Peffer v. Federal Cartridge Corporation

• Decision Date: 06 October 1945
• Docket Number: 601,570,Civil Actions No. 580,569,603,638.
• Citation: 63 F. Supp. 291
• Parties: PEFFER et al. v. FEDERAL CARTRIDGE CORPORATION.
• Court: U.S. District Court — District of Minnesota

63 F. Supp. 291

PEFFER et al. v. FEDERAL CARTRIDGE CORPORATION.

Civil Actions Nos. 580, 569, 570, 601, 603, 638.

District Court, D. Minnesota, Third Division.

October 6, 1945.

John Edmund Burke and Clifford W. Gardner, both of St. Paul, Minn., for plaintiffs.

Victor E. Anderson, U. S. Atty., and Linus J. Hammond, Asst. U. S. Atty., both of St. Paul, Minn., and Bert E. Church, of Kansas City, Mo., for defendant.

NORDBYE, District Judge.

The particular claimants herein involved are six former employees of the defendant whose claims were instituted in their behalf by Lawrence Peffer in the case of Lawrence Peffer et al. v. Federal Cartridge Corporation — Stanley W. Thiele, A. W. Durrin, Irvin P. Erickson, Borg R. Nielson, John Wing, and Warren Dornfeld — and five former employees who brought separate suits against the defendant — Paul J. Tambornino, Eric T. Wick, Anthony M. Fiola, Ray J. Lindquist, and Teddy Webb. These cases have been consolidated for trial.

For the purpose of this proceeding, plaintiffs' counsel have waived their contention that the defendant was engaged in interstate commerce or in the production of goods for commerce prior to March 9, 1942; hence, these plaintiffs have abandoned so much of their claims as are for periods prior to that date. Defendant has agreed that all of the plaintiffs are covered by the Fair Labor Standards Act except Almon W. Durrin and Stanley Thiele. There are presented the following questions:

1. Were the plaintiffs Almon W. Durrin and Stanley Thiele exempt from the overtime provisions of the Fair Labor Standards Act by reason of their being employed in bona fide administrative capacities?

2. Were the remaining plaintiffs employed during the respective periods in question under a contract by which the weekly salaries paid to them were for a maximum of forty hours, or were the weekly salaries which were paid to them intended to compensate them for all hours worked during said periods without maximum limitation?

These questions will be discussed in the above order.

I.

The Federal Cartridge Corporation, and the Federal Cartridge Corporation doing business as Twin Cities Ordnance Plant (hereinafter referred to as the defendant), is a cost-plus-a-fixed-fee contractor with the United States Government for the manufacture of small arms ammunition. These plaintiffs were employed by the defendant in connection with the operation of this ordnance plant located near New Brighton, Minnesota. Durrin and Thiele were classified as administrative assistants. Their starting salary was $200 per month, but for the greater part of their employment they received $69.60 per week, which totaled over $300 per month. The duties of these two men were substantially the same except for a period of about three months when Durrin was placed in charge of the activities promulgated for the protection of the plant during possible air raids. They both were assistants to one Frank Hubbs, an assistant manager of defendants. In determining whether these two men were employed in a bona fide administrative capacity, reference should be made to the definition promulgated by the Administrator pursuant to the authority granted by the Act. The pertinent portions of the definition follow:

"Administrative. The term `employee employed in a bona fide * * * administrative * * * capacity' in Section 13 (a) (1) of the act shall mean any employee —

"(A) Who is compensated for his services on a salary or fee basis at a rate of not less than $200 per month (exclusive of board, lodging, or other facilities). and

"(B) (1) Who regularly and directly assists an employee employed in a bona fide executive or administrative capacity (as such terms are defined in these regulations), where such assistance is nonmanual in nature and requires the exercise of discretion and independent judgment; or

* * * * * *

"(3) Whose work involves the execution under only general supervision of special nonmanual assignments and tasks directly related to management policies or general business operations involving the exercise of discretion and independent judgment."

