Wirtz v. BOB ADAIR, INC.

• Decision Date: 11 December 1963
• Docket Number: No. 1007.,1007.
• Citation: 224 F. Supp. 750
• Parties: W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. ROBERT E. BOB ADAIR, INC., and Robert E. Adair, Sr., Defendants.
• Court: U.S. District Court — Western District of Arkansas

224 F. Supp. 750

W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. ROBERT E. BOB ADAIR, INC., and Robert E. Adair, Sr., Defendants.

No. 1007.

United States District Court W.D. Arkansas, El Dorado Division.

December 11, 1963.

Floyd G. Ansley, Atty., U. S. Dept. of Labor, Birmingham, Ala., for plaintiff.

Emon A. Mahony, of Mahony & Yocum, El Dorado, Ark., for defendants.

HENLEY, District Judge.

This is an action brought by the Secretary of Labor under the authority of section 17 of the Fair Labor Standards Act of 1938, as amended by the Act of May 5, 1961, Pub.L. 87-30, 75 Stat. 74, 29 U.S.C.A. (Cum.Supp.), § 217. The Secretary contends that the defendants have been in violation of the overtime compensation provisions of the Act,¹ and that unless an injunction is issued the alleged violations will continue. In addition to seeking an injunction against future violations, the Secretary, as authorized by the 1961 amendment to section 17, also asks that the defendants be restrained from withholding payment of overtime compensation found by the Court to be due present and former employees of the defendants under the Act. The cause is now before the Court on the question of whether, in view of the Secretary's prayer that defendants be ordered in effect to pay out money alleged to be due individual employees or former employees, defendants are entitled to a jury trial. That question is presented by the Secretary's motion to strike the demand for such trial appearing in the defendants' answer. The motion has been submitted on memorandum briefs, as authorized by Local Rule 8 of this Court.

The complaint alleges in substance that the corporate defendant is an Arkansas corporation engaged in the business of maintaining and servicing oil wells; that the individual defendant, by virtue of his relationship to the corporation and its activities, is an employer within the meaning of the Act; that the defendants employ approximately 15 employees who are engaged in interstate commerce, and who are covered by the Act; that with respect to eight identified employees the defendants have failed during stated periods of time to pay overtime compensation required by the Act; and that the specified amounts of money are due said employees. The prayer of the complaint is that the defendants and their privies be enjoined permanently from violating the overtime compensation provisions of the Act and from withholding payment of the amounts of overtime compensation found by the Court to be due to the individual employees named in the complaint.

In their answer the defendants, in addition to demanding trial by jury, deny that plaintiff is entitled to relief on the merits.

While the Secretary has always had the authority under section 17 to maintain suits for injunctions to restrain threatened future violations of the Act, he was prohibited, at least during the period between the effective date of the 1949 amendments to the Act and the effective date of the 1961 amendments, from obtaining back pay awards in section 17 proceedings. However, the 1961 amendment to section 17 deleted the prohibition set forth in the 1949 amendment to that section, and provided expressly that the jurisdiction of the district courts to grant injunctions against violations of the Act should include the power to restrain the withholding of payment of minimum wages or overtime compensation found by the court to be due to employees covered by the Act.

In insisting upon trial by jury the defendants take the position that when the Secretary, as now authorized, seeks a back pay award in a section 17 proceeding, the action, at least to the extent that it seeks such an award, is an action at law brought for the benefit of the involved employees and that a trial by jury is demandable of right under the guarantee of jury trial set forth in the Seventh Amendment to the Constitution of the United States, particularly in view of the effect that a demand for a back pay award by the Secretary under section 17 has upon the rights of individual employees under the 1961 amendment to section 16.

The question presented is novel to this Court,² and, indeed, there seems to be only one reported case directly in point, namely, Wirtz v. Alapaha Yellow Pine Products, Inc., M.D., Ga., 217 F.Supp. 465, in which case it was held that there is no right of trial by jury in a section 17 case even where, as here, the Secretary asks that the employer be enjoined from withholding unpaid minimum wages or paid overtime compensation found to be due. For reasons to be stated the Court finds itself in agreement with the result reached in that case, and the Secretary's motion to strike defendants' demand for jury trial will be granted.

In order to get the question of defendants' right to a jury trial into proper focus, it is well to consider sections 16 and 17 together, and to consider the historical development of both sections.

