Karabetis v. Mayor and City Council of Baltimore
| Decision Date | 04 September 1987 |
| Docket Number | No. 1697,1697 |
| Parties | , 28 Wage & Hour Cas. (BNA) 398, 111 Lab.Cas. P 56,042 Ioannis KARABETIS et al. v. MAYOR AND CITY COUNCIL OF BALTIMORE. Sept. Term 1986. |
| Court | Court of Special Appeals of Maryland |
Peter Prevas (Konstantine J. Prevas and Prevas & Prevas, on brief), Baltimore, for appellants.
John William Trotz, Asst. City Sol. (Benjamin L. Brown, City Sol., on brief), Baltimore, for appellee.
Argued before WILNER, ALPERT and ROBERT M. BELL, JJ.
This case is about an alleged present day economic exploitation of laborers in a doughnut factory. The plight of workers has historically been manifested by two extremes: long working hours for low wages on the one hand, and rampant unemployment on the other. The apex was reached more than half a century ago during that era of economic despair known as the Great Depression. Competition for limited markets demanded that labor costs be cut. The result was substandard wages, rampant unemployment, and increased use of children as a cheap labor source. 1 Those tragically lean years gave birth, in 1938, to the Fair Labor Standards Act (FLSA).
FLSA created a national minimum wage, mandatory overtime pay, and rules concerning child labor for employees engaged in interstate commerce or in the production of goods for interstate commerce. The Congressional findings and declaration of policy stated:
(a) The Congress finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce; and (5) interferes with the orderly and fair marketing of goods in commerce. That Congress further finds that the employment of persons in domestic service in households affects commerce.
(b) It is declared to be the policy of this chapter, through the exercise by Congress of its power to regulate commerce among the several States and with foreign nations, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power.
29 U.S.C. § 202 (1982).
Some 28 years after enactment of FLSA, the Mayor and City Council of Baltimore found:
many persons employed in Baltimore are paid wages which, in relation to the cost of living in the City and the income necessary to sustain minimum standards of decent living conditions, are insufficient to provide adequate maintenance for themselves and their families; that the employment of such persons at such wages impairs the health, efficiency, and well-being of the persons so employed and of their families, reduces the purchasing power of such persons, diminishes and depresses business, trade, and industry in the City, threatens the stability and well-being of the City's economic life, fosters and contributes toward slum conditions and housing evils and creates conditions of want and deprivation tending to weaken and undermine family life and breed crime and juvenile delinquency.
Baltimore City Code, Art. 19, § 61 (1983). The City, therefore, enacted its own Wage Law. 2
Violation of the City ordinance by appellants resulted in a judgment of $78,294.66 ($54,294.66 restitution and $24,000 in civil penalties) against them and spawned this appeal.
In October 1983, the Wage Commission for Baltimore City (the "Commission") began receiving complaints that Elrino Bakery, a general partnership, was not paying its employees overtime compensation in accordance with the Baltimore City Wage Law, Baltimore City Code, art. 19 § 61 et seq. (1983), which requires, inter alia, that employees be paid one and one-half times the usual hourly rate for all hours worked in excess of forty during a single work week. Subsequently, both the Wage Commission for Baltimore City and the Federal Wage and Hour Division of the United States Department of Labor began investigations to determine whether Elrino Bakery was paying overtime compensation. Upon learning of the federal investigation, the Baltimore City investigator "put his investigation on hold" while the federal investigation continued.
The federal investigator determined that Elrino Bakery had violated the FLSA provision requiring that employees be paid time and a half for overtime. 29 U.S.C. § 207(a)(1) (1983). Before instituting formal proceedings, the federal investigator offered a settlement of $26,000.00 to the owners of Elrino Bakery. The owners accepted the offer and promptly paid $26,000.00 in restitution. Elrino Bakery admitted to previous violations, but asserted that it had complied with the law since the federal investigation.
