Robertson v. Alaska Juneau Gold Mining Co.

• Decision Date: 28 May 1945
• Docket Number: No. 22658-S.,22658-S.
• Citation: 61 F. Supp. 265
• Parties: ROBERTSON et al. v. ALASKA JUNEAU GOLD MINING CO. et al.
• Court: U.S. District Court — Northern District of California

61 F. Supp. 265

ROBERTSON et al. v. ALASKA JUNEAU GOLD MINING CO. et al.

No. 22658-S.

District Court, N. D. California, S. D.

May 28, 1945.

Gladstein, Grossman, Sawyer & Edises, of San Francisco, Cal., for plaintiff.

William E. Colby, of San Francisco, Cal., for defendant.

ST. SURE, District Judge.

Plaintiff sues on behalf of himself and other former employees of defendant to recover overtime payments and liquidated damages alleged by plaintiff to be due under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq. The facts, except as hereinafter specified, are undisputed. Defendant operated a large low grade hard rock gold mine at Juneau, Alaska, for about seventeen years. The rock yielded less than $1 a ton, so that it was necessary for defendant to keep operating costs low. It suspended operations in 1944 due to operational losses over a period of approximately a year. The general superintendent of the company testified that the employees were paid wages higher than those paid by any other large hard rock mine anywhere.

When the Fair Labor Standards Act became effective on October 24, 1938, wages formerly paid on the basis of an eight hour day were adjusted to conform to the Act's provision for overtime for hours worked in excess of 44 hours a week, by reducing the hourly rate of pay so that, when added to the overtime rate of pay, or time and a half, it resulted in the employees receiving the same or slightly more wages than they were previously paid. Wages were computed on a weekly basis. This method of computation was held to be proper in Walling v. A. H. Belo Corp., 316 U.S. 624, 630, 62 S.Ct. 1223, 86 L.Ed. 1716. In November of 1938, the wages were increased a few cents to compensate the employees for loss of time due to enforced lay-offs. In January, 1939, after an election, the CIO was designated as the bargaining agent for the employees. In May of 1939 the company entered into its first formal agreement with the union, continuing in effect the same method of payment, with the same rates of pay as were fixed in November of 1938. The agreement provided for renegotiation of its terms upon thirty days' notice. Under the Weekly plan of payment a man who laid off for a day lost overtime for the week to the extent of his hours of absence. Defendant contends that for this reason the union notified the company that it wished to renegotiate this part of the contract, and demanded that the split-day plan of payment be inaugurated, in place of the weekly method of calculation then in force. Mr. Faulkner, the attorney for the company, conferred in Washington with Mr. Andrews, the then Administrator of the Wage and Hour Division, with regard to the legality of such a plan. The Administrator stated publicly that such a plan was legal and authorized. Plaintiff contends that the plan "was the company's brainchild, not the creature of the union." However, the contention of defendant is supported by the fact that the split-day plan resulted in an increased overall cost to the company, and by the following testimony on the part of plaintiff:

"Mr. Colby: Did you know by any means afterwards or before the union had requested the company to put this split-day plan into operation? A. I heard it discussed probably many times, but it was — the request was made before I knew it was made. * * *

"The Court: You knew there was a demand made? A. Yes."

Defendant's contention that the demand for the change was made by the union is further supported by the recital in the ensuing agreement of October 5, 1939, between the company and the union: "the union has submitted to the company a proposal for computation of pay on the basis of a seven hour day with time and a half for all in excess of said seven hours and the wage scale or schedule based thereon, which proposal the company has accepted." The agreement provided for a daily rate of pay at seven hours regular time and one hour overtime, based on a 42 hour week. The effect of the new wage scale was that an employee who worked a full week received the same amount or slightly more than he received under the agreement of May 2, 1939, whereas a man who laid off during the week received substantially more than he would have received under the weekly method of computing overtime, because he accumulated overtime by the day rather than by the week. Thus the company paid a greater total amount in wages than it had paid under the original plan.

In May of 1940 a new agreement was entered into, altering the basis of calculating the daily rate to 6.6 hours regular time and 1.4 hours overtime, to meet the provision in the Act reducing working hours from 42 to 40 hours per week as of October 24, 1940. This resulted in a slight increase to the employees because of the fractional split of 6.6 hours regular time and 1.4 hours overtime, rather than of 6 2/3 and 1 1/3 .

In December of 1940 the Wage and Hour Division notified the company that the split-day plan of computing wages was a violation of the Act, and threatened to sue the company in West Virginia, the state of its incorporation. The overtime which the Administrator claimed was due was computed by adding regular pay and overtime pay for the split day and adding additional time and a half for the last eight hours of the week. A stipulated judgment was entered in this court (Fleming v. Alaska...