Wirtz v. OFFICE COMMUNICATIONS COMPANY
| Decision Date | 30 August 1965 |
| Docket Number | No. C-34-WS-64.,C-34-WS-64. |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | W. Willard WIRTZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. OFFICE COMMUNICATIONS COMPANY and Moyer Pinkston Hendrix, Defendants. |
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Charles Donahue, Sol., Beverley R. Worrell, Reg. Atty., Isabelle R. Cappello, and Joe D. Sparks, Atty., U. S. Dept. of Labor, for the plaintiff.
Roy L. Deal and John M. Minor, of Deal, Hutchins & Minor, Winston-Salem, N. C., for defendants.
This action was brought by the plaintiff, W. Willard Wirtz, Secretary of Labor, to enjoin the defendants, Office Communications Company and Moyer Pinkston Hendrix, from future violations of the overtime compensation and record-keeping provisions of the Fair Labor Standards Act, as amended, 29 U.S.C.A. § 201 et seq., hereinafter referred to as the Act, and to restrain the withholding of overtime compensation alleged to be withheld unlawfully from employees of the defendants.
The case was heard by the Court without a jury. At the end of the defendants' evidence, the plaintiff moved to strike the defenses of the defendants under Rule 12(f) of the Federal Rules of Civil Procedure. The Court denied the motion. At the end of all the evidence, the plaintiff renewed his motion to strike the defenses of the defendants, and the defendants renewed their motion to dismiss. The Court reserved the right to rule on the motions after the submission of proposed Findings of Fact and Conclusions of Law by the parties.
Having now carefully considered all of counsels' proposals, arguments and contentions, as well as the testimony, pleadings, stipulations, briefs and exhibits submitted, and the reasonable inferences to be drawn therefrom, the Court, pursuant to Rule 52 of the Federal Rules of Civil Procedure, makes its Findings of Fact and Conclusions of Law as follows:
Findings of Fact
1. The plaintiff, the Secretary of Labor, United States Department of Labor, brings this action pursuant to the authority conferred upon him by the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 201 et seq. The corporate defendant, Office Communications Company, is a corporation organized and existing under and by virtue of the laws of the State of North Carolina, having its principal place of business in Winston-Salem, North Carolina, where it has been engaged in the operation of a telephone answering service. The individual defendant, Moyer Pinkston Hendrix, is a citizen and resident of the State of North Carolina, and as president of the corporate defendant actively manages, supervises and directs the business of Office Communications Company.
2. The defendants have operated, and still operate, a private board telephone exchange with approximately 200 jacks, approximately 180 of which jacks are utilized in the answering of telephones of its customers. The private board exchanges operated by the defendants are, through a system of relays, wires, switches, various electronic devices, tied in with telephones in all of the states of the United States, and some foreign countries, and thereby are a part of a nationwide and worldwide telephone system. Defendants' business is in interstate commerce and the employees are regularly engaged in interstate commerce.
3. The corporate defendant operates its private board exchanges twenty-four hours a day, seven days a week and employees of the corporate defendant are on duty at all times. The work schedule of the operators is based on a forty hour workweek; however, at various times the employees worked in excess of the forty hour schedule. During the period involved, the corporate defendant had 165 to 180 customers, who are located entirely in the Winston-Salem area and consist primarily of doctors, lawyers, realtors, railroad companies, insurance firms, and producers of goods for interstate commerce. The service is paid for at a basic rate of $18.00 per month, which amount covers 85 completed messages, the calls in excess of 85 are billed at the rate of ten cents (10¢) per call. The service rendered consists primarily of receiving messages for the customer when he does not answer his own phone; making a physical note of the message received; and later transmitting it to the individual customer. The equipment used by the corporate defendant is leased from Southern Bell Telephone and Telegraph Company.
