Petition for Writ of Certiorari — Tobin v. Alma Mills

Page

Opinions below .......... MY or eae ee 1

MEIN Kole oes Set ova les oe Ran Ree rey ea ae, 1

Questions presented ......... Sine eT ioe patel ee 2

UI nt erat cine Cue cat wae 2

EE Mr coe ae ek eA dud wage Meee cone ater 3

Reasons for granting the writ. . AR CR eae ie me AO 8

ERG ele le ARP aaa sire ate on ¥ 25

aI IES a liars sno ea eee ore 26

CITATIONS

Cases:

Brooklyn Bank vy. O’Neil, 324 U.S. 697... .... 16

Fleming v. Miller, 47 F. Supp. 1004, reversed, 138 F.2d

629, certiorari denied, 321 U. S. 784.......... ad 20

Handler v. Thrasher, 191 F.2d 120. Wes .. 8,22, 24

Lenroot vy. Interstate Bakeries Corp., “146 F.2d 325 + oo ee

McComb v. Jacksonville Paper Co., 336 U.S. 187. 6,8, 17, 22-23

Michelsen v. Penney, 135 F.2d See 25

Milk Wagon Drivers Union v. Meadowmoor Dairies, 312

ERY eA ae, tre te Ne coe nels give copia giant sf ; 18

People v. Sheffield Farms, 225 N.Y. 25, 121 N.E. 474 24

Rutherford Food Corp. v. McComb, 331 U.S. 722 , 24

Schine Theatres v. United States, 334 U.S. 110 16

Tobin v. Industrial Bank & Trust Co., E. D. Mo., Jan.

1" SR 2 Ra ae PRR nara dena Ree 21

Tobin v. Moore, M. D. Ga., Jan. 5, 1952... 21

United States v. Darby, 312 U.S. 100. 5

United States v. Radio Corporation of America, 46 F.

Supp. 654, appeal withdrawn, 318 U.S. 796 20

United States v. Swift & Co., 286 U.S. 106

2, 8, 9-10, 11, 13-14, 15, 16, 17, 18, 20

Western Union Tel. Co. v. International Brotherhood of

Electrical Workers, 133 F. 2d 955... .... eee 20

Statutes:

Fair Labor Standards Act of 1938, ce. 676, 52 Stat. 1060,

29 U.S.C. et seq...... Looker 2

See. 3 .... Ree SK: ae 26

ee eee sole tices 26

ORE | SIAR area cre arse ae te vate teeters : 27

Rr rinse eens PPA eee OS is 27

Statutes—Continued Page

Fair Labor Standards Amendments, ¢. 736, 63 Stat. 910,

29 U.S.C., Supp. 1V, see. 217:

RR a a, sa ee 17

Portal-to-Portal Act of 1947, ¢. 52, 61 Stat. 84, 29 U.S.C.

251-262:

Miscellaneous:

House Report 1453, 8lst Cong., Ist Sess............... 17

pt a — LEAT

Inthe Supreme Court of the Bnited States

OcTOBER TERM, 1951

No. 561

Maurice J. ToBrn, SECRETARY OF LaABor, UNITED

StaTEs DEPARTMENT OF LABOR, PETITIONER

Vv.

ALMA MILLS

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FOURTH CIRCUIT

The Solicitor General, on behalf of the Secre-

tary of Labor, prays that a writ of certiorari issue

to review the judgment of the United States Court

of Appeals for the Fourth Circuit, entered in the

above case on November 5, 1951.

OPINIONS BELOW

The opinion of the District Court (R. 8a-24a)

is reported at 92 F. Supp. 728. The opinion of the

Court of Appeals (R. 98-102) is reported at 192 F.

2d 133.

JURISDICTION

The judgment of the Court of Appeals was en-

tered on November 5, 1951 (R. 102-103). The jur-

isdiction of this Court is invoked under 28 U.S.C.

1254(1).

(1)

2

QUESTIONS PRESENTED

In 1940 a permanent injunction was entered

against respondent restraining violations of over-

time and other provisions of the Fair Labor Stand-

ards Act. In 1949 respondent, alleging that it had

been in full compliance, moved that the injunction

be vacated. On the basis of the undisputed fact

that a number of employees in respondent’s mill

had worked overtime, without compensation, reg-

ularly and openly over a period of at least two

years immediately prior to the filing of the motion

to vacate, the trial court adjudicated respondent in

civil contempt. Nevertheless, it vacated the in-

junction on the ground that the violations were

unintentional and not willful. The court of appeals

reversed the contempt adjudication and affirmed

the dissolution of the injunction. The questions

presented are:

(1) Whether, in the absence of any claim or

showing by respondent of changed circumstances

or special hardship, the permanent injunction can

be dissolved consistently with the governing prin-

ciples of United States v. Swift & Co., 286 US.

106.

(2) Whether respondent is relieved of respon-

sibility under the Act and from accountability in

civil contempt for the admitted overtime work be-

cause its top management had issued instructions

against and had no actual knowledge of such work.

