Burry v. National Trailer Convoy, Inc.

• Decision Date: 17 April 1963
• Docket Number: Civ. A. No. 4508.
• Citation: 239 F. Supp. 85
• Parties: Daniel K. BURRY and Sara Burry v. NATIONAL TRAILER CONVOY, INC.
• Court: U.S. District Court — Eastern District of Tennessee

239 F. Supp. 85

Daniel K. BURRY and Sara Burry v. NATIONAL TRAILER CONVOY, INC.

Civ. A. No. 4508.

United States District Court E. D. Tennessee, N. D.

April 17, 1963.

R. T. Mann, Privette & Mann, Knoxville, Tenn., for plaintiffs.

Joseph A. McAfee, Egerton, McAfee, Armistead & Davis, Knoxville, Tenn., Floyd L. Rheam, Rheam & Noss, Tulsa, Okl., for defendant.

ROBERT L. TAYLOR, District Judge.

Daniel K. Burry and Sara Burry instituted an action for wages allegedly due to them under the Fair Labor Standards Act.

Jurisdiction of this Court is derived from Section 16(b) of the Fair Labor Standards Act, 29 U.S.C. § 216(b), and Title 28, Section 1337.

Mr. Burry started to work for the defendant as terminal manager in 1956 in Knoxville. He entered into a written contract with the defendant which was to commence on the 1st day of November, 1960. This contract contains some twenty-three separate paragraphs and sets forth in detail the terms under which he was to operate the Knoxville terminal. Mr. Burry's services were terminated on December 3, 1961, and the statute of limitations precludes him from recovering any amount prior to July 16, 1960.

It was understood by both parties that Mr. Burry was to operate a truck in the transportation of mobile homes for the defendant in connection with the operation of the Knoxville terminal and that he would necessarily be away from that terminal while he was making hauls of mobile homes over the roads out of Knoxville.

Mr. Burry claims that he was not paid the minimum wage of a $1.00 an hour for the first 40 hours and $1.15 per hour during the period of time those rates applied under the Fair Labor Standards Act. He claims that he worked during the critical period involved in this lawsuit on an average of fourteen hours per day during the week days and six hours on each Sunday when he was in Knoxville. He claims that he worked 90 hours per week during this period of time for a portion of which he has not been paid as required by the Fair Labor Standards Act.

Mr. Burry claims that the written contract entered into by him and the company was a device used by the company to avoid payment of wages to him in accordance with the Fair Labor Standards Act.

Mrs. Sara Burry claims that she was an employee of the defendant during this period and that she worked 90 hours a week during the absence of her husband from the City of Knoxville and for which she has not been paid anything by the defendant.

In response to those contentions of plaintiffs, the defendant denies liability either to Mr. Burry or Mrs. Burry. Defendant says that the contract shows Mr. Burry was to receive commissions at the rate of one cent per mile for primary transportation of mobile homes — which means from the factory to the distributor — and two cents per mile for secondary transportation — which means from the distributor to the seller or any other subsequent hauls; that Burry was paid in accordance with those rates; that the contract provides, among other things, that he was either to be paid on a commission or an hourly basis, whichever was greater, and that if his commissions were greater than the amount earned on an hourly basis he was to be paid on the commission basis less the expenses which he had incurred in the operation of the business in the form of telephone bills and possibly other items which the company, under its agreement with him, had a right to deduct.

Defendant says Burry was paid on a monthly basis.

With respect to the claim of Mrs. Burry, the defendant states that she was not its employee and that if she worked, which is denied, she was employed by her husband and he is responsible for any wages she may have earned; and that it did not suffer or permit her to work within the meaning of the Fair Labor Standards Act.

Defendant says that it did not know that she was claiming to work for it, and that the written contract provides that if and when Mr. Burry employed any additional help, such help would be considered his employee rather than that of the company.

Other defenses raised by the defendant are estoppel based on monthly reports made by Mr. Burry to the company setting forth the amount of time he worked during that month. These reports are filed as Exhibit No. 3 in the record and purport to show the time spent in preparing freight bills, paying drivers, relaying trailers, checking leased equipment, routine office work, leasing drivers, soliciting business and miscellaneous work.

