Snyder v. Wessner

• Decision Date: 29 June 1944
• Docket Number: Civ. 1069.
• Citation: 55 F. Supp. 971
• Parties: SNYDER v. WESSNER.
• Court: U.S. District Court — District of Minnesota

55 F. Supp. 971

SNYDER v. WESSNER.

Civ. 1069.

District Court, D. Minnesota, Fourth Division.

June 29, 1944.

Stanley V. Shanedling, of Minneapolis, Minn., for plaintiff.

Howard P. Quealy and Kelly & Mangan, all of Minneapolis, Minn., for defendant.

JOYCE, District Judge.

This is an action for overtime pay alleged to be due under the Fair Labor Standards Act of 1938, 52 Stat. 1060-1069, 29 U.S.C.A. §§ 201-219, and an additional amount as liquidated damages together with reasonable attorney's fees as provided in Section 16(b) of the Act, 29 U.S.C.A. § 216(b).

Defendant is engaged in the tailoring business, making men's suits and overcoats and both men's and women's uniforms to measure. The business is both wholesale and retail and is interstate in character. Plaintiff handled substantially all the coats that were manufactured and was concededly engaged in interstate commerce within the meaning of the Act. There are about forty employees. The entire factory is located in one large room but the manufacturing operations are divided into departments; e. g. the coat department, vest department, pants department, and cutting department, which operate more or less independently of each other. We are concerned here only with the coat department.

Plaintiff is a tailor and was employed by defendant in 1938 as a sleeve, collar, and shoulder "baster" in the coat department. He was paid on a piece-work basis and his earnings fluctuated as the business is seasonal in nature. On January 13, 1941, he became foreman of the coat department at an agreed salary of $50 a week. This amount was later increased to $55 and finally to $60. With this salary guarantee was coupled an arrangement whereby he received a bonus dependent upon the number of coats produced in the department in a week. Thus, during busy seasons especially, plaintiff's earnings exceeded his guaranteed salary, reaching a high of $78.25 for the week ending May 9, 1942. Plaintiff continued in his capacity as foreman until he left defendant's employ April 24, 1943. It is for this period that overtime compensation is sought. Defendant contends that as foreman plaintiff was an executive employee and therefore exempt from the provisions of the Fair Labor Standards Act.

There are between fifteen and eighteen employees in the coat department. It operates on what has been referred to as a "chain" operation; that is, on each garment a certain sequence of operations is necessary and each employee has his particular operation to perform. The garment moves from one employee's table or machine to the next until it is completed at the end of the "chain". Most of the employees work on a piece-work basis; that is, they are paid only for the work actually done. As a coat comes into the department a ticket is attached to it showing the operations to be performed on it. As each operation is completed, the operator removes the perforated section of the ticket for his particular operation. This shows that he has done the work and is the basis of his compensation. Other employees work on a straight hourly basis all or part of the time. Plaintiff was the only coat department employee on a salary. It also appears that there are many operations in the coat department for which there were no piece-work tickets and which were always compensated for on an hourly basis. An example of these is "marking try-ons", that is, marking the coat with chalk after it had been tried on the customer, and "busheling", or making alterations. These are ordinary tailoring operations. It is the nature of plaintiff's duties as foreman of this department that is the kernel of this dispute.

1. Section 13(a) of the Act, 29 U.S.C.A. § 213(a), provides in part: "The provisions of sections 206 and 207 of this title pertaining to minimum wages and maximum hours shall not apply with respect to (1) any employee employed in a bona fide executive, administrative, professional, or local retailing capacity, or in the capacity of outside salesman (as such terms are defined and delimited by regulations of the Administrator); * * *."

The pertinent regulations promulgated pursuant to the above section provide:

"Section 541.1—Executive.