STATUTE INVOLVED

The pertinent provisions of the Fair Labor

3

Standards Act of 1938 (c. 676, 52 Stat. 1060, 29

U.S.C. 201 et seq.), are set forth in the Appendix.

STATEMENT

The present proceedings grew out of an action

brought initially by the Administrator of the Wage

and Hour Division to enjoin Alma Mills from vio-

lating the minimum wage, ove:time compensation

and other specified provisions of the Fair Labor

Standards Act of 1938. There was no contest, and,

with respondent’s consent, the District Court, on

August 23, 1940, entered a permanent injunction.

(R. la-7a.)

There were no further court proceedings until

March 16, 1949, when respondent filed its motion to

vacate the judgment (R. 8a-9a). At a pretrial con-

ference on this motion, the Administrator sought

and was granted leave to make an investigation of

appellee’s operations prior to the hearing on the

motion. Thereafter, on January 17, 1950, the Ad-

ministrator filed his response, alleging that Alma

Mills had violated the overtime compensation and

certain other provisions of the injunction. It

prayed that the motion to vacate the injunction be

denied, and that the employer be adjudged in civil

contempt. (R. 9a.)

The facts underlying the trial court’s finding of

civil contempt were undisputed, and may be sum-

marized as follows:

Respondent, a corporation, employs over 400

persons in its cotton textile mill located in Gaffney,

South Carolina, approximately 30 or 35 of whom

ER ME POTN LI ERE EIS EES LE LORE SRL STMT EN GE NEON AAA a

4

are women employed as spinners. One of the prin-

cipal tasks of the spinners, in addition to repairing

broken ends of thread and placing the roving in

the frames as it is being spun, is to clean the vari-

ous parts of the frames so that the lint will not ac-

cumulate and become entangled in the frames caus-

ing ‘‘slugs’’ and imperfections in the cloth or mis-

alignment of the frame. (R. 18a; 70a, 71a, 75a, 31a,

34a-35a, 59a-60a.)' During the period from Sep-

tember 1946 to April 1949 (the period covered by

the inspection), most of the spinners regularly be-

gan work at their frames prior to the time at which

their assigned shifts began (R. 10a; 44a, 45a, 53a,

65a-66a). Because of the other duties entailed in

keeping frames in proper operation, even veteran

spinners of many years’ experience felt hard

pressed to perform the necessary clean-up work

in the course of their regular shift (R. 10a; 46a,

53a, 54a, 60a, 62a). One testified she had been

‘‘eleaning up before work time 23 years’’ (R. 46a).

Several spent an hour or more per day on this

cleaning work (34a, 53a, 57a), in addition to the

customary forty-hour workweek (36a-37a, 55a).

None received any pay whatsoever for the extra

time thus spent in the cleaning activities (37a,

55a), nor were records kept concerning this work

(75a).

1 References before the semi-colon are to the trial court's

opinion; references after the semi-colon are to the supporting

evidence,

oe

eI ae CEE a

ad

5

The work in question was performed at the

frames in the spinning department of respondent’s

mill while they were in normal operation, week

after week over the period of approximately two

and one-half years covered by the inspection. It

was done openly in plain view, so that ‘‘anybody,”’

including managerial or supervisory personnel,

could have observed the work taking place ‘‘if

they had looked”’ (R. 59a, 37a, 68a). The trial court

accepted respondent’s contention that instructions

had been issued through the supervisory ‘‘second-

hands’’* against the performance of work in ad-

vance of regular shift hours (R. 74a, 24a), but it

is undisputed that the instructions were not en-

forced and that the practice did not stop until

April 1949, when there was an inspection of the

mill by a representative of the United States De-

partment of Labor (R. 88a).

* The second-hands of the different shifts gave varied ac-

counts of their attitude and conduct in relation to the manage-

ment’s avowed “policy” against preshift work. Two (shift

supervisors Duncan and Newton) testified that they were un-

able to observe whether employees on the succeeding shift were

coming in early because of their own preoccupation toward

the end of the shift with clerical work which had to be done

at “a little office” away from the spinning room (R. 79a-80,

8la). The third (supervisor Lavender) testified that prior to

April 1949 certain employees persisted in disobeying his in-

structions concerning preshift cleaning, but that finally in April

1949 he told them that if they did not “quit” he would report

the matter to “higher authorities;” and this proved effective

(R. 84a-86a).

Vice President Hamrick testified that while he often visited

the spinning rooms, he was unaware of whether preshift work

‘was being done because the spinners often changed shifts and

therefore were not. identified in his mind with any particular

shift (R. 72a-73a).

Si ta |

6

Apart from respondent’s allegations of com-

pliance in its motion to vacate, its pleadings con-

tain no allegations that changes in conditions and

circumstances had occurred since the issuance of

the injunction that would justify vacating the de-

cree. Nor, except for its attempt to avoid respon-

sibility for the above-described pre-shift work,

did respondent introduce any evidence in support

of the motion to vacate. Specifically, respondent

made no allegation and offered no proof that the

injunction was in any way hampering sale of its

stock, that any such sale was contemplated, or that

there had been any changes in corporate manage-

ment or structure. On the contrary, respondent’s

counsel expressly conceded at the pretrial confer-

ence that there had been no corporate changes af-

fecting this respondent, and that its stock was still

owned by the interests that controlled it at the

time of the issuance of the injunction (see infra,

p. 12).

