Mitchell v. STRICKLAND TRANSPORTATION COMPANY

• Citation: 267 F.2d 821
• Decision Date: 09 June 1959
• Docket Number: No. 17563.,17563.
• Parties: James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. STRICKLAND TRANSPORTATION COMPANY, Inc., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

267 F.2d 821 (1959)

James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellant, v. STRICKLAND TRANSPORTATION COMPANY, Inc., Appellee.

No. 17563.

United States Court of Appeals Fifth Circuit.

June 9, 1959.

Jack I. Karro, Atty., Dept. of Labor, Washington, D. C., Bessie Margolin, Asst. Sol., Dept. of Labor, Washington, D. C., Earl Street, Regional Atty., Dept. of Labor, Dallas, Tex., Stuart Rothman, Sol., Washington, D. C., for appellant.

Ralph W. Currie, Dallas, Tex., Currie, Kohen & Freeman, Dallas, Tex., of counsel, for appellee.

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

TUTTLE, Circuit Judge.

This is an appeal from a judgment denying an injunction against violation of the overtime and record-keeping provisions of the Wage and Hour Law, and dismissing appellant's complaint. This is technically the second appearance of this case in this Court. In its earlier appearance, 5 Cir., 228 F.2d 124, we reversed a judgment of the trial court which had held that a night watchman was an independent contractor, and thus not covered by the Act, 29 U.S.C.A. § 201 et seq. The mandate returned the case to the district court "to issue such orders as may be necessary to assure compliance in the future."

Upon remand, the Secretary of Labor moved for a permanent injunction enjoining the defendant from violating the overtime provisions of the Act. This motion was supported by introduction of the record of a conviction of Strickland for violation of the Act on a nolo contendre plea entered in 1947, and on which a fine of $1500.00 had been imposed. Appellee filed its answer supported by affidavit and oral testimony asserting that it was, and would continue to be, in full compliance with the provisions of the law, and prayed that the complaint be dismissed.

Appellant, on January 2, 1957, filed a supplemental complaint in which it was alleged flatly that "defendant has, since January 1, 1956, violated, and is violating the provisions of Sections 7 and 15 (a)(2) of the Act * * *." It is clear from the record now before us that as to any asserted violations upon which appellant here relies there was no violation of the Act occurring at the time of the filing of this supplemental complaint.¹

It is clear that Strickland had for some time early in 1956 used some bookkeeping employees of another transportation company whose stock Strickland had contracted to buy and whose business Strickland was operating under temporary authority of the I.C.C. for work which, when performed by them, brought their total employment by the two companies in excess of 40 hours per week. They were not paid overtime rates for such excess hours.

It is not in dispute that when Strickland's top management learned of this practice counsel was consulted. Thereupon counsel asked the regional attorney for appellant whether he deemed this prohibited, and upon receiving an affirmative answer the company forthwith stopped the practice. No investigation was made at that time, and the practice had been stopped several months before a subsequent investigation was started by appellant as a basis for contesting Strickland's motion for dismissal of the complaint.

Upon this showing the trial court entered its order denying the injunction and dismissing the complaint.²

The Secretary of Labor is here appealing on the ground that the court erred in refusing to enjoin Strickland "from repeating its violations of the Act in the future." Appellant's brief makes the assertion that "the undisputed evidence is such, we submit, as to preclude the denial of injunctive relief herein within the broadest limits of sound judicial discretion," calling our attention by way of comparison to this court's decisions in Mitchell v. Hausman, d/b/a Alice Meat Co., 5 Cir., 261 F.2d 778; Lenroot v. Kemp, 5 Cir., 153 F.2d 153; and Hughes Tool Co. v. Owen, 5 Cir., 123 F.2d 950, 953.

We conclude otherwise. It cannot be said that on this record the trial judge abused its discretion in refusing to grant a permanent injunction as requested by the appellant.

This is another case as to which it can fairly be said that the Secretary of Labor seeks from the appellate courts the setting down of a standard of review of the denial of injunction based on the proposition that there can be no effective enforcement of the Wage and Hour Law unless temporary injunctions are granted pendente lite and permanent injunctions issued after coverage is established in the case in suit. This follows, so runs the argument, because otherwise recalcitrant employers can gamble by violating the terms of the Act and avoid the higher payments due their employees until final judgment is entered against them. This results because the law forbids the awarding of back pay in actions for an injunction; because of the difficulty of proving wilfulness in criminal actions and because of the reluctance of employees to authorize suit by the Secretary for back pay. The Supreme Court has given support to this contention in its recent decision in Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207, 214, 79 S.Ct. 260, 265, 3 L.Ed.2d 243, where it said:

"Even a cursory examination of these provisions the provisions for enforcement shows that the injunction is the only effective device available to the Secretary when coverage is in doubt and he wishes to establish the availability of the Act to employees not theretofore afforded its protections."

However, the Secretary, by the clearest implication, here suggests that the ordinary rule of review of the discretionary act of granting or refusing an injunction must, because of this policy consideration, be somehow changed. The Court in...