Reference may also be made to the "Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition." Under date of October 24, 1940, it appears that the recommendations made in the report were adopted by the Administrator. This report is helpful in that it tends to explain the reasons which prompted the definition of an administrative employee. For instance, on pages 4 and 5 of the report appears the following discussion of the terms "executive" and "administrative" employees:

"* * * While the usage of the two terms is so vague and so overlapping that there is no generally recognized and precise line of demarcation between them, it does no violence to the common understanding of the words to apply `executive' to the person who is a boss over men and to apply `administrative' to the person who establishes or affects or carries out policy but who has little or no authority over the specific actions of other individuals."

Then on page 27 appears certain discussion regarding other considerations which prompted the recommendation of the definition of an administrative employee:

"It will be noted that there are three types of employees included within the proposed exemption (subject to the salary qualification). The first type is the assistant to an executive or administrative employee. In modern industrial practice there has been a steady and increasing use of persons who assist an executive in the performance of his duties without themselves having executive authority. Typical titles of persons in this group are executive assistant to the president, confidential assistant, executive secretary, assistant to the general manager, and administrative assistant. It may be noted that such positions have counterparts in Government service.

"Generally speaking, such assistants are found in large establishments where the official assisted has duties of such scope and which require so much attention that the work of personal scrutiny, correspondence, and interviews must be delegated."

Furthermore, in another part of the report found on page 27 there appear the reasons for providing that the administrative employees must exercise discretion and independent judgment in the performance of their duties, and we are aided in determining what was intended by the inclusion of such requirement by reference to the following:

"* * * However, it is clear that without adequate safeguards the claim could be made that not only the executive secretary but also the special messenger, for example, is an assistant to the general manager. It is, therefore, specified in this subsection of the Regulations that the assistance `requires the exercise of discretion and independent judgment.' This in itself will assist in drawing a line between the stenographer whose task is primarily mechanical in nature and the true executive secretary who, although she may take some dictation and do some typing, is primarily employed because of her ability to distinguish between callers at the office and to carry out other special and important duties."

The testimony of Durrin and Thiele, as well as other evidence introduced, fully establishes that Mr. Hubbs was employed in an executive or administrative capacity within the meaning of the Act. Mr. Horn, President of the Federal Cartridge Corporation, refers to Mr. Hubbs as one of the "top men" of an organization which at one time had some twenty to twenty-five thousand employees. It is also undisputed that the assistance given Mr. Hubbs by Durrin and Thiele was nonmanual in character. Indeed, there can be no serious dispute that the evidence indisputably establishes, first, that Durrin and Thiele were compensated for their services on a salary basis at a rate of not less than $200 per month, and second, that they regularly and directly assisted an employee (Hubbs) employed in a bona fide executive or administrative capacity, as such terms are used in the regulations promulgated by the Administrator. Therefore, the only factual question which requires any discussion is whether the evidence establishes that the assistance rendered by these two men required the exercise of "discretion and independent judgment." A brief reference to some of the salient facts will indicate that the defendant has convincingly sustained the burden of proof in this regard.

Durrin was fifty-one years of age. He had been connected with the grain business in Minneapolis for many years. In his application for employment, he noted under the heading "List all types of work you have done and prefer to do," the following: "Auditing — Sales Department — Purchasing Department." And under the heading "For what position or kind of work do you apply," he wrote: "Purchase or Sales, Auditing."

Thiele had been manager of the wheatbuying department of one of the large milling companies in Minneapolis for many years. He was forty-four years of age. He had taken a two and one-half year premedic course at the University of Minnesota. In recounting the nature and responsibilities of his prior work, he stated in his employment application: "Executive nature — buying wheat and operating hedge. Giving instructions to wheat buyers and pit traders as to purchasing wheat and trading in futures as dictated by company's need for supplies and position on the market. Conferring with company officers as to policies in buying and hedging. Considerable discretionary powers."

It will be observed, therefore, that both of these men had been employed in responsible positions in the past, and while the administrative work at an ordnance plant differs from the character of work they had performed theretofore, their age and experience fully justified their new employer in classifying them as administrative assistants and clothing them with discretionary powers and duties which required the...