Bennett v. Panama Canal Company, 71-1522.

• Decision Date: 31 January 1973
• Docket Number: No. 71-1522.,71-1522.
• Citation: 475 F.2d 1280
• Parties: Rafael E. BENNETT et al., Appellants, v. The PANAMA CANAL COMPANY.
• Court: U.S. Court of Appeals — District of Columbia Circuit

475 F.2d 1280 (1973)

Rafael E. BENNETT et al., Appellants, v. The PANAMA CANAL COMPANY.

No. 71-1522.

United States Court of Appeals, District of Columbia Circuit.

Argued October 31, 1972.

Decided January 31, 1973.

Stanley B. Gruber, New York City, of the Court of Appeals of New York, pro hac vice, by special leave of court, for appellants. A. Fred Freedman, Washington, D. C., and Abraham E. Freedman, New York City, were on the brief, for appellants.

George M. Beasley, III, Atty., Dept. of Justice with L. Patrick Gray, III, Asst. Atty. Gen., at the time the brief was filed, Thomas A. Flannery, U. S. Atty. at the time the brief was filed, and Alan S. Rosenthal, Atty. Dept. of Justice, were on the brief, for appellee.

Before McGOWAN and ROBB, Circuit Judges, and WYZANSKI^*, Senior United States District Judge for the District of Massachusetts.

WYZANSKI, Senior District Judge.

This is a class action brought on behalf of approximately 800 linehandlers employed by Panama Canal Company. Appellants complain that appellee did not pay them wages at the level required by 5 U.S.C. § 5342(b), which they say directs that all "vessel employees" of appellee be paid in accordance with wage practices of the maritime industry. Appellants seek as relief three years of back wages and an injunction ordering that hereafter wages be paid at the statutory rate.

The District Court, Gesell J., in a characteristically able and pithy opinion, (see Learned Hand, The Spirit of Liberty (1952), Charles Neave, pp. 156-157) found these as facts.

When a vessel passes through the Panama Canal a crew of eight to twelve linehandlers is put aboard at different stages of transit to handle lines for towing and positioning the vessel. This task requires skill and training, is hazardous, and is highly specialized. Linehandlers on a ship are in contact with linehandlers on shore who hand lines to the towing machinery or belay. The ship linehandlers work under the direction of a boatswain or instruction from the Canal Officers, but are also under general supervision of the vessel's regular officers.

Appellee determines the linehandlers' wages hourly on the basis of local wages in the Panama Canal Zone. The rate is above the minimum required by the Fair Labor Standards Act. Appellee has changed that rate from time to time after periodic review in the light of local conditions. However, these rates have been only a fraction of the straight-time monthly pay received by able-bodied seamen in the maritime industry. Overtime rates are similarly disparate.

Appellants contend that they are "vessel employees" within the coverage of 5 U.S.C. § 5342(b), and that that statute must be given mandatory effect.

The District Court held that appellants perform a unique function and that there is no wage practice of the maritime industry applicable to them. Supporting the first of those conclusions, the court noted that, unlike ordinary seamen, appellants do not go to sea, have more regular hours and stabler work conditions, and need not develop the variety of skills required of those who work at sea under wholly different conditions. The court further held that since there is not any wage practice of the maritime industry for linehandlers, appellee necessarily established its own pay level for them, and that appellee had proceeded in a far from arbitrary fashion inasmuch as the rates were in line with blue-collar labor rates and were occasionally carefully reviewed. Summarizing, Judge Gesell concluded that appellee had not been shown to have violated 5 U.S.C. § 5342(b).

We agree. The district court's findings of fact are supported by substantial evidence. U.S.C. § 5342(b) does not require appellee to pay appellants in accordance with the wage practices of the maritime industry. The statute provides that "the employees of the Panama Canal Company may be paid in accordance with the wage practices of the maritime industry." Ordinarily "may" is a permissive not a mandatory term. Farmers & Merchants Bank v. Federal Reserve Bank, 262 U.S. 649, 662, 43 S.Ct. 651, 67 L.Ed. 1157 (1923); John Reiner & Co. v. United States, 325 F.2d 438, 441, 163 Ct.Cl. 381, 388 (Ct.Cl.1963). Here the permissive interpretation is conclusively proven to be correct not merely by the fact that when...