Tobin v. Kansas Milling Co.

• Decision Date: 22 February 1952
• Docket Number: No. 4329.,4329.
• Citation: 195 F.2d 282
• Parties: TOBIN v. KANSAS MILLING CO.
• Court: U.S. Court of Appeals — Tenth Circuit

195 F.2d 282 (1952)

TOBIN v. KANSAS MILLING CO.

No. 4329.

United States Court of Appeals Tenth Circuit.

February 22, 1952.

Joseph D. Mladinov, Atty., U. S. Dept. of Labor, Washington, D. C. (William S. Tyson, Solicitor, U. S. Dept. of Labor, Bessie Margolin, Asst. Solicitor, U. S. Dept. of Labor, William A. Lowe, Atty., U. S. Dept. of Labor, all of Washington, D.C., and Francis M. Cook, Regional Atty., U. S. Dept. of Labor, Kansas City, Mo., on the brief), for appellant.

Dale M. Stucky, Wichita, Kan. (Howard T. Fleeson, Homer V. Gooing, Wayne Coulson, Paul R. Kitch and Donald R. Newkirk, all of Wichita, Kan., on the brief), for appellee.

Before PHILLIPS, Chief Judge, and HUXMAN and MURRAH, Circuit Judges.

PHILLIPS, Chief Judge.

W. R. McComb, Administrator of the Wage and Hour Division of the United States Department of Labor, brought this action against the Kansas Milling Company¹ seeking a judgment enjoining the Milling Company from violating the provisions of § 15(a)(1), (2), and (5) of the Fair Labor Standards Act of 1938,² 52 Stat. 1060, 29 U.S.C.A. §§ 201 et seq. The complaint was filed April 28, 1949. The case came on for trial March 7, 1950.

The Milling Company is engaged in the operation of an elevator and flour mill at Cherryvale, Kansas, where it purchases and stores wheat and manufactures flour and feed. It also operates like plants at other points in Kansas. The Cherryvale plant has an elevator department, a flour mill department, and a warehouse department. The elevator department and the flour mill department are distinct and separate operating departments. The Milling Company employs approximately 26 employees at its Cherryvale plant, among whom are an elevator foreman and three second millers. At the commencement of the trial, it was stipulated that the elevator foreman and the three second millers were engaged in the production of goods for commerce and that "during the period from beginning in December, 1946, and particularly to December, 1948," the three second millers and the elevator foreman worked in certain weeks in excess of 40 hours and in certain other weeks less than 40 hours, and that they were compensated on a monthly salary, which was the same whether they worked more or less than 40 hours. There was no proof that the number of hours worked weekly by such employees after December, 1948, was in excess of 40 hours. Following the stipulation, the Administrator rested.

The Administrator promulgated regulations, effective October 24, 1940, defining the term "employee employed in a bona fide executive * * * capacity" in § 13(a) of the Act. The provisions of such regulations here material read as follows:

"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 nonexempt employees do not exceed 20 per cent of the number of hours worked in the workweek by the nonexempt employees under his direction: Provided, That this paragraph shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment."

Thereafter, the Administrator promulgated amended regulations, effective January 25, 1950, defining the term "employee employed in a bona fide executive * * * capacity." The provisions of the amended regulations which changed the former regulation and are here material read as follows:

"(a) Whose primary duty consists of the management of the enterprise in which he is employed or of a customarily recognized department or subdivision thereof; and

"(b) Who customarily and regularly directs the work of two or more other employees therein; and

* * * * * *

"(e) Who does not devote more than 20 per cent to his hours worked in the workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (a) through (d) of this section: Provided, That this paragraph shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment, or who owns at least a 20-percent interest in the enterprise in which he is employed; and

"(f) Who is compensated for his services on a salary basis at a rate of not less than $55 per week (or $30 per week if employed in Puerto Rico or the Virgin Islands) exclusive of board, lodging, or other facilities:

"Provided, That an employee who is compensated on a salary basis at a rate of not less than $100 per week (exclusive of board, lodging, or other facilities), and whose primary duty consists of the management of the enterprise in which he is employed or of a customarily recognized department or subdivision thereof, and includes the customary and regular direction of the work of two or more other employees therein, shall be deemed to meet all of the requirements of this section."

The Milling Company introduced evidence undertaking to establish that the elevator foreman and the three second millers were employed in a bona fide executive capacity and were, therefore, exempt under § 13(a)(1) of the Act.

The trial court made findings of fact which brought the elevator foreman and the three second millers within the term "bona fide executive * * * capacity" as defined in both regulations, and entered a judgment for the Milling Company. Maurice J. Tobin, Secretary of Labor, was substituted as party plaintiff and has appealed from such judgment.

The appeal involves only the elevator foreman, Archie Hatcher, and one second miller, Fred Honeywell, and is predicated on the contention that as to those two employees the findings are clearly erroneous.

The elevator department has a wheat storage capacity of 150,000 bushels. Wheat is delivered to the elevator by railroad box car, motor truck, and wagon. Wheat delivered by box car is unloaded into a dump by employees called shovelers. Wheat arriving by motor truck is unloaded at a truck dump and by wagon at a wagon dump. After the wheat is unloaded, it is elevated to the elevator by machinery and is binned according to various characteristics of the wheat. Wheat in the elevator is maintained in proper condition, fumigated, turned, aerated, separated, and mixed for the mill. Records are kept and weekly inventories are made of the amount and qualities of wheat in the elevator.

Hatcher, as elevator foreman, is in complete charge of the maintenance and operation of the elevator department at the Cherryvale plant. He participates in management conferences and he customarily and regularly exercises discretionary powers in the performance of his duties. He supervises an elaborate operation requiring skill, knowledge, experience, and judgment. He is qualified for the position he holds. He performs a negligible amount of manual labor, and, with minor exceptions, does not perform any service similar to that performed by employees under him. He has power to hire and discharge employees and regularly exercises such power. After the wheat is unloaded at the elevator, Hatcher, in the exercise of judgment, determines its moisture, protein, and fragment content, its baking quality, and other important characteristics. During the periods when wheat is moving to the elevator, it is ordinarily operated 24 hours a day. Two shovelers are employed during each eight hour shift, and during the day shift two additional shovelers are employed to handle the clean up, the sweeping, and the shoveling of screenings. During periods, which in the aggregate cover several months, when a small amount of wheat is being received at the elevator, only one shoveler is employed. The amount of wheat received at the elevator varies, depending on the demand for flour and the amount of wheat in storage. While a large amount of wheat is usually received at harvest time, heavy movements also occur at other times. Hatcher customarily and regularly directs the work of all the elevator employees. During the period when it was stipulated that Hatcher worked in excess of 40 hours per week, he received a salary of $220 per month. At the time of the trial he was receiving a larger salary.

Honeywell was employed by the Milling Company in January, 1948, as an apprentice second miller for "on the job training" under the Act of June 22, 1944, as amended, 58 Stat. 284, 287, 38 U.S.C.A. Pocket Part C. 12, part VIII. Prior to April 28, 1949, he had acquired sufficient training and experience to perform the duties and discharge the responsibilities of a second miller. On occasions he had complete supervision of the operation of the flour mill at night and was qualified to discharge that responsibility, but he ordinarily worked as a daytime second miller. In the performance of his duties he exercised discretionary powers. He had power to hire and discharge employees working under him. He actively managed the flour mill during his working shift. He supervised and directed the work of two employees who worked under him, a maintenance man and a sweeper-oiler. The duties of the sweeper-oiler were to oil the machinery, do sweeping and perform similar physical tasks. The duty of the maintenance man was to perform major repair work.

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