Walling v. Panther Creek Mines

• Decision Date: 01 March 1945
• Docket Number: No. 8442.,8442.
• Citation: 148 F.2d 604
• Parties: WALLING, Adm'r of Wage and Hour Division, U. S. Dept. of Labor, v. PANTHER CREEK MINES, Inc.
• Court: U.S. Court of Appeals — Seventh Circuit

148 F.2d 604 (1945)

WALLING, Adm'r of Wage and Hour Division, U. S. Dept. of Labor, v. PANTHER CREEK MINES, Inc.

No. 8442.

Circuit Court of Appeals, Seventh Circuit.

March 1, 1945.

Douglas B. Maggs, of Washington, D. C., Kenneth P. Montgomery and Victor M. Harding, Jr., both of Chicago, Ill., and Bessie Margolin, Asst. Sol., Department of Labor, and Joseph I. Nachman, Atty., U. S. Department of Labor, both of Washington, D. C., for appellant.

Clayton J. Barber and Samuel C. Fielden, both of Springfield, Ill., for appellee.

Before EVANS, SPARKS, and KERNER, Circuit Judges.

KERNER, Circuit Judge.

The Administrator of the Wage and Hour Division sought an injunction under § 17 of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. § 217, to restrain defendant from violating the minimum wage, overtime, and record-keeping requirements of said Act. After a trial and after making findings of fact and conclusions of law, the District Court dismissed the suit for want of equity. The Administrator appeals.

The principal question is whether defendant's record-keeping system met the legal requirements.

Defendant contends that the only real issue is whether the court abused its discretion in denying the injunctive relief sought. The Administrator rightly concedes that granting an injunction under § 17 of the Act lies within the trial court's discretion, Walling v. T. Buettner & Co., 7 Cir., 133 F.2d 306; cf. Hecht Co. v. Bowles, 321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754, and that the injunction is not to be used to punish past offenses, but only in a proper case to prevent wrongdoing in the future. But the Administrator also correctly asserts that where the evidence clearly shows existing violations and the likelihood, indeed, the virtual certainty, of future violations, a decision denying an injunction will be reversed. Goshen Mfg. Co. v. Myers Mfg. Co., 242 U.S. 202, 37 S.Ct. 105, 61 L.Ed. 248; Hughes Tool Co. v. Owen, 5 Cir., 123 F.2d 950; Walling v. Mid-Continent Pipe Line Co., 10 Cir., 143 F.2d 308. We emphasize the point that this is not a case where the alleged unlawful practices have been abandoned, and compliance effected, with the promise that they will not be resumed. On the contrary, the challenged practices are continuing, and defendant asserts that they are lawful. No promise has been made to discontinue or correct them. The trial court was of the opinion that the defendant may have committed violations of the Act, and if it did, the violations were only "technical." Thus the question boils down to whether the practices are illegal, for if they are, since the standards of the public interest, not the requirements of private litigation, measure the need for injunctive relief, an injunction should be issued.

Defendant operates three coal mines from which coal moves in interstate commerce. No question of coverage is raised. It employs some 650 men, the overwhelming percentage being diggers. The diggers are paid on a tonnage basis, and the others on a salary or daily basis. The record shows that it was defendant's practice for a long period to use arbitrary, fictitious figures instead of the hours actually worked in respect to certain of its non-digging employees. For example, the stenographer was shown on the company's books as working 54 hours a week, whereas the testimony showed that she never worked more than 48 hours a week and frequently less than that, so the hours recorded on the books did not represent the hours actually worked. However, we do not express any opinion on the practices with respect to the non-digging employees for it is true that on the last day of the trial defendant's superintendent stated that the company was then keeping the actual hours worked by the salaried employees. Since our conclusion as to the records of the diggers controls our decision on this appeal, it is not necessary to treat the question of the sufficiency and accuracy of the records of the other employees.

Section 11(c) of the Act, 29 U.S. C.A. § 211(c), provides that every employer subject to any provision of the Act shall make, keep, and preserve such records of his employees' wages and hours as the Administrator shall prescribe by regulation or order as necessary or appropriate for the enforcement of the Act or the regulations or orders thereunder. The record-keeping requirements are valid, United States v. Darby, 312 U.S. 100, 125, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430, and if reasonable and pertinent they are binding on the courts. Fanelli v. United States Gypsum Co., 2 Cir., 141 F.2d 216, 218; Walling v. Yeakley, 10 Cir., 140 F.2d 830; Walling v. Sun Publishing Co., 6 Cir., 140 F.2d 445; George Lawley & Son Corporation v. South, 1 Cir., 140 F.2d 439, 151 A.L.R. 1081; cf. Federal Security Adm'r v. Quaker Oats Co., 318 U.S. 218, 228, 63 S.Ct. 589, 87 L.Ed. 724; United States v. George S. Bush & Co., 310 U.S. 371, 380, 60 S.Ct. 944, 84 L.Ed. 1259. Even before the effective date of the Act, the Administrator published regulations in the Federal Register which provided for record-keeping, 3 Fed.Reg. 2533. They provide, inter alia, that the employer's records show for each employee: the hours worked each workday and total hours worked each workweek; regular hourly rate of pay if overtime is worked and overtime excess compensation is due; the basis on which wages are paid; total daily or weekly straight-time earnings (excluding overtime excess compensation); and total wages paid each pay period, 29 Code of Fed.Reg.Cum.Supp., Chap. V, Part 516.

On this appeal the principal requirement to be considered will be the primary one, namely, the hours worked each workday and total hours worked each workweek. The Administrator says he cannot tell how extensive defendant's violations have been because this requirement has not been met.

In studying the record and exhibits, certain striking things have impressed us. First and foremost has been defendant's admission that its own records are unreliable and its willingness to impeach them. Then, too, on its exhibits 1 to 43, what purported to be an objective statement of days worked, was shown to be an estimate based on the clerk's or superintendent's general notion of what a man could or should produce, rather than what the attendance record showed. Defendant concedes numerous instances of inaccuracy; the system was admittedly slipshod; and its past history does not augur future compliance.

Taking these points up in reverse order, we look first to the history of this controversy. In May, 1941, the Wage and Hour inspectors found that defendant's payroll records showed the quantity of coal each man produced per day (and the union contract specified the amount he was to be paid per ton), but failed to reveal the number of hours worked. Defendant's officers were expressly told that records showing this must be kept. It was not until four months later that defendant began to keep a so-called attendance record. Yet even in keeping this meager attendance record, defendant, from June, 1942 up until March, 1943, at Mine No. 5, relapsed into not entering it on the payroll record.

In view of the slipshod character of defendant's system, it is not strange that inaccuracies resulted. A brief description of the system is necessary. The term "attendance record" is a misnomer, for in actuality, it was a list of absences. Each miner had a number, and the ...