After the federal settlement, the federal investigator referred the case back to the Baltimore City Wage Commission, which reopened its investigation of the same time period covered by the federal investigation. 3 The city investigator determined that the federal investigation was incomplete and cursory and that the violations discovered by the federal investigator were a mere "drop in the bucket." An administrative hearing was held on December 10, 1985, before the Baltimore City Wage Commission to determine whether Elrino Bakery owed overtime compensation to its employees pursuant to the Baltimore City Wage Law.
George Karabetis, part owner of the bakery, appeared before the Commission without benefit of counsel. He demonstrated some difficulty with the English language, causing the tribunal concern over whether there would be communication difficulties. Nevertheless, Karabetis acknowledged that he had not been paying time and a half to employees who worked overtime.
The Commission scheduled a second hearing for January 4, 1986. The owners of Elrino Bakery, appellants, did not attend the second hearing. The Commission issued an order requiring them to pay $54,294.66 in restitution and $24,000.00 in civil penalties.
Appellants failed to appeal this order to the Circuit Court for Baltimore City within the thirty day period required by the Baltimore City Wage Law. Baltimore City Code, art. 19 § 70(d) (1983). On April 24, 1986, appellees, the Mayor and City Council of Baltimore, filed a complaint in the Circuit Court for Baltimore City to enforce the administrative order of the Wage Commission for Baltimore City. When served with this complaint, Elrino Bakery retained an attorney to defend the enforcement action.
The Mayor and City Council of Baltimore filed a motion for summary judgment, which was heard by Judge Thomas Ward. Appellants opposed the motion for summary judgment, asserting that:
(1) the action of the Wage Commission for Baltimore City was pre-empted by the FLSA, thereby making the administrative order invalid and unenforceable (2) Elrino Bakery could properly raise the validity of the administrative order sought to be enforced even though an appeal was not taken within the thirty (30) days provided by the Baltimore City Wage Law; and
(3) the facts in the record were insufficient to sustain a judgment in the enforcement action.
On November 14, 1986, Judge Ward signed an order granting the motion for summary judgment. Elrino Bakery filed a timely appeal to this court and presents the following questions:
I. Whether, in judicial proceedings to enforce an order of the Wage Commission for Baltimore City, Defendant[s], who had previously failed to appeal from such order within the thirty (30) days provided by local ordinance, were entitled to raise as a defense in the enforcement proceedings the issue of the validity of the order sought to be enforced?
II. Whether the jurisdiction of the Wage Commission for Baltimore City to issue an order to enforce the maximum hour provisions of the Baltimore City Wage Law, Baltimore City Code art. 19 § 61 et seq. (Repl.Vol.1983) was pre-empted by the Federal Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (1982) where both the Federal Act and the City Ordinance specify the same maximum hour provisions and where the employer in question was subject to the provisions of the Federal Fair Labor Standards Act?
III. Did the trial court err in granting plaintiff's motion for summary judgment where plaintiff had not proven all of the elements of its cause of action for enforcement of the Order of the Wage Commission for Baltimore City?
Appellants contend that the trial court erred in granting appellee's motion for summary judgment. Specifically appellants argue that, although they did not file a timely appeal from the order of the Wage Commission for Baltimore City, they were entitled to defend the enforcement action brought by Baltimore City by challenging the validity of the order sought to be enforced.
The Baltimore City Wage and Hour Law established a Wage Commission, Baltimore City Code, art. 19, § 62 (1983), and empowered that commission to take action to enforce the Baltimore Wage and Hour Laws, Baltimore City Code, art. 19, § 63 (1983). Once the Commission has resolved a case and issued a final order, the respondent may file an appeal to the Circuit Court for Baltimore City within 30 days. Baltimore City Code, art. 19, § 70(d) (1983). If the respondent files no appeal and fails to comply with the order, the Wage Commission "may certify such proceedings to the City Solicitor and request that he petition the Circuit Court for Baltimore City to enforce" the order. Id.
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