Petition for Writ of Certiorari — Walling v. Halliburton Oil Well Cementing Co. (No. 74)

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cae Ocrosrr TERM, 1945

|. Mercanre WaLLING, ADMINISTRATOR OF THE

\\\GE-AND Hour Drvisron, ‘Unrrep States DrE-.

£MENT OF LABOR, PETITIONER

| a

‘BURTON Or Wet Cementinu CoMPaNy,

A CORPORATION ,

(10N FOR WRIT OF CERTIORARI TO THE

\TES CIRCUIT OOWRT OF APPEALS FOR THE

‘CCUIr . :

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: 16 °

ling v.: Alaska-Pacific Consolidated Mining Co., 56 F.

Supp. 698, reversed, 152 F. 2d 812, petition for certiorari

SN a ku wahthhesd bodes +ckesd ne bkbenaee tans sans 14, 16

"Walling v. Belo Corp., 316 U.S. 624....-.-.+-.-. 4,8, 12, 18,17

Walling v, Emery Wholesale Corp, 49 F. Supp. !92, affirmed, °

BG OE kno Anes 3 canws sosadaceennvaaeusa 17°

Walling v. Harnischfeg4 Porp., 145 F. 2d 589, reversed,'325

pr MEicdatdnutdoenbisedgonbdeneiencoaddaccie 8, 11,17

Walling v. Helmerich é Payne, 138 F. 2d 705, reversed, 323

Ck CIE ERIS EPRI DORR 8, 9, 10, 17, 19

Walling v. Richmond Screw Anchor Co., 9 Wage Hour Rept. -

297, (C. C. A. 2),.decided March 9, 1946 - cee tinea len . 16

S Walling v. Uhlmann Grain Co., 7 Wage Hour Rept. 128,

pore: 405 TF, DR Bek oxt nanvcaasenauusancad ----- 14,15,16 |

Walling v. Yourigerman-Reynolds Hardwood Co., 145 F. 2d °

349, reversed, 325 U. 8. 419... PEE END 8,9, 10, 11; 12, 13, 15, 17

Watkins v. Hudson Coal Co., 151 F. 2d 311, certiérari denied

February 4, “a Kneewesepesinbenamee 14

Federa! Statutes: | :

Fair Labor Standards Act of 1938, 52 Stat. 1060, 29

U. 8. C. 201 et seq.:

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laneoug: be

Interpretative Bulletin No. 4, issued by the Administrator,

Wage and Hour’ Division, Department of Labor.._._. _- 4

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5,

Sete ope Goth Bs

. ~“ Ocrosen J'enm, 1985 |

‘No. ae

+L, Mereaure, WALLING, ADMINISTRATOR OF THE

Wace anv Hour Divigion. UNtItTep States De-

PARTMENT or LaBork, PETITIONER

a AO v. |

HAuurpurton Or. WeELt CEMENTING Company,

- A CORPORATION | |

= OR OF CERTIORARI TO THE UNITED

‘STATES CIRCUIT T OF APPEALS FOR THE NINTH

The 8 ae General, on behalf of L. Metealfe

‘Walling, Administrator of the Wage and Hour

Division,- United States Department of Labor,

prays that a writ of certiokari issue to review the /

judgment of the Cireuit Coyrtof Appeals for the

Ninth Cireuit entered in the above case on De-

—_< 29, me. y | oo

- ORENTONS BELOW oe

The o ni te ao (R. 4-29) is

* reported at-57 F. Shipp . 408. The majority and

dissenting opinions of the Circuit Court of -Ap- .

peals = 480-483) are reported. at 152 F. 2d 622.

i

<2

JURISDICTION |

The judgment of the Circuit Court of Appea

was entered on December 29, 1945 (R: 484). The

jurisdiction of this Court is invoked under Sec-

tion 240 (a) of the Judicial Code as amended by

the Act of February 13, 1925.,

QUESTION PRESENTED

Respondent made agreements with.each of its

employees specifying a basic hourly rate of pay,

with a guaranty of a fixed weekly salary regard-

less of the*number of hours worked. Although

respondent’s employees generally worked less than

60 hours-a week, the: specified hotiyly rate was

determined by dividing the employees’ weekly

salary by 106 (40+172x44), so that an employee

would have to work in excess of 84 hours a week

in order to earn additional compensation... The

question pre is whether the. arbitrary rate

of pay specifi in the agreement is the ‘‘regular —

rate” of pay‘uppn which overtime compensation

is to be computed under Section 7 of the Fair

._ Labor Standards Act of 1938. \,

STATUTE INVOLVED. |

The pertinent provisions of the Fair Labor

Standards Aat of 1938 (52 Stat. 1060, 29 U.5. C.,

sec. 201): are as follows:

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

otherwise provided in ‘this ‘section, employ. .

