Reeves v. International Tel. and Tel. Corp.

Citation616 F.2d 1342
Decision Date15 May 1980
Docket NumberNo. 78-1286,78-1286
Parties24 Wage & Hour Cas. (BN 735, 89 Lab.Cas. P 33,912 Hewett M. REEVES, Plaintiff-Appellant Cross-Appellee, v. INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, Defendant-Appellee Cross-Appellant, Ray Marshall, Secretary of Labor, United States Department of Labor,Intervenor-Appellant Cross-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Leroy H. Scott, Jr., Shreveport, La., for plaintiff-appellant, cross-appellee.

Donald S. Shire, Associate Sol., U. S. Dept. of Labor, Mary Ann Bernard, Washington, D. C., for intervenor-appellant cross-appellee.

Bowling, Brackhahn & Jackson, Memphis, Tenn., Cook, Clark, Egan, Yancey & King, Sidney E. Cook, Dewey Corley, Shreveport, La., Gordon E. Jackson, Michael R. Forman, Memphis, Tenn., for defendant-appellee cross-appellant.

Appeals from the United States District Court for the Western District of Louisiana.

Before GOLDBERG, FRANK M. JOHNSON, Jr. and HATCHETT, Circuit Judges.

HATCHETT, Circuit Judge.

An employee, Hewett M. Reeves, instituted this action in September, 1967, to recover unpaid wages and liquidated damages allegedly due him from International Telephone and Telegraph Corporation (IT&T) under the Fair Labor Standards Act (Act), 29 U.S.C. §§ 201-219. The Secretary of Labor (Secretary) subsequently intervened under section 11(a) and section 17 of the Act. By appeal and cross-appeal, the parties seek review of the district court's judgment ordering reinstatement and awarding $96,245.74 to claimant for unpaid wages, liquidated damages, back pay and attorney's fees. We affirm the judgment on liability and reinstatement, but increase the damages awarded for back pay and attorney's fees.


Nature of Employment.

In May, 1965, Reeves was employed by IT&T as a microwave field engineer at a compensation rate of $8,400 per year. 1 In that capacity, he traveled to contract sites in remote areas of the world installing and testing microwave equipment. In conducting his duties, Reeves followed prescribed procedures and standards in the utilization of complex measuring devices to ensure that equipment installed performed within a predetermined range of tolerance. It was Reeves's responsibility, as an employee whose primary duties were performed outside the supervisory presence of his employer, to maintain and report hourly work records. These records were maintained primarily for billing purposes and, as claimant contends, to form the basis for an accurate calculation of compensable overtime hours.

During his period of employment, Reeves regularly lodged complaints with supervisors and colleagues over what he considered to be a failure on IT&T's part to adequately compensate him for overtime hours reported. On August 28, 1967, Reeves formalized his grievance by filing a complaint with the Wage and Hour Division of the Department of Labor. The following day, August 29, 1967, Reeves was terminated from his employment at IT&T.

Procedural History.

Reeves instituted this action with his timely complaint in federal court charging IT&T with unlawful discharge under section 15(a)(3) 2 and requesting unpaid wages and liquidated damages computed from an estimated average workweek of approximately 75 hours. Claiming that Reeves was an exempt employee working for the company in a bona fide executive, administrative, or professional capacity as described in 29 U.S.C. § 213(a)(1), 3 IT&T denied the charges.

On April 27, 1973, the district court ruled against IT&T on the exemption question and appointed a United States Magistrate to take evidence and make recommendations on the quantum issue. Reeves v. International Telephone & Telegraph, 357 F.Supp. 295 (W.D.La.1973). In the opening hearings before the magistrate, IT&T moved to dismiss Reeves's action under section 15(a)(3) on the grounds that the court lacked jurisdiction under the Act to entertain a private civil action to recover damages for discharge under that provision. In written support of its motion, IT&T maintained that only the Secretary of Labor was authorized under the Act to seek relief. Hearings before the magistrate were stayed, pending a ruling by the district court on the motion to dismiss. That ruling came on July 26, 1973, when the district court denied the motion "as having been filed too late and having further delayed the trial of this case." Four weeks later, the Secretary petitioned for intervention under section 11(a) of the Act. The Secretary filed with the petition a complaint seeking equitable redress on behalf of Reeves for employer violations under section 15(a)(3). The district court granted the motion for intervention, and quantum hearings before the magistrate were reinstituted.

Magistrate's Report and District Court Judgment.