The trial court concluded that respondent had

violated the terms of the injunction. While accept-

ing respondent’s assertion that this work was per-

formed outside the regular shift hours ‘‘contrary to

instructions * * * and without the knowledge

or consent’? of respondent, the court held that

respondent ‘‘has committed civil contempt without

regard to the question of whether the violations

were intentional,’’ because it is not necessary to

show that ‘‘the alleged civil contempt was willfully

committed by the contemnor,”’ citing McComb vy.

et

7

Jacksonville Paper Co., 336 U.S. 187 (R. 10a, 21a).

It therefore ordered respondent to purge itself of

contempt by making restitution of unpaid over-

| time compensation and paying a compensatory fine

‘ in the amount of the expense incurred for the in-

vestigation and presentation of the case (R. 23a).

However, on the ground that respondent ‘thas

made bona fide efforts to comply”? with the injunc-

tion and ‘‘did not intentionally or willfully vio-

: late,’’ the district court ordered that the injunction

;

be vacated (R. 23a-24a).

The Secretary of Labor appealed from the part

of the judgment vacating the permanent injunction

(R. 28a). Respondent cross appealed from the

part of the judgment adjudicating it in civil con-

tempt and requiring payment of restitution and a

compensatory fine (R. 29a).

The court of appeals held with respondent on

both issues, reversing the adjudication in contempt

and affirming the vacation of the injunction. It

held that respondent could not be guilty of civil

contempt in view of the finding that the work was

performed without the knowledge and contrary to

3 The Secretary also appealed from the part of the judgment

which limited the restitution award to the period of two years

preceding the contempt application, on the ground that section

6 of the Portal-to-Portal Act (c. 52, 61 Stat. 84, 29 U.'SC..

Supp. IV, 255) “would apply to any action brought by the

employees” and that the Administrator “must be limited in

his recovery to that which the holder of the beneficial interest

is entitled to” (R. 20a). This issue was not reached by the

Court of Appeals because of its reversal of the adjudication

in contempt. If certiorari is granted, we shall urge that the

limitation period is inapplicable to the equitable remedies for

civil contempt.

8

the instructions of respondent. As grounds for

upholding the vacation of the injunction, the court

of appeals cited, in addition to its conclusion that

respondent had been in compliance over a period

of years, ‘‘changes’’ in respondent’s ownership and

management which the appellate court assumed

had occurred, and contemplated changes which the

court said it was ‘‘told at the bar of the court’’ were

being hampered by the continuance of the injunc-

tion.

REASONS FOR GRANTING THE WRIT

In both of its aspects, the decision below departs

from established principles laid down by this

Court. The ruling vacating the injunction is in

conflict with United States v. Swift & Co., 286 U.S.

106. The reversal of the contempt adjudication,

which rests on the assumption that an employer

who is inattentive or lax about labor conditions in

his business can escape responsibility under the

Act, and relieves the employer of the risk of even

the civil sanctions of the injunction remedy, is in-

consistent with WeComb vy. Jacksonville Paper Co.,

336 U.S. 187, and is in conflict with the decisions

of the Eighth Circuit in Lenroot vy. Interstate

Bakeries, 146 F. 2d 325, and of the Tenth Circuit in

Handler v. Thrasher, 191 F. 2d 120.

Both rulings are of large importance in the ad-

ministration and enforcement of the Fair Labor

Standards Act. The ruling which denies the in-

junction the attributes of finality recognized by

the Swift decision opens the door wide to needlessly

burdensome relitigation of outstanding injunc-

e tions, and raises serious enforcement problems not

i only under this Act but under other federal regu-

latory statutes in which Congress has provided

the injunction as a means for enforcement. While

this case arises under the Fair Labor Standards

Act, the court below placed its decision on the

broad ground, equally applicable to other statutes,

that the Swift case does not require ‘‘that the con-

sent decrees that the various administrative

agencies have been obtaining should be extended in

F perpetuo against people who have been obeying the

: law over long periods * * *.’’ (R. 102.)

1. In the Swift case, this Court, reversing the

lower court’s relaxation of a permanent consent

decree, entered over ten years earlier in anti-trust

proceedings, held that the discretion of a court of

equity to remove restraints imposed by a final de-

|: eree is limited. While recognizing the inherent

F ‘*nower of a court of equity to modify an injunction

[ in adaptation to changed conditions,’’ this Court

: stated that a final disposition of litigation by

permanent injunction ‘‘will not lightly be undone

at the suit of the offenders’’ 286 U.S. at 114, 120.

