Missel v. Overnight Motor Transp. Co.

• Decision Date: 05 January 1942
• Docket Number: No. 4867.,4867.
• Parties: MISSEL v. OVERNIGHT MOTOR TRANSP. CO., Inc.
• Court: U.S. Court of Appeals — Fourth Circuit

126 F.2d 98 (1942)

MISSEL v. OVERNIGHT MOTOR TRANSP. CO., Inc.

No. 4867.

Circuit Court of Appeals, Fourth Circuit.

January 5, 1942.

COPYRIGHT MATERIAL OMITTED

George A. Mahone, of Baltimore, Md. (William O. Tydings, of Baltimore, Md., on the brief), for appellant.

John R. Norris, of Baltimore, Md., and J. Ninian Beall, of Washington, D. C. (Clayton W. Daneker, of Baltimore Md., on the brief), for appellee.

John E. Skilling, of Counsel for Administrator of Wage and Hour Division, U. S. Department of Labor, of Washington, D. C., (Warner W. Gardner, Sol., and Irving J. Levy, Asst. Sol., both of Washington, D. C., Beverley R. Worrell, Regional Atty., of Richmond, Va., and Jacob D. Hyman, of Counsel for Administrator of Wage and Hour Division, U. S. Department of Labor, of Washington, D. C., on the brief), amicus curiae.

J. Ninian Beall, of Washington, D. C., and John R. Norris, of Baltimore, Md., for American Trucking Ass'n, Inc., amicus curiae.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

DOBIE, Circuit Judge.

This is an appeal from a final judgment of the District Court of the United States for the District of Maryland entered for the defendant in an action brought by appellant, as plaintiff, to recover from appellee, defendant, unpaid overtime compensation alleged to be due under Section 7(a) of the Fair Labor Standards Act of 1938, 52 Stat. 1060-1069 (1938), 29 U.S.C.A. §§ 201-219 (hereinafter referred to as the Act), and an additional amount as liquidated damages, together with reasonable attorney's fees and costs of the action, as provided in Section 16(b) of the Act. The opinion of the District Court is reported in 40 F.Supp. 174. The case presents the problem of computation of overtime pay under the Act. Since this in turn presents questions of interpretation and rights and liabilities under the Act which are of considerable public interest and importance,¹ the Administrator, pursuant to leave granted by this Court, was permitted to submit a brief as amicus curiae, and to argue the case before this Court through counsel, confining his discussion to questions of interpretation of the Act involved in this appeal.

The case was tried on the complaint, answer, amendment to the complaint, and stipulation of facts by the parties. Accordingly, we adopt the statement of facts set out in the brief for the Administrator. Defendant admitted the following facts: that the court below had jurisdiction over the parties and the subject matter; that the defendant was licensed to engage, and was engaged, in the business of motor transportation of freight in interstate commerce and had employed plaintiff in that business; that all duties performed by plaintiff for defendant were "in commerce"; that none of the duties performed by plaintiff was that of a driver, driver's helper, loader, or mechanic, as defined by the Interstate Commerce Commission in its decision of March 4, 1941, in Ex Parte MC-2 and MC -3; rather his duties were those of a rate clerk, cashier, and dispatcher; and that defendant kept no records of hours worked by plaintiff prior to June 14, 1940.

The parties agreed that plaintiff began to work for defendant on November 26, 1937, at a salary of $23 per week, plus supper money of $2.50 per week, and that after November 1, 1938, he worked for a salary of $25 per week, plus supper money of $2.50 per week, and that he worked a varying number of hours per workweek from the time his employment began, prior to the effective date of the Act, until his employment terminated on October 19, 1940. It was further agreed that in at least two workweeks during the period from October 24, 1938, to October 23, 1939, plaintiff was on duty 80 hours; that in at least three workweeks during the period from October 24, 1939, to October 19, 1940, plaintiff was on duty 75 hours. The issues raised by the pleadings as to hours worked in other workweeks were not tried or adjudicated. Plaintiff's offer of testimony was rejected by the court as unnecessary for adjudication of the controlling legal question raised by the facts agreed upon.

