# Petition for a Writ of Certiorari — Union Dime Savings Bank v. Adams

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for a Writ of Certiorari
- **Published:** January 1, 1944
- **Citation:** 323 U.S. 751

## Text

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CUIANLES ELMORE OROPLE

ER

No 387%

IN THE

Supreme Court of the United States

Octoser Term, 1944

Union Dime Savines Bank,
Petitioner,
against

Tra Apams, Cuirrrorp Grecory, Cecrn Hunt, Jack PizziroLa
and Lreonarpo RartctirFe,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO BE
ADDRESSED TO THE UNITED STATES CIRCUIT
COURT OF APPEALS FOR THE SECOND
CIRCUIT

Rosert R. Bruce,
Counsel for Petitioner.

McLanauan, Merritt, IncranaM & CurisTy,
40 Wall Street,
New York, N. Y.
Of Counsel.

INDEX
PAGE
Parties and History of the Proceedings ............ 2
PAT oa Sixvrin ce CV sea an BER OOO a ea See eee 4
Facts as Established by the Findings .............. 5
eteGnG FPN 5.6-0 5 i x enidee ages eka nees caus 8
Reasons in Support of Petition .................... 9
PT eee a Er roy 6 yo eee ger? Pete = 13

CITATIONS.

Cases:

Borella v. The Borden Company, —— F. (2d) ——

(C. C. A. 2d, Decided July 28, 1944) ........... 12
Fleming v. Arsenal Building Corporation, 125 F. (2d)

EE 50 et a AN aA Re eae ee Lee eee 11
Greenberg v. Arsenal Building Corp. and Spear &

Co. Ine., F. (2d) —- (C. C. A. 2d, decided

ee) RN ee Pre errr an Wa eee 12
Kirschbaum v. Walling, 316 U. S. 517 ............. 3, 11
Overnight Motor Transportation Co. v. Missel, 316

5 ok eee I ora Ge he SORA ED EERE OE ERS 10, 11
Rucker v. First National Bank, 138 F. (2d) 699. Cer-

thowmrd emend, Sei CT). Bi FO, iit kav es vesenees 12
Warren-Bradshaw Co. v. Hall, 317 U.S. 88 ........ 10, 11

Statutes:
Fair Labor Standards Act of 1938 (Act of June 25,

1938, ¢. 676, 52 Stat. 1060, 29 U. S. C., See. 201,

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SRREHSEDHSP CECE HVAC SHEA ERED?

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ch aaa PONE I EE, LER INS

PUB ETSESETLE DRE LE LEE LI I PON

ARIE WIE ISAT SLA tly AE BL OE AEE Btn DINE a

SLA IIO Re 8 LRA AHS AE a Sta A Ti eS NNO BN

aetna eee

IN THE

Supreme Court of the United States

Octroper Term, 1944

+
Union Dime Savines Bank,

Petitioner,
against

Ina Apams, Cuirrorp Gregory, Ceci Hunt, Jack PizzrroLa
and Lreonarpo Rarciirre,
Respondents.

,’ —_
+

Comes now Union Dime Savings Bank, your petitioner,
by Kobert R. Bruce, as counsel, and moves this Honorable

Court that it shall by certiorari or other proper process @
directed to the Honorable United States Cireuit Court of @
Appeals for the Second Circuit require said Court to ;

—

certify and remove to this Court for its review and deter-

mination, a certain cause lately pending in said Court, c
wherein your petitioner was defendant-appellant and [ra 4
Adams and other persons named therein were plaintiffs- &

appellees, and to that end your petitioner now tenders
herewith its petition with a certified copy of the record
in said cause.

Rosert R. Bruce,
Counsel for Petitioner.

SS Let) 1 ARUN EN BURNS RIOR NE EI 5 at Cala

Moher ee

PETITION FOR A WRIT OF CERTIORARI TO BE
ADDRESSED TO THE UNITED STATES CIRCUIT
COURT OF APPEALS FOR THE SECOND
CIRCUIT

Your petitioner, Union Dime Savings Bank, respect-
fully shows to this Court as follows:

Parties and History of the Proceedings

1. Petitioner is a savings bank and a corporation duly
organized and existing under the laws of the State of New
York and maintains its place of business in the City,
County and State of New York.