The opinion emphasized the need to keep ‘‘in mind

steadily the limits of inquiry proper to the case,”’

the Court specifically noting that: ‘‘We are not

framing a decree. We are asking ourselves

whether anything has happened that will justify

us now in changing a decree.’’ 286 U.S. at 119. The

Eiger . — — Misr EP ararms ULAR OP RR ARP Sem tie te

10

scope of proper inquiry, said the Court, does not

include ‘liberty to reverse under the guise of read-

justing.”’ /bid. And general changes occurring

merely by reason of the passage of time were ex-

pressly held inadequate grounds for relaxing the

restraints. ‘‘Nothing less than a clear showing

of grievous wrong evoked by new and unforeseen

conditions’’ (7d. at 119), said this Court, or a show-

ing that the injunction ‘‘has been turned through

changing circumstances into an instrument of

wrong”? (id. at 115), would justify removing the

restraints.

Instead of requiring defendant to make a show-

ing of tangible circumstances justifying release

from the permanent decree, as required in the

Swift case, the decision below would place upon

plaintiff the burden of again proving affirmatively

the need for an injunction as if an original decree

were being framed. This unprecedented depar-

ture from the Swift rule is particularly unjusti-

fiable in this case where the trial court, on the basis

of undisputed evidence showing at least laxity or

negligence about compliance, found recent viola-

tions of the injunction.

Respondent in the instant case did not attempt

to allege or prove ‘‘new and unforeseen condi-

tions”? or any ‘‘changing cireumstances’’? which

have converted the decree into ‘‘an instrument of

wrong.’’ On the contrary, apart from the plainly

untenable assertion that the injunction was void

ab initio (see district court’s opinion, R. 12a-13a),

11

the only ground respondent advanced for its mo-

tion to vacate was that it had been in compliance

with the injunction since its issuance. The district

court, however, found to the contrary, and the re-

versal of this finding by the court of appeals, if

not wrong (see Point 2, infra), is at least open to

serious doubt.

In any event, none of the grounds relied upon by

the court below to distinguish the Swift decision is

well founded. Insofar as the decision below con-

cludes that there was a showing of changed circum-

stances or special hardship, it rests upon un-

supported and inaccurate factual assumptions.

Kqually untenable is the attempted distinction be-

tween injunctions to enforee the anti-trust laws

and injunctions obtained by ‘‘various administra-

tive agencies” to enforce what the court character-

izes as a ‘‘mere regulatory statute’? (R. 101, 102).

Apparently recognizing that at least some change

in circumstances, other than the mere passage of

time, should be necessary to justify upsetting a

final decree, the court below departed from the rec-

ord to supply this deficiency, stating that (R. 98,

101):

* * * We were told at the bar of the court

that the reason for the application was that the

owners of the stock of the company wished to

sell it and that the fact that the company was

subject to the injunction was interfering with

the sale. * * *

* * * * *

aay ISR 218 i ap Peay EP SR NRL Ce IE RIERA TO MELE RD THLE WO OO ICIS IRAP ARPS CN ee Nr

12

* * * The continuance of the injunction

was hampering the owners of the company in

disposing of their stock * * *,

* * « * *

* * * The whole business atmosphere of

most corporations as well as their ownership

and management have undergone radical

changes after the lapse of so long a period; and

there is no reason to hold them subject to such

an injunctive order when changes of this sort

have occurred * * *,

The court of appeals must inadvertently have

been misled by some statement at the oral argu-

ment,’ for nothing in the pleadings or evidence

supported such a claim. In fact, admissions by re-

spondent’s counsel at the pre-trial conference show

the contrary.®

*Counsel for both parties do not recollect the statement

referred to by the court, and are agreed that it is inaccurate

insofar as the Alma Mills Company is concerned. The court

of appeals may perhaps have been misled by evidence or state-

ments regarding other companies under the same ownership

which, however, were not involved in this appeal.

5In response to a specific question from the trial judge

whether any changes had occurred in the status of Alma Mills

and one of the other companies under joint ownership, respond-

ent’s counsel replied:

Mr. McGuee: Your Honor, they are under the same

status that they were at the time of the entry of the judg-

ment.

The Court: No corporate changes?

Mr. McGuee: No, sir.

The Court: What are the names of those?

Mr. McGuee: Alma Mills and Musgrove Mills.

The Court: They are owned by the Hamrick interests?

Mr. McGuee: Yes, sir, they are still owned by the

Hamrick interests.

The transcript of the pre-trial conference was not included in

ELLE ERIE LES GIL LINE YEO LE TLE IGN LON LDS LIT LN Ie LITT LEN MUD ANGELA GE LEY, Iai TARE SO IT RR

13

The record in the instant case is thus devoid of

any support for the attempt by the court below to

distinguish the Swift case as follows (R. 102):

While the same corporations were in existence

with the same potentiality for monopolizing

trade and commerce they sought to have the

decree amended by eliminating some of its

key provisions. It was against this back-

ground that the Supreme Court held that the

modification of the decree was not warranted

because change in conditions had not been

shown.