SR

a

3 \

b \

any of his employees -who is engaged in |

commerce or in the production. of goods

for commerce—

* ® * * * on

38), For a workweek longer than forty

hours. after the expiration of the second

‘yoar from *-*-“ ages effective | date

Lof this section],

unless such employee receives eompensa-

‘tion for his employment.in excess of the ,

hours above specified at a rate of not less

_ than one and one-half times the regular —

rate at which he is employed.

STATEMENT

’ Respondent performs various services for per-

sons engaged in the drilling and operation of

oil wells (R. 63). | This-suit relates to the “field

employees,” consisting of cementers, testers, ¢e-°

ment equipment drivers, field mechanics and

others (R. 31): Prior to the effective date of

| the Fair Labor Standards Act, the field employees

were paid on a monthly salary basis _(R.-13).

Shortly after the enactment. of the Act, re-

‘spondent pieigete wage plarfessentially similar

to the one néw-in effect (R. 13-17). Except for s

a brief period (frem March 1, 1942, until July’.

‘1, 1942, when respondent’s field employees. were

paid a weekly salary and overtime co pensation

on the basis of a regular rate, computed by divid-

—

ct, A

oI

_ing hours worked into the weekly salary)’ (R.

17), the wage plan was essentially as follows:

‘'Fhe employment ‘contract specified a ‘‘basic”

hourly rate for the first 40 hours of each week

and provided for the payment of not less than 144 -

times this rate for hours in excess of 40. The

‘contract also guaranteed that each employee

would receive weekly, for regular time and over-.

time, not less|than a sum equivalent to 106 times

the: basic rate (R, 68-70, 401). As explained

‘by respondent, ‘‘the _ — rate has been

_ fixed so that each empk * * *° may work

a total of 84 hours i in any Ldn workweek befof

receiving compensation in excess of. the guar-

~ anteed .weekly salary’? (R. 314-315).

1 Respondent’s answer states that.the plan set forth in Sec.

12 of the Administrator’s Interpretative Bulletin No. 4 was

.adopted (7.17). Sec. 12 (R. 235) reads as follows: “If an em-

ployee earns $23 per week but works a fluctuating number of —

hours, his regular rate of pay will be the average hourly

rate each week. Suppose that during the course of four weeks

the employee works 40, 46, 50, and. 41 hours. . His regular.

hourly rate of pay each week is approximately 57.5 cents, 50

cents, 46 cents, and 56.1 cents, respectively. For the first’

. week the employee is entitled to he paid $23; for the second

“week $24.50 ($23:+[6 hours X25 cents]) or ({40 hoursx#0 -

“cents)-i S¢ hoursx75 cents)) ;for the third week $25.30 -

. (923+ [10 hours X 23 ¢gnts]) or (£40 hours X 46:cents] + [10

hours X 69 cents]) ; for the fourth week approximately $23.28

($23+[1 hour X28 cents}) or (40 hours * 56,1 counts] + {1

hour X 84 cents]).”

‘After the decision of this Court i in Walling v. Belo Com.

316 U. S. 624, respondent reverted to the plan in question |

here.

7On June 25, 1942, respondent advised each employee

that “from and after J ted 1, 1942, your basic rate of pay will

5 : =

Notwithstanding the contract provisions for a

_ basie hourly rate and a weekly guaranty, the field

- «mployees were paid in substantially the same

manner as before the Act became effective. Re-

% ‘spondent? s description of the plan stated that “for

the majority of emplféyees * * * the guar- —

anteed weekly salary has been determined by

merely reducing each employee’s present. monthly

salary to a weekly figure’’ (R. 315) and “‘irregu-

lar hour ‘field employees are now working and —

will continue to work ‘on a monthly minimum

salary basis; however, for contract purposes, the

monthly salary is reduced to an equivalent weekly ~

salary’”’ (R. T1-78). Employees continued to. be

- paid their monthly salaries« on a semimonthly

basis (R. 78).