2. Respondents were employed by petitioner as elevator
operators and in other capacities as building service em-
ployees at various times between October 24, 1938 and
February 26, 1942, in two loft buildings owned by peti-
tioner and located in the Borough of Manhattan, New
York City. Petitioner originally acquired both loft build-
ings thru foreclosure of mortgages held by it as invest-
ments and carried on none of its functions as a savings
bank in these buildings.

3. Respondents commenced this action on July 22, 1942,
in the United States District Court for the Southern Dis-
trict of New York under Section 16(b) of the Fair Labor
Standard Act of 1938 (Act of June 25, 1938, e. 676, 52
Stat. 1060, 29 U.S. C. See. 201, et seq.) to recover over-
time wages allegedly due under Section 7(a) of that Act
for their respective periods of employment by petitioner
between October 24, 1938, effective date of the Act, and
February 26, 1942, together with liquidated damages of
an equal amount, attorneys’ fees and costs,

4. Petitioner’s answer denied that respondents were
covered by the Act and, in addition, pleaded several
affirmative defenses and an equitable counterclaim predi-

LIAN ATES SRE INL ROT RORY GE ™~y

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cated upon the fact that respondents’ entire employment
had been governed by collective bargaining agreements
between the parties and upon the conduct of respondents
under those agreements. In brief, the affirmative defenses
were (1) payment based upon a construction of the col-
lective agreements in compliance with the <Aet; (2)
: estoppel against respondents’ complete claim; (3) estoppel
against respondents’ claim for liquidated damages, attor-
neys fees and costs alone; (4) unconstitutionality of See-
tion 16(b) of the Act for want of due process if recovery
of liquidated damages were permitted under all the cir-
cumstances of this case; (5) right to arbitrate respond-
ents’ claims; and finally (6) a counterclaim for reforma-
tion of the collective bargaining agreements upon thie
ground that they were entered into and carried out by the
parties under a mutual mistake of law and fact or of law
alone regarding the application of the Act to their em-
| ployment relationship and that the true intention of the
parties was thwarted by such mutual mistake.

5. By order dated February 11, 1945 (R. 89-935)," Judge
Simon H. Rifkind struck out all petitioner’s aifirmative
defenses as insufficient in law but allowed the counter-
claim for reformation of the collective bargaining agree-
ments to stand for trial.

| 6. Trial was had before Judge Harold P. Burke in
March, 1943. At the trial, petitioner, deeming the issue
of coverage foreclosed by this Court’s decision in Kirsch-
baum v. Walling, 316 U. S. 517 (because the greater part
of the rentable area of both buildings was occupied by
tenants producing goods for commerce) stipulated that
respondents were covered by the Act during their em-
ployment. It was also stipulated that the proof should
be limited to the case of the respondent Lra Adams and
if he was found entitled to recover, then all respondents
should recover on the basis of certain specified amounts
for overtime compensation under the Act.

* All references are to folios of the Record for greater particularity.

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7. An opinion and findings of fact and conclusions of
law dated November 11, 1943 (R. 1138-1170) sustaining
respondents’ claims were filed by Judge Burke and pur-
suant thereto judgment (R. 1171-1176) was entered
against petitioner on November 27, 1943 in favor of re-
spondents for the sum of $3,947.02, consisting of $1,498.76
overtime compensation, $1,498.76 liquidated damages, $800
attorneys’ fee (stipulated as reasonable in event of re-
spondents’ recovery) and $149.50 costs and disbursements.

8. As disclosed by Judge Burke’s opinion (R. 1168),
judgment against petitioner’s counterclaim for reforma-
tion and in favor of respondents was rested on the
ground that ‘the evidence falls short of establishing
clearly that the Union representative shared the same be-
lief (i. e., that the Act did not apply) and that the al-
leged mutual mistake resulted in a contract which failed
to express the actual intent of the parties.’’

