Weir v. Hudson Coal Co.

• Decision Date: 17 August 1951
• Docket Number: Civ. No. 2893.
• Parties: WEIR et al. v. HUDSON COAL CO.
• Court: U.S. District Court — Middle District of Pennsylvania

99 F. Supp. 423

WEIR et al. v. HUDSON COAL CO.

Civ. No. 2893.

United States District Court M. D. Pennsylvania.

August 17, 1951.

James G. McDonough, Robert Martin and Bernard J. Brown, Scranton, Pa., for plaintiffs.

R. S. Houck, Francis D. Mahon, Scranton, Pa., for defendant.

WATSON, Chief Judge.

This is an action under the Fair Labor Standards Act of 1938,¹ to recover amounts alleged to be due as wages, together with liquidated damages and attorneys' fees. A stipulation of facts has been filed by the parties which are adopted as the Court's findings of fact.

Plaintiffs were employed by the defendant in the production of goods for commerce as defined by Section 3(j) of the Fair Labor Standards Act, being employed as patrolmen. Defendant is a Pennsylvania corporation engaged in the business of mining, preparing and selling anthracite coal.

Plaintiffs contend that defendant should have paid them a higher hourly rate for regular hours and a higher hourly rate for overtime hours during the workweek periods hereinafter more specifically set forth as to each plaintiff's claim.

Except in the case of Edward A. Cummings and William P. Bradley, plaintiffs were individually employed by the defendant at divers times prior to March 1942 under oral contracts and for an indefinite period. As patrolmen, the plaintiffs worked 5 days per week and 12 hours per day or a total of 60 hours per week, and prior to March 1942 received a monthly salary of $132.76. In March, 1942, the defendant submitted to each patrolman a written contract of hire providing for certain changes in his employment, which written contract contained the following provision: "(2) The employee is employed upon an hourly basis, and his rate of pay shall be $0.4378 per hour for the first forty hours worked in each week, and for any hours worked in any week in excess of that number, he shall be paid one and one-half times that rate."

Six of the named plaintiffs signed the written contracts of hire, but six others refused to sign. Two of the plaintiffs, Bradley and Cummings, were not employed until after March, 1942, but signed similar contracts after they were employed.

On July 10, 1942, defendant sent letters to each of the six plaintiffs who refused to sign the above contracts of hire, informing them that from and after July 16, 1942 the terms of employment would be the same as contained in the written contracts of hire submitted to them in March, 1942.

On or about July 11, 1942, the six plaintiffs who refused to sign the written contracts of hire, and two other plaintiffs who had signed the contracts of hire, sent a joint letter to the defendant, acknowledging receipt of defendant's letter of July 10, 1942, and advising defendant that they refused to accept $0.4378 per hour as their basic hourly rate of pay, and further stated:

"We and each of us shall continue performing our present duties as we have so performed them in the past and we and each of us hereby state that our continuing to work shall not be considered as a voluntary acceptance of the proposed reduction of wages."

"We and each of us feels that the Fair Labor Standards Act of 1938 prohibits such an involuntary reduction in that it is an attempt to evade the provisions of said Act."

By letter dated July 14, 1942, defendant acknowledged receipt of the above joint letter of July 11, 1942 to each of the eight plaintiffs, denying that the hourly rate of $0.4378 was an evasion of the Fair Labor Standards Act of 1938 and further stated: "We therefore must insist that if you continue to work for us after July 16, 1942, you must accept in full compensation for your services the rates and conditions of employment stated in our letter of July 10, 1942."

Plaintiffs thereafter were granted increases in pay from time to time resulting in a higher basic hourly rate, but in each case such increases or new basic hourly rates were expressly stated to be based upon the $0.4378 per hour rate fixed by the written contracts of hire, or the letters of July 10, 1942, which were sent to those patrolmen who refused to sign the contracts of hire.

It is agreed by all parties that if the correct and legal hourly rate of pay was $0.4378 per hour on April 1, 1942 as to the plaintiffs who signed the written contracts, and on July 16, 1942 as to those who refused to sign, and if said rate, as increased in the future, continued to be the correct and legal hourly rate of pay to May 31, 1946, then the plaintiffs have received all regular and overtime wages to which they are entitled over the period covered by this suit and have no cause of action against the defendant.