‘Wage increases and deductions for idaiane

were also considered in terms of monthly salaries. |

When an increase was effected, the employee was

informed . the new contract reflected ‘his

change in salary from his previous monthly’ rate

to:the new rate’? (R. 108). When an employee:

was absent: from work for such reasons as ,sick-

ness or "“‘volugtary lay off,’”’ the amount by which _

ee. e-oeo per hour for the first 40 hours each week and

jhat for time over 40 hours each week, you will receive for

éach hour of work not less than one and one-half times such

basic rate * * *, with a guaranty * * * that you

shall receive weekly for regular time and for such overtime; | *

* * * a sum not less than $ Rd ae ” (pif.-ex. 1A, R.

70, 401).

6 : Y Liane ta a

his pay was reduced was computed, not on the

basis of his contract hourly: or overtime rate,

but on the basis of a proportionate amount fof

his monthly salary. - As’ directed by respondent: —

‘Reduce the semi-monthly base salary to a daily

rate (semi-monthly pay dividend by number of

: days in that pay period *.* ™*) and multiply by

the number ‘of bands Jost” (R. 110, se ex, 4

R. 217-222). 7

Prior to the institution of this suit, the payroll

records showed only the monthly and semimonthly -

salaries with no provision made for hourly -and

overtime rates (plf. ex. 3, R. 160-177). ‘Only

’ hours worked in excess of 84 a week were recorded

as overtime worked and only the compensation.

for these’ hours was recorded as overtime pay

(R. 114, 143-144, 160-178). It was admitted that,

the overtime rate “‘has no practical use unless tha

_ employee works in excess of 84 hours in a single:

workweek”’ (R. 316). The guaranteed salary was

paid ‘when fewer than 84 hours’ were worked and

_whetiier more or less than 40 hours were worked -

in a week (R. 160-180). Respondent stated that -;

_under the contracts ‘‘the employee will receive his

minimum weekly wage even when the necessities

of the business do not require the employee to work

more than a few hours in a given week”’ (R.'312).

The 84-hour workweek did not represent the

regular or usual, or even the. average, number of

hours worked by the respondent's field employees.

7

_ A tabulation of the man-weeks of work performed

froin July 5, 1942 to ‘Mareh 11, 1944, shows that

approximately 80 pereent were weeks in which

less than 84 hours were worked (R. 226, 384) and

that approximately 13 percent weke weeks in

which less than 40 hours were workéd (R.:384).

$4 for all classes of workers, operators averaging

61.6 hours, drivers 62.4 hours, and mechanics 56.5

hours (R. 357-362). On the’ basis of the average

number of hours worked, the average hourly rate

received by each class of employee was consider-

contract.

this litigation, certain changes were made in re-

‘spoadeut’s method of compensating its employees.

remained unaltered. One change involved the

payment of employees biweekly instead of semi-

monthly (R. 115, 180, plf..es, 3-A, R. 181-182).

hours worked’ in eXCPSS of 40 as overtime hours,

as well as the rates allocated to these hours (R.°

120, 146, 181- 182). ‘One. 6f the, incidents of this

change Wag the provision that In connection with ~

deductions for absences. ‘‘one-seventh .of the

weekly guarantee may be éonsidered a daily guar-

antee i the number of working days in the

7204-462

dy

According to respondent’s estiiates, the average.

weekly hours of work were considerably less than

ably higher than the ove rtime rate: _— in the

On January 30: 1944, after the institution of.

However, the basie practices previously described -

Payroll records were also revised so’ that, among ~

other things, they reflected for tlie first time the:

<

‘ week” (Ry 116), which again averaged “basic”

and “overtime” rates, |

- (R. 28, 29, 34) and-entered, a judgment. dismissing

the complaint (K. 43-45). On appeal, the Circuit

Shourly-’ rates’? *"*°* were * * *- ealet-

lated. mertly.. t ‘retain the, employer’s pre- -

statutory costs” y R. 482-483). To approve sjich

. »

- * o °

< -

84-hour week bore no relation to. the regu:

-lar or usual number of hours worked by: the

employees under consideration, *- *> * the.

of th statute and its purposes”? (R. 483).

