Williams v. Jacksonville Terminal Co Pickett v. Union Terminal Co

• Decision Date: 02 March 1942
• Docket Number: 1023,Nos. 112,s. 112
• Citation: 315 U.S. 386,86 L.Ed. 914,62 S.Ct. 659
• Parties: WILLIAMS et al. v. JACKSONVILLE TERMINAL CO. PICKETT v. UNION TERMINAL CO
• Court: U.S. Supreme Court

315 U.S. 386

62 S.Ct. 659

86 L.Ed. 914

WILLIAMS et al.

v JACKSONVILLE TERMINAL CO.

PICKETT

v. UNION TERMINAL CO.

Nos. 112, 1023.

Argued Jan. 5, 6, 1942.

Decided March 2, 1942.

Rehearing Denied March 30, 1942.

See 315 U.S. 830, 62 S.Ct. 909, 86 L.Ed. —-.

Mr. Frank F. L'Engle, of Jacksonville, Fla., for petitioners Williams and others.

[Argument of Counsel from page 387 intentionally omitted] Messrs. Charles M. Hay and S. D. Flanagan, both of St. Louis, Mo., for petitioner Pickett.

Mr. Robert L. Stern, of Washington, D.C., for Administrator of Wage and Hour Division, United States Department of Labor, as amicus curiae, by special leave of Court.

Messrs. John Dickinson, of Philadelphia, Pa., and Julian Hartridge, of Jacksonville, Fla., for respondent Jacksonville Terminal Co.

Messrs. John Dickinson, of Philadelphia, Pa., and Robert G. Payne, of Dallas, Tex., for respondent Union Terminal Co.

Mr. Justice REED delivered the opinion of the Court.

The question presented by both these cases is whether a railroad company operating a terminal subject to the Railway Labor Act, 45 U.S.C.A. § 181 et seq. and the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., is required by those statutes, in the absence of a negotiated agreement respecting wages, to pay 'red caps' a fixed minimum hourly wage irrespective of the tips from passengers received by the red caps, or whether an accounting and guarantee plan which leaves all tips with the red caps and assures them that each will receive at least the minimum wage is valid.

The Fair Labor Standards Act is not intended to do away with tipping. Nor does it appear that Congress intended by the general minimum wage to give the tipping employments an earnings-preference over the non-service vocations. The petitioners do not dispute the railroad's contention that, during the entire period, each red cap received as earnings—cash pay plus tips—a sum equal to the required minimum wage. Nor is there denial of increased pay to the red caps on account of the minimum wage guarantee of the challenged plan as compared with the former tipping system. The guarantee also betters the mischief of irregular income from tips and increases wage security. The desirability of considering tips in setting a minimum wage, that is whether tips from the viewpoint of social welfare should be counted as part of that legal wage, is not for judicial decision.¹ We deal here only with the petitioners' assertion that the wages Act requires railroads to pay the red caps the minimum wage without regard to their earnings from tips.

The cases have a common background. Prior to October 24, 1938, the effective date of the Fair Labor Standands Act, the red caps at the terminals in question performed their familiar tasks without reward other than the tips of the passengers, and although subject to considerable supervision by the terminals² were not officially considered employees. On September 29, 1938, the Interstate Commerce Commission, acting under § 1 of the Railway Labor Act, 45 U.S.C. § 151, 45 U.S.C.A. § 151, ruled that red caps in cities of over 100,000 population were employees within that Act. 229 I.C.C. 410.

Subsequent to that ruling the parallel series of events culminating in the two controversies now before us, while differing in details, followed the same general pattern. In No. 112 nothing further occurred until the Fair Labor Standards Act became effective. At that time the Jacksonville Terminal, in supposed compliance with the Act, began paying its red caps in cash the amount by which the statutory minimum wage exceeded each red cap's receipts in tips. This system in some form was used at the terminal until July 1, 1940.

In the belief that the Act required payment of the minimum wage wighout deduction of tips, the red caps, by their representative, Williams, brought an action against the terminal in United States District Court for the recovery of unpaid minimum wages between October 24, 1938, and July 1, 1940, and an equal additional amount as liquidated damages. Jurisdiction of the action was conferred by § 24(8) of the Judicial Code, 28 U.S.C. § 41(8), 28 U.S.C.A. § 41(8), and by § 16(b) of the Fair Labor Standards Act, 29 U.S.C. § 216(b), 29 U.S.C.A. § 216(b).³ The terminal answered and moved for summary judgment. Upon consideration of the exhibits, depositions, and stipulated facts the trial judge granted the motion, and the circuit court of appeals affirmed. 5 Cir., 118 F.2d 324. Because of the importance of the question whether the tips could be treated as payment of the statutory wage, the petition of the red caps' representative for certiorari was granted. 314 U.S. 590, 62 S.Ct. 64, 86 L.Ed. -.

