Macklin v. Kaiser Co.

• Decision Date: 20 December 1946
• Docket Number: Civil Action No. 3000.
• Citation: 69 F. Supp. 137
• Parties: MACKLIN et al. v. KAISER CO., Inc.
• Court: U.S. District Court — District of Oregon

69 F. Supp. 137

MACKLIN et al. v. KAISER CO., Inc.

Civil Action No. 3000.

District Court, D. Oregon.

December 20, 1946.

Mowry & Mowry, and Thomas H. Tongue, III, all of Portland, Or., for plaintiff.

Fletcher Rockwood, of Portland, Or., and Thelen, Marrin, Johnson & Bridges, of San Francisco, Cal., for defendant.

JAMES ALGER FEE, District Judge.

The initiation of the present litigation came about through one Clarence Culver, a former resident of Oklahoma. He came to this section, according to his testimony, at the request of the Kaisers who were soliciting help. At first employed at Oregon Shipbuilding Corporation and later as a guard at Swan Island Shipyard on July 24, 1943, he drew 95 cents an hour until October 3, 1943, when he was employed at $1.05 per hour until his release on February 27, 1945. He claims he was required to report at roll call from eight to thirty minutes ahead of midnight when he went on duty and watched until 8:00 A. M. For some unaccountable reason, it was some months after his release while he was in other employment, that he first gave thought to the fact that he had been putting in overtime in connection with the roll call. As a result he wrote to the Wage and Hour Office at Washington, D. C. The Wage and Hour Office in Portland advised Culver, who is one of the plaintiffs here, regretfully, that they were unable to prosecute for the recovery of overtime and suggested that he take measures to bring suit himself. They did not advise him that there was any doubt as to his right to collect in view of the fact that any liability might ultimately fall upon the United States Government for whom the employees of this bureau were working. Judge Dawkins in an opinion marked with crisp perspicacity says in Love v. Silas Mason Co., D.C., 66 F.Supp. 753, 754, where he discusses the effect of a contract between the United States Government and the employer for the prosecution of the war effort:

"This contract with the Government was entered into for performance in this state for the producing of munitions needed to prosecute the recent war and any judgment recovered will have to be paid, not by defendant, but by the Government.

"According to the contention of defendant in this case all these employees, who have sued for several hundred thousand dollars, continued to work without complaint under the assumption by all parties that they were not affected by the Fair Labor Standards Act."

This action was begun under these auspices by fifty guards of the war-time operated shipyards of Kaiser Company Incorporated to recover overtime, penalties and attorney fees under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq. The action is founded on the claim that each of these guards was required to report one half hour before being posted as a watch, for roll call. Whether the intention before filing suit was to dispose of this cause by settlement or otherwise, the parties have now stipulated that the defendant company should pay less than the amount claimed for overtime, make no payment on penalties and pay a sum as attorney fees in full settlement of all liability. The United States Maritime Commission has approved the agreement by a letter in writing.

Thereafter, motion was filed for this court to enter judgment in strict accordance with the stipulation. The court did not enter the judgment. Instead, the taking of testimony was ordered. Evidence indicating the attorney fees demanded were reasonable if the order entered, was then offered. Only upon the insistence of the court was any testimony offered as to the facts. There was no cross-examination since one of the attorneys for defendant frankly stated that if this were a trial on the merits he would have asked questions, but since he did not consider the proceeding of that nature he would not cross-examine. The United States did not intervene, nor was there any appearance in its behalf. The court directed the United States Attorney to appear amicus curiae. The testimony of nine only of the fifty plaintiffs tended to show that a roll call was once established at thirty minutes before the time of going on duty. Another witness indicated that this degenerated and eventually guards even reported late without penalty. Due to the suggestion of the court, there were other plaintiffs in the courtroom and it was stated without objection that their testimony would be the same as the other plaintiffs and this was stated also as to the generated and eventually guards even rebalance of the fifty plaintiffs who neither testified nor were in the courtroom.