It is plain that respondent in the instant case is

also still ‘‘in existence with the same potentiality”’

for violating the Fair Labor Standards Act.

Not only was the sweeping assertion of changed

conditions by the court below contrary to the facts

of the instant case, but the Swift decision itself spe-

cifically contradicts the assumption that a final

decree may be relaxed merely because of general

business changes brought on by the passage of time.

In answer to the contention in the Swift case that

‘conditions in the packing industry and in the sale

of groceries and other foods had been transformed

so completely that the restraints of the injunction,

however appropriate and just in February, 1920

[about a decade earlier], were now useless and op-

pressive,’’ this Court responded that ‘‘ Life is never

the record on appeal because it did not seem material in view

of the admission that there had been no changes. The parties

have agreed that this transcript may be made part of the record

for purposes of review by this Court.

CSA AERP IRI REMENGS LI OMI EERE L LE ELLEN ELEN LOE CERO LE

14

static, and the passing of a decade has brought

changes to the grocery business as it has to every

other.’’ The question, however, is how significant

the changes were with specific reference to the de-

fendant, and whether defendant was ‘‘suffering

hardship so extreme and unexpected as to justify

us in saying that they are the victims of oppression.

Nothing less than a clear showing of grievous

wrong evoked by new and unforeseen conditions,”’

said the Court, ‘‘should lead us to change what was

decreed after years of litigation with the consent of

all concerned.’’ 286 U.S. at 113, 119.

The other factual grounds cited by the opinion

below as distinguishing the Swift case are equally

without merit. The Swift opinion itself sufficiently

answers the reference by the court below to the fact

that only a relatively ‘‘few of a large number of

employees’’ were involved in the alleged violations

and that the questioned practices were ‘‘ without

the knowledge or consent of the company”’ (R. 100-

101). In the Swift case, too, it was assumed that

there were only ‘‘sporadic inst>nc s of unfair prae-

tices’? which were ‘‘practices as to which the de-

fendants’ officers disclaim responsibility or knowl-

edge.’’ 286 U.S. at 118. Observing that ‘‘it is easy

to make such excuses with plausibility when a busi-

ness is so huge,’’ the Court ruled that ‘‘the diffi-

eulty of ferreting out these evils and repressing

them when discovered supplies an additional rea-

son why we should leave the defendants where we

find them, especially since the place where we find

15

them is the one where they agreed to be.’’ Id. at

118-119.

Apart from these unsupported factual distine-

tions, the court below was apparently of the view

that the full scope of the injunction remedy, as

recognized in the Swift decision, is unnecessary to

the enforcement of the Fair Labor Standards Act

and other federal regulatory statutes. According

to the opinion below, there is not the same need or

justification for a continuing injunction where the

person enjoined ‘‘has been guilty of nothing more

than a violation of a mere regulatory statute.’’

This view, we submit, reflects a serious misappre-

eee

hension of the role of the injunction remedy in the

enforcement of this and other regulatory statutes.

It may be noted that the anti-trust laws are, of

course, also within the category of ‘‘regulatory

statute.’ And this Court itself has specifically

recognized the similarity of purpose between regu-

lation of unfair labor practices by this Act and

the regulation of other types of unfair competi-

tion by the anti-trust laws. See United States v.

Darby, 312 U. 8. 100, 122, where it is pointed

out that this Act is ‘‘directed at the suppression of

a method or kind of competition in interstate com-

merce which it has in effect condemned as ‘unfair’,

| as the Clayton Act has condemned other ‘unfair

: methods of competition’ made effective through

interstate commerce’? [emphasis supplied].

Thus the sound reasons underlying the Swift de-

cision apply with equal force to the injunction rem-

be FRECHE er AULA T SALLE ITIL, 2 OIEN SPOR IMME POE ih OATS

16

edy under the Fair Labor Standards Act. The

need to discourage relitigation of issues previously

determined and to give some attributes of finality

to an equity decree, the soundness of relieving the

enforcement agency of the burden and expense of

repeated investigation of and litigation with prior

offenders, as well as the importance of protecting

the courts from a flood of unnecessary litigation,

are equally applicable to the Fair Labor Standards

Act and other similar federal regulatory statutes.

There are indeed special reasons for applying

_ the standards of the Swift case to injunctions under

the Fair Labor Standards Act. The injunction

is the only remedy now available to the Govern-

ment ‘‘to require div estiture of [benefits] unlaw-

fully acquired”? by noncomplying employers. Cf.

Schine Theatres v. United States, 334 U.S. 110, 128.

This is the sole effective means for meeting one of

the most difficult problems of enforcement of this

Act—the problem arising from the fear on the part

of complying employers, particularly in the highly

competitive industries regulated by this Act, that

their less law-abiding or less conscientious compet-

itors will secure and retain substantial competitive

advantage by periodic or sporadic noncompliance,

whether intentional or not. As this Court has

observed, the criminal remedies are ‘‘for wilful

violations—difficult to prove’’ (Brooklyn Bank v.