9. An appeal was thereupon taken to the United States
Cireuit Court of Appeals for the Second Circuit by peti-
tioner from both the final judgment and from the inter-
mediate order striking the various affirmative defenses,
excepting the defense of arbitration which had become
moot because of the trial. On July 18, 1944, the Cireuit
Court affirmed the judgment and granted an additional
allowance of $500 to respondents’ attorneys as counsel
fees for the appeal (R. pp. 399-403).

10. On July 24, 1944, the Second Cireuit Court entered
its order upon the stipulation of the parties staying and
withholdings its mandate in this case for a period of
thirty days pending this application by your petitioner
for a writ of certiorari to said Court.

Jurisdiction
11. The jurisdiction of this Court is based on Seetion
240(a) of the Judicial Code, 28 U.S. C. 347 as amended
by the Act of February 13, 1925.

SE OR

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1

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Facts as Established by the Findings

12, The relevant findings of the Trial Court are sub-
stantially as follows (both paraphrased and quoted. find-
ings being assigned their actual numbers in parentheses ) :

(3-4) Throughout plaintiffs’ employment there ex-
isted certain master collective bargaining agreements
between The Realty Advisory Board on Labor Re-
lations, Ine., an organization of building owners and
managing agents in the Borough of Manhattan, New
York City, and Local 32-B, Building Service Im-
plovees’ International Union, A. F. of L., covering
terms and conditions of employment of building serv-
ice employees in defendant’s two loft buildings and
other signatory buildings (R. 1159-1140). These col-
lective agreements were the so-called Mayor’s Board
of Survey Agreement which, as supplemented by
various interim arbitration awards, was effective from
Mareh 15, 1936 to April 23, 1939 and the Sloan Agree-
ment which, also supplemented by an arbitration
award known as the Sloan Award, was effective from
April 24, 1939 to April 20, 1942 (R. 1140). (Complete
copies of these agreements are included in the sepa-
rate binder of exhibits stipulated to be handed up
to the Cirenit Court on argument of the appeal (R.
1186-1188) as Exhibits A-1 to A-6 inclusive and Ex-
hibits B and B-1.)

(5-6) Plaintiffs were at all times members of Local
39_B (sometimes called the Union herein) and ‘*were
employed by and actually worked for the defendant
on the basis of a specified regular maximum work-
week at a specified regular weekly wage and were
paid at the rate of time and one-half for all hours
worked in exeess of such regnlar maximum = work-
week. Pursuant to the collective bargaining agree-
ments plaintiff Ira Adams was employed by and actu-
ally worked for the defendant during the following
periods on the following basis: October 24, 1988 to
April 27, 1939, $28 per week for a 48 hour week;
April 28, 1939) to October 24, 1940, $24 per week
for a 47 hour week; October 25, 1940 to February
26, 1942, $25 per week for a 47 hour week’? (R.
1141-1142).

6

(21) ‘*The form of the collective agreements, par-
ticularly the Madden Award and the Sloan Agree-
ment indieate that the collective agreements were
made by the Union as agents for its members includ-
ing the plaintiffs herein. The plaintiffs, as to wages
and hours and working conditions, were bound by the
terms of said agreements’? (R. 1150).

(7) In loft buildings signatory to the Sloan Agree-
ment, of which there were about 700 in the Borough.
of Manhattan employing about 3500 employees, the
percentage of space occupied by tenants engaged in
production of goods for commerce varied from a
small percentage to one hundred per cent (R. 1142-
1148).

