Shultz v. Wheaton Glass Co.

• Decision Date: 09 November 1970
• Docket Number: Civ. No. 53-66.
• Parties: George P. SHULTZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. WHEATON GLASS CO., a corporation, Defendant.
• Court: U.S. District Court — District of New Jersey

319 F. Supp. 229

George P. SHULTZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. WHEATON GLASS CO., a corporation, Defendant.

Civ. No. 53-66.

United States District Court, D. New Jersey.

November 9, 1970.

Bessie Margolin, Associate Sol., Francis V. La Ruffa, Regional Sol. (Peter G. Nash, Sol., and Oliver M. Cooper, Counsel for Trial Litigation), Washington, D. C., for plaintiff.

Joseph B. Kauffman, Atlantic City, N. J., Bruce W. Kauffman, David Pittinsky, Dilworth, Paxson, Kalish, Kohn & Levy, Marcus Manoff, Philadelphia, Pa., of counsel for defendant.

OPINION

COHEN, District Judge:

This matter is now before the Court upon the certified judgment of the United States Court of Appeals for the Third Circuit,¹ directing entry of an appropriate judgment in favor of the plaintiff, George P. Schultz, Secretary of the United States Department of Labor.

Plaintiff's attorneys submitted a proposed form of judgment which embodies the relief initially demanded in the complaint filed almost five years ago on January 18, 1966. In pertinent part, the proposed judgment affirmatively enjoins the defendant, Wheaton Glass Co., from withholding future wages of female "selector-packers" which are not equal to the wage rate paid to male "selector-packer-stackers";² it orders that all back wages determined to be due these females be paid to the plaintiff for their benefit, dating from March 1, 1965, the date on which the Equal Pay Act of 1963, 29 U.S.C. § 206(d),³ became effective, with respect to Wheaton; and further, it provides that interest shall be awarded upon such back pay at the legal rate up to the date the said wages are in fact equalized.

In opposing the Secretary's proposed judgment, Wheaton strenuously resists both its form and substance. Wheaton offers, instead, its own form of judgment which in substance provides for the equalization of wage rates in the classifications of "selector-packers" and "selector-packers-stackers" from May 18, 1970, the date on which certiorari was denied by the United States Supreme Court, rather than March 1, 1965, as claimed by the Secretary; it provides also, that all employees in both these job classifications be paid the same wage currently paid to the males, if such employees perform all duties assigned to them by Wheaton in a non-discriminatory manner. Wheaton's proposed judgment is silent with respect to interest.

Contemporaneously with the submission of the proposed judgments, Wheaton moved for an order dismissing that portion of the Secretary's action which, under § 217 of the Fair Labor Standards Act, seeks an award of back wages on behalf of the female employees. In support of this motion, Wheaton urges that this Court lacks subject matter jurisdiction⁴ to grant such relief when, as here, the existence of a "novel question of law" forecloses under § 216 (c) a recovery of back wages in instances where the law is not "fully settled." And, contends Wheaton, inasmuch as the Secretary succeeded under § 217 to the right of action of the employee, he is bound by the restriction of the "novel question of law" provision contained in § 216. This is so, continues the argument, because §§ 216 and 217 must be read in pari materia. 29 U.S.C. § 216(c), which authorizes the Secretary upon the filing of a written request by any employee claiming unpaid minimum wages or unpaid overtime (back pay due for a violation of the Equal Pay Act is treated as unpaid minimum wages) to bring an action in any court of competent jurisdiction to recover the amount of such back pay, contains an express jurisdictional limitation:

"Provided, that this authority to sue shall not be used by the Secretary of Labor in any case involving an issue of law which has not been settled finally by the courts, and in any such case no court shall have jurisdiction over such action or proceeding initiated or brought by the Secretary of Labor if it does involve any issue of law not so finally settled."

The enforcement provision of 29 U.S.C. § 217 contains no such jurisdictional limitation:

"The district courts * * * shall have jurisdiction, for cause shown, to restrain violations of section 215 of this title, including in case of violations of section 215(a) (2) of this title the restraint of any withholding of payment of minimum wages or overtime compensation found by the court to be due employees * * *"⁵

Under this latter provision, the Secretary no longer requires prior written authorization or consent from an employee on whose behalf he brings suit. Under this enforcement provision he is acting in the public interest. Wirtz v. Novinger's, 261 F.Supp. 698 (M.D.Pa.1966).