At the outset it is to be noted that the Fair Labor Standards Act of 1938 did not purport to change the manner or method of making or amending contracts of hire. It established minimum wages, maximum hours and overtime rates, which must be complied with, but beyond this the employer and employee may still make or amend their own contract of employment. Atlantic Co. v. Walling, 5 Cir., 1942, 131 F.2d 518.

It is admitted by the plaintiffs that at no time during the period in question was the hourly wage rate which they received below the minimum hourly rate established under the Fair Labor Standards Act.

It is well established that a general or indefinite hiring is presumed to be a hiring at will and, being at will, is subject to termination or modification at any time by either party. Trainer v. Laird, 1936, 320 Pa. 414, 183 A. 40; Thullen v. Triumph Electric Co., 3 Cir., 1915, 227 F. 837. Plaintiffs contend that as to each of the plaintiffs who refused to sign the written contract submitted to him by the defendant, there never was a new contract entered into betwen said plaintiff and defendant for there was no meeting of the minds. Plaintiffs notified defendant that they refused to accept the reduction in pay, and therefore contend that the status of the parties and the wage rate remained the same throughout the period of their employment. The United States Supreme Court, in the case of Williams v. Jacksonville Terminal Co., 1942, 315 U.S. 386, 62 S.Ct. 659, 665, 86 L.Ed. 914, held to the contrary. The question in that case was whether or not the tips received by redcaps could be considered in determining whether the redcaps were paid the minimum wage. The Terminal Co. had notified the redcaps that effective October 24, 1938 the redcaps would have to report the amount of tips received by them daily and, though allowed to retain the tips, such sums would be considered as wages. Two days later, a representative of the redcaps protested this proposal in a letter to the Terminal Company, concluding: "This letter is formal notice to the carrier, made for and on behalf of each employee concerned as a protest against the method proposed by the carrier to meet its obligation under the said law, and since it appears that the carrier has acted in the premise without authority of law or upon order of the Administrator, we are accordingly filing this notice of protest, for the reasons set forth herein."

No action was ever taken to recall or revoke the letter of protest and the individual redcaps never told the company that they accepted the terms of its letter of October 24 but throughout the entire period the redcaps performed their usual duties. The demand for additional pay was never abandoned, and no redcaps were discharged for refusing to expressly consent to the company's action. The conduct of the plaintiffs in the instant case closely parallels that followed by the redcaps, for the plaintiffs who refused to sign the contract of hire never told the defendant that they accepted the terms of defendant's letter of July 10, 1942, nor did they abandon their demand for additional pay, nor were any of them discharged for refusing to expressly consent to the defendant's action.

The Supreme Court stated, "This employment of the redcaps was at will and subject to the employers' conclusions as to the desirability of continuing their employment. * * *"

"With the effective date of the Act the employers became bound to pay a minimum wage to their employees, the redcaps. Accordingly the latter were notified that future earnings from tips must be accounted for and considered as wages. Although continuously protesting the authority of the railroads to take over the tips, the redcaps remained at work subject to the requirement. Such protests were unavailing against the employers. Although the new plan was not satisfactory to the redcaps, the notice transferred to the railroads' credit so much of the tips as it affected. By continuing to work, a new contract was created. (Emphasis supplied.)

In Shepler v. Crucible Fuel Co., 3 Cir., 1944, 140 F.2d 371, 374, the Court cited the "redcap case", stating, "* * * the Court held, we think broadly and unequivocally, that continuance in an employment under a new method of computing pay creates a new contract and that the employee's consent to the new arrangement may be found from the continuance, notwithstanding repeated protests on his part."

It is clear that all of the plaintiffs, including the nonsigners, who impliedly acquiesced in the new terms by continuing to work, entered into a contract of employment with the defendant, whereby, under a new method of computing pay, they received $0.4378 an hour instead of the flat monthly salary of $132.76 which they had been receiving prior thereto.

Plaintiffs also contend that even if there were such contracts of employment between all of the plaintiffs and the defendant the contracts are invalid and illegal in view of the customs and usages in the Anthracite industry. Plaintiffs point out that "for many years it was the custom and usage of the Anthracite industry, at or about the same time that any increase was granted to those employees covered by the Union-Operators agreement, to grant a similar increase to all of the industry employees not covered by said agreements."...