Martin v. Wolfson, 33769.

• Decision Date: 27 December 1944
• Docket Number: No. 33769.,33769.
• Parties: MARTIN v. WOLFSON et al.
• Court: Minnesota Supreme Court

218 Minn. 557
16 N.W.2d 884

MARTIN
v.
WOLFSON et al.

No. 33769.

Supreme Court of Minnesota.

Dec. 15, 1944.
Rehearing Denied Dec. 27, 1944.

Suit by Mae D. Martin against Wilfred Wolfson and Bernard Wolfson, individually and as copartners doing business as the Kenwood Hotel Company, to recover overtime wages due under minimum wage order No. 13 adopted by the Industrial Commission. From an order granting defendants judgment notwithstanding the verdict, the plaintiff appeals.

Order reversed with directions.

[16 N.W.2d 885]

Syllabus by the Court.

1. Rule or order to govern future conduct, made by administrative tribunal pursuant to legislative mandate, is not subject to collateral attack except upon jurisdictional or constitutional grounds.

2. Where at public hearing of Industrial Commission spokesmen for industry offered oral testimony and argument and written data and briefs, in opposition to recommendations of advisory board appointed to make estimate of wages, and such spokesmen made no demand that witnesses be sworn and examined and evidence introduced as in court proceedings, informality of proceedings was waived and could not be raised collaterally in subsequent action based on wage order adopted by commission.

3. Minimum wage order is neither void nor voidable because unsupported by formal recitals or findings of fact, no findings being required by statute.

4. Presumption of existence of facts justifying specific exercise of authority legally delegated to administrative tribunal attaches to minimum wage order, blanket in form, and burden is upon hotel owners who attack order in collateral proceeding to show that hotel industry or occupation was not investigated, or that not more than one-sixth of women employed therein were receiving less than living wages so as to deprive commission of statutory authority to prescribe minimum wages for that industry or occupation.

5. Minimum wage order is not subject to collateral impeachment on ground that facts upon which it was based were not sufficiently established by proof before Industrial Commission.

6. Objection that administrative order does not comply with statutory conditions authorizing its promulgation cannot be raised by one not prejudiced by the irregularity.

Appeal from District Court, Hennepin County; Paul W. Guilford, Judge.
Arthur T. Nelson, of Minneapolis, for appellant.

Stanley V. Shanedling, of Minneapolis, for respondents.

William D. Gunn, of St. Paul, filed a brief amicus curiae on behalf of Minnesota State Federation of Labor.

STREISSGUTH, Justice.

Plaintiff, employed by defendants as manager and housekeeper of an apartment hotel, recovered a verdict for overtime wages due her under minimum wage order No. 13 adopted by the Industrial Commission

[16 N.W.2d 886]

in 1938 under authority of L.1913, c. 547, as amended by L.1921, c. 84, and L.1923, c. 153, Minn.St.1941, s 177.01 et seq., Mason St.1927, s 4210 et seq.¹ By her appeal from an order granting defendants judgment notwithstanding the verdict, plaintiff seeks to restore the verdict against defendants' claim that the wage order is void because irregularly adopted.

The pertinent provisions of the Minimum Wage Act are:

‘177.03 The commission may at its discretion investigate the wages paid to women and minors in any occupation in this state. * * *’

‘177.05 The commission shall specify times to hold public hearings at which employers, employees, or other interested persons may appear and give testimony as to wages, profits, and other pertinent conditions of the occupation or industry. The commission, or any member thereof, shall have power to subpoena witnesses, to administer oaths, and to compel the production of books, papers, and other evidence. * * *’

‘177.06 If after investigation of any occupation the commission is of opinion that the wages paid to one-sixth or more of the women or minors employed therein are less than living wages, it shall forthwith proceed to establish legal minimum rates of wages for that occupation, as hereinafter described and provided.’

‘177.08 The commission may at its discretion establish in any occupation an advisory board. * * * The commission shall make rules and regulations governing * * * the modes of procedure of the advisory boards and exercise exclusive jurisdiction over all questions arising with reference to the validity of the procedure and determination of these boards. * * *’

‘177.09 Each advisory board shall have the same power as the commission to subpoena witnesses, administer oaths, and compel the production of books, papers, and other evidence. * * * Each advisory board shall recommend to the commission an estimate of the minimum wages, whether by time rate or by price rate, sufficient for living wages for women and minors of ordinary ability, * * *.’