A careful study of the Act reveals that Congress, in furtherance of the paramount public welfare, regulated the labor market by legislative enactment (FLSA). Mindful of its avowed purpose in preventing deleterious effects upon the national economy caused by discriminate wage scales, Congress enacted §§ 16 and 17 of the Act (29 U.S.C. §§ 216, 217), thus affording protection to employees by providing them with a right of action for the recoupment of back wages illegally withheld from them by their employers. Congress was well aware that, in many instances, employees were reluctant to bring direct wage and hour actions against their employers for fear of subsequent retaliation. Consequently, after much experience with the problem, in 1961 Congress amended the Act to empower the Secretary of Labor to both enforce compliance with the law and to recover employees' back wages unlawfully withheld. Prior to the 1961 Amendment, jurisdiction of the District Courts was confined by the 1949 restriction solely to the restraint of violations of wage and hour rights. By the Amendment in 1961, the following phrase was added to § 17:

"including in the case of violations of section 15(a) (2) the restraint of any withholding of payment of minimum wages or overtime compensation found by the court to be due to employees under this Act (except sums which employees are barred from recovering, at the time of the commencement of the action to restrain the violations, by virtue of the provisions of section 6 of the Portal-to-Portal Act of 1947)." (Parentheses in the Amendment.)

The legislative history of the 1961 Amendment demonstrates a broad Congressional design to restore to the District Courts their full equity powers. In keeping with this goal, the above 1949 restriction on jurisdiction was repealed. This broader jurisdictional power was not merely to enforce an employee's private, individual right; rather, it was more expansive and expressly designed to "correct a continuing offense against the public interest." See Senate Report No. 145, 87th Cong. 1st Sess., 1961 U.S. Code Cong. & Admin. News, pp. 1620-1658. Wirtz v. Jones, 340 F.2d 901 (5 Cir. 1965); Mitchell v. De Mario Jewelry, 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960). See also, Senate Report No. 1744, 86th Cong.2d Sess. pp. 38 and 39, which confirms the broader purpose sought to be accomplished and resulted in the passage of the 1961 Amendment:

"The proposal 1961 Amendment would accomplish this objective by revising section 17 of the Act, which gives the courts express jurisdiction to restrain violations of the Act. The proposal would expressly include within this jurisdiction consonant with the general equity jurisdiction of the courts, authority to restrain any withholding of payment by employers of the amounts of minimum wages or overtime compensation required by the Act which the courts find to be due and owing such employees.

"The proposal would relieve the courts and employers from multiplicity of suits based on the same violations of the Act by an employer. This is accomplished by authorizing adjudication in a single action for injunction by the Secretary of all substantive issues of coverage, exemption, and violation and by enabling the courts to grant the remedies necessary to extinguish all matters in controversy." (Emphasis supplied.)

It would be a hollow victory, indeed, for the Secretary to litigate with an offending employer over a five year period, only to secure his future compliance. If that were the sole purpose of the legislation, as contended by Wheaton, then an unjust enrichment of the offending employer by foreclosing the Secretary's recovery of improperly withheld wages would result.

One of the very objects of the Amendment was to settle all matters in controversy in one proceeding, thereby avoiding a multiplicity of suits based upon the same violations of the Act. Senate Report No. 1744, supra. The 1961 Senate Report, No. 145 supra, reenforces this underlying theme. Thus, it was not the sole or restricted purpose of the 1961 Amendment, as argued by Wheaton, merely to substitute the Secretary of Labor for an employee desirous of litigating his Section 16(c) rights. Were it otherwise, Congress would only have had to amend Section 16(c) to such effect. Instead, it very carefully amended Section 16(b) and Section 17, thereby obviating the necessity for an employee's request of the Secretary to seek vindication of his individual Section 15 rights and concomitantly conferred upon the Courts full equity powers to grant the Secretary complete relief in one proceeding. That the Secretary has a right to recover back wages under Section 17 is confirmed by a reading of the case law. Wirtz v. Jones, 340 F.2d 901 (5 Cir. 1965). Other courts have adopted the excellent analysis and discussion of the history of Section 17 in Jones. See: Wirtz v. Alapaha Yellow Pine Products, Inc., 217 F.Supp. 465 (M.D.Ga.1963); Wirtz v. Robert E. Bob Adair, Inc., 224 F.Supp. 750 (W.D.Ark.1963); Wirtz v. Novinger's Inc., supra; Wirtz v. Martin, 17 WH. Cases 609 (M.D.Pa.1967) not officially reported, and Swann Oil Co., 18 WH. Cases 672 (E.D.Pa.1968), not officially reported. Compare: Wirtz v. W. G. Lockhart Construction Co., 230 F. Supp. 823, 829 (N.D.Ohio 1964) accepting the Jones...