O’Neil, 324 U.S. 697, 709). Similarly, the effective-

ness of the employee remedy is haphazard, depend-

ing upon the initiative of particular employees and

EL LETLLOL ONE NIT IIL PERS ELEC LAETITIA TIE HE! Lek NE RR CRI Nt”

17

their willingness to risk incurring the disfavor of

their employers. The injunction is the sole reliable

remedy under the Act to prevent a prior offender

from retaining advantages accruing from subse-

quent negligent or unintentional noncompliance.

And it is now clear that the injunction must be out-

standing in order for the restitution remedy to be

available.© The restitution remedy has been the

most effective spur to general voluntary compliance

because it reduces to a minimum the danger of an

unfair competitive advantage through noncom-

pliance. As this Court has noted, it effectively

places upon the employer ‘‘the risk of crossing

the forbidden line’? even though the court might

find that he ‘‘had no purpose to evade the decree.”’

McComb vy. Jacksonville Paper Co., 336 U.S. 187,

192, 193.

Since an injunction against an offender under

this Act cannot be dissolved ‘‘without prejudice to

the interests of the classes whom this particular

restraint Was intended to protect”’ (cf. Swift opin-

ion, 286 U.S. at 117-118), there is no less, and per-

haps greater, reason for applying the standards of

®The 1949 Amendment to Section 17 of the Fair Labor

Standards Act expressly deprives the courts of jurisdiction to

order restitution in an original action by the Government for

an injunction (29 U.S.C., Supp. IV, 217, Appendix, infra, p.

27). The Conference Report on the compromise version of

the 1949 Amendments, which was enacted, explains that this

Amendment was not “intended in any way to affect the court’s

authority in contempt proceedings for enforcement of injunc-

tions issued under section 17 for violations occurring subse-

quent to the issuance of such injunctions” (H. Rept. 1453,

81st Cong., Ist Sess., page 32).

PME NA ONE EES LR ALOT TELS BTM RI EE RRC EE ie re

18

the Swift case. Especially when it is considered

that injunctions under this Act do not impose any

restraint or obligation other than the basic require-

ments of the law impose in any event, the argument

for more lenient standards fails. An injunction

under this Act does not, as anti-trust and other

kinds of injunctions often do, impose restraints

upon conduct that would under some circumstances

be legal.’ In such cases there is obviously greater

reason for flexibility and more occasion to relax

restraints as conditions change. On the other hand,

the sole purpose and effect of an injunction under

this Act, so far as unintentional and non-willful

violations are concerned, is simply to admonish a

prior offender that he will not be permitted in the

future to retain any benefits accruing from his

noncompliance but will be obliged to make amends.

The implication in the opinion below that a con-

tinuing injunction under this Act imposes an undue

burden and hardship derives from a wholly un-

realistic view of the actual effect of such injune-

tions. The potentiality of criminal contempt, to

7 Thus even though it appeared that the injunction in the

Swift case imposed “restraints upon the exercise of powers that

would normally be” within the defendant’s legal rights (286

U.S. at 119), it was held an abuse of discretion to modify such

restraints in the absence of ‘ta clear showing of grievous wrong

evoked by new and unforseen conditions” Jbid. Cf. also

Milk Wagon Drivers Union v. Meadowmoor Dairies, 312 US.

287, 299, where the Court in upholding an injunction restrain-

ing peaceful picketing stated that inasmuch as this re-

tricted the right of free speech the injunction could later be

modified upon a proper showing that the dangers of violation

had ceased.

19

which the court below referred, is plainly no reason

for regarding the injunction as too burdensome,

because criminal penalties cannot be invoked in a

contempt proceeding without proof of willfulness

and the same burden of proof rests on the Govern-

ment as in any other criminal prosecution. In any

event, the potentiality of criminal violation is cer-

tainly no reason for leniency in relaxing an injunc-

tion. The only ‘‘additional penalties”? to which an

employer is subjected by the pendency of an in-

junction are the strictly civil remedies of restitu-

tion of unpaid wages and of the expenses of en-

forcement by way of compensatory fine. There is

no doubt that the injunction with its tangible

remedy of restitution serves as a deterrent over and

beyond the bare prohibitions of the statute. As

expressed by the officials of the company involved

in this very case, ‘any management that has an

injunction over them are not going to promiscu-

ously let people violate the laws when there is

nothing to be gained by the company by those viola-

tions’? (Tr. 121); the injunction induces the em-

ployer to take ‘‘extra precaution to be sure’’ that

subordinates strictly adhere to the requirements

(Tr. 129-130). It is this extra degree of precau-

tion that is of utmost importance in enforcing the

Act against prior offenders. Except in rare cases

the protection given employees, competitors and

the public by the purely restorative remedies af-

20

forded by a continuing injunction far outweighs

any burden thus placed on an employer.*

The sound limitations of the Swift decision have

heretofore been consistently followed by the lower

courts. See United States v. Radio Corp. of Amer-

ica, 46 F. Supp. 654 (D. Del.), appeal with-

drawn, 318 U. S. 796; Fleming v. Miller, 47 F.

