Walling v. General Industries Co., 10078.

• Decision Date: 28 May 1946
• Docket Number: No. 10078.,10078.
• Citation: 155 F.2d 711
• Parties: WALLING, Adm'r of Wage and Hour Div., U. S. Dept. of Labor, v. GENERAL INDUSTRIES CO.
• Court: U.S. Court of Appeals — Sixth Circuit

155 F.2d 711 (1946)

WALLING, Adm'r of Wage and Hour Div., U. S. Dept. of Labor, v. GENERAL INDUSTRIES CO.

No. 10078.

Circuit Court of Appeals, Sixth Circuit.

May 28, 1946.

Morton Liftin, of Washington, D. C. (William S. Tyson and Bessie Margolin, both of Washington, D. C., Charles A. Reynard, Regional Atty., of Cleveland, Ohio, and David O. Walter, of Washington, D. C., on the brief), for appellant.

M. Reese Dill, of Cleveland, Ohio (Glenn O. Smith and M. Reese Dill, both of Cleveland, Ohio, on the brief), for appellee.

Before HICKS, ALLEN, and MILLER, Circuit Judges.

ALLEN, Circuit Judge.

The Administrator sought to enjoin the appellee from alleged violation of the Fair Labor Standards Act, 29 U.S.C., § 201 et seq., 29 U.S.C.A. § 201 et seq. The District Court, sitting without a jury, found that the appellee had not violated the Act; that the employees in question were exempt, and refused the relief prayed for.

The Administrator claims that the appellee has refused to compensate four of its employees for overtime work in accordance with the requirements of § 7 and § 15(a) (2) of the Act, 29 U.S.C., § 207(a) and § 213(a), 29 U.S.C.A. §§ 207(a), 213 (a). The pertinent provisions of the controlling statutes, Title 29 U.S.C. § 207(a) (1), (3), § 213(a), 29 U.S.C.A. §§ 207(a) (1, 3), 213(a), read as follows:

§ 207(a). "No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce —

"(1) for a workweek longer than forty-four hours during the first year from the effective date of this section,

"(2) for a workweek longer than forty-two hours during the second year from such date, or

"(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed."

§ 213(a). "The provisions of sections 206 and 207 of this title shall not apply with respect to (1) any employee employed in a bona fide executive, administrative, professional, or local retailing capacity, * * * (as such terms are defined and delimited by regulations of the Administrator) * * *."

It is conceded that all of the employees are engaged in the production of goods for commerce. Three of them, Jasper Page, Peter Spooner and Fred Stegman, are licensed operating engineers in appellee's steam and electric power generating and heating department. This department is vital to the operation of appellee's business, and is in continuous operation on a three-shift basis. Each man is responsible for an eight-hour shift. Except when the chief engineer, Latteman, is present in the department, which generally occurs on Stegman's shift, each of the three engineers is the sole employee in the power plant during his shift. In the boiler-room, which is a contiguous part of the department, firemen and coal-passers are employed whose duty is to maintain a high and constant steam pressure essential to the work of the power plant. As operating engineers, Stegman, Page and Spooner are in charge of four large steam boilers, three large direct current electrical generators, compressors, pumps, engines and other mechanical equipment. The three engineers are individually responsible during their respective shifts for the operation of this machinery, and for keeping it in good condition. They are required to pack the waterpumps, to wipe and oil the engines, and to make minor emergency repairs. They mop the floors and do everything necessary to keep the plant clean and in proper working condition. They make minor adjustments, read the gauges, and are constantly on watch for indications of trouble. Stegman, who works on the first shift under Latteman, the chief engineer, is regarded as having charge of the department when Latteman is away, but no one else is present during his shift except Latteman. Each of the three men receives a salary in excess of $200 per month and is paid additional straight time for overtime.

The fourth employee, Clarence Payne, is employed in the payroll and tabulating department as assistant paymaster. He has charge of the international business machines equipment and has two assistants who manipulate the machines. Payne sets the machines up to make the desired tabulations by arranging the plug-boards on the tabulators. The time-cards, which are tabulated, carry 280 columns, and each column has 80 possible punches. Many thousands of complex combinations in setting the connections on the plug-board are shown to exist. The type of data obtained varies and includes preparing, recording, tabulating and furnishing to appellee payrolls for employees as well as records, analyses and reports and other information as desired. In the paymaster's absence Payne is in complete charge of the department. He is compensated in excess of $200 per month and an amount equivalent to straight time overtime for work in excess of 40 hours per week. Payne testified at first that he spent one hour and a half a day in supervision; but he later stated in effect that for some time his work had been changed, and that most of his time was spent with the paymaster in going over procedure, assisting in correspondence, and consulting with his assistants in the tabulating department whenever necessary. It clearly appears from his explanatory testimony that more than 80% of Payne's work is non-manual.

No question is raised as to the validity of the regulations. Two problems are presented: (1) Whether the four employees or any of them are exempted from the Act under the regulations, and (2) whether, regardless of exemption, they have been receiving compensation in accordance with the Act. The pertinent portion of the regulations is printed in the margin.¹

The Administrator claims that of the six requirements contained in the definition of executive, only that relating to compensation has been complied with as to Stegman, Spooner and Page, and that as to Payne, only the requirement as to compensation has been complied with under the definition of an administrative employee.

Whether or not employees are exempt under the Act is primarily a question of fact. Fletcher v. Grinnell Bros., 6 Cir., 150 F.2d 337, 340. The burden of proving that an employee is exempt rests upon the one who claims the exemption. Smith v. Porter, 8 Cir., 143 F.2d 292, 294. The District Court, in carefully separated findings of fact, determined that the work of the three engineers met each of the six tests prescribed by § 541.1, and that that of the assistant paymaster met the test imposed by § 541.2. These findings may not be set aside on appeal unless clearly erroneous. United States v. Madsen Construction Co., 6 Cir., 139 F.2d 613, 615.

The case of the engineers is one of the border-line cases which necessarily exist even in small industrial organizations. The District Court found as a fact that Stegman, Page and Spooner were employed as foremen or supervisors of the department, with power to supervise the work of firemen and coal-passers in the boiler-room; that they customarily and regularly directed the work of other employees in the department, and customarily exercised discretionary powers. We think these findings are not sustained by the evidence. The work done by the engineers was highly skilled mechanical work. While the machinery was vital to the plant, dangerous and complicated, its operation involved no exercise of discretion, but merely the proper application of the skilled engineering training which these men had received. Although the three engineers were responsible for the proper operation of the machinery during their shifts, and, as the factory manager testifies, "in charge of management of the property," none of them could fire or hire or give orders to any man in the boiler-room. Latteman, the chief engineer, who was present at the plant during one shift and on call 24 hours a day and seven days a week, was in full charge of the department. While Latteman might act on information from Stegman, Page, or Spooner, during the period...