Defendant contends that it directed Mr. Burry to state accurately on these reports the amount of time he worked during the particular week and the character of his work as classified in the form. As an additional defense, defendant relies specifically upon each and every paragraph of the contract.

Defendant says that the district office under which Knoxville falls is located at Thomson, Georgia, that it had no one in Knoxville at the time involved in the suit as a representative except Mr. Burry and the defendant relied upon his records as representing the exact amount of time he worked.

Certain principles relating to the wage and hour law with which this Court is in accord are outlined in the thorough brief presented by the attorney for the defendant. The Court will briefly mention some of them.

First, an employer and employee are free to make any agreement they desire provided that the agreement provides for compensation at least as great as the minimum wage fixed by the Act. Walling v. A. H. Belo Corp., 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716.

Second, parties are free to contract even though the employer declares that if the employee does not sign the written contract his work will be terminated, provided again the contract meets the minimum payment requirement of the Act. Atlantic Company v. Walling, 5 Cir., 131 F.2d 518.

Third, plaintiff has the burden of proof in each case of proving with reasonable certainty that he or she worked more than the maximum hours in any week and that he or she has not been paid the minimum wage; that such work was performed with the knowledge of the employer or performed under such circumstances that the law would supply knowledge and if the commission received by the employee did not equal or exceed the minimum wage, plaintiff would have the burden to show the amount of commission received and that it was less than the minimum wage. Fox v. Summit King Mines, (C.A.9) 143 F.2d 926.

Fourth, defendant had the right to contract that plaintiff would notify it if he was working overtime or expected to work overtime, and that he obtain permission from defendant before continuing the practice. 56 C.J.S. Master and Servant Section 151, page 701.

Fifth, an employer may, under the Act, employ a person on a commission basis. 29 U.S.C.A.App. §§ 776.5 and 778.3(b).

Sixth, that if an employee is keeping his own time sheets secretly and does not notify his employer that he is keeping such sheets and keeps them for the purpose of committing a fraud on the employer or to trick the employer in paying him overtime wages, he is precluded from recovering overtime wages under such circumstances. No person should ever be permitted to profit from his own fraud.

The principles announced are fairly well established in the decisions that have arisen under the Fair Labor Standards Act, but the application of these principles to the present case is not as easy as their statement.

The issues that were formulated in the pre-trial order in this case are:

(1) Was Mr. Daniel K. Burry an independent contractor or an employee during the period of time referred to in the complaint. The contract between Mr. Burry and the defendant contains many restrictions on the work of Mr. Burry. It refers to him as agent of the defendant. Some of the witnesses in this case have referred to him throughout their testimony as the terminal agent of the defendant. The defendant had the right to hire or fire him; it had the right to control his means of operation, and it is the opinion of the Court, and the Court finds as a fact, that during the period of time involved in this lawsuit Burry was an agent of the defendant and not an independent contractor.

(2) If not paid the minimum wages as required by the Act, what amount is the defendant indebted to him? (It appears that Burry signed some papers furnished to him by the defendant on which he listed the number of hours he worked for the defendant each week and the character of the work performed during that week. If it appears that such papers were not used by the defendant as a device to evade the minimum wage standard provided for in the Act, is Mr. Burry bound by these statements furnished the defendant purporting to contain the hours which he worked?)

The Court finds that Mr. Burry was not paid the minimum wages as required by the Act. The wages paid him during the period of time are set forth on Exhibit No. 28. In July, 1960, the first month that is involved here, Burry received a net amount of $41.89. During the week of July 18, 1960, he worked 41 hours overtime. He is entitled to straight rate for the first 40 hours and time-and-a-half for the next 41 hours. The company is entitled to a credit of the net amount paid to him during this period.

The Court will declare general principles from which a judgment will be formulated without going into each item shown on Exhibit No. 28 and on Exhibit No. 22, but in the preparation of the judgment the pattern will be followed which has been applied to the month of July, 1960 and shown on Exhibit No. 28 and Exhibit No. 2.

The Court finds that the hours worked by Mr. Burry during the period of time involved in the suit is less than 14 hours a day. The Court finds that the defendant should be entitled to credit for each three-hour day worked by him. The Court reaches this conclusion in this way.

Mrs. Burry testified that they started to work at 8:00 a. m. on week days and worked until 9:00 or 10:00 at night....