Section 6 of the Act requires every employer to pay each employee engaged in interstate commerce wages at the prescribed rates per hour.⁴ Violation of that requirement renders the employer liable for the unpaid wages and for liquidated damages recoverable in an action by the employees' designated agent or representative.⁵ Since the terminal admitted by stipulation that Williams was the red caps' authorized representative ad litem, that the red caps were its employees, and that they were engaged in interstate commerce, the sole issue was whether the payment required by § 6 of the Act had been made.

The evidence, taken most favorably to the red caps, discloses the following. About October 24, 1938, the effec- tive date of the Act, the terminal issued a written notice to each red cap:

'Jacksonville, Florida,

'Oct. 24th, 1938.

'To Red Cap ...,

'Jacksonville Terminal Company:

'In view of the requirements of the Fair Labor Standards Act, effective October 24, 1938, and in consideration of your hereafter engaging in the handling of hand beggage and traveling effects of passengers or otherwise assisting them at or about stations or destinations, it will be necessary that you report daily to the undersigned the amounts received by you as tips or remuneration for such services.

'The carrier hereby guarantees to each person continuing such service after October 24, 1938 compensation which, together with and including the sums of money received as above provided, which will not be less than the minimum wage provided by law.

'You are privileged to retain subject to their being credited on such guarantee all such tips or remuneration received by you except such portion thereof as may be required of you by the undersigned for taxes of any character imposed upon you by law and collectible by the undersigned.

'All the matters above referred to are subject to the right of the carrier to determine from time to time the number and identity of persons to be permitted to engage in said work and the hours to be devoted thereto, to establish rules and regulations relating to the manner, method and place of rendition of such service, and the accounting required.

'Jacksonville Terminal Company.

'By J. L. Wilkes,

'President-General Manager.'

On November 3rd L. L. Wooten, the General Chairman of the Brotherhood of Railway and Steamship Clerks, received the red caps' designation of the Brotherhood as their bargaining representative. November 4th he saw a copy of the terminal's notice. In the meantime he had written Wilkes on October 25th that in view of the I.C.C. decision he considered the red caps covered by the collective labor agreement of February 1, 1937, between the Brotherhood and the terminal, and within the union's jurisdiction. After the designation the Brotherhood, continually protesting the invalidity of the existing accounting and guarantee system,⁶ attempted negotiations with the Terminal for a red cap contract. Eventually, June 16, 1939, a contract limited to hours of service and working conditions was signed. Meanwhile the red caps continued their accustomed activities, made the reports, kept the tips, and accepted the sums proffered them by the terminal. At first no receipts for wage payments were required at Jacksonville; later receipts were introduced expressly reserving the red caps' right to sue for additional amounts under the Act.⁷ On July 1, 1940, the terminal inaugurated a new system of charging passengers ten cents per parcel for red cap service, and paying the red caps an hourly wage. An agreement with the Brotherhood reducing this arrangement to writing and ending the controversial accounting and guarantee system was signed August 9th No. 1023 is a similar proceeding brought against the Union Terminal Company by Pickett, the agent of forty-five red caps working in the Dallas terminal. At the trial the evidence, consisting of an agreed statement of facts, some exhibits, and some uncontradicted testimony, indicated, and the trial judge found, that the red caps were employees of the terminal and were engaged in interstate commerce. He further found that prior to the Fair Labor Standards Act the red caps were paid by the tips of the public, that no other contract was made on or since October 22, 1938, and that the question of tips as wages was still an open one. On the ground that tips of the public were not wages paid by the employer, he gave judgment in favor of the red caps. The circuit court of appeals reversed, 5 Cir., 118 F.2d 328, and certiorari was denied. 313 U.S. 591, 61 S.Ct. 1115, 85 .l.Ed. 1546. Because of the importance of the issues presented, on petition for rehearing certiorari was granted. 314 U.S. 704, 62 S.Ct. 55, 86 L.Ed. —-.

Since the basic elements of Pickett's case are no longer in dispute, the crucial issue again is whether the minimum wages were paid. It was shown that after the I.C.C. ruling that red caps were employees, the red caps notified the Dallas terminal on October 11, 1938, that the Board of Adjustment of the Brotherhood of Railway and Steamship Clerks was their authorized representative under the Railway Labor Act, and Pickett, as General Chairman of the Board, asked for a conference in order to negotiate an agreement. On ...