4. Defendants' employees were paid an established and stated salary for the forty hour scheduled workweek. The employees involved in this action were paid salaries for a forty hour workweek as follows:
SALARY FOR 40-HOUR
EMPLOYEE DATES EMPLOYED WEEK
Maggie J. Bowen 4/2/62-12/17/62 $60.00
1/21/63-3/15/63 $62.50
Cleo M. Gerry 8/27/62-12/10/62 $47.50
12/10/62-6/24/63 $50.00
Freddie C. Meadows 4/2/62-8/27/62 $62.50
8/27/62-5/6/63 $67.50
5/7/63-9/9/63 $75.00
Loretta L. Pruitt 4/30/62-12/17/62 $55.00
3/4/63-6/30/63 $57.50
7/1/63-9/2/63 $60.00
Wanda C. Warren 4/2/62-9/17/62 $50.00
1/21/63-1/28/63 $52.00
For their work in excess of forty hours in a workweek, the employees were paid by separate check, and they were compensated for the overtime hours at their regular rate of pay, which was determined by dividing their salary by forty, the number of hours which the regular salary was intended to compensate. The employees were not compensated for hours worked in excess of the scheduled workweek at one and one-half times their regular pay, and deductions for Social Security and withholding taxes were not made from the separate checks given in payment for the overtime hours worked. Some of the employees also performed work during the hours worked in excess of the scheduled workweek for the individual defendant in his business as a Certified Public Accountant. This work was usually performed while the employees were sitting at the switchboard and taking phone calls and messages for the corporate defendant. The Court finds that during the hours worked in excess of the scheduled forty hour workweek, even though some of the employees during such hours performed work for the individual defendant as a Certified Public Accountant, they were still primarily employed by and engaged in the business of the corporate defendant.
5. The defendants did not retain or produce at the trial records of the overtime hours worked each day and each workweek by the employees for the corporate defendant. Evidence was introduced, however, showing the amount of the separate checks which the defendants' employees received for hours worked in excess of forty. The total of such separate checks received by employees, less amounts shown to have been received for purposes other than hours worked in excess of forty hours per week, are as follows:
a. Maggie J. Bowen $199.80
b. Cleo M. Gerry 25.40
c. Freddie C. Meadows 805.21
d. Loretta L. Pruitt 435.15
e. Wanda C. Warren 38.95
The Court finds that the defendants failed to keep and maintain adequate records as required by the Fair Labor Standards Act.
6. The defendants have unlawfully withheld from the employees listed in Paragraph 4 as overtime compensation the amount of $752.27.
7. In 1960, the Wage and Hour Division of the Department of Labor investigated the conduct of the defendants' business, and as a result of this investigation, the Secretary of Labor instituted a suit for an injunction to restrain the defendants from violating the Act. On August 28, 1961, the suit was concluded when the Secretary of Labor through his representatives and the defendants entered into a stipulation in which the defendants agreed to conform to the Act as to wages, overtime compensation, and recordkeeping requirements. The Court finds that the defendants have continued to violate the Act in regard to overtime compensation and recordkeeping requirements.
In the determination of the matters presented herein, the Court makes reference to the provisions of Section 7(a) (1) of the Act, 29 U.S.C.A. § 207(a) (1), which provides that no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce for any workweek longer than forty hours, unless such employee receives compensation for his employment in excess of forty at a rate of not less than one and one-half times the regular rate at which he is employed.
In a case of this nature, the burden of proof is on the plaintiff to show by the preponderance of the evidence that the employees of the defendants were engaged in interstate commerce. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515, reh. den. 329 U.S. 822, 67 S.Ct. 25, 91 L.Ed. 699 (1946); Mitchell v. Telephone Answering Service, Inc., 183 F.Supp. 607 (D.P.R. 1959); aff. sub nomine Telephone Answering Service v. Goldberg, 1 Cir., 290 F.2d 529 (1961). However, in the present case, the parties have stipulated that the defendants and their employees were engaged in interstate commerce. The plaintiff also has the burden of showing that the defendants' employees performed work for which they were improperly compensated. Anderson v. Mt. Clemens, supra. Herein, it was established by evidence of the plaintiff that the employees of the defendants were on a forty hour per week schedule at a set rate of compensation; that the employees worked in excess of forty hours and were compensated for...
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