Brooklyn Sav Bank v. Neil Dize v. Maddrix Arsenal Bldg Corporation v. Greenberg 8212 1945

Decision Date09 April 1945
Docket Number554,Nos. 445,421,s. 445
Citation324 U.S. 697,89 L.Ed. 1296,65 S.Ct. 895
PartiesBROOKLYN SAV. BANK v. O'NEIL. DIZE v. MADDRIX. ARSENAL BLDG. CORPORATION et al. v. GREENBERG. Argued Feb. 2—6, 1945
CourtU.S. Supreme Court

Messrs. Homer Cummings, of Washington, D.C., and Sedwick Snedeker, of Brooklyn, N.Y., for petitioner Brooklyn Sav. Bank.

Mr. Max R. Simon, of Brooklyn, N.Y., for respondent O'Neil.

Mr. Hyman Ginsberg, of Baltimore, Md., for petitioner Dize.

Mr. Paul Berman, of Baltimore, Md., for respondent Maddrix.

Mr. Robert R. Bruce, of New York City, for petitioners Arsenal Bldg. Corp. and another.

Mr. Aaron Benenson, of New York City, for respondent Greenberg.

Mr. Justice REED delivered the opinion of the Court.

The writs of certiorari granted in these three cases present questions as to the interpretation of Section 16(b) of the Fair Labor Standards Act of 1938, 52 Stat. 1060, at 1069, 29 U.S.C.A. § 216(b), which provides that an employer who violates the minimum wage and maximum hour provisions of the Act '* * * shall be liable to the employee or 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. * * *'1 Cases No. 445 and No. 554, raise the question whether an employee subject to the terms of the Act can waive or release his right to receive from his employer liquidated damages under Section 16(b). Case No. 421 presents the issue of whether in a suit brought pursuant to the provisions of Section 16(b) the employee is entitled to interest on sums recovered as wages and liquidated damages under that section. Since these three cases involve similar problems relating to the interpretation of Section 16(b) and the Congressional policy behind its adoption, all three cases will be dealt with in one opinion. See also J. F. Fitzgerald Const. Co. v. Pedersen, No. 462, 324 U.S. 720, 65 S.Ct. 892.

No. 445.

The petitioner, Brooklyn Savings Bank, owned and operated an eleven story office building in which the respondent was employed as a night watchman during a two year period from November 5, 1938, to August 30, 1940. Since a substantial portion of that building was devoted to the production of goods for commerce,2 the respondent was entitled to overtime compensation under the provisions of Section 7 of the Fair Labor Standards Act, 29 U.S.C.A. § 207. 3 52 Stat. 1063. No such compensation was paid at that time. However, in November, 1942, over two years after the respondent had left petitioner's service, the petitioner computed the statutory overtime compensation due the respondent and offered him a check for $423.16 in return for a release of all of his rights under the Act. The respondent signed the release and took the check. Since this sum did not include any payment for liquidated damages provided for in Section 16(b) of the Act, the respondent subsequently instituted the present proceeding in a New York City Municipal Court to recover liquidated damages due him under Section 16(b). The complaint was dismissed on the grounds that respondent failed to prove a cause of action and also that the respondent 'released any claim for liquidated damages or counsel fees.' The Appellate Term reversed, per curiam, holding that respondent was employed in the production of goods for commerce within the meaning of the Fair Labor Standards Act and was entitled therefore to recover liquidated damages by reason of petitioner's default in making overtime payments as required by Section 7 of the Act.4 This decision was affirmed by the New York Appellate Division,5 and by the New York Court of Appeals.6 Since the New York Court of Appeals decided a federal question of substance not heretofore determined by this Court, we granted certiorari7 limited to the question of whether the respondent's release of all further claims and damages under the Act, given at the time he received payment of the overtime compensation due under the Act, is a defense to an action subsequently brought solely to recover liquidated damages. The jurisdiction of this Court rests on Section 237(b) of the Judicial Code, 28 U.S.C.A. § 344(a).

No. 554.

