Harrington v. Empire Const. Co.

• Decision Date: 03 March 1947
• Docket Number: Civil Action No. 2413.
• Citation: 71 F. Supp. 324
• Parties: HARRINGTON v. EMPIRE CONST. CO.
• Court: U.S. District Court — District of Maryland

71 F. Supp. 324

HARRINGTON v. EMPIRE CONST. CO.

Civil Action No. 2413.

District Court, D. Maryland.

March 3, 1947.

Jacob Blum, of Baltimore, Md., for plaintiff.

Harry J. Dingle, of Baltimore, Md., for defendant.

WILLIAM C. COLEMAN, District Judge.

This is a case arising under the Fair Labor Standards Act of 1938, 29 U.S.C.A. §§ 201-219.

As a result of the original hearing the plaintiff was found to be entitled, under the Act, to recover from the defendant additional compensation on account of wages, and, since the parties were unable to agree on the sum due, the case was referred to a Special Master for the purpose of taking testimony and determining the correct amount. He has reported his findings to the Court, to which both parties have filed certain exceptions. The matter is now before the Court on these exceptions.

Summarizing the Special Master's conclusions, they are as follows: (1) That the regular work-week of the plaintiff in the field was 48 hours; (2) that his regular office work-week prior to May, 1943, was 42 hours, and subsequent thereto, 40 hours; (3) that he was entitled to certain additional sums for Sunday work. As a result, the Special Master reported that he found the total sum of $2,228.95 to be due the plaintiff by the defendant.

The plaintiff excepted to the Special Master's findings on the ground (1) that he was employed on a 40-hour work-week instead of a 48-hour work-week, and (2) that the Special Master has failed, as directed by the Court, to recommend what counsel fee should be allowed the plaintiff.

The defendant has excepted to the Special Master's report on the ground (1) that the plaintiff, instead of being employed on a 48-hour work-week, was employed on a six-day work-week basis on a fixed salary, regardless of the number of hours worked during any week, and (2) that the plaintiff was not entitled, as the Special Master found, to payment for double time on account of work performed on Sunday or the seventh consecutive work-day.

It will thus be seen that the Special Master, the plaintiff, and the defendant are all three in disagreement as to the basis on which the plaintiff was employed. So we shall proceed first to a consideration of the Special Master's findings on this question.

The formula for determining an employee's regular hourly rate of pay has been definitely fixed by the Supreme Court. In Overnight Motor Company v. Missel, 316 U.S. 572, at page 580, 62 S.Ct. 1216, 1221, 86 L.Ed. 1682, the Court said: "No problem is presented in assimilating the computation of overtime for employees under contract for a fixed weekly wage for regular contract hours which are the actual hours worked, to similar computations for employees on hourly rates. Where the employment contract is for a weekly wage with variable or fluctuating hours the same method of computation produces the regular rate for each week. As that rate is on an hourly basis, it is regular in the statutory sense inasmuch as the rate per hour does not vary for the entire week, though week by week the regular rate varies with the number of hours worked. It is true that the longer the hours the less the rate and the pay per hour. This is not an argument, however, against this method of determining the regular rate of employment for the week in question. Apart from the Act if there is a fixed weekly wage regardless of the length of the work-week, the longer the hours the less are the earnings per hour." See also Walling v. Youngerman-Reynolds Hardwood Company, 325 U.S. 419, 65 S.Ct. 1242, 89 L.Ed. 1705.

The rule thus announced is correctly embodied as follows, in an Interpretative Bulletin of the Wage and Hour Administration (Bulletin No. 4, paragraph 10): "If the employee is on a weekly salary basis, his regular hourly rate of pay, on which time and a half must be paid, is computed by dividing the salary by the regular number of hours worked or if no regular number of hours is worked, by the total number of hours worked each week. If the employee works a regular number of hours, the regular hourly rate of pay will be a fixed rate, remaining unchanged from week to week. But if the employee works a fluctuating and not a regular number of hours, his regular hourly rate of pay will be the average hourly rate for the week and will vary from week to week." (Emphasis supplied.)

