U.S. v. Barnette, s. 76-1890

• Decision Date: 31 January 1977
• Docket Number: 76-2222,Nos. 76-1890,s. 76-1890
• Citation: 546 F.2d 187
• Parties: 23 Wage & Hour Cas. (BN 51, 80 Lab.Cas. P 33,476 UNITED STATES of America, Plaintiff-Appellee, v. Jim S. BARNETTE, Defendant-Appellant. James H. HOGUE, Acting Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. TROY MOTORS, INC., a corporation, et al., Defendants, Jim S. Barnette, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 187

546 F.2d 187

23 Wage & Hour Cas. (BN 51, 80 Lab.Cas. P 33,476

UNITED STATES of America, Plaintiff-Appellee, v. Jim S. BARNETTE, Defendant-Appellant.

James H. HOGUE, Acting Secretary of Labor, United States

Department of Labor, Plaintiff-Appellee, v. TROY MOTORS, INC., a corporation, et al., Defendants, Jim S. Barnette, Defendant-Appellant.

Nos. 76-1890, 76-2222.

United States Court of Appeals Fifth Circuit.

Jan. 31, 1977.

Rehearing Denied March 25, 1977.

See 549 F.2d 398.

Al J. Sansone, Montgomery, Ala., for defendant-appellant.

Ira DeMent, U. S. Atty., Kenneth E. Vines, Asst. U. S. Atty., Montgomery, Ala., for plaintiff-appellee in No. 76-1890.

Norman H. Winston, Assoc., Reg. Solicitor, U. S. Dept. of Labor, Birmingham, Ala., William J. Kilberg, Sol. of Labor, Carin Ann Clauss, Jacob I. Karro, Ovida C. Prevost, Sandy McCormack, Atty., U. S. Dept. of Labor, Washington, D. C., for plaintiff-appellee in No. 76-2222.

Appeals from the United States District Court for the Middle District of Alabama.

Before TUTTLE, CLARK and RONEY, Circuit Judges.

TUTTLE, Circuit Judge:

These are appeals from conviction of appellant, Barnette, of civil and criminal contempt in a case arising from a consent order enjoining violation by him and his Troy Motors, Inc., a corporation, of the terms of the wage and hour laws. The specific charge of which appellant was found guilty is that after the corporation had made payments to some 20 employees under the consent order ¹ Barnette "wilfully violated the prohibitions of the judgment by coercing many of the employees to whom back wages were found due by the court to make partial kickback of back wages previously paid by defendants to said employees pursuant to the said court order."

The trial court dismissed both civil and criminal complaints against the corporation. There can be no doubt about the sufficiency of the evidence to sustain the court's determination that Barnette was guilty of civil contempt as will be demonstrated by the discussion hereafter with respect to the criminal case. We also conclude that under the standard that the Government must prove guilt of criminal contempt beyond a reasonable doubt, United States of America v. Alek Fidanian, 465 F.2d 755 (5th Cir. 1972), Barnette's conviction in the criminal contempt case must also be affirmed.

It is undisputed that five of the employees of Troy Motors, Inc., a corporation wholly-owned by Barnette, received payments from the Secretary of Labor resulting from the consent decree which ordered the company to make payments as back wages due to 20 of its employees in the total amount of $7,759.54 and that of that amount five of the employees had refunded to Barnette the sum of $1,783.72. Appellant bases his claim of the lack of sufficient evidence to permit a finding of guilt primarily on the fact that each of the five persons gave testimony at the trial which, if totally believed by the trial court, would have supported a finding that all of the "kickbacks" were voluntary. On the other hand, it is equally clear that testimony given by at least four out of the five, and possibly the fifth as well, would support a finding that there was some element of coercion or threat as the motivating factor which resulted in these employees paying back, generally, about two-thirds of the amount each of them received for unpaid wages under the consent decree. We need not consider whether even a totally voluntary repayment by these employees and its acceptance by Barnette would have been sufficient to sustain a criminal charge. It certainly would have been sufficient to sustain the charge of civil contempt under the long line of cases which hold uniformly that employees cannot, by their consent exculpate their employer, from complying strictly with the requirements of the wage and hour laws, Brooklyn Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945) and see Mayhew's Super Liquor Stores, Inc. v. Hodgson, 464 F.2d 1196 (5th Cir. 1972), where in footnote 1, page 1197, this Court said:

" 'The legislative history of the Fair Labor Standards Act shows an intent on the part of Congress to protect certain groups of the population from substandard wages and excessive hours which endangered the national health and well-being and the free flow of goods in interstate commerce. The statute was a recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result the free movement of goods in interstate commerce. To accomplish this purpose standards of minimum wages and maximum hours were provided. Neither petitioner nor respondent suggests that the right to the basic statutory minimum wage could be waived by any employee subject to the Act. No one can doubt but that to allow waiver of statutory wages by agreement would nullify the purposes of the Act.' 324 U.S. at 706-707, 65 S.Ct. at 902. Following Brooklyn Bank, a number of cases have held that contractual understandings which have the effect of 'circumventing or invading the command of the Wage and Hour Act' are invalid and unenforceable. Mitchell v. Turner, 286 F.2d 104 (5th Cir. 1960); Wood v. Meier, 218 F.2d 419, 420 (5th Cir. 1955); Handler v. Thrasher, 191 F.2d 120, 123 (10th Cir. 1951); Mitchell v. Greinetz, 235 F.2d 621, 625 (10th Cir. 1956); Caserta v. Home Lines Agency, Inc., 273 F.2d 943, 946 (2nd Cir. 1959)."

But here there was much more for the trial court to base its decision on. The trial court, resolving all questions of credibility, which necessarily played a substantial part in the trial because of the relationship of employer and employee, could have found the following facts with respect to the five employees and the amounts they paid to Barnette out of the refunds they received for unpaid back wages.

I. LUCY GAYLORD: Mrs. Gaylord was a bookkeeper. She worked under Don Hutson, the office manager, whose wife Lynn Hutson, was the head bookkeeper. Before receiving her back paycheck from the Labor Department, Mrs. Gaylord was approached by the lawyer for defendants, Barron, who asked her whether she intended to return the money to Barnette. She replied that she probably would but was undecided. She was also asked by the head bookkeeper, Mrs. Hutson, the wife of her boss, whether she had yet received the check and whether she was going to return it. To this she answered "yes." When she received her check, she kept it for a few days to see what the others were going to do; she finally told Barnette she wanted to return the check to him. She said: "I went to Mr. Barnette and told him that I had my check and wanted to give it back to him and asked him how to give it back to him, and he told me just to have a steak dinner and give him the balance." (Emphasis added.) The record discloses that Gaylord's steak dinner cost her only $8.28, because she refunded $31.72. In response to a question on cross-examination as to whether Barnette asked her "to give that money back to him or to Troy Motors" she answered: "No, sir, not directly."

Following the cross-examination, the following testimony was given:

"THE COURT: You testified that you were not coerced directly?

WITNESS: Yes, sir.

THE COURT: The implications of that statement to me is that you may have been coerced indirectly.

WITNESS: Well, nobody ever really

THE COURT: Will you explain to me what you meant when you said, 'Not directly'?

WITNESS: Well, nobody ever really told me that I would lose my job if I didn't give the money back; but, I mean, it was just you know, everybody was kind of afraid, I guess you could say that, what might happen if they didn't. Nobody really had any concrete evidence that it would, I don't think."

At the time of the consent decree, she had been working for $75.00 a week on a 44 hour week schedule.

II. WILLIAM HEAD: As was the case with other employees, Head was interviewed by defendant's counsel, Barron, who told him that the company was going to have to pay back wages and asked whether he thought he had been underpaid. Head replied that he had not; he was later told by Barnette personally that he would be receiving a check and "he would like to have some of it back, if possible." Head received a check for $589. After paying some of the amount out of his checking account to pay bills with, he gave Barnette $100 in cash and had $75 deducted subsequently from his regular paycheck, which was entered on the company's books as charges for advances. In response to the question whether Head had any conversation with Mr. Barnette about how much of the $589 he "could" keep, Head testified: "We agreed that he would give us a third of it; yes, sir, and we give him the other back." Head fared better than the other employees, because he had spent more of his refund and had only $100 cash left to refund to Barnette and these proceedings ensued before the remaining total of $250 could be deducted from his wages. Head was the company's service manager and had charge of all employees in the shop area, including at least some of the other three employees. He held a meeting in his office where he discussed with the others the idea of returning their back pay, explaining that the company was in trouble and that they might lose their jobs, although he testified he was not told by Barnette to say this.

III. DARREL CORLEY: Corley, with an eighth grade education, greased cars and handled lubrication and oil changes in the service department. He received a check for $716. He gave back "two or three hundred" and said he still "owe(d) him some more money." He identified a charge against his account of $177 as to which Barnette had told him that if anybody asked him that "this $177 was for money he loaned (him) to pay doctor's bills." He testified that no such loan had been made and he...