+ 7) ,

dS

The District, Court, relying on the authority of

this Court's décision in Walling v. Belo Corp. 1» 316 ©

U.S. 624, held that respondent? s wage plan did

not violate the ovextime requirements of the Act

Court of Appeals, Judge Garvece: dissenting, af-

fitmed on the -ground that the case presented

neither a ee distinction”? froth the Belo °

case nor ‘‘any difference in principle’’ ¢R. 481).

Judge Garrecht stated, however, that in his view

th” contrhets “ ‘were: for weekly wages, for var-

iable hours. .* -* * [The] ariBtrarily chosen

#

a scheme ‘‘would be to encourage ‘eireumvention

a

REASON FOR GRANTING THE WRIT

1. The court below has decided a Federal

“question in a way probably in conflect with the

decisions of this Court in Walling v. Helmerich

., & Payne, 323 U. S. 37, W alling v. Youn, erman-

a Reynolds’ ‘Hardwood Co., 325 U:-S. 49 - and

Walling v. Harnischfeger Cc Or DP, 335 U. S. 427.

These- decisions reemphasized the two-fold Lau

Se Laney | oe

>

‘9

pose of the overtime a. of the Act: (1) |

to spread employment by.-placing financial pres~

sure on the employer through the overtime pay —

requirement * * *; and (2) to compensate

~ employees for the burden of a workweek in excess

of the hours fixed in the Act.’’ (323 U.S. at 40;

see also 325 U. S.. at 423-424.) Like the wage

plans involved in the above three eases, the

guaranteed wage plan here does not satisfy either

of these purposes. «It enables respondent. ‘to

avoid paying real overtime wages for at least

the. first 40 ‘hours [44 hours in the instant case] _

worked in,excess of the statutory maximum work-

week, thus negativing any possible effect such a

payment might .have had- upon the spreading of

employment” (323 U..S.. at 40-41)... Since re-

spondent incurs no. additional financial cost until

the employee’s workweek .exceeds. 84 hours, there _

is no incentive to the employer ‘‘to reduce the

hours of work fto-the ‘Statutory maximum] and

to employ more men.” ‘(325 U. S. at 423-424.)

eniployees for the burden of a long workweek’’

(ibid.) is equally frustrated, inasmuch as. re- 3

spondent’s plan.is “‘so designed as to deprive

the employees of their ‘statutory right to receive

‘for all hours worked in excess of the first regular

-40 hours one and one-half times the actual reg-

ular rate”? (323 U. 8. at 40). ‘The contract in

feet converts the statutory maxinium workweek

cof 40hours into an n 64 hour ‘iaaximum workweek.

“And the statutory purpose “of compensating the ee

10

As this Court stated with respect to ‘a> similar

‘vice’? in the Helmerich & Payne wage plan, °

“No plan so obviously inconsistent with the

statutory purpose cari lay a > ganels to ney’:

(323 U.S. at 40).

_ : Respondeni’s wage plan violates not iis the

statutory purposes, but also ‘‘the basie rules for

—_—.. correctly the .actual regulay rate con-

templated by Section 7 (a)’’ (323 U. S. at 40).

The “regular rate’ specified in respondent’ 8

wage plan is pot based ‘‘upon the wages eatatiy |

receivedvar upon the hours actually and regularly

spent. each week in working” (323 U..8. at 41).

- It is not computed so a& to take into account “all

payments which the parties have agreed shall be

received regularly during the. workweek, ex-

elusive of overtime payments"(325 U. S. at 424

425), and which -this Court has held must ‘“au-

tomatically enter into the computation of the

reguler rate for purposes of Section 7 (a) re

gardiess of any contract provision to the contrary”

' (325 U.S. at 432). Respondent’s employees ,

regularly receive their full salaries in the frequent

workweeks in which they work-.no overtime,

and cven in those in which they work consider- |

ably less than ‘the statutory maximum number

of hours ( pli. exs. 3 and 3A, R. 160-182).