The defendant company was engaged in the construction business. The plaintiff was employed as one of its field clerks from March 26, 1941, to January 17, 1944. He had previously worked for the defendant in the same capacity. His duties included responsibility for buying material, making out invoices, etc., and also supervising the making of certain payrolls. During the time here in question the defendant was engaged in construction work at various places near Baltimore, and, in the course of his employment, the plaintiff worked on eleven of these projects as well as in the defendant's local office. There appears to have been no definite understanding between plaintiff and any representative of the company at the time plaintiff commenced his employment as to what would be the unit of time for computing the amounts due him, other than that he was employed on a weekly salary which varied during the period of employment from $40 to $60 a week. Plaintiff insists he was employed for a 40-hour week; in other words, that if he were paid $50 a week his regular hourly rate of pay would be $50 divided by 40, or $1.25 per hour. The defendant, however, maintains that plaintiff was employed for a variable number of hours per week; in other words, that in weeks when he may have worked 70 hours his regular hourly rate of pay would be $50 divided by 70, or only 71 cents per hour, and in weeks when he may have worked 54 hours, it would be $50 divided by 54, or 93 cents per hour. Disagreeing with both of these contentions, the Special Master found that plaintiff was employed on basis of a 48-hour week for field work; in other words, that his regular hourly rate of pay would be $50 divided by 48, or $1.04 per hour; and that for office work he was employed part of the time on a 42-hour basis, and for the rest on a 40-hour basis.

The Special Master heard a large amount of testimony on the question. He summarized his conclusions as follows: "(1) The payrolls do not show the actual or any (hours) time worked by the plaintiff; (2) that the regular work-week of the plaintiff in the field was 48 hours; (3) that the regular work-week of the plaintiff in the Baltimore office prior to May, 1943, was 42 hours; after that the work-week was 40; (4) that the plaintiff was employed at a weekly salary. This was at different times $40, $45, $50 and $60 per week. If he worked on Sunday, he received one-sixth of his weekly salary in addition to the above. Under the circumstances of the case, these payments for Sunday work are credits to be allowed against his unpaid compensation for overtime work."

The testimony is, in many instances, not only conflicting but ambiguous. We shall not attempt to set forth here our detailed analysis of it, but, as a result of this analysis, we reach the conclusion that with respect to plaintiff's employment until May, 1943, neither the conclusion of the Special Master nor the contention of the plaintiff is correct, but that the position of the defendant is the one that more accurately represents the true situation, namely, that plaintiff was employed for a variable number of hours per week. That is to say, plaintiff's hourly wage must be computed separately for each week worked until May, 1943, including such periods of time as were worked in the Baltimore office, by dividing the number of hours he actually worked into the amount of pay he was actually receiving.

We believe that the reasons advanced by the Special Master for his conclusion that the plaintiff was employed prior to, as well as after May, 1943, on a 48-hour week for field work, and on a 42-hour week basis up to that time, but on a 40-hour week basis thereafter for office work, do not, by the weight of the more credible evidence, support that conclusion, but, on the contrary, indicate that the plaintiff was employed prior to May, 1943, at a weekly salary for a six-day week, regardless of the kind of work or the number of hours worked. It is true that the plaintiff and other like employees were instructed to report their hours of work for payroll purposes as eight hours per day, six days per week, or a total of 48 hours. However, there is no indication that the defendant would have been satisfied to employ plaintiff if he had worked merely 48 hours per week, regardless of the exigencies of his job. Also, we believe it is clear from the testimony that plaintiff understood he was employed to do each given job, regardless of how many hours this would require. It is apparent that the defendant's payrolls were falsified, not, however, for the purpose of indicating that plaintiff was employed for a regular number of hours, but either for the purpose of more simple book-keeping or in order to deceive the Wage and Hour Division. As was said in the Hardwood Company case, supra, 325 U.S. at pages 424, 425, 65 S.Ct. at page 1245, 89 L.Ed. 1705: "The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments. It is not an arbitrary label chosen by the parties; it is an actual fact. Once the parties have decided upon the amount of wages and the mode of payment the determination of the regular rate becomes a matter of mathematical computation, the result of which is unaffected by any designation of a contrary `regular rate' in the wage contract."

Although, as disclosed by the testimony heard by the Special Master, the Wage and Hour Division was apparently of the opinion that plaintiff was employed on a 48-hour per week basis prior to May, 1943, we believe this view is not to be...