(S) ‘During the negotiations of the so-called Me-
Grady Agreement in the Garment Center in Decem-
ber 1958 through February 1939, there was brief dis-
cussion between the negotiating committees of the
Union and representatives of associations represent-
ing building owners regarding the possible applica-
tion of the Fair Labor Standards Act of 1938 to
building service employees in loft and_ office build-
ings operating under collective agreements made be-
tween the Union and said associations and the Realty
Advisory Board. Such discussions were incidental
to other questions involved and the matter was but
casually treated and summarily dismissed. The nego-
tiating committee of the Union in those discussions
was substantially the same committee which nego-
tiated the Sloan Agreement with Realty Advisory
Board. Some of the members of the Realty Ad-
visory Board negotiating committee in the Sloan
Agreement negotiations were also members of the
negotiating committee of the associations in the Me-
Girady agreement negotiations’? (R. 1143-1144).

(9) **The Sloan Agreement was negotiated between
March 1939 and July 1939. During the negotiations
there was little or no discussion of the possible ap-
plication of the Act to the employment relationship
involved in said negotiations’? (R. 1145).

(10) ‘During the period covered by the complaint
no claim was ever made by the Union to the Realty

Advisory Board, or to the defendant, or to the arbi-
trator, or to the Impartial Chairman, that the ques-
tion of benefits under the Act should be arbitrated
under the provisions of the collective Agreements
nor that the said agreements should be adjusted to
comply with the requirements of the Act’? CR. 1145-
1146).

(11) **Between June 25, 1938, when the Act was
approved, and June 1, 1942, no claim was ever made
by the Union to the defendant or its managing avent
that the members of the Union employed in the two
buildings were entitled to the benefits of the Act or
to any other or different rate of pay than that pre-
scribed by the collective bargaining agreements”” (R.

1146).

(12) **Between the date of approval of the Act
and July 22, 1942, when this action was commenced,
no claim was ever made by any of the plaintiffs
that they were entitled to benefits of the Act im any
respect or to any different rate of pay than that
prescribed by the collective agreements’? (R. 1145-

1146).

(13) “The plaintiffs were paid weekly and signed
weekly pay rolls acknowledging payment in full for
all hours worked during each week when employed
by the defendant’? (R. 1146).

(15) **‘No provision was made by the defendant
and its managing agents in its annual estimates of
the cost of operation and maintenance of said huild-
ings for overtime payments under Section 7 (a) of

the Aet’’ (R. 1148).

(16) ‘*During the period covered by the complaint
the two buildings were operated by the defendant
at a loss and were sold at a loss before the com-
menecement of this action’? (R. 1148).

(17) ‘*Between October 1938 and July 1959, when
the Sloan Agreement was signed, there was no new
contractual relationship entered into by the parties
but merely a continuation of the relationship as modi-
fied and fixed by the Madden Award” (R. 114s).

8

(18) ‘*There is no clear and convincing proof that,
at the time of the signing of the Sloan Agreement
in July, 1939, and at the time of the making of the
Sloan Award in October, 1940, the parties to those
collective bargaining agreements were mutually mis-
taken as to the applicability of the provisions of the
Fair Labor Standards Act to building service em-
ployees in loft buildings, such as the plaintiffs’? (R.
1149).

a veerehe
Beh seg

Questions Presented

13. On the basis of the foregoing, petitioner desires this
Court to review the following questions:

(a) Whether collective bargaining agreements
which provided no express hourly rate of pay but
ealled for a specified regular weekly wage and over-
time compensation at the rate of time and one-half
for hours in exeess of the regular workweek (of 48
and 47 hours in successive periods), were in com-
pliance with Section 7(a) of the Act where the reg- [|
ular hourly rate reasonably to be implied therefrom — {
always exceeded the minimum hourly rate required — f
by Section 6 of the Act.

(b) Whether the collective bargaining agreements
and the eonduet of respondent employees thereunder
in relation to petitioner give rise to an equitable
estoppel against the recovery of liquidated damages,
attorneys’ fees and costs by respondents. Implicit in
this question, whether any concept of public policy
embedded in the Act or in the law generally pre-
cludes the raising of such an estoppel.

(c) Whether allowing respondent employees to re-
cover liquidated damages, attorneys’ fees and costs
under all the cireumstances of this case produces a
result so harsh and grossly inequitable as to consti-
tute an application of Section 16(b) of the Act that

2

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TRIE IN ES aE SE Te Tait

9

is violative of due process under the Filth Amend-
ment.