Néither, the designation in respondent’s contract

nor the evidence that employees sometimes (when

more than 84 hours are /worked) receive’ ‘‘over-

_ time’? compensation pe the contract ‘‘regu-

?

dl

lar’’ rates can ‘‘nezative the fact that

[respondent’s] employees do in fact receive the

higher rate’? during their non-overtime hours:

(see 325 U. S. at 430).

Just as the guarantved piece rates or “incentive —

bonuses,’’ rather than the contract hourly rates,

actually determined the employees’ compensation

in the Harnischfeyer and Y oungermax-Reynolds

cases, so the full monthly and weekly salaries -

in the instant case actually determine the com-

pensation paid respondent’ s employees for ‘the

normal, nonove#ime workweek’’ (see 325 -U. S.

- at 424). This is demonstrated not only by the fact

that the employees regularly receive, their full sal-

aries in the frequent workygeks in which they work

no overtime, but also by the fact that the monthly

or weekly salary, Whd not the contract ‘‘regular’’

- rate, controls the deductions made in weeks in

which. an employee is voluntarily absent (plf.

exs. 4, 4A; R. 217-224). It is clear that- the

weekly guaranty, not the designated rates, should

_ have been used in determining the regular rate

under the statute. Ag this Coyrt said in the

Youngerman-Reynolds case (325 U. S. at 424

435), “Once the parties have decided upon the

amount of wages and the mode of payment the

determination of the regular rate becomes a mat-

ter of mathematical computation, the result of

‘which-is unaffected by. any designation of fF con- ©

trary ‘regular rate’ in the wage contracts.’

Ly

— 6

" 12

«. ¢ _—

_ Although the contract here is in some respects

‘similar to that in the Bélo case, we believe the

reliance of the court below onthe Belo decision

was misplaced. In the light of this Court’s de-

cisions in the Helmerich & Payne, Harnischfeger

and Youngerman-Reynolds | cases; mere similarity

in contract form is insuffic 0 validate an

otherwise artificial and @alistic wage scfieme.

The Belo plan was upheld: because the majority

of this Court in that case ‘‘felt that in fixing a

_rate of 67 cents an hour the contracts did in fact

set, the actual regular tate at, which the workers

were enployed”’ (Youngerman-Reynolds case, 325.

U. S. at 426). Having found that the hourly

rate was in fact genuine and controlling, a .

Court said that the weekly guaranty was not “

herently inconsistent”’ with the specified nie

rete but might reasonably be construed as con-

sisting of the: specified hourly rate for nor-

overtime hours’ and a flexible, fluctuating rate

for overtime hours. 316 U. 8. at 631. But. the

Belo case does not hold that the recital in a eon- |

tract of: an hourly rate necessarily establishes a

genuine hourly rate. Other factors may con-.

clusively show that the weekly salary and not the

contract hourly rate is controlling in determining

the compensation paid.

Unlike’ the. rates in the Belo case, the regular

rates here were ‘fixed * * * ata point com-

pletely unrelated-to the payments actually and

_

OF | m . of

ED ele mal Bear

nori@alty: received each week by the employees.’’

(See the. Youngerman-Reynolds decision, 325

U.S. at 426.) Whatever reason there may have

heen for holding that the 5414-hour week in the |

Belo: case was consistent. with the actual facts ‘of

employment, clearly here the ‘84-hour week bore

no relation to the regular or usual number of.

hours worked by the empioyees under considera-

tion’? (dissenting opinion of Judge Garrecht,

‘R. 483). Moreover, the intention of the parties

here. to set the specified hourly rate as the regular

rate cannot de squared with the weekly guaranty,

as this Court found it could be in the Belo|case,

on’ the ‘theory that the, guaranty could be \con-

strued to provide additional . overtime ¢ y in

weeks which did not exhaust the guaranty at the

‘stipulated. ratesf As.the dissent below aptly

states, ‘‘it is fantastic to presume that the weekly

- wages in those weeks in which [employees] ®orked

only a few hours—much less than 40—might, have

included eXtra compensation for overtime” (R.

