Olearchick v. American Steel Foundries

• Decision Date: 29 July 1947
• Docket Number: Civil Actions No. 5884,5820.
• Citation: 73 F. Supp. 273
• Parties: OLEARCHICK et al. v. AMERICAN STEEL FOUNDRIES. MARTIN et al. v. CARNEGIE-ILLINOIS STEEL CORPORATION.
• Court: U.S. District Court — Western District of Pennsylvania

73 F. Supp. 273

OLEARCHICK et al. v. AMERICAN STEEL FOUNDRIES.

MARTIN et al. v. CARNEGIE-ILLINOIS STEEL CORPORATION.

Civil Actions Nos. 5884, 5820.

District Court, W. D. Pennsylvania.

July 29, 1947.

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A. M. Oliver and Ellis R. Defibaugh, both of Pittsburgh, Pa., for plaintiffs.

Reed, Smith, Shaw & McClay, of Pittsburgh, Pa. (John C. Bane, Jr., and John G. Wayman, both of Pittsburgh, Pa., of counsel), for defendants.

WALLACE S. GOURLEY, District Judge.

These cases are similar in nature and raise the same problem, and as a result thereof are considered and determined in one opinion.

Civil Action No. 5884.

This is an action by four (4) of the employees of American Steel Foundries, a corporation, to recover overtime compensation, plus a like amount as liquidated damages and an attorney's fee under the provisions of Section 16(b) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 216(b).

Three (3) of the plaintiffs, Olearchick, Reckhause, and Toth filed their complaint on or about August 15, 1946, alleging that they had been employed in interstate commerce or in the production of goods for commerce by the defendant; that they had worked in excess of the statutory maximum prescribed by the Act; and that they had not been compensated for such excess hours at a rate not less than one and one-half (1½) times their regular rate as required by Section 7 of the Act. The defendant filed its answer which admitted that during some workweeks material to the action, the plaintiffs had been employed by the defendant in work relating to the manufacture of goods for interstate commerce, and that during some of these workweeks the plaintiffs had been employed for hours in excess of the statutory maximum. It denied any liability under the Act, however, by averring that the defendant had paid the plaintiffs all amounts due and owing them, and (as a separate defense) that during any period or periods in which any of the plaintiffs were not paid overtime compensation in accordance with the provisions of Section 7 that such plaintiff was employed in a bona fide executive or administrative capacity within the meaning of Section 13(a) of the Act, and was, therefore, specifically exempt from such overtime requirements.

On or about November 4, 1946, Samuel Marchitello was added as a party plaintiff by Order of Court and with the consent of the defendant. The plaintiffs on or about November 12, 1946, served interrogatories upon the defendant for each of the plaintiffs requiring a detailed statement of facts as contained in the payroll records relating to such plaintiff. These interrogatories were answered in due time. The case was placed on the Jury Trial List for the May Term of 1947, apparently as a matter of course, because the defendant was not notified and had no knowledge that the matter would be placed upon that trial list. Promptly upon notice that the case had been placed upon the Jury Trial List, the defendant presented a motion requesting that the case be removed from the list for the May Term of 1947, specifying in writing the reasons why this should be done.

Civil Action No. 5820

The facts and questions to be determined by the Court are substantially the same as the facts and questions to be determined in the case of A. Olearchick et al. v. American Steel Foundries, a corporation, Civil Action File No. 5884.

The principal differences between the two cases will be found in the fact that there are two plaintiffs in this case as opposed to four in the other, and that the accounting problem in this case is somewhat complicated by the requirement that a special method of payment of additional compensation for overtime hours must be considered. The two plaintiffs involved in this case may also meet the requirements for exemption as professional employees, and further, did not have the same job throughout the entire period so that it will be necessary at the trial of the case to consider not only the facts with regard to two different plaintiffs, but the facts with regard to the several jobs held by those plaintiffs at different times.

Two questions have been raised by the defendant in each of the proceedings:

1. Under the law, should this case be tried by the Court, or should it be tried by the Court with a jury?

2. Regardless of how the case is to be tried, is it expedient to try at the May Term of Court, 1947?

The second question has now become moot for the reason that each of these cases has been continued by the Court pending disposition of the question raised in the motion to remove the cases from the Jury Trial List for the May Term, 1947.

It is first necessary to consider the existing law as to the right of trial by jury in cases brought under the Fair Labor Standards Act for overtime compensation, liquidated damages, and attorneys' fees. There does not appear to be any existing Act of Congress or is there any provision in the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., its supplements or amendments, which specifically states one way or the other as to whether or not a right to a trial by jury shall exist.

Rule 38 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides as follows:

"Rule 38. Jury Trial of Right

"(a) Right Preserved. The right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by the statute of the United States shall be preserved to the parties inviolate.

"(b) Demand. Any party may demand a trial by jury of any issue triable of right by a jury by serving upon the other parties a demand therefor in writing at any time after the commencement of the action and not later than 10 days after the service of the last pleading directed to such issue. Such demand may be indorsed upon a pleading of the party."

Although Section (b) of Rule 38 provides a time within which demands for a jury trial must be made, said provision of this rule does not enter into the argument since demand for jury trial in each of the cases was timely. The Fair Labor Standards Act under which these suits have been brought does not provide for a trial by jury as a matter of right, nor as hereinbefore mentioned does any other Act of Congress so provide. In order for the plaintiffs to show that they are entitled to a jury trial as a matter of right, they must show that the right is preserved by the Seventh Amendment to the Constitution. That Amendment provides that "In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by the jury shall be otherwise re-examined in any court of the United States, and then according to the rules of the common law."

It is further provided in Rule 39(a) of the Federal Rules of Civil Procedure:

"Rule 39. Trial by Jury or by the Court

"(a) By Jury. When trial by jury has been demanded as provided in Rule 38, the action shall be designated upon the docket as a jury action. The trial of all issues so demanded shall be by jury, unless (1) the parties or their attorneys of record, by written stipulation filed with the court or by an oral stipulation made in open court and entered in the record, consent to trial by the court sitting without a jury or "(2) the court upon motion or of its own initiative finds that a right of trial by jury of some or all of those issues does not exist under the Constitution or statutes of the United States."

It is contended by the defendants that an action brought under the provisions of section 16(b) of the Fair Labor Standards Act is not a common law action, but is a very special and purely statutory right of action given to the employees only under the Act and exercisable only in the manner described by the Act.

It is the contention of the plaintiffs in each action that under the provisions of the Fair Labor Standards Act, the remedy which is invoked is not a public remedy, but is private in nature as it applies to each plaintiff who claims a right to recover for overtime compensation, liquidated damages and attorneys' fees which the defendant in each instance has refused and neglected to pay in accordance with the provisions of existing law. It was set forth by Congress at the time of the enactment of the Fair Labor Standards Act, more particularly the Act of June 25, 1938, c. 676, § 2, 52 Stat. 1060, 29 U.S.C.A. § 202, as follows:

"§ 202. Congressional finding and declaration of policy.

"(a) The Congress finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce; and (5) interferes with the orderly and fair marketing of goods in commerce.

"(b) It is declared to be the policy of sections 201-219 of this title, through the exercise by Congress of its power to regulate commerce among the several States, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power. June 25, 1938, c. 676, § 2, 52 Stat. 1060."

It is, therefore, the primary purpose of the Fair Labor Standards Act, through the exercise of legislative power, to prohibit the shipment of goods in interstate commerce if they are produced under sub-standard labor conditions and such prohibition has been held to be an appropriate exercise of the power of congress over interstate commerce. Roland Electric Co. v. Walling, 326...