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

"(A) whose primary duty consists of the management of the establishment in which he is employed or of a customarily recognized department or subdivision thereof, and

"(B) who customarily and regularly directs the work of other employees therein, and

"(C) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight, and

"(D) who customarily and regularly exercises discretionary powers, and

"(E) who is compensated for his services on a salary basis at not less than $30 per week (exclusive of board, lodging, or other facilities, and

"(F) whose hours of work of the same nature as that performed by non-exempt employees do not exceed 20 per cent of the number of hours worked in the work-week by the non-exempt employees under his direction; provided that this subsection (F) shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment." (Title 29 Code of Federal Regulations, 1940 Supp., Ch. 5, Section 541.1)

It has been said of these regulations that they "have the force of law as much as though they were written in the statute." Helliwell v. Haberman, 2 Cir., 140 F.2d 833, 834. And: "they must be regarded not as setting up criteria which should be given consideration in determining whether an employee falls within the exempted employments, but as defining and delimiting such phrases and as setting up absolute criteria through which the question of exemption must be determined." (Italics supplied.) Walling v. Yeakley, 10 Cir., 140 F.2d 830, 832.

Exemptions from the Act are to be strictly construed and one claiming their benefit must bring his case within both their letter and spirit. Schmidtke v. Conesa, 1 Cir., 141 F.2d 634; Miller Hatcheries v. Boyer, 8 Cir., 131 F.2d 283. This is particularly true when the exemption claimed is for an employee engaged in interstate commerce. Ralph Knight, Inc., v. Mantel, 8 Cir., 135 F.2d 514.

The regulations above quoted prescribe six conditions, in the conjunctive, which must all be fulfilled before an employer can claim an exemption on the ground that his employee is an executive. Helliwell v. Haberman, supra. We need here be concerned only with that part of Section 541.1 (F) that provides: "whose hours of work of the same nature as that performed by nonexempt employees do not exceed 20 per cent of the number of hours worked in the work week by the nonexempt employees under his direction."

The validity of this subsection of the regulations is upheld and the reasons leading to its adoption are discussed in Ralph Knight, Inc., v. Mantel, 8 Cir., 135 F.2d 514. There is some uncertainty as to what is meant by "number of hours worked in the work week by the nonexempt employees" as a base to be used in calculating the 20 per cent. In George Lawley & Son Corp. v. South, 1 Cir., 140 F.2d 439, it is suggested that what is meant is the actual number of hours worked by individual employees in a particular work week. But such exactitude does not seem to be required. The previous regulation (which 541.1 (F) supplanted) read: "who does no substantial amount of work of the same nature as that performed by nonexempt employees". The vagueness of this language apparently caused uncertainty and, after holding hearings, the administrator promulgated the present regulation. It appears that the 20 per cent rule was an attempt to restate and clarify the term "substantial amount." Ralph Knight, Inc., v. Mantel, supra. See The Report and Recommendations of the Presiding Officer at Hearing Preliminary to Redefinition, October 24, 1940. Thus, the standard work week of the nonexempt employee is the base to be used in calculating the 20 per cent. If that is approximately forty hours, an "executive" can work up to eight hours per week, but no longer, at nonexempt work without losing his exemption. If the standard work week is thirty or fifty hours, the allowance would be six and ten hours respectively. See Report and Recommendations, supra.

In the case at bar the normal standard work week was forty hours. Each year there were two busy seasons, approximately from March 15 to July 4, and from September 1 to January 1. For these periods I find the standard work week, for exemption purposes, to have been 44 hours. Applying the percentage rule strictly and as an "absolute criterion", the determinative fact is whether plaintiff, after he became foreman, did nonexempt work more than eight hours a week during the normal season or more than 8.8 hours during the busy seasons.

Plaintiff testified that after becoming foreman he continued to do tailoring work as he had before with the added duties of opening the shop in the morning and staying until the last employee had left. In the morning he would "line up" the work so that the other employees would have enough to do. He testified that this would take not longer than fifteen to twenty minutes a day, and often work was left over from the previous day. If one of the operators got behind with his work, plaintiff would "pitch in" and help as otherwise the next operator in the "chain" would soon be out of work. Plaintiff also testified that most of the operators were skilled and needed little supervision during the day. The "chain" system had been used long before he became foreman and was semiautomatic. Often, when an operator was finished he would throw the coat onto the table of the next operator, but when it was necessary to take it to the far...