Atlantic Co. v. Broughton, No. 11076

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtHOLMES, WALLER, and LEE, Circuit
Citation146 F.2d 480
PartiesATLANTIC CO. v. BROUGHTON et al., and three other cases.
Decision Date05 January 1945
Docket Number11077.,No. 11076

146 F.2d 480 (1944)

ATLANTIC CO.
v.
BROUGHTON et al., and three other cases.

Nos. 11076, 11077.

Circuit Court of Appeals, Fifth Circuit.

December 4, 1944.

Rehearing Denied January 5, 1945.


146 F.2d 481

W. K. Meadow and Robert B. Troutman, both of Atlanta, Ga., for Atlantic Co.

Homer C. Denton and Richard E. Cotton, both of Atlanta, Ga., for A. Broughton and Emanuel Carthan et al.

Douglas B. Maggs, Solicitor, U. S. Dept. of Labor, and Bessie Margolin, Asst. Solicitor, U. S. Dept. of Labor, both of Washington, D. C., for amicus curiae.

Before HOLMES, WALLER, and LEE, Circuit Judges.

HOLMES, Circuit Judge.

These appeals are from separate judgments in favor of employees of appellant in suits brought by them to recover minimum wages and overtime compensation, with liquidated damages and attorney's fees, alleged to be due and owing under the Fair Labor Standards Act.1

Upon direct appeal in each case, the issue is whether or not a contract of accord and satisfaction relating to the indebtedness was legally effective to extinguish the alleged cause of action. The appellees in each case (by cross-appeal) assert that they were entitled to statutory liquidated damages, not only upon the total of the wages and overtime compensation remaining due after crediting the sums paid pursuant to the settlements, but also upon the amounts received thereunder.

The evidence as to whether a bona fide dispute existed between the parties, upon the question of what wages remained due and unpaid to each employee with whom the settlements were made, and as to whether such settlements were accepted in final and complete adjustment of that dispute, was conflicting. These issues of fact were submitted to the jury, but the jury was unable to agree upon a verdict, and was discharged. The judgments appealed

146 F.2d 482
from were entered upon a renewed motion for a directed verdict under Rule 50 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Therefore, these questions of fact remain unanswered in the record before us

This is immaterial in so far as our decision upon the direct appeals is concerned; for we think that, whether or not there was a settlement in good faith of a bona fide dispute, each employee thereafter was entitled to be paid whatever difference then remained between the total of the wages paid and the total due him under the Act, plus liquidated damages thereon and attorney's fees.

It is undisputed that an ascertained balance remained due as wages to each appellee after crediting the amounts paid pursuant to the settlements. In the Fair Labor Standards Act, Congress intended "to achieve a uniform national policy of guaranteeing compensation for all work or employment engaged in by employees covered by the Act. Any custom or contract falling short of that basic policy, like an agreement to pay less than the minimum wage requirements, cannot be utilized to deprive employees of their statutory rights."2 Sections 6 and 7 of the Act effectuate that policy by providing in mandatory language that every employer shall pay the wages prescribed, and Sections 15 and 16 provide criminal punishment for any failure to comply therewith.3 Though settlements in accord and satisfaction are favored in law, they may not be sanctioned and enforced when they contravene and tend to nullify the letter and spirit of an Act of Congress.4

The narrow issue raised by the cross-appeals involves that part of Section 16(b) of the Act which provides that any employer who violates the provisions of Section 6 or 7 of the Act shall be liable to the employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.5 Under this section, if an employer on any regular payment date fails to pay the full amount of the minimum wages and overtime compensation due an employee, there immediately arises an obligation upon the employer to pay the employee the difference between the wages paid and the wages due, plus an equal additional amount as liquidated damages; and the payment thereafter of the balance due as wages, even though made prior to suit, does not release the accrued liability for liquidated damages.6 Such damages are not inflicted as a penalty, but are allowed as compensation for detention of a workman's pay.7

This issue, due to important differences between the nature of the obligation to pay wages and of the obligation to pay liquidated damages, is controlled by principles other than those decisive of the issue on direct appeal. Failure to comply with the former obligation is a criminal offense, but the Act places upon the employer only a civil liability to pay liquidated damages, and the failure to pay such damages is not a crime or misdemeanor. Though created by statute, the liability to pay liquidated damages is no different from any other ordinary obligation to pay a sum of money. It is in the nature of a Congressional estimate of the damages resulting to an employee from a wrongful withholding of any part of his wages or overtime compensation. As such, it is a proper subject of accord and satisfaction.

If, as cross-appellees contend, the payments in settlement were made under such circumstances as would create an agreement of accord and satisfaction, the claim for liquidated damages upon the amounts given in settlement was extinguished. If not, such claims continue to be valid obligations enforceable in this proceeding. Since the disputed question of fact upon which this issue turns was not decided in the court below, the cause must be remanded with instructions that these questions be submitted to a jury for determination.

