Overnight Motor Transp Co v. Missel

Citation316 U.S. 572,62 S.Ct. 1216,86 L.Ed. 1682
Decision Date08 June 1942
Docket NumberNo. 939,939
PartiesOVERNIGHT MOTOR TRANSP. CO., Inc., v. MISSEL
CourtU.S. Supreme Court

Messrs. J. Ninian Beall, of Washington, D.C., and John R. Norris, of Baltimore, Md., for petitioner.

Messrs. George A. Mahone, William O. Tydings, and W. Hamilton Whiteford, all of Baltimore, Md., for respondent.

Mr. Justice REED delivered the opinion of the Court.

This case involves the application of the overtime section of the Fair Labor Standards Act of 19381 to an employee working irregular hours for a fixed weekly wage.

Respondent, Missel, was an employee of the petitioner, Overnight Motor Transportation Company, a corporation engaged in interstate motor transportation as a common carrier. He acted as rate clerk and performed other incidental duties, none of which were connected with safety of operation. The work for which he was employed involved wide fluctuations in the time required to complete his duties. The employment of respondent began before the effective date of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., October 24, 1938, and terminated October 19, 1940. Until November 1, 1938, his salary was $25.50 per week and thereafter $27.50. Time records are available for only a third of the critical period, and these show an average workweek of 65 hours, with a maximum of 80 for each of two weeks in the first year of the Act's operation and a maximum of 75 hours in each of three weeks in the second year. Nothing above the weekly wage was paid, because these maximum workweeks, computed at the statutory minimum rates with time and a half for overtime for the years in question, would not require an addition to the weekly wage.

Respondent brought a statutory action to recover alleged unpaid overtime compensation in such sum as might be found due him, an additional equal amount as liquidated damages, and counsel fee.2 The trial court, refus- ing to hear evidence on the precise amount claimed, decided in favor of the petitioner on the ground that an agreement for a fixed weekly wage for irregular hours satisfied the requirements of the Act. Under such circumstances the court was of the view that pay would be adequate which amounted to the required minimum for the regular hours and time and a half the minimum for overtime. 40 F.Supp. 174. The Circuit Court of Appeals reversed with directions to enter judgment for the plaintiff in accordance with its opinion, an order which we interpret as authorizing a hearing in the trial court as to the amounts due. 126 F.2d 98. As the questions involved were important in the administration of the Fair Labor Standards Act, we granted certiorari. 315 U.S. 791, 62 S.Ct. 641, 86 L.Ed. —-.

Petitioner renews here its contentions that the private right to contract for a fixed weekly wage with employees in commerce is restricted only by the requirement that the wages paid should comply with the minimum wage schedule of the Fair Labor Standards Act, section 6, 29 U.S.C.A. § 206, with overtime pay at time and a half that minimum, that in any event the Act does not preclude lump sum salaries in excess of the minimum, and that a contrary interpretation of the statute would render it unconstitutional.

It is plain that the respondent as a transportation worker was engaged in commerce within the meaning of the Act,3 and unless specifically exempted was entitled to whatever benefits the overtime provisions conferred.