(d) Whether the finding of the Trial Court, at-
firmed by the Cireuit Court, that there is no clear
and convincing proof of mutual mistake in the mak-
ing and carrying out of the collective bargaining
agreements and of consequent frustration of the true
intention of the parties, is not clearly erroneous.

(e) Whether, as held by the Second Cireuit Court
of Appeals, ‘treformation of a contract which in
terms violated a remedial statute would tend to frus-
trate the administration of the Act and contravene
its policy’? (R. p. 405).

Reasons in Support of Petition

14. There are involved in this case novel questions in
the construetion and application of the Fair Labor Stand-
ards Aet of 1938 not vet reviewed by this Court or, in the
ease of two questions presented, not so clearly and di-
reetly settled as to dispose of a mass of litigation which
has arisen under the Act.

(a) This Court has not yet reviewed the question
whether employees who have accepted the full bene-
fits of collective bargaining agreements freely and
fairly negotiated and made no claims or demands
under the Act during the life of such agreements,
particularly under cireumstances tending to show
that both employees and employers believed in good
faith that the Act did not apply to their employ-
ment relationship, can still recover liquidated dam-
ages, attorneys’ fees and costs under Section 16(b)
of the Act. In other words, this Court has not re-
viewed a case where the defense has been made that
cireumstances such as here presented give rise to an

10

estoppel against claims for liquidated damages under
Section 16(b) of the Act as distinguished from over-
time compensation under Section 7(a).

(b) This Court has not yet reviewed the question
whether it would be contrary to the policy of the Act to
reform a collective bargaining agreement entered into and
earried out under a mutual mistake regarding applica-

tion of the Act to the employment relationship involved,

in order to earry out the true intention of the employer
and employees to make a lawful agreement for a specified
regular weekly wage.

(c) In Overnight Motor Transportation Co. v. Missel,
316 U. S. 572, 581, and Warren-Bradshaw Co. v. Hall,
317 U.S. 88, 93, this Court, in construing individual em-
ployment contracts as distinguished from collective agree-
ments with the long-established bargaining history here
involved, refused to find by implication an hourly rate
which would have sustained the employment as in com-
plianee with the Act. However, there are critical differ-
ences between the facts in the above mentioned cases and
the present one. In the Missel case, this Court said at
page SSL:

“But there was no contractual limit upon the hours
which petitioner could have required respondent to
work for the agreed wage, had he seen fit to do so,
and no provision for additional pay in the event thie
hours worked required minimum compensation greater
than the fixed wage. Implication cannot mend a con-
tract so deficient in complying with the law.’’

Of course, in the present case there was a definite con-
tractual ceiling of 48 or 47 hours on the week’s work
with rate and one-half for hours worked in excess of the
regular workweek. The minimum compensation always
exceeded the Act’s standard and could never be less in
any event.

11

In Warren-Bradshaw, it is clear, as pointed out by
Judge Hutcheson in the Cireuit Court’s opinion (124 F.
(2d) 42, 44) ‘‘that they (the employees) worked on a
straight hourly basis. * * *’’ In the present case, re-
spondents worked on a regular weekly basis. Moreover,
the provision for special overtime compensation for hours
worked in excess of the regular workweek implied that
compensation for any legal overtime within the regular
workweek was absorbed in the regular weekly wage. This
implication is fortified by respondents’ regular weekly ac-
knowledgments of full payment for all hours worked and
their failure currently to demand additional corpensa-
tion,

(d) Likewise, in Overnight Motor Transportation Co.
y. Missel, 316 U. S. 572, it was held that the imposition
of liquidated damages under Section 16(b) of the Act
did not violate due process. It does not eredit the fune-
tion and fair tradition of this Court to suggest that this
holding was meant to apply to every possible set of cir-
cumstances irrespective of the harshness and inequity of
the result. That the holding is limited to the specific
facts of the Missel ease is borne out by the Court's
detailed exposition (p. 582) of the employer’s reasonable
opportunity to determine in advance that his employee
was covered by the Act. Until June 1, 1942, some months
alter respondents’ employment by petitioner had ended,
coverage in this case was distinetly doubtful. Indeed,
the great weight of authority was against it. Fleming
v. Arsenal Building Corporation, 125 F. (2d) 278, 281.