After the testimony was finished the court raised the question as to whether Kaiser Company, Incorporated, was engaged in the production of goods for commerce in building these ships. One of the attorneys stated, without contradiction, that the Kaiser Company, Incorporated, was so engaged. The court also raised the question as to whether the plaintiffs were so engaged. In reply it was stated that in the case of some guards there was a dispute as to this feature since they had worked in barracks areas, dormitory areas, and cafeteria areas outside the fence, but that the settlement was in gross and covered these employees also.

The court at the outset was inclined to enter judgment on a stipulation between private parties but was of opinion, since there was a public interest, testimony was required. On an independent search conducted in view of the fact that all concerned were acquiescing in the entry of judgment, the court discovered serious obstacles. Therefore, the court raised the question as to whether the inclusion of overtime for employees who worked in positions where they were thus guarding installations which had no relation to the production of goods for commerce, was not a compromise of coverage whereby the overtime worked by employees who might have been engaged in the production of goods for commerce was balanced off against the time of those who clearly were not so engaged, and a compromise thus effected which did not do justice to the inalienable rights of the former. In view of the factual situation thus existing and in view of the failure to pay anything on account of the liquidated damages provided for by the Act, the court pointed out that it was probable that plaintiffs could not accept a compromise of their respective claims assuming these were valid. The court made this inquiry in the light of the opinion in D. A. Schulte, Inc., v. Gangi, 66 S.Ct. 925, 90 L.Ed. —

Briefs were filed upon the legality of the settlement in the light of these propositions. It was argued by both plaintiffs and defendant that it is permissible for employees to settle where there is a dispute as to the amount of overtime worked as distinguished from coverage. Explaining away a rather fulsome statement above noted indicating some employees had not worked all the time guarding installations used for the production of goods for commerce, defendant now says an investigation has been made which discloses that no employees worked a complete week around that type of installation. Further, it says "it must be recognized that if during a particular week a plaintiff performed any work in commerce or in the production of goods for commerce, then he is entitled to the benefits of the Act for that week, irrespective of whether a part of his work was intrastate in character. Consequently, defendant has determined that there are no facts with respect to the plaintiffs here involved warranting an assertion that during any work week any of said plaintiffs were not entitled to the benefits of the Act, * * *." Defendant, therefore, offers to include these propositions in a stipulation.

The court is still impressed with the position that even in private litigation the plaintiffs, or others in their situation, would not be permitted simply to enter a compromise judgment upon a stipulation which did not set up facts showing their coverage. This stipulation is devoid of any agreement as to such facts. Although there is loose expression in some opinions, no law requires a court to perform the judicial act of entering judgment simply because the parties have agreed that a certain figure shall be used as the amount of damage or liability. The court has jurisdiction to dismiss the action even though the reasons for so doing may be utterly inadequate.¹ Likewise, the court has jurisdiction to refuse to enter judgment upon a stipulation which does not set out facts. The court might well conclude this case upon the proposition that the plaintiffs have no right to bargain away the benefits conferred by the Act in question. A court can "always refuse to sanction such agreements, when right and justice so require." McLeod v. Hyman, 272 Pa. 582, 116 A. 535, 536.

But the court has made an independent investigation and is of opinion that judgment cannot be entered on this stipulation in any event. An examination into the pleadings, the stipulation itself, and the statements made by the respective attorneys in court makes crystal clear the proposition that any judgment entered in this case based on the stipulation would determine questions of fact which are highly controversial and establish as principles of law theories highly debatable. These may be outlined as follows: (a) There is a question as to whether the Kaiser Company, Incorporated, was engaged in the production of goods for commerce; (b) there is a question of whether these individual men were engaged in the production of goods for commerce either directly or indirectly even when they were guarding the main installations of the shipyard; (c) there is a question whether all of these men were engaged at all times in the production of goods for commerce when they were guarding other installations only indirectly connected with the construction; (d) there is a question of whether plaintiffs should be entitled to compromise their individual claims whether effecting...