Cotton v. Weyerhaeuser Timber Co.

• Citation: 147 P.2d 299,20 Wn.2d 300
• Decision Date: 23 March 1944
• Docket Number: 29084.
• Parties: COTTON v. WEYERHAEUSER TIMBER CO.
• Court: Washington Supreme Court

147 P.2d 299

20 Wn.2d 300

COTTON v. WEYERHAEUSER TIMBER CO.

No. 29084.

Supreme Court of Washington, En Banc.

March 23, 1944

Action by M. L. Cotton against the Weyerhaeuser Timber Company to recover overtime wages under the Fair Labor Standards Act. From a judgment of dismissal, plaintiff appeals.

Affirmed.

GRADY JEFFERS, and BLAKE, JJ., dissenting.

Appeal from Superior Court, Lewis County; J. M Phillips, Judge.

Fred M Bond, of South Bend, for appellant.

W. E Heidinger and T. J. Hanify, both of Tacoma, for respondent.

STEINERT Justice.

Plaintiff brought suit to recover a specified amount alleged to be due him for overtime work performed under certain regulations of the Fair Labor Standards Act of 1938, and for an equal amount claimed by him as liquidated damages accruing under that same act. Upon a trial Before the court without a jury, findings were made and a judgment dismissing the action was entered. Plaintiff appealed.

The theory upon which the appellant, W. L. Cotton, predicated his complaint was that at the times here involved the respondent, Weyerhaeuser Timber Company, was engaged in the manufacture of logs and timber products for 'commerce,' as that term is denied in the Fair Labor Standards Act of 1938; that during the period covering the years 1938 to 1940, inclusive, appellant was employed by the respondent as a bookkeeper and clerk; that from October 24, 1938, to and including August 31, 1940, he had worked during certain weeks, a total of 558 1/2 hours in excess of the aggregate number of hours permitted by the Federal act as the maximum period of weekly employment performable without payment of additional compensation; that for such excess hours of work he was entitled to be paid at the rate of one and one-half times his regular rate of pay; that he was further entitled to recover, under the provisions of the Federal statute, liquidated damages in an amount equal to the total amount due him for overtime work, and, in addition, a reasonable attorney's fee and costs of the action.

Respondent, in its answer, denied generally the material allegations of the complaint and further pleaded as affirmative defenses: (1) that during the entire period here involved its activities consisted of the production of logs for sale within the state of Washington exclusively; (2) that the appellant is estopped from claiming any additional or overtime compensation, for the reason that, if he did work overtime, he nevertheless failed to report that fact to the respondent, as was his duty to do, but instead, performed such work without the knowledge, sufferance, or permission of the respondent; (3) that, from October 24, 1938, to August 1, 1940, appellant was employed by the respondent in a bona fide executive capacity (as that term was and is defined by regulations of the administrator of the wage and hour division) and was therefore expressly exempted from the application of the minimum wage and maximum hour provisions of the Fair Labor Standards Act of 1938; further, that on and after August 1, 1940, appellant was employed in the capacity of bookkeeper, whose duty was to keep an accurate record of the hours worked by him and to report the results to the respondent, but that appellant failed to comply with that duty; and (4) that during the entire period of appellant's alleged services he was employed by respondent at a fixed and agreed monthly salary, which was paid to him periodically as it accrued, in full of the amounts then owing to him.

The affirmative matter of the answer, in so far as it affected appellant's alleged right of recovery, was denied by him in his reply.

Upon the evidence introduced by the respective parties, the trial court made and entered findings of fact to the effect: (1) that at all times here involved, respondent was engaged in conducting logging operations in Grays Harbor county, Washington, and that appellant during his employment by respondent was engaged in the production of goods for interstate commerce or in an occupation necessary to that character of production; (2) that appellant was employed in a bona fide executive capacity (as defined and delimited by regulations of the Administrator of the Wage and Hour Division) and was expressly exempted from the application of the minimum wage and maximum hour provisions of the Fair Labor Standards Act of 1938; (3) that appellant was employed at a monthly salary which exceeded the minimum wages prescribed by the Federal act for the years involved and that such salary was paid to him in full, currently as it accrued, prior to the commencement of this action; and (4) that appellant had failed to prove by a preponderance of the evidence that he was employed by the respondent for any work week in excess of the time prescribed by the Federal act.

The Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 201-219, was enacted June 25, 1938, and, as to §§ 206 and 207 thereof, became effective October 24, 1938. The express purpose of the act, as stated in § 202, is, through the exercise by Congress of its regulatory power over commerce among the several states, to correct and as rapidly as practicable to eliminate certain detrimental labor conditions declared to exist in industries engaged in commerce or in the production of goods for commerce.

The material portions of the various sections of the act applicable to this case are as follows:

'§ 203. [29 U.S.C.A.] Definitions

'As used in sections 201-219 of this title--* * * '(b) 'Commerce' means trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof. * * *

'(d) 'Employer' includes any person acting directly or indirectly in the interest of an employer in relation to an employee. * * *.

'(e) 'Employee' includes any individual employed by an employer. * * *

'(g) 'Employ' includes to suffer or permit to work. * * *

'(i) 'Goods' means goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, * * *.

'(j) 'Produced' means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this chapter an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State.' (Italics ours.)

'§ 206. Minimum wages; * * *

'(a) Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods for commerce wages at the following rates----

'(1) during the first year from the effective date of this section [October 24, 1938], not less than 25 cents an hour,

'(2) during the next six years from such date, not less than 30 cents an hour, * * *.'

'§ 207. Maximum hours

'(a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce----

'(1) for a workweek longer than forty-four hours during the first year from the effective date of this section [October 24, 1938],

'(2) for a workweek longer than forty-two hours during the second year from such date, or

'(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. * * *'

'§ 213. Examptions

'(a) The provisions of sections 206 and 207 of this title shall not apply with respect to (1) any employee employee in a bona fide executive, administrative, professional, or local retailing capacity, or in the capacity of outside salesman (as such terms are defined and delimited by regulations of the Administrator); * * *.'

'§ 216. Penalties; civil and criminal liability * * *

'(b) Any employer who violates the provisions of section 206 or section 207 of this title 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. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees * * *. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.'

On October 24, 1938, the administrator issued certain regulations, among which was section numbered 541.1 defining and delimiting the term 'any employee employed in a bona fide executive, administrative, * * * capacity' appearing in § 213 of the Federal act. That section of the regulations reads as follows:

'Section 541.1--Executive and Administrative

'The term 'employee employed in a bona fide executive (and) administrative * * * capacity' in Section 13(a)(1) [§ 213] of the Act shall mean any employee

'(1) Whose primary duty is the management of the establishment, or a customarily recognized department thereof, in which he is employed, and

'(2) who customarily and regularly directs the work of other employees therein, and

'(3) who has the authority to hire and fire other employees or whose suggestions and recommendations as to the hiring and firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight, and

'(4) who...