483).° Even in workweeks of more than 40 hours,

respondent does not appear to have considered

‘Examination of the Belo record discloses that the $40

weekly guaranty was paid whether more or tess than the

statutory maximum hours were worked. (Belo record 194-

337.) However, the significance of these fact#was not: fully

appree iated prior to this Coyrt’s decision, and, therefork, the

Court’s attention was not directed to them, »The emphasis

inthe recent decisions.on the compensation paid during non-

overtime workweeks as indicative of the actual regular rate oe

“Of pay demonstrates th th he importance of such facts.

oy, ail

\ ae a

14 a

the guaranty as the payment of additional over-

tinf.- The payroll. records show a fixed “‘over-

time fate notwithstanding the contract provision

for thé payment of overtime at ‘‘not less than

- on@and one-half times’’ the specified hourly rate

* (R. 120; pif. ex. XA, R. 181-182) and contain an

entry for ‘‘additiomAl compensation per guaranty”’

where compensation for the io worked at the

‘ specified base and overtime rates did not equal the

be ae guaranty (ibid.). :

‘2. The decision of the court, below is in conflict

with the decision of the Circuit Court, of Appeals

for the Seventh Circuit in Walling . Uhlmann

"Grain Co., 151 F. 2d 381, which held Ynvalid:a

wage pla virtually the same as the one here in

question.’ As here, the employment contract, in

the Uhimann case specified an hourly rate and pro-_

vided for overtime compensation at 11% times thi

rate: To insure the payment of a fixed weekly \

for a fluctuating workweek the contract stated that’

employees would be subject to call for a specified

number of hours and weekly payments were predi-*

cated upon the number of hours an employee Ww.

subject to call. The,employees Worked an average

— ae —_ pas tail

‘ For other circuit court of appeals decisions rejecting sim-

ilar, artificially fixed “regular rates,” see Watkins vy. Hudson

Coal Co., 151 F. 2d 311 (C. C. A. 3), certiorari denied Feb-

ruary 4, 1946; Walling v. Alaxka-Pacific Consolidated Mining

Co.. 152 F. 2d 812 (C. C. A. 9), petition for certiorari pending;

_H. D. Castle Co.v. Walling,9 —— Hour Rept. 114 (CL C. A.

5, 1946),

Fim

\ | 15. ae

of about 15 hours fewer each week than their ‘on

- call’? hours and were pafthe same weekly salary

regardless of the number of hours worked.’ The

employer’s - books, however, showed the amount

paid as composed of both vanien-<38 and overtime

compensation, ar

If striking: down the plan the Cireuit Court

of Appeals relied upon the decisions of this Court

in Walling v. Youngerman-Reynolds Hardwood

00., supra, and Walling v. Harnischfeger Corp.,

supra. It emphasized the facts that (1) fhe con- -

tract rate was predicated’ upgn the number of

hours an, employee yas subject to eall, which

averaged ‘about 15 more than the hours actually

worked and (2) “the amount of compensation

received by an employee was the same, ir-

respective of the “nuniber of hours worked”

Tp. 383). Virtually the same condi

present here. The “regular”? rate is lacaces

upon an 84-hour workweek although.the average _\

workweek is about 24 hours less, and the com-

pensation of the employee is the same irrespective = «

a the hours worked except in the .sthall, per

éentage of workWweeks in -which more than 8&4

hours are worked. *

In regard to the Belo case, the court in the

Uhlmann Grain Co. case concluded, as a result -

&

*Under the terms of din pa As i SS were sup-

poser to repet¥e additiona @ompensation if required to work.

in excess of the number of “on call” hours stipulated in the

contracts is\ The number of * on call” hours never exceeded 60.

, ae

— 16 —

‘of this Court’s -later decisions, that “if the

Supreme Court has not repudiated its holding in

the Beloncase, it has come so cloge.as to léave no .

.room for its applicatiom except upon an identical

state.of facts.” (151 F. 2d at 383.) The Circuit -

~ Court of Appeals for the Ninth Cireuit agreed

with ‘tliis statement in Walling v. ‘Alaska-Pacific

- Consolidated. Mining Co., 152 F. 2d 812, at. p. 814"

but in the instant ease the majority has upheld a

- wage plan which is virtually the same as the

U himann plan, in relidnce upon the Bele decision.

: 3. Since the decision of this Court in the Belo

ease, many employers/like respondent here, have

devised compensation | contracts ‘which super

Peially, at,least, closely resemble the Belo contract.