Plaintiff argued, in the alternative, that his regular rate of pay is to be determined either by dividing the number of hours worked each workweek into his weekly wage, or by dividing the applicable statutory maximum hours (44 or 42) into the weekly wage. Defendant contended that plaintiff was employed at a weekly salary to do a job which necessarily involved irregular hours rather than to work a fixed schedule of hours, and, therefore, the sole effect of the Act was to fix a minimum wage for all hours worked and overtime compensation at time and one-half the statutory minimum rate per hour for hours worked in excess of the statutory maximum. It was admitted by the parties that the contract of employment was not evidenced by any writing; that plaintiff was hired to work for no specific number of hours per day or week and that these hours varied greatly from day to day.

The court below found that the plaintiff's weekly wage (plus supper money) was more than the total minimum wages prescribed by the Act plus one and one-half times such minimum rate for the overtime hours actually worked by the plaintiff, and that defendant, accordingly, had not violated the Act. The court held that the overtime provisions of the Act were primarily minimum wage provisions, and were therefore satisfied if an employee was paid at time and one-half the statutory minimum rate for each overtime hour. The court's opinion is predicated on the premise that the purpose of the Act is to establish and gradually raise minimum wages, and that the overtime provisions were inserted, not to discourage or limit overtime work, but merely as part of a plan to raise substandard wages by providing definite pay for overtime work.

The pertinent section of the Act, which is the crux of this case, is Section 7(a), 52 Stat. 1063 (1938), 29 U.S.C.A. § 207(a).² Section 7(a), dealing with maximum hours, provides:

"No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce —

"(1) for a workweek longer than forty-four hours during the first year from the effective date of this section,

"(2) for a workweek longer than forty-two hours during the second year from such date, or

"(3) for a workweek longer than forty hours after the expiration of the second year from such date,

unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." (Italics added.)

In their oral argument before this Court, counsel for the plaintiff and counsel for the Administrator contended that Section 7(a) is primarily a maximum hours provision and hence an employer must pay one and one-half times the actual wage the employee is receiving for overtime. On the other hand, counsel for the defendant argued, in line with the reasoning of the lower court, that Section 7(a) is primarily a minimum wage provision and hence an employer is entitled to pay one and one-half times the statutory minimum wage for overtime. Thus, the important question presented on this appeal is whether "regular rate" as used in Section 7(a) means the hourly rate arrived at by dividing plaintiff's actual weekly wage by the number of hours actually worked in each workweek,³ or whether it means the statutory minimum rate. This, of course, raises the broad question as to what the real purpose of Section 7(a) of the Act is.

We are unable to agree with the lower court that the primary purposes of the Fair Labor Standards Act are satisfied by the payment of time and one-half the statutory minimum wage for overtime. Furthermore, we do not believe that Section 7(a) is merely part of a broad scheme of minimum wage regulation.

Purpose of Section 7(a) of the Fair Labor Standards Act.⁴

Every statute born of economic and social pressure, attempting to harmonize discordant socio-economic forces, must be viewed in the framework of conditions aimed to be remedied thereby. Consequently, it is vital that the Congressional findings and declaration of policy set forth in the Act be examined with care. The findings of Congress, as set forth in Section 2(a), are that the existence in industries engaged in commerce of substandard labor conditions do not conduce to the maintenance of minimal health, living, and general welfare standards of workers employed therein; that the free flow of commerce is burdened thereby; that unfair competition, labor disputes and disorderly marketing result. The declaration of policy is unequivocally set out in Section 2(b) where it is declared to be the policy of Congress in the exercise of its commerce power to correct and eliminate these burdensome conditions without substantial impairment of employment or earning power. As was stated by the Chief Justice of the United States: "* * * the motive and purpose of the present regulation is plainly to make effective the Congressional conception of public policy that interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions, which competition is injurious to the commerce and to the states from and to which the commerce flows." See United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 457, 85 L.Ed. 609, 132 A.L.R. 1430. The objectives of the Act, as expressed, demonstrate that the Act, comprehensive in its purpose and remedial in character, should be liberally construed. See Bowie v. Gonzalez, 1 Cir., 117 F.2d 11, 16; Fleming v. Hawkeye Pearl Button Co., 8 Cir., 113 F.2d 52, 56; Fleming v. A. B. Kirschbaum Co., D.C., 38 F.Supp. 204, 206. Only in this way can the coordination of our economic life and the elimination of unfair differentials in labor conditions be effectively achieved.⁵

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