Mitchell v. Robert De Mario Jewelry, Inc., 17068.

Citation260 F.2d 929
Decision Date07 November 1958
Docket NumberNo. 17068.,17068.
PartiesJames P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. ROBERT DE MARIO JEWELRY, INC. and Robert DeMario, an Individual, Appellees. ROBERT DE MARIO JEWELRY, INC. and Robert DeMario, an Individual, Cross-Appellant, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Cross-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Jacob I. Karro, Atty., Dept. of Labor, Bessie Margolin, Asst. Sol., Dept. of Labor, Sylvia S. Ellison, Dept. of Labor, Washington, D. C. (Stuart Rothman, Solicitor, Washington, D. C., Albert M. Horn, Birmingham, Ala., United States Department of Labor, Beverley R. Worrell, Regional Attorney, Birmingham, Ala., on the brief), for appellant.

R. Lamar Moore, Moultrie, Ga. (Moore, Gibson, DeLoache & Gardner, Moultrie, Ga., on the brief), for appellees.

Before HUTCHESON, Chief Judge, and TUTTLE and JONES, Circuit Judges.

JONES, Circuit Judge.

The Secretary of Labor brought suit in the United States District Court for the Middle District of Georgia, invoking the jurisdiction conferred by Section 17 of the Fair Labor Standards Act,1 against Robert DeMario Jewelry, Inc., a corporation, and Robert DeMario who controlled the corporation and owned most of its stock. It was charged by the Secretary that three employees of the jewelry company had been wrongfully discharged in violation of Section 15 of the Act2 for having complained to the Secretary that they were not receiving minimum wages. In addition to seeking an injunction, in general terms, against violations of Section 15(a) (3) of the Act, the Secretary prayed that the appellees be required to reinstate the three discharged employees and to reimburse them for wages lost as a result of the wrongful discharges.

The district court entered its decree ordering the reinstatement of the three discharged employees. The district judge indicated a doubt as to whether the court had any power to decree reimbursement for lost wages but found it unnecessary to determine this question "inasmuch as in the exercise of the Court's discretion such would not be ordered even assuming, without deciding, that the Court would have jurisdiction to order such reimbursement." The Secretary has appealed and urges that the district court erred in refusing to direct the appellees to make reimbursement to the employees for wages lost as a result of their wrongful discharge. The Secretary designated for printing only those portions of the record consisting of the Complaint, the Answer, and the Findings of Fact, Conclusions of Law and Decree. The appellees, saying that the record on appeal is not sufficient to permit a determination of whether there was an abuse of discretion in denying reimbursement, move that the appeal be dismissed.

The printed record is sufficient for our disposition of the case. If the appellees believed that the portion which the appellant designated for printing was inadequate, the rules of this Court provide the method by which other portions of the record may be included. 5th Cir. Rule 23, 28 U.S.C.A Section 17 of the Fair Labor Standards Act, as originally enacted, merely conferred jurisdiction upon the district courts to restrain violations of Section 15 of the Act. The limiting proviso was not then a part of the statute. The Eighth Circuit Court of Appeals sustained a consent decree in a suit by the Wage and Hour Administrator directing payment to employees of the defendant of the difference between wages paid and the amount payable at the prescribed minimum hourly and overtime rates. Walling v. Miller, 8 Cir., 1943, 138 F.2d 629, certiorari denied 321 U.S. 784, 64 S.Ct. 781, 88 L.Ed. 1076. Doubt was expressed as to the authority of the administrator to maintain the suit, but it was found unnecessary to decide the question. One of the judges, in an opinion concurring specially, expressed the opinion that the power given to district courts to restrain violations included the power to direct payments of wage deficiencies unlawfully withheld. Thereafter it was held by the Second Circuit Court of Appeals that in a proceeding brought under Section 17 for the reinstatement of wrongfully discharged employees the court had inherent power to enforce payment of wages lost by the discharge. Walling v. O'Grady, 2 Cir., 1944, 146 F.2d 422. In support of its decision the court cited and relied upon Texas & N. O. R. Co. v. Brotherhood of Ry. Clerks, 281 U.S. 548, 50 S.Ct. 427, 74 L.Ed. 1034; Phelps Dodge Corporation v. N. L. R. B., 313 U.S. 177, 61 S.Ct. 845, 85 L.Ed. 1271, 133 A.L.R. 1217; and the specially concurring opinion in Walling v. Miller, supra.