15. The widespread public interest antl great impor-
tance of these questions to real estate owners and their
building service employees is manifest. The decision of
this Court on June 1, 1942, in Kirschbaum v. Walling,
216 U. S. 517, came as a distinct surprise and shock to
independent landlords of loft buildings all over the coun-
try. Radical adjustments were necessary in many cases
and were promptly made for the future. However, such

12

adjustments could not dispose of the huge existing liabili-
ties for overtime compensation and equal amounts of
liquidated damages which fell upon real estate owners
still suffering in many sections of the nation from the
long depression. In New York City alone, the retro-
active liability of loft building owners was estimated to
approximate twelve million dollars. To the knowledge
of petitioner’s attorneys, there are hundreds of cases
pending in the Federal and State Courts in New York:
City at various stages of litigation involving the same or
similar issues as those now presented by this ease. A
large number of cases have been stipulated to abide the
ultimate decision in this ease or in another ease, Greei-
berg v. Arsenal Building Corp. and Spear & Co. Inc.,
also decided by the Second Cireuit Court of Appeals at
the same time as the present case, where additional ques-
tions of law are presented as well as similar ones involvy-
ing other collective bargaining arrangements. (A_peti-
tion for writ of certiorari will soon be presented in the
Greenberg case). The fact that there were 700 loft build-
ings in the Borough of Manhattan, New York City, where
building service employment was governed by the collec-
tive bargaining agreements peculiar to this case, demon-
strates the importance of this litigation.

Moreover, it is possible that the retroactive liabilities
will not be limited to loft buildings but will extend to
office buildings,—at least those buildings where, though no
physical production actually occurs, the tenants adminis-
ter and supervise production elsewhere. In Rucker v.
First National Bank, 138 F. (2d) 699 (C. C. A. 10th,
1945), it was held in such a case that the building service
employees are not covered by the Act. This Court
denied certiorari. 321 U. S. 769. But in Borella v.
The Borden Company, F, (2d) (C. C. A. 2d,
decided July 28, 1944), a different result has been reached.
If the Borella doctrine is ultimately sustained, the exist-
ing retroactive liabilities of landlords of loft and_ office
buildings in New York City and, in fact, throughout thie

13

country, will be substantially increased. The final and
authoritative settlement by this Court of the questions
here presented will necessarily be conclusive of a great
mass of pending and threatened litigation.

16. Finally, this case squarely presents questions as to
the validity and effectiveness of collective bargaining
agreements negotiated and carried out during a period
when the applieation of the Act to employments of the
character here involved was not seriously regarded by
reasonable men, laymen, lawyers and courts alike. If the
decision of the courts below in this case is to stand, **the
process of collective bargaining is turned into a serap of
paper’? with results that ‘tcannot be joyfully regarded.”
(Rifkind, J. on the motion to strike the affirmative de-
fenses and counterclaims in this case, R. 87-89.)

Conclusion

Wuererore, your petitioner respectfully prays that a
writ of certiorari be issued out of and under the seal of
this Court to the United States Cireuit Court of Appeals
for the Seeond Cireuit, commanding said Court to certify
and send to this Honorable Court a full and complete
transeript of the record and all proceedings in the within
cause and to stand to and abide by such order and diree-
tion as to your Honors shall seem meet, and the cireun-
stances of the case require, and that your petitioner may
have such other and further relief or remedy in the
premises as to this Court may seem proper.

Rosperr R. Bruce,
Counsel for Petitioner.
McLananan, Merrirt, [xcranam
& Curisty,
40 Wall Street,
New York, N. Y.
of Counsel

Dated: August 22, 1944.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA34806415_2257%3A1. Public record. Not legal advice.