For a period after the Belo decision the lower

Federal courts tended te uphold such wage plans’

so long as they specified regular and overtime

‘rates, reg=rdless of the realities of. the situations

presented. ’ Atlantic Co. v. Walling, Tal F. 2q 518

(C.'C. A. 5); Green Head Bit & Supply Co. ¥. »

Walling, 49 F. Supp. 696 (W. D. Okla.), reversed,

138 F. 2d 453 (C. C-x. 10) ; Murray v. Nobtéeville

Milling Co., 131 #. 24 470 (C..C. A. 7); Walli

v. Alaska-Pacific Consolidated Mining Co.

Scpp. 592 (W. D. Wgsh.), reversed, 152. F-

— 812 (C. C. A. 9); Walling v. Uhlmann Grain C

7 Wage — Rept. 128 (N. D. I. ), rev

* The C ireuit Court of Appeals for the Second Circut has

taken the sanie view in Walling v. Richmond Screw Anchor

. Co., 9 Wage Hour Rept. 297, decided March 4, 1946.

° od . z . : ss : aad

; 17

151. F. 2d 381 (0. C. A. 7); Walling v. Harniseh-

feger Corp., 145 FP. 2d 589 (C, C; A. 7), reversed,

325 U. 8. 427; Walling v. Youngermgn-Reynolds

Hardwood Co., 145 F. 2d 349 (C. C, A. 5), re-

yersed, 325 U. S. 419; Walling v. Helmerich &

‘Payne, 138 F. 2d 705 (C. C. A, 10), reversed,

323 U. S. 37; Walling v. Emery Wholesale Corp.,

49 F. Supp. 192 (N. D. Ga.), om 138 F.2d

548 (Cy CO. A. 5). 3

This dévelopment was .arrested by the later

decisions of this Court in Walling v- Helmerich

& Payne, supra; Walling v. Harnischfeger Corp., —

supra; and Walling ~v. Youngenman-Reynolds

Hardwood Co., supra. But-the area of con-

_ tiined vitality of the Belo decision, if any, is

| by no means clear. © This situation ys led toa .

conflict among the circuits and ‘to wancertainty

on. the part of employers, employees, and the

Adminjstrator. A restatement of the scope of

thé Belo decision, or a ination of its doc-

trine, would seem spaunidis to. + darify existing:

uncertainties, te:

While it is clear. that there—was no intention

in the Belo decision to sanction frustration of the

overtime policy of. the Act, it has become in-

creasingly- evident that the Belo type of contract

-by its very nature tends to defeat the purposes

‘of Section 7. To the extent that the Belo eontraet

permits work to be performed in excess of the _

ss

2

18 °

statutory” maximum workweek without entailing

mn \ additional wage expense to the employer and

additional ‘compensation to the employee, it vio-

lates ‘the basic statutory objectives. And insofar -

as it accepts as valid a specified hourly rate which

is not the rate paid for the ‘‘normal non-overtime

“workweek,” as, for example, when the weekly

guaranty is paid whether more or less than 40

hours are worked in a week, it gives greater

weight to nomenclature than to reality. These

aspects of the Belo contract seem inconsistent in

principle with this Court’s subsequent opinions.

_ The nomenclature of the Belo contract has been

copied by respondent in establishing its 84-hour

workweek, but in actual Speration the plan does

not satisfy the statutory pyrposes. Respondent's

plan illustrates the reliance placed by many em-

ployers and ‘by some courts on the Belo doctrine

to support wage plans which utilize the Belo

nomenclature but which in actual fact are no less

violative of the statutory terms and purposes —

than were the plans rejected in the three recent

- decisions of this Court. To avoid the multiplicity .

of suits resulting from the continued need. to

litigate the validity of each particular wage plan

bearing a resemblance to the Belo plan, # is im.

portant that the question of the application of |

the Belo decision be settled by this Court. - The

instant case seems to furnish an appropriate

So .f ake we Fhe ae lel

var J

~

19

vehicle for reexamining the: scope and doctrine

of the Belo decision in the light of the “‘ingenious

mathematical manipulations”’ to which employers

have resorted (Helmerich & Payne case, supra, at

p. 41) in the foup-féar interval sin¢e that décision.

_ Discrimination ‘and‘unfairness in the operation

of Section 7 will result