Supp. 1004 (D. Minn.), where the one respect

in which the district court modified the decree was

reversed on appeal, 138 F. 2d 629 (C.A. 8), cer-

tiorari denied, 321 U.S. 784; Western Union Tel.

Co. v. International Brotherhood of Electrical

Workers, 133 F. 2d 955 (C.A. 7) where the court

of appeals held it error to dissolve a labor dispute

injunction issued nearly 20 years earlier. The only

cases suggesting that the passage of time without

misconduct might justify relaxation of a decree are

cases Where the circumstances had so changed since

the issuance of the injunction that the conduct en-

joined was no longer unlawful, such as, for ex-

ample, cases involving restraints on peaceful

picketing or the right to carry on one’s business or

to use one’s property in a particular manner. The

decisions cited by the court below are cases of this

8 To analogize this relatively mild remedy to the criminal

probation and parole laws, as the court below did, is to reveal

the error in the court’s reasoning. The injunction places no

burden on defendant to report periodically to the court or to

any other public official, it does not require defendant to remain

within the confines of any particular jurisdiction or impose any

other restraints upon defendant’s freedom of action, and cer-

tainly does not carry any of the stigma of a criminal on

probation.

21

type. None of them holds that a restraint upon

conduct still unlawful should be relaxed in the

absence of a clear showing of changed cireum-

stances causing special hardship.

The ruling below, if permitted to stand, intro-

duces large areas of uncertainty in the present en-

forcement procedures. If a permanent injunction

may be dissolved merely because of the passage of

time without further violation, how long a time

suffices? And must the Government necessarily

assume the burden in each case of again investigat-

ing and proving that there has been further vio-

lation? Is it to be irrelevant that the defendant

fails to show that the passage of time has worked

such a change in conditions as to make continuance

of the injunction a hardship ?

It may be expected that the decision below will

encourage the filing of motions to vacate.” The

Government, of course, cannot allow the injune-

tions to be dissolved without at least investigating

the employer's current conduct. Thus, of neces-

sity, it appears that the burden and expense of in-

vestigating and proving further violations would

be on the Government.

The extent of the additional enforcement prob-

lem thus created by the ruling below may be judged

* Two district courts during the past month have already

granted such motions to vacate on the authority of the Ale

Mills decision below. Tobin v. Industrial Bank & Trust Co.

E.D. Mo., Civil Action No. 1674 (January 11, 1952): Tobin

v. Henry F. Moore, M.D. Ga., Civil Action No. 57 (Janu: ary

5, 1952).

22

from the fact that there are over 6000 injunctions

outstanding, although this comprises less than 1%

of the total number (over 700,000) of employer es-

tablishments covered by the Act. Since the appro-

priations for enforcement provide funds for in-

spections of only a small fraction of the total num-

ber of covered establishments, the inspection pro-

gram must be most selectively planned. Because

the pendency of an injunction affords an added

deterrent, it has in the past served as a dependa-

ble means of reducing the number of necessary in-

vestigations. The decision below would serve to

increase rather than reduce the number of nec-

essary investigations. It could easily result in

diverting a disproportionate part of the personnel

and appropriation available for investigation and

enforcement to the task of defending motions to

dissolve pending injunctions. Since the timing

and number of dissolution proceedings are wholly

out of the control of the administrative agency,

this would seriously strain and disrupt the avail-

able enforcement facilities.

2. The reversal of the adjudication in civil con-

tempt rests on reasoning inconsistent with this

Court's decision in McComb v. Jacksonville Paper

Co., 336 U.S. 187, and in conflict with decisions of

the Eighth Circuit in Lenroot v. Interstate Bak-

eries Corp., 146 F. 2d 325, and of the Tenth Circuit

in Handler v. Thrasher, 191 F. 2d 120.

Although the opinion below disclaims inconsist-

WBS Nee

“~ 23

ency with the Jacksonville Paper decision, it holds

in effect that an employer on whose premises work

is regularly performed without payment in ac-

cordance with the statutory standards can escape

all civil accountability under the Act and under

the injunction through laxity and inattention to

labor conditions in his business. This result seems

clearly inconsistent with the reasoning in the

Jacksonville Paper case, that conduct ‘does not

cease to be a violation of a law and of a decree

merely because it may have been done innocently”’

336 U.S. at 191. The employer, which had already

shown a ‘“‘proclivity for unlawful conduct”? (Jd.

at 192), was directly ‘‘alerted by the decree”

against any ‘‘program of experimentation with

disobedience of the law’’, and therefore assumed

‘the risk of crossing the forbidden line’’, even

though the court might find that he ‘had no pur-

pose to evade the decree’’ Jd. at 192, 193. The very

purpose of the injunction remedy, after a viola-

tion of the Act has occurred and been proved, is to

place upon the employer the risks of further non-

compliance and to provide suitable remedial relief

for negligent and mistaken conduct even if not

sufficiently blameworthy to warrant punitive sanc-

tions. The Act, no less than the decree, ‘‘was not

fashioned so as to grant or withhold its benefits

dependent on the state of mind of respondents.