The O'Grady case was followed in the Second Circuit by McComb v. Frank Scerbo & Sons, 2 Cir., 1949, 177 F.2d 137, in which it was held that the district courts had power, in a suit to restrain violations of the minimum wage and hour provisions of the Act, to order restitution of overtime wages. In the opinion of the court it followed, and it recited in its opinion that it was following, its O'Grady case. It quoted from the special concurrence in Walling v. Miller, supra. The authorities relied upon in the O'Grady case were cited and also the intervening decision in McComb v. Jacksonville Paper Co., 336 U.S. 187, 69 S.Ct. 497, 93 L.Ed. 599. Cf. Brotherhood of Ry. & S. S. Clerks v. Texas & N. O. R. Co., D.C., 25 F.2d 876, affirmed 5 Cir., 33 F.2d 13. The Texas & N. O. R. Co. case and McComb v. Jacksonville Paper Co. case involved situations where prior decrees, framed to act prospectively, had not been complied with and contempt proceedings had thereafter been instituted. In the McComb v. Jacksonville Paper Co. opinion 336 U.S. 187, 69 S.Ct. 500 it was said "We can lay to one side the question whether the Administrator, when suing to restrain violations of the Act, is entitled to a decree of restitution for unpaid wages." It is hornbook law that in a contempt proceedings for the violation of an injunction the court may ascertain damages for the breach and enter judgment for such damages. 12 Am.Jur. 430-432, Contempt § 62. The power of Federal courts to enforce decrees and punish by contempt for their breach is expressly recognized in Rule 70, Fed.Rules Civ. Proc., 28 U.S.C.A. Cf. National Drying Machinery Co. v. Ackoff, 3 Cir., 1957, 245 F.2d 192, certiorari denied 355 U.S. 832, 78 S.Ct. 47, 2 L.Ed.2d 44. Phelps Dodge Corp. v. N. L. R. B. involved the provision of the National Labor Relations Act, 29 U.S.C.A. § 160(c), authorizing the Labor Board, under the circumstances stated by the Congress, "to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of" that Act. No such power is conferred on the courts by Section 17 of the Fair Labor Standards Act. 313 U.S. 177, 61 S.Ct. 849.

By the Fair Labor Standards Amendments of 1949, 63 Stat. 910, 920, Section 17 was amended by adding the proviso,

"That no court shall have jurisdiction, in any action brought by the Administrator Secretary of Labor to restrain such violations, to order the payment to employees of unpaid minimum wages or unpaid overtime compensation or an additional equal amount as liquidated damages in such action."

For the Secretary the inference is drawn that this amendment recognizes the power of district courts to order restitution in an injunction decree ordering reinstatement of wrongfully discharged employees. For the jewelry company employer it is said that the amendment negatives any such inference and, on the contrary, shows a Congressional recognition of the non-existence of such power as is claimed by the Secretary for the courts. The Conference Committee, in its report, discussed the purposes and effect of the amendment to Section 17.3 In the drafting of the 1949 Act there was included as Section 16(c) the provision that, with the exceptions stated, the Administrator, now the Secretary, could sue with the consent of the employees for unpaid minimum wages and unpaid overtime compensation. Thus was created a cause of action in the Secretary. Suits by him under the statute are, in effect, suits by the United States. Walling v. Norfolk Southern Ry. Co., 4 Cir., 1947, 162 F.2d 95; Walling v. Frank Adam Electric Co., 8 Cir., 1947, 163 F.2d 277; Mitchell v. Floyd Pappin & Son, D.C. Mont.1954, 122 F.Supp. 755. Section 17 denies to the courts any power to order payment of minimum wages and overtime to employees in the Secretary's suit to enjoin violations of Section 15. The Congress could have given but did not give to the Secretary any cause of action to sue for restitution on behalf of wrongfully discharged employees. Are we to assume, absent any expression in congressional enactment or legislative history, that Congress intended by implication to give the Secretary acting on behalf of the United States, such a cause of action? We think not.

The Secretary has expressed a doubt that a wrongfully discharged employee has a cause of action, enforceable in a Federal Court, to recover for losses resulting from a wrongful discharge. The Second Circuit Court of Appeals has held, in a case arising before the 1949 amendment, that the employee had no right which he could assert in a Federal forum.4 We do not feel any necessity for deciding whether or not the employee has a cause of action. If he has, then without congressional authority the Federal courts cannot, at the suit of the Secretary, enforce his cause of action. The employee would be the real party in interest. Cf. Rule 17(a), Fed.Rules Civ. Proc., 28 U.S.C.A. If the Secretary is seeking to enforce, on behalf of the United States or in his own right as Secretary, a cause of action vested in him, we must look for a congressional enactment which creates the cause of action. The right of the Secretary to seek and the power of the court to grant the relief which was denied by the district court must be expressly...

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