In his quantum report filed on September 9, 1977, the magistrate concluded that IT&T unlawfully discharged Reeves and willfully withheld overtime wages during the period of his employment. Accordingly, he recommended a judgment immediately reinstating Reeves and awarding him appropriate back pay, unpaid wages and attorney's fees. Calculating the award based on a 60 hour workweek at an average straight time hourly wage of $4.31 per hour, the magistrate determined that Reeves was entitled to $22,164.28 as unpaid wages and liquidated damages, and $6,134.48 back pay and diminished earnings. 4 An additional $25,000 for attorney's fees brought the magistrate's total recommended award to $53,298.76. Reimbursed expenses were disallowed.

The district court increased the back pay award to reflect the amount owed for years 1967 through 1974 ($39,081.46) 5 and increased the attorney's fees to $35,000. In all other respects the magistrate's recommendations were adopted. Immediate reinstatement was ordered and damages for Reeves were assessed at $96,245.74. 6 Each party finds error in this judgment.


IT&T contends that the district court erred in (1) asserting jurisdiction under the Act; (2) adjudicating Reeves's non-exempt status; (3) finding an unlawful discharge; (4) calculating damages and attorney's fees; and (5) excluding key defense witnesses. Reeves contests the adequacy of damages awarded on three levels: (a) quantum of attorney's fees; (b) denial of reimbursement expenses; and (c) computation based on a 60 hour workweek. The Secretary defends jurisdiction and urges a "make whole" back pay award calculated on the basis of a higher projected income than that utilized by the district court. We will address the issues in the sequence provided by IT&T, discussing the Secretary's and Reeves's claims as they logically present themselves.


IT&T rests its jurisdictional challenge on the following argument: 7

(1) In 1967, when the claimant instituted this suit, the Act did not authorize a private right of action for damages for the wrongful discharge of an employee. Standing to raise the section 15(a)(3) violation rested solely with the Secretary of Labor, who did not file suit at that time. Powell v. Washington Post Co., 267 F.2d 651 (D.C.Cir.1959).

(2) From the earliest pre-trial stipulation in 1969, the employer has challenged the court's jurisdiction over the unlawful discharge claim. Before April, 1973, the district court limited the scope of his judicial inquiry to a resolution of the exemption issue. For this reason, the employee's challenges to jurisdiction were not lodged in a formal motion to dismiss until after that date. The district court erred in not dismissing the unlawful discharge action in response to the challenges set forth in the pre-trial stipulations and later in the motion to dismiss.

(3) The Secretary first attempted to intervene in August, 1973, four weeks after IT&T moved to dismiss the action and nearly six years after the original complaint was filed. The Secretary was barred from intervening at this time by virtue of the statute of limitations governing actions under section 17 of the Act. Section 17 adopts as a limitation on injunctive proceedings the statutory time bar imposed in section 6 of the Portal-to-Portal Act, 29 U.S.C. §§ 251-262. That section limits Secretarial enforcement to within two years after the cause of action accrued, or within three years if the violation was willful. In either case, the Secretary's six year delay in proceeding to enforce the Act was time barred by statute. Even discounting the statute's effect, the Secretary was prohibited by the doctrine of laches from intervening some six years after suit was filed.

(4) Because intervention was untimely, the Secretary's action could not create an independent basis for jurisdiction over the unlawful discharge claim.

(5) With no private right of action available and with no legitimate basis for Secretarial intervention, the district court was without jurisdiction and should have dismissed the unlawful discharge claim in 1973.

(6) The district court's wrongful failure to dismiss in 1973 cannot form the basis for jurisdiction in 1977. Congressional creation of a private right of action in 1977 for recovery under section 15(a)(3) cannot form the basis for jurisdiction. The proposition that a court must apply whatever law is in effect at the time a decision is rendered is inapplicable here. Although the decision was rendered after the amendment creating the private right of action, a correct ruling in 1973 would have forever foreclosed the unlawful discharge claim. The claimant should not be rewarded for the court's erroneous ruling in 1973, which kept viable an otherwise illegitimate claim.

While IT&T's argument is an appealing one, its analysis does not withstand close scrutiny. First, the record does not support IT&T's contention that jurisdiction over the unlawful discharge was challenged in pre-trial stipulations from 1969 to 1971. 8 The only basis for IT&T's position is the general claim appearing in each stipulation that: "plaintiff has no remedy for his discharge." We do not view...

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