While now conceding that United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430, settles the constitutional power of Congress to legislate against labor conditions detrimental to a minimum standard of living required for the general well-being of workers, petitioner argues that there is no power under the Constitution to regulate the hours or wages of workers whose pay, in every instance, at least equals the minimum and whose hours are not injurious to health. Freedom of contract between employer and employee, it is urged, is destroyed by such an interpretation.4 But hours or wages not patently burdensome to health may yet be subject to regulation to achieve other purposes. We assume here the statutory objectives discussed later, i.e., that the act is aimed at hours as well as wages. The commerce power is plenary,5 may deal with activities in connection with production for commerce6 and as said in the Darby case, may extend 'to those activities intrastate which so affect interstate commerce or the exercise of the power of Congress over it as to make regulation of them appropriate means to the attainment of a legitimate end, the exercise of the granted power of Congress to regulate interstate commerce.' 312 U.S. at page 118, 61 S.Ct. at page 459, 85 L.Ed. 609, 132 A.L.R. 1430. Long hours may impede the free interstate flow of commodities by creating friction between production areas with different length workweeks, by offering opportunities for unfair competition through undue extension of hours, and by inducing labor discontent apt to lead to interference with commerce through interruption of work. Overtime pay probably will not solve all problems of overtime work, but Congress may properly use it to lessen the irritations. Substandard labor conditions were deemed by Congress to be 'injurious to the commerce and to the states from and to which the commerce flows.' United States v. Darby, 312 U.S. 100, 115, 657, 61 S.Ct. 451, 457, 85 L.Ed. 609, 132 A.L.R. 1430. To protect that commerce from the consequences of production of goods under substandard conditions, it may choose means reasonably adapted to those ends, including regulation of intrastate activities, 312 U.S. at page 121, 61 S.Ct. at page 460, 85 L.Ed. 609, 132 A.L.R. 1430, by minimum wage and maximum hour requirements, 312 U.S. at page 123, 61 S.Ct. at page 461, 85 L.Ed. 609, 132 A.L.R. 1430. Compare Santa Cruz Fruit Packing Co. v. National Labor Relations Board, 303 U.S. 453, 466, 58 S.Ct. 656, 660, 82 L.Ed. 954. If overtime pay may have this effect upon commerce, private contracts made before or after the passage of legislation regulating overtime cannot take the overtime transactions 'from the reach of dominant constitutional power.' Norman v. Baltimore & O.R. Co., 294 U.S. 240, 306—311, 55 S.Ct. 407, 416, 79 L.Ed. 885, 95 A.L.R. 1352. If in the judgment of Congress time and a half for overtime has a substantial effect on these conditions it lies with Congress' power to use it to promote the employees' well-being.

Statutory Construction. The petitioner attacks the basic conceptions upon which the Circuit Court of Appeals determined that the compensation paid by the respondent violated section 7(a) of the act.7 That court felt that 'one of the fundamental purposes of the Act was to induce worksharing and relieve unemployment by reducing hours of work.' (126 F.2d 98, 103.) We agree that the purpose of the act was not limited to a scheme to raise substandard wages first by a minimum wage and then by increased pay for overtime work. Of course, this was one effect of the time and a half provision, but another and an intended effect was to require extra pay for overtime work by those covered by the act even though their hourly wages exceeded the statutory minimum. The provision of section 7(a) requiring this extra pay for overtime is clear and unambiguous. It calls for 150% of the regular, not the minimum, wage. By this requirement, although overtime was not flatly prohibited financial pressure was applied to spread employment to avoid the extra wage and workers were assured additional pay to compensate them for the burden of a workweek beyond the hours fixed in the act. In a period of widespread unemployment and small profits, the economy inherent in avoiding extra pay was expected to have an appreciable effect in the distribution of available work. Reduction of hours was a part of the plan from the beginning. 'A fair day's pay for a fair day's work' was the objective stated in the Presidential message which initiated the legislation.8 That message referred to a 'general maximum working week', 'longer hours on the payment of time and a half for overtime' and the evil of 'overwork' as well as 'underpay.' The message of November 15, 1937, calling for the enactment of this type of legislation referred again to protection from excessive hours.9 Senate Report No. 884 just cited, page 4, the companion House Report10 and the Conference report11 all spoke of maximum hours as a separately desirable object. Indeed, the form of the act itself in setting up two sections of standards, Section 6 for wages and Section 7 for hours, emphasizes the duality of the Congressional purpose. The existence of such a purpose is no less certain because Congress chose to use a less drastic form of limitation than outright prohibition of overtime. We conclude that the act was designed to require payment for overtime at time and a half the regular pay, where that pay is above the minimum, as well as where the regular pay is at the minimum.12

We now come to the determination of the meaning of the words 'the regular rate at which he is employed.' Since we have previously determined in this opinion, in the discussion of petitioner's objection to the application of the Act on the ground of unconstitutionality, that the scope of the commerce power is broad enough to support federal regulation of hours, we are concerned at this point only with the method of finding the regular rate under the contract with respondent. Congress might have sought its objective of clearing the channel of commerce of the obstacles of burdensome labor disputes by minimum wage legislation only. We have seen that it added overtime pay. The wages for minimum pay are expressed in terms of so much an hour. Sec. 6(a)(1)'Not less than 25 cents an hour' with raises for succeeding years or by order of the Administrator under Sec. 8. Cf. Opp Cotton Mills v. Administrator, 312 U.S....

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