‘177.10 Upon receipt of estimates of wages from an advisory board, the commission shall review the same and, if it approves them, shall make them the minimum wages in that occupation, as provided in section 177.07. Such wages shall be regarded as determined by the commission itself and the order of the commission putting them into effect shall have the same force and authority as though the wages were determined without the assistance of an advisory board.’

It will be noted that the statute contemplates an investigation of ‘pertinent conditions of the occupation or industry’ by the commission itself, in connection with which public hearings are to be held (s 177.05). Not until the commission itself, ‘after investigation of any occupation,‘ forms an ‘opinion that the wages paid to one-sixth or more of the women or minors employed therein are less than living wages,‘ is there occasion for the establishment of ‘legal minimum rates of wages for that occupation’ (s 177.06), either by the advisory board or by the commission. And the question as to whether such condition exists in ‘any occupation’ under investigation is reserved exclusively to the commission, after a hearing, regardless of what procedure it adopts to arrive at an estimate of living wages. The appointment of an advisory board is discretionary (s 177.08). Its exclusive function is to ‘recommend to the commission an estimate of the minimum wages * * * sufficient for living wages' (s 177.09). No public hearings before the board are prescribed.

In promulgating order No. 13, the commission adopted the advisory-board mode of procedure. In May, 1937, it appointed a board made up of five persons representing employers, one of them a hotel owner and operator, and five persons representing employes. Later, Dr. Elizabeth Monahan, acceptable to both groups, was appointed to represent the public, and she was elected chairman. The board was not directed to function in any particular occupation, as contemplated by statute, and did not attempt so to limit its investigation. Instead, it made a general, but thorough, investigation of living costs of women in all occupations throughout the state. Its work is well summed up in its ‘findings and recommendations,‘ submitted to the commission in February 1938, in the form of a letter, reciting inter alia: ’* * * Our conclusions were arrived at after months of investigation and the collection from various sections of the state of data that enter into costs of living in this state.

[16 N.W.2d 887]

Several hundred budgets of women to be affected by the proposed minimum wage were considered; department stores were visited to obtain prices of wearing apparel; Y.W.C.A.‘s, homes for working girls, hotels and restaurants were canvassed to determine an average minimum cost of board and lodgings, and every source of information available in this and other states was utilized in arriving at our schedule of minimum wages and the standard basic week for which such wages shall be paid.’ Then followed a classification of cities into four classes; the recommended wage scales for women, minors, learners or apprentices in each class; definitions of terms used; and other matters not material here. There was no finding as to what percentage of women employed in any occupation was receiving less than living wages; in fact, the investigations had not covered that particular question.

The board's recommendations were published in daily newspapers of Minneapolis, St. Paul, and Duluth on February 21, 1938. On March 28, the commission published a notice of a public hearing to be held in St. Paul on April 11, for the consideration of the recommendations made by the board, inviting ‘any employer, employe or interested person in the state of Minnesota’ to ‘appear at said hearing and give testimony as to wages, profits, conditions and other matters pertinent to the subject.’

The public hearing was held at the time and place fixed. About two hundred people attended, representing employers, employes, and the public. While witnesses were not sworn, many employers expressed their views and gave unsworn testimony as to wages, profits, and other pertinent matters. Many produced and filed data and statements showing their profits and losses and the probable effect of the proposed order on their business. Many filed briefs in support of their respective positions. In all, 36 persons were heard, most of them employers or employers' representatives, among them the president of the Minnesota Employers Association.

The hotel industry was especially well represented. The Secretary of the State Hotel Association spoke briefly, introducing William Lycan of Bemidji, representing the hotel industry and its chief spokesman. Hotel owners from St. Peter, St. Cloud, Brainerd, Rochester, Glenwood, Hutchinson, and Owatonna were also introduced and offered their tithes to the discussion. None of the hotel owners group who wanted to testify were ‘prevented from testifying or stating their views,‘ according to the undisputed testimony of the chairman of the commission. ‘There wasn't a man at the public hearing that wanted to talk that did not have an opportunity.’

The chairman...