Joseph v. Ray

• Decision Date: 24 December 1943
• Docket Number: No. 2723.,2723.
• Citation: 139 F.2d 409
• Parties: JOSEPH v. RAY.
• Court: U.S. Court of Appeals — Tenth Circuit

139 F.2d 409 (1943)

JOSEPH v. RAY.

No. 2723.

Circuit Court of Appeals, Tenth Circuit.

December 24, 1943.

Floyd L. Rheam, of Tulsa, Okl. (Valjean Biddison, of Tulsa, Okl., on the brief), for appellant.

W. L. Shirey, of Tulsa, Okl., for appellee.

Morton Liftin, of Washington, D. C. (Douglas B. Maggs, Sol., and Bessie Margolin, Asst. Sol., both of Washington, D. C., Llewellyn B. Duke, Regional Atty., of Dallas, Tex., and H. Michele Olsson, Atty., of Washington, D. C., United States Department of Labor, on the brief), amicus curiae.

Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

Elmer Ray brought this suit against his employer, Jim Joseph, to recover overtime compensation, liquidated damages, and attorney's fee, as provided by Sections 6, 7, and 16(b) of the Fair Labor Standards Act of 1938, 52 Stat. 1060-1069, 29 U.S.C.A. 201-219. The employer denied liability under the Act, contending that the employee was employed in a "bona fide executive * * * capacity" within the meaning of Sections 13 (a) (1), and was therefore exempt from the coverage of the Act. Alternatively, the employer contended that the employee did not work in excess of the statutory workweek, during the period of his employment, and consequently was not entitled to overtime compensation, liquidated damages and attorney's fee granted by Section 16(b) of the Act. The trial court denied the asserted exemption, holding that the employee was "engaged in commerce or in the production of goods for commerce"; that he was not a "bona fide executive" and had worked in excess of the statutory workweek, as defined by Section 7, for which he was entitled to overtime compensation, liquidated damages and attorney's fee. Judgment was entered for the total sum of $1,918.04, and the employer has appealed.

The facts, as found by the court, and fairly supported by the evidence, controlling the question of coverage, are substantially these: Sometime in 1937, the appellant, who owned and operated a grocery store in Bristow, Oklahoma, became interested in a "stripper" oil lease, known as the Liston lease, and in 1940 acquired an interest in an adjoining lease, known as the Porter lease. Being inexperienced in the operation of this type of lease he employed appellee as a pumper to operate the two leases, with instructions to "take care of the lease as if it were his own". Accordingly, the appellee undertook the management and operation of the leases; did all the work and labor necessary and incidental to pumping the wells and marketing the oil produced therefrom, including laying pipe lines, building power houses, engine blocks, constructing tanks, pulling tubing and general repair and upkeep. He was the only permanent employee on the lease, but whenever it became necessary he was authorized to, and did, employ others to assist him in the performance of the work and labor incidental to the operation of the leases. He supervised and directed the work of the extra employees, but worked side by side with them, doing the same type of labor. During the period of his employment approximately 40 different men were employed for various short periods of time, and were paid the regular scale of wages by the employee from his own funds, for which he was reimbursed by his employer monthly. He was authorized to purchase equipment and supplies for necessary replacements and repairs, which he either charged to his employer or paid out of his personal funds, for which he was reimbursed. When first employed, he received a salary of $80 per month; when the Fair Labor Standards Act became effective he was receiving $100 per month, and his salary was later raised to $125 per month, but he never received as much as $30 per week. The oil produced from the leases was transported by pipe line to the Mid-Continent Petroleum Corporation's refinery at Tulsa, Oklahoma.

The Fair Labor Standards Act was designed to include within its scope and coverage, every employee "engaged in commerce or in the production of goods for commerce", except those specifically exempted therefrom; and, the Act is remedial and should be given a liberal construction to accord with the legislative purpose. Helena Glendale Ferry Co. v. Walling, 8 Cir., 132 F.2d 616; Bowie v. Gonzalez, 1 Cir., 117 F.2d 11; Fleming v. Hawkeye Pearl Button Co., 8 Cir., 113 F.2d 52; Abram v. San Joaquin Cotton Oil Co., 49 F.Supp. 393. Coverage under the Act is not, however, presumed by the mere fact of employment; it is incumbent upon the one asserting rights thereunder to show that the employee is "engaged in commerce or in the production of goods for commerce", Rucker v. First National Bank of Miami, Oklahoma, 138 F.2d 699; Stoike v. First National Bank, 290 N.Y. 195, 48 N.E.2d 482, certiorari denied 64 S.Ct. 50, 88 L.Ed. ___; Warren-Bradshaw Drilling Co. v. Hall, 317 U.S. 88, 63 S.Ct. 125, 87 L.Ed. 83. But having thus established the character of the employment the provisions of the Act are applicable, unless it is shown that the employment clearly falls within one of the exemptions carved from the general rule of coverage. Helena Glendale Ferry Co. v. Walling, supra; Bowie v. Gonzalez, supra; Fleming v. Hawkeye Pearl Button Co., supra; Abram v. San Joaquin Cotton Oil Co., supra. That the employee was "engaged in commerce or in the production of goods for commerce" is not challenged on appeal. We have here only the narrow question whether the employee was a "bona fide executive" within the meaning of Section 13(a) (1), and therefore exempt from the coverage of the Act.

Section 13 of the Act provides in part: "(a) The provisions of sections 6 and 7 shall not apply with respect to (1) any employee employed in a bona fide executive, * * * capacity * * * (as such terms are defined and delimited by regulations of the Administrator)". 52 Stat. 1067, 29 U.S. C.A. § 213(a). In pursuance of the authority granted, the Administrator, as of October 24, 1940,¹ defined and delimited that term as any employee "(a) whose primary duty consists of the management of the establishment, in which he is employed or of a customarily recognized department or sub-division thereof, and (b) who customarily and regularly directs the work of other employees therein, and (c) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight, and (d) who customarily and regularly exercises discretionary powers, and (e) who is compensated for his services on a salary basis at not less than...