The petitioner in this second case operated a box factory in which he employed the respondent during the period from October, 1938, the effective date of the Fair Labor Standards Act, to November, 1942, when respondent was discharged. During this period the respondent worked hours in excess of the statutory maximums in effect during this period. Petitioner failed to pay respondent time and one-half for overtime as required by the Act. In September, 1942, the Wage and Hour Administration procured an injunction, by consent, prohibiting the petitioner from violating the Act. In November, 1942, the petitioner tendered the respondent $500 for wages due and owing under the Act, the latter accepting the money and signing a general release of all claims against petitioner under the Act. Both parties knew at this time that more than $500 was due to respondent for minimum wages and overtime pay under the Act. Shortly thereafter, the respondent engaged counsel to recover the balance due him under the Act. Petitioner, before suit was filed, tendered the balance of the statutory wages due, but respondent refused to accept it because it did not include an equal sum for liquidated damages. Thereupon the respondent brought suit for $276.05, the balance of the statutory wages due respondent, and $776.05, being liquidated damages equal to the whole amount ($500 plus $276.05) which had originally been unlawfully withheld. In his answer, the petitioner pleaded settlement of respondent's claim for $500, the release given by respondent pursuant to such settlement, and the petitioner's subsequent tender of a check for the deficiency in statutory minimum and overtime wages due. The District Court granted judgment for the respondent relying on Guess v. Montague, 4 Cir., 140 F.2d 500, which held invalid a settlement agreement on the part of employees to accept less than the statutory minimum wage.8 The Circuit Court of Appeals for the Fourth Circuit affirmed.9

Because the decision of the Circuit Court of Appeals decided an important question of federal law which has not been, but should be, settled by this Court, we granted certiorari10 limited to the question of whether there had been a compromise of respondent's claim. Jurisdiction of this Court rests on Section 240(a) of the Judicial Code, 28 U.S.C.A. § 347(a).

The petition in No. 445 raises the question of whether an employee, accepting from his employer a delayed pay- ment of the basic statutory wages due under the Act, can validly release and waive and further right to recover liquidated damages under the provisions of Section 16(b).11 A preliminary question arises as to whether respondent's release was given in settlement of a bona fide dispute between the parties with respect to coverage or amount due under the Act or whether it constituted a mere waiver of his right to liquidated damages. The state courts made no findings of fact on this issue. Where a state court fails to pass on evidence or make findings of fact because under their respective views the fact referred to are immaterial, we are not relieved from the duty of examining the evidence for the purpose of determining what facts reasonably might be and presumably would be found therefrom by the state court. Merchants' Nat. Bank of Richmond, Va., v. City of Richmond, 256 U.S. 635, 638, 41 S.Ct. 619, 620, 65 L.Ed. 1135; Carlson v. State of Washington ex rel. Curtiss, 234 U.S. 103, 105, 34 S.Ct. 717, 58 L.Ed. 1237; Cf. United Gas Public Service Co. v. State of Texas, 303 U.S. 123, 143, 625, 58 S.Ct. 483, 493, 82 L.Ed. 702; Creswill v. Grand Lodge, K.P., 225 U.S. 246, 261, 32 S.Ct. 822, 827, 56 L.Ed. 1074. We think the record in this case shows that the release was not given in settlement of a bona fide dispute between employer and employee. Petitioner undertook to pay the respondent after our decision in Kirschbaum v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638, which determined the applicability of the Fair Labor Standards Act to building operators like the petitioner. Petitioner's answer in the Municipal Court merely relied upon payment of the statutory liability and the release of other claims. With the exception of the recital in the release, there is nothing in the record which shows that the respondent's release was obtained as the result of the settlement of a bona fide dispute between the parties with respect to coverage or amount.12 Moreover, the decision by the New York Appellate Division was based on Rigopoulos v. Kervan, 2 Cir., 140 F.2d 506, 151 A.L.R. 1126, which involved waiver of right to liquidated damages in the absence of a bona fide dispute and which expressly reserved decision on the question of validity of a settlement where there was such a dispute between the parties. The issue presented in No. 445 therefore is whether in the absence of a bona fide dispute between the parties as to liability, respondent's written waiver of his right to liquidated damages under Section 16(b) bars a subsequent action to recover liquidated damages. We are of the opinion that it does not bar such claim.13

It has been held in this and other courts that a statutory right conferred on a private party, but affecting the public interest, may not be waived or released if such waiver or release contravenes the statutory policy. Midstate Horticultural Co. v. Pennsylvania Railroad Co., 320 U.S. 356, 361, 64 S.Ct. 128, 130, 88 L.Ed. 96; A. J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 667, 35 S.Ct. 444, 446, 59 L.Ed. 774. Cf. Young v. Higbee Company, 324 U.S. 204, 65 S.Ct. 594. Where a private right is granted in the public interest to effectuate a legislative policy, waiver of a right so charged or colored with the public...

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