Brennan v. Carl Roessler, Incorporated

• Decision Date: 03 July 1973
• Docket Number: Civ. A. No. 14200.
• Citation: 361 F. Supp. 229
• Parties: Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. CARL ROESSLER, INCORPORATED, Defendant.
• Court: U.S. District Court — District of Connecticut

361 F. Supp. 229

Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. CARL ROESSLER, INCORPORATED, Defendant.

Civ. A. No. 14200.

United States District Court, D. Connecticut.

July 3, 1973.

William J. Kilberg, Solicitor of Labor, Albert H. Ross, Regional Solicitor, U. S. Dept. of Labor, by Paul J. Katz, Brockton, Mass., for plaintiff.

Slavitt & Connery, Norwalk, Conn., by Frank W. Murphy, Norwalk, Conn., for defendant.

LUMBARD,^* Circuit Judge:

The Secretary of Labor brings this action under 29 U.S.C. § 217 against Carl Roessler, Inc., to restrain defendant from continuing to withhold overtime wages that the Secretary asserts are due to five of defendant's past and present employees under the Fair Labor Standards Act (Act), 29 U.S.C. § 201 et seq.,¹ and to enjoin defendant from violating the overtime and recordkeeping provisions of the Act² in the future. The defendant corporation is a wholesale meat producer whose principal place of business, at all times pertinent to this action, was located at 915 State Street in New Haven, Connecticut.

The five employees affected by this action are Louis Aceto, Robert McKernan, Joseph Abbatello, Ernest Pauluccy, and Frederick Hart. The Secretary's position is that none of these employees was properly compensated for overtime worked and, thus, that back wages are due these employees in the aggregate amount of $4,635.12, plus interest of $880.67. As to all the employees except Hart, defendant admitted the periods of employment that are relevant to this action.³ As to Hart, his testimony at trial, uncontradicted by defendant, was that defendant employed him from March 1969 to March or April 1970. Each of these employees was paid a fixed salary every week and was paid no overtime for hours worked in excess of forty. The evidence indicated that no records of hours worked, straight time pay, and overtime pay were kept for these employees.

Two of the employees, Aceto and McKernan, held the same position with defendant, Data Processing Manager, McKernan succeeding Aceto in that position. Defendant argues that it was not required to pay overtime compensation to these employees because the position they held was exempt from the overtime provisions of the Act. Essentially, defendant contends that the position of Data Processing Manager is a bona fide executive and/or administrative position and as such is exempted from the overtime provisions by 29 U.S.C. § 213. Section 213 provides that bona fide executive and administrative positions are exempt, but it leaves it to the Secretary to define by regulation what constitutes such a position, which the Secretary has done in Part 541 of 29 C.F.R. Thus, with respect to Aceto and McKernan, the parties' arguments revolve around whether the post of Data Processing Manager meets the tests established by the regulations for an executive or administrative position.

Defendant concedes that Abbatello, Pauluccy, and Hart held positions at the times relevant to this case that were not exempt from the overtime provisions of the act. Abbatello was hired as a management trainee and was paid a fixed salary of $150 per week. He testified that his weekly work hours fluctuated and exceeded 40. Pauluccy was a cost accountant, described as a bookkeeper-clerk by defendant, and received a constant weekly salary of $154. He testified that the number of hours he worked varied and exceeded 40. Hart was employed as a maintenance man and was paid $150 per week, later increased to $160. His testimony was that his hours also fluctuated and often exceeded 40 per week.

Essentially, defendant's position with respect to Abbatello, Pauluccy, and Hart is that any violations of the Act were merely technical and more a matter of bookkeeping than of substance. Its contention is that each employee was hired to work a fixed number of hours and to perform specific duties in return for a constant weekly salary. Defendant argues that it could have achieved this same arrangement while complying with the Act merely by hiring the employees in a manner that came within 29 U.S.C. § 207(e) and maintaining records that indicated straight-time pay up to 40 hours and overtime pay for time worked thereafter. Therefore, defendant contends that these employees should not receive a windfall merely because of a technical violation stemming from the manner in which they were hired.