On direct appeal, the judgment in each case is affirmed; on cross-appeal, the judgment in each case is reversed and the cause

146 F.2d 483
is remanded to the District Court for further proceedings not inconsistent with this opinion

WALLER, Circuit Judge (dissenting).

It is against the intent and command of the Fair Labor Standards Act for a covered employer to pay less than the minimum wages provided by the Act. Secs. 206 and 216, 29 U.S.C.A. It is also contrary to the law's policy for the employer to work such an employee longer than the prescribed hours without paying time and one-half for all overtime. Secs. 207 and 216, 29 U.S.C.A. The Act is definitely a part of the public policy of the land as relates to the duties of the employer to an employee engaged in interstate commerce. No contract to hire and pay eligible employees less than the minimum wage prescribed by the Act would be binding, but we are not here considering the legal effect of a contract of employment to operate in the future,1 or to avoid the...

To continue reading

Request your trial
25 practice notes
  • Martinez v. Bohls Bearing Equipment Co., No. Civ.A.SA-04-CA-0120-XR.
    • United States
    • United States District Courts. 5th Circuit. Western District of Texas
    • April 11, 2005
    ...The ability to settle claims in cases involving bona fide disputes was less certain, however. Compare Atlantic Co. v. Broughton, 146 F.2d 480 (5th Cir.1944) ("If ... the payments in settlement were made under such circumstances as would create an agreement of accord and satisfaction, the cl......
  • Perdue v. Green, 1101337 and 1101506.
    • United States
    • Supreme Court of Alabama
    • April 19, 2013
    ...or overlooked an illegal provision, would be to vacate [its] approval of the entire settlement”); and Atlantic Co. v. Broughton, 146 F.2d 480, 482 (5th Cir.1945) (“Though settlements in accord and satisfaction are favored in law, they may not be sanctioned and enforced when they contravene ......
  • Brooklyn Sav Bank v. Neil Dize v. Maddrix Arsenal Bldg Corporation v. Greenberg 8212 1945, Nos. 445
    • United States
    • United States Supreme Court
    • April 9, 1945
    ...over the right to compromise claims under the statute in cases involving a bona fide dispute. See Atlantic Company v. Broughton, 5 Cir., 146 F.2d 480; Post et al. v. Fleming, et al., supra; Fleming v. Warshawsky & Co., 7 Cir., 123 F.2d 622; Donahue v. Susquehanna Collieries Co., 3 Cir., 138......
  • Roland Electrical Co. v. Black, No. 5600.
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • August 12, 1947
    ...U.S. 772, 64 S.Ct. 77, 88 L.Ed. 462; Rigopoulos v. Kervan, 2 Cir., 140 F.2d 506, 507, 151 A. L.R. 1126; Atlantic Co. v. Broughton, 5 Cir., 146 F.2d 480, 482; Keen v. Mid-Continent Petroleum Corp., D.C.Iowa, 63 F. Supp. 120, 128, 129, affirmed 8 Cir., 157 F.2d 310. This accords with the publ......
  • Request a trial to view additional results
24 cases
  • Martinez v. Bohls Bearing Equipment Co., No. Civ.A.SA-04-CA-0120-XR.
    • United States
    • United States District Courts. 5th Circuit. Western District of Texas
    • April 11, 2005
    ...The ability to settle claims in cases involving bona fide disputes was less certain, however. Compare Atlantic Co. v. Broughton, 146 F.2d 480 (5th Cir.1944) ("If ... the payments in settlement were made under such circumstances as would create an agreement of accord and satisfaction, the cl......
  • Perdue v. Green, 1101337 and 1101506.
    • United States
    • Supreme Court of Alabama
    • April 19, 2013
    ...or overlooked an illegal provision, would be to vacate [its] approval of the entire settlement”); and Atlantic Co. v. Broughton, 146 F.2d 480, 482 (5th Cir.1945) (“Though settlements in accord and satisfaction are favored in law, they may not be sanctioned and enforced when they contravene ......
  • Brooklyn Sav Bank v. Neil Dize v. Maddrix Arsenal Bldg Corporation v. Greenberg 8212 1945, Nos. 445
    • United States
    • United States Supreme Court
    • April 9, 1945
    ...over the right to compromise claims under the statute in cases involving a bona fide dispute. See Atlantic Company v. Broughton, 5 Cir., 146 F.2d 480; Post et al. v. Fleming, et al., supra; Fleming v. Warshawsky & Co., 7 Cir., 123 F.2d 622; Donahue v. Susquehanna Collieries Co., 3 Cir., 138......
  • Roland Electrical Co. v. Black, No. 5600.
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • August 12, 1947
    ...U.S. 772, 64 S.Ct. 77, 88 L.Ed. 462; Rigopoulos v. Kervan, 2 Cir., 140 F.2d 506, 507, 151 A. L.R. 1126; Atlantic Co. v. Broughton, 5 Cir., 146 F.2d 480, 482; Keen v. Mid-Continent Petroleum Corp., D.C.Iowa, 63 F. Supp. 120, 128, 129, affirmed 8 Cir., 157 F.2d 310. This accords with the publ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT