc.
• Court: U.S. District Court — Southern District of New York

96 F. Supp. 142

ADDISON et al. v. HURON STEVEDORING CORP.

AARON et al. v. BAY BRIDGE OPERATING CO., Inc.

United States District Court S. D. New York.

December 14, 1950.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Max R. Simon, and Goldwater & Flynn, all of New York City (Monroe Goldwater, Max R. Simon, James L. Goldwater and Richard M. Goldwater, all of New York City, of counsel) for plaintiffs.

Cahill, Gordon, Zachary & Reindel, New York City, for Huron Stevedoring Corp.

Kirlin, Campbell, Hickox & Keating, New York City, for Bay Ridge Operating Co., Inc.

Fred J. Knauer, Kenneth D. Wallace, James H. Herbert and J. J. McDonnell, all of New York City, of counsel.

H. G. Morison, Asst. Atty. Gen., Irving H. Saypol, U. S. Atty., New York City (Edward H. Hickey, Special Asst. to the Atty. Gen. and Marvin C. Taylor, Special Atty. Department of Justice, Washington, D. C., of counsel), for other defendants.

Clark, Carr & Ellis, New York City (Paul A. Crouch, New York City, of counsel), amicus curiae for Various Contractors.

LEIBELL, District Judge.

The history of this litigation may be outlined as follows:

These two actions were brought under the Fair Labor Standards Act, § 16(b), 29 U.S.C.A. § 216(b), for wages due for "overtime", as that term was defined in § 7(a) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 207(a). Both actions were commenced by the filing of the complaints in this Court on October 4, 1945. They were consolidated for the purposes of trial by a stipulation and order of May 14, 1946. The claims of twenty plaintiff longshoremen (ten in each case), as typical of certain groups of claimants, were severed by stipulation June 17, 1946 and went to trial before Judge Rifkind on that date. He held for the defendants, the employing stevedores, 69 F.Supp. 956, except in certain comparatively minor items of the claims, page 961, relating to skill and cargo differentials, as to which additional proof was to be received and supplemental findings made. On appeal to the Court of Appeals, Second Circuit, the judgment for the defendants was reversed and the suits were remanded for the determination of the amounts due the plaintiffs in accordance with the opinion of the appellate court. 162 F.2d 665 at page 670. On a petition for a rehearing the appellate court stated, June 24, 1947, page 673:

"The petition for rehearing is denied. Our decision remanding the suits should be interpreted to permit the district court to consider any matters presented to it under the Portal-to-Portal Act of 1947, 29 U.S. C.A. § 251 et seq.¹ We do not, however, determine the scope or validity of any portions of that Act, since those matters have not been argued on these appeals."

The defendants petitioned the United States Supreme Court for a writ of certiorari, which was granted November 10, 1947, 332 U.S. 814, 68 S.Ct. 155, 92 L.Ed. 391, "On account of the importance of the method of computing the regular rate of pay in employment contracts providing for extra pay". 334 U.S. 446 at page 459, 68 S.Ct. 1186, at page 1194, 92 L.Ed. 1502. Mr. Justice Reed wrote the opinion for the majority of the Court. 334 U.S. 446, 68 S.Ct. 1186. It affirmed the judgment of the Circuit Court of Appeals with a modification, in that the order of the Circuit Court of Appeals allowing the District Court to consider any matters presented to it by petitioners as a defense in whole or in part under the Portal-to-Portal Act was broadened "so as to permit the District Court to allow any amendments to the complaint or answer or any further evidence that the District Court may consider just". 334 U.S. at page 477, 68 S.Ct. at page 1203.

The suits came on for a retrial on the remand on April 1, 1949 and on various dates thereafter, the last November 9, 1949. Meanwhile Public Law 177 of the Eighty-First Congress was approved by the President July 20, 1949; and on October 26, 1949 the Fair Labor Standards Act was amended by Public Law 393 which embodied in the Act itself the substance of Public Law 177, 29 U.S.C.A. § 201 et seq. The defendants' answers were amended and supplemented to include defenses under the Portal-to-Portal Act of 1947, and Public Laws 177 and 393 of the Eighty-First Congress. The period in suit before Judge Rifkind dated back to October 1, 1943, but the claims of the plaintiffs, by statement of their counsel, now cover only the period of October 15, 1943 to September 30, 1945.

* * * * * *

The collective bargaining agreement involved in these actions provided for a "straight time" rate of pay of $1.25 per hour for work performed on general cargo from 8 A.M. to 5:00 P.M., exclusive of 12 noon to 1 P.M. It also provided as "overtime", a rate of $1.87½ per hour, which was arithmetically the equivalent of time and a half the "straight time" rate.²

Section 7(a) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 207(a) provided:

"(a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce—

"(1) for a workweek longer than forty-four hours during the first year from the effective date of this section,

"(2) for a workweek longer than forty-two hours during the second year from such date, or

"(3) for a workweek longer than forty hours after the expiration of the second year from such date, 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 forty hour statutory workweek was in effect during the period involved in this litigation (October 15, 1943 to September 30, 1945).

The District Court held, 69 F.Supp. 956, that the "regular rate" defined in the statute did not necessarily mean average rate; that the contract "straight time" rate established by the collectively bargained agreement with the longshoremen's union was a "regular rate" within the statute; and that the contract "overtime" rate for general cargo (1½ times the contract straight-time rate), met the requirements of the statute as to overtime.

On appeal to the Circuit Court of Appeals, Second Circuit, 162 F.2d 665, that Court held that a "regular rate" could not be established by contract or by a collectively-bargained agreement which did not comply with the provisions of the Statute as to regular rates, and that where the employee worked at varying hours and varying rates the "regular rate" was determined by dividing the total wages actually paid to the employee in any one week by the total hours actually worked for his employer in that week. As an appendix to its opinion the Circuit Court of Appeals quoted certain of the District Court's Findings of Fact. Findings Nos. 14 to 20 inclusive, 22, 25, 26, 30, 33 to 36 inclusive, and 41 to 46 inclusive

On appeal to the Supreme Court of the United States, 334 U.S. 446, 68 S.Ct. 1186 it was held that the "regular rate" of pay is not established by an arbitrary label chosen by the parties but, as the Circuit Court of Appeals had held, was a fact to be determined from the evidence in accordance with the provisions of the statute. The Supreme Court held that as a general rule the "regular rate" of pay was determined by dividing the weekly compensation by the hours worked.

The Supreme Court expressed the view that the compensation which had been paid as contract "overtime" to these plaintiffs was not the type of overtime required by the statute; that the contract overtime was in effect a shift or work differential and represented higher wages paid because of the nature of the work done or because of the time at which it was done. The following quotations from the Supreme Court's opinion states its holding in this respect:

"Under the definition, a mere higher rate paid as a job differential or as a shift differential, or for Sunday or holiday work, is not an overtime premium. It is immaterial in determining the character of the extra pay that an employee has actually worked at a lower rate earlier in the workweek prior to the receipt of the higher rate. The higher rate must be paid because of the hours previously worked, for the extra pay to be an overtime premium." 334 U.S. at page 466, 68 S.Ct. at page 1197.

"Where an employee receives a higher wage or rate because of undesirable hours or disagreeable work, such wage represents a shift differential or higher wages because of the character of work done or the time at which he is required to labor rather than an overtime premium. Such payments enter into the determination of the regular rate of pay." 334 U.S. at page 468, 68 S.Ct. at page 1198.

"The statute commands that an employee receive time and one-half his regular rate of pay for statutory excess compensation. The contract here in question fails to give that compensation to an employee who works all or part of his time in the less desirable contract overtime hours." 334 U.S. at page 470, 68 S.Ct. at page 1200.

"As a matter of fact, regular working hours under a contract, even for an individual, has no significance in determining the rate of pay under the statute. It is not important whether pay is earned for work outside of regular working hours. The time when work is done does not control whether or not all or a part of the pay for that work is to be considered as a part of the regular pay.

"We think, therefore, that this case presents no problems that involve determination of the regular hours of work. As an employment contract for irregular hours the rule of dividing the weekly wage by the number of hours worked to find the regular rate of pay would apply." 334 U.S. as page 473, 68 S.Ct. at page 1201.

"Under the contract we are examining the respondents' work in overtime hours was performed without any relation as to whether they had or had not worked before. Under our view of § 7(a)'s requirements their high pay was not...