It laid on them a duty to obey specified provisions

of the statute.’’ (See 336 U.S. at 191.)

+ err ayy

24

The ruling that work performed without the

actual knowledge of the employer and contrary to

his instructions is not employment within the stat-

utory definitions would relieve an employer of re-

spousibility for enforcement of his instructions

and would place a premium on lax, negligent con-

duct. The statutory definition of ‘‘employ”’ is de-

rived from the definitions of the state child labor

laws (see Rutherford Food Corp. v. McComb, 331

U.S. 722, 728, n. 7), which have been interpreted

as placing a ‘personal duty’’ upon the employer

‘to inquire into the conditions prevailing in his

**—he ‘‘must neither create nor suffer in

his business the prohibited conditions’? (See Peo-

ple v. Sheffield Farms, 225 N. Y. 25, 29, 121 N. FE.

474, 476). In the Interstate Bakeries case, the

Kighth Circuit, following the Shefficld Farms in-

terpretation of the employer’s responsibility under

the State statute, held that defendant corporation

and its officials were responsible under the Act

for work performed by minors in their business

business

despite the trial court’s finding that such work was

neither authorized nor known by them, and was

contrary to the declared policy of the corporation.

Similarly, the Tenth Cireuit in J/andler vy.

Thrasher held an employer responsible for unau-

thorized overtime work performed by an oil

pumper despite an express agreement that no over-

time work was to be done without the employer’s

consent. This construction of the Act accords with

a a RR gg hie RAE Rae RS DUNE? et Ea ROR Sayan ie ee

eee FLOR te ERR IR LER ON IML AE AIRE « * haiegt SPR _—

,

25

the generally recognized common-sense view that

a businessman is accountable for facts he would

have discovered by reasonable observation or in-

quiry into his operations. If he is not held thus

accountable, the employer ‘‘inattentive to duty will

secure greater and greater exemption from lia-

bility.”’ Cf. Michelsen v. Penney, 135 F. 2d 409,

418 (C.A. 2).

CONCLUSION

3 It is respectfully submitted that this petition for

: a writ of certiorari should be granted.

Puitie B. PERLMAN,

Solicitor General.

WILLIAM S. Tyson,

Solicitor of Labor.

JANUARY 1952.

1° Despite the findings in the instant case of lack of authori-

zation or knowledge, there is abundant uncontradicted evidence

in the record on which to hold the employer civilly accountable.

The work was performed openly in appellee's mill while it was

in operation, within plain view of the supervisory personnel,

for a period of at least two and one-half years, i.e., as far back

as the inspection went (R. 59a, 37a, 68a). It was done regu-

larly by virtually all the spinners. Though high management

theoretically forbade it, nothing effective was done to termi-

nate the practice until April 1949, when a representative of the

United States Department of Labor inspected the plant in con-

nection with respondent's motion to dissolve the injunction.

Bae RLE 2 © Pe eR ET TIS ARN ee Se EO AEE ORT RPC geet

26

APPENDIX

Fair Labor Standards Act of 1938, ec. 676, 52 Stat.

1060, 29 U.S.C. 201.

Sec. 3. As used in this Act—

* * * * *

(d) ‘*Employer’’ includes any person act-

.. ng directly or indirectly in the interest of an

employer in relation to an employee but shall

not include the United States or any State or

political subdivision of a State, or any labor

organization (other than when acting as an

employer), or anyone acting in the capacity of

officer or agent of such labor organization.

(e) ‘*Employee’”’ includes any individual

employed by an employer.

* * * * *

(g) ‘*Employ”’ includes to suffer or permit

to work. ;

* * * * *

Sec. 7. (a) No employer shall, except as

otherwise provided in this section, employ any

of his employees who is engaged in commerce

or in the production of goods for commerce—

* * * * *

(3) for a workweek longer than forty hours

after the expiration of the second year from

such date, unless such employee receives com-

pensation for his employment in excess of the

EMER TRIO BEE SPL ds IETS IR ELECTS IE POET LI LO MET IS IRN SY RO

27

hours above specified at a rate not less than

one and one-half times the regular rate at

which he is employed.

* * * * *

Sec. 15 (a) After the expiration of one hun-

dred and twenty days from the date of the en-

actment of this Act, it shall be unlawful for

any person—

* * * * *

(2) to violate any of the provisions of sec-

tion 6 or section 7 * * *;

* * * * *

Sec. 17. The district courts of the United

States * * * shall have jurisdiction, for cause

shown, * * * to restrain violations of section

15: Provided, That no court shall have juris-

diction, in any action brought by the Admin-

istrator to restrain such violations, to order

the payment to employees of unpaid minimum

wages or unpaid overtime compensation or an

additional equal amount as liquidated dam-

ages in such action.

wou. s. Government PRINTING OFFICE: 1982 965796 6e7

RIOR PRE AC 8 MNT BARRE SINTER TINE S NSIL SPONSE RO TUPLE YE ANG