When the Act was originally adopted in 1938,³ section 16(b) provided that any employer who should violate the minimum wage or overtime compensation provisions of the Act should be liable to the employee or employees affected by such violation in the amount of their unpaid minimum wages or their unpaid overtime compensation, and in an additional equal amount as liquidated damages. It was provided that an action to recover unpaid minimum wages or unpaid overtime compensation, plus liquidated damages, might be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. It was further provided that such employee or employees might designate an agent or representative to maintain the action for and in behalf of all employees similarly situated. And finally it was provided that in a section 16 action the court should in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.

Original section 17 of the Act conferred upon the federal district courts jurisdiction to restrain violations of section 15, which jurisdiction, of course, included jurisdiction to restrain violations of the minimum wage and overtime compensation provisions of the Act. Section 17 remained in its original form until it was amended in 1949.

Section 16(b) was amended rather drastically, but in a manner not here particularly pertinent, by the Portal to Portal Act of 1947,⁴ and was again amended in a respect not relevant here in 1949.⁵

In litigation arising under the Act during the period between its original adoption and the effective date of the 1949 amendments questions arose as to the right of litigants to jury trials in proceedings brought under sections 16 and 17 and as to the extent of the district courts' power to enjoin violations of the Act in section 17 proceedings.

As far as right to trial by jury was concerned, it became settled that in section 16(b) cases wherein money judgments were sought the litigants were entitled to trial by jury upon timely demand. See Lewis v. Times Publishing Co., 5 Cir., 185 F.2d 457; Olearchick v. American Steel Foundries, W.D.Pa., 73 F.Supp. 273; 5 Moore's Federal Practice, 2d Ed., ¶ 38.27, p. 208. Also it became settled that in section 17 proceedings wherein prospectively operating injunctive relief only was sought there was no right to a jury trial. See Olearchick v. American Steel Foundries, supra; Walling v. Richmond Screw Anchor Co., E.D.N.Y., 52 F.Supp. 670; Fleming v. Peavy-Wilson Lumber Co., W.D.La., 38 F.Supp. 1001; 5 Moore, op. cit., p. 209.⁶

During the pre-1949 amendment period one of the problems which arose under section 17 was whether the courts had jurisdiction to order an employer to make reparation for unpaid minimum wages or unpaid overtime compensation. The answer to that question was not clear. Some courts took the view that such jurisdiction did not exist; others held that it did. See McComb v. Frank Scerbo & Sons, 2 Cir., 177 F.2d 137, 139, aff'g. McComb v. Frank Scerbo & Sons, S.D.N.Y., 80 F.Supp. 457; Jacksonville Paper Co. v. McComb, 5 Cir., 167 F.2d 448, 450; Walling v. Crane, 5 Cir., 158 F.2d 80; cf. Walling v. O'Grady, 2 Cir., 146 F.2d 422. In McComb v. Jacksonville Paper Co., 336 U.S. 187, 193, 69 S.Ct. 497, 500, 93 L.Ed. 599, the Supreme Court laid the question "to one side." And the Court of Appeals for this Circuit in Walling v. Miller, 138 F.2d 629, in affirming a consent decree calling for payments of back wages assumed without deciding that apart from the consent of the employer the court had no authority to order reparations in a section 17 case. It is to be noted, however, that Judge Woodrough in a concurring opinion took the position that such authority did exist under the section as then written.

The right of a district court in a section 17 case to include an award of back pay in its injunction was upheld by the Court of Appeals for the Second Circuit in Scerbo, supra, which was decided on August 18, 1949. At that time amendments to the Act were being considered by the Congress; and on October 17, 1949, the Managers on the part of the House and Senate submitted a conference report recommending that section 17 be amended so as to reverse "such decisions as McComb v. Scerbo (C.C.A. 2) 17 Labor Cases, No. 65,297, in which the court included a restitution order in an injunction decree granted under section 17." U. S. Code Congressional Service, 1949, p. 2273. The conference report in this respect was adopted, and from October 26, 1949, to the passage of the 1961 Act the district courts were, as indicated, expressly prohibited in section 17 cases from ordering employers to make reparation for unpaid minimum wages or unpaid overtime compensation. Depending on one's view of the law prior to the 1949 amendment, the power of the district courts to render back pay orders in section 17 cases was...