With regard to his prayer for an injunction against future violations of the Act, the Secretary introduced evidence of six earlier wage-hour investigations of defendant at the office in question between 1956 and 1967. The Secretary's position is that the defendant has shown a disregard of the Act and the regulations promulgated thereunder and, thus, that an injunction against such future activity is warranted. On the other hand, the defendant asserts that it has made a good faith attempt to comply with the Act, that the Secretary has shown neither that any violations were wilful nor that there is any intention or probability that the defendant will violate the Act in the future, and thus that no injunction should issue.

I.

The first question is whether the position of Data Processing Manager at the time it was held by Aceto and McKernan, respectively, was exempted from the provisions of the Act because it was an executive or administrative post. As indicated earlier, the tests for determining this are established by regulations promulgated by the Secretary pursuant to legislative mandate. In 29 C.F.R. § 541.1, essentially the following test is established for determining whether an individual is employed in a bona fide executive capacity:

(1) His primary duty must consist of the management of the enterprise or of a department or subdivision thereof; and

(2) He must customarily and regularly direct the work of two or more other employees; and

(3) He must have authority to hire and fire other employees or to make recommendations on such matters that will be given particular weight; and

(4) He must customarily and regularly exercise discretionary power; and

(5) He must not devote more than 20 per cent of his time to activities not directly related to those described in paragraphs (1) through (4); and

(6) He must be paid at least $150 per week.⁴

These requirements are themselves further defined in the regulations.

At the outset, the court notes that the burden is on the defendant to show that the position at issue fell within the claimed exemption. Walling v. General Industries Co., 330 U.S. 545, 548, 67 S.Ct. 883, 91 L.Ed. 1088 (1947); Helliwell v. Haberman, 140 F.2d 833, 834 (2 Cir. 1944). Moreover, each requirement must be fulfilled before the exemption can be applicable because the elements are in the conjunctive. Despite the impressive title of the position, the defendant has not borne its burden of showing that the Data Processing Manager was a bona fide executive position under the statute and regulations. Of the six requirements listed above, the evidence indicates that this position did not comply with the first, second, and fourth requirements. The testimony of Aceto and McKernan indicates clearly that the primary duty of the position was not management but the operation of relatively uncomplicated data processing equipment, and the court so finds. Similarly, although the evidence indicated that the position entailed supervision of one full-time and one part-time employee, this does not fulfill the second requirement since 29 C.F.R. § 541.105 clearly states that "two or more employees" refers to full-time employees or their equivalent in part-time employees.

Finally, the court finds that the evidence does not support the contention that this position entailed the customary and regular exercise of discretionary powers. As stated in 29 C.F.R. § 541.207, "the exercise of discretion and independent judgment involves the comparison and evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered." Moreover, "the term . . implies that the person has the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance." Although this regulation deals particularly with the administrative exemption, there is no reason to think that this requirement, which is necessary for both exemptions, should be interpreted differently for the executive exemption than for the administrative. From the evidence adduced at trial, the court finds that the defendant has failed to show by a preponderance of the evidence that the position of Data Processing Manager satisfied this element of the exemption. The picture painted by the evidence is rather of a position characterized by the operation of data processing machinery, the transcription and tabulation of figures, and other routine and relatively manual chores.

The administrative exemption is governed by 29 C.F.R. §§ 541.2 and 541.201 et seq. There is no need for an extended discussion of the elements thereof because the court's discussion above of the question of the customary exercise of discretionary powers is dispositive. This element of the executive exemption is also essential to the administrative exemption. Since the court has found that element lacking here, the exemption is inapplicable. Accordingly, although the position carries the title of "Data Processing Manager," the court finds it not to be exempt from the overtime provisions of the Act.

II.

Defendant's contention that any violations of the Act with respect to Abbatello, Pauluccy and Hart were merely technical and not substantive is wholly without merit. An essential ingredient in support of defendant's contention is lacking: an agreement between employer and employee prior to the performance of the services that specifies a basic hourly rate of pay and not less than one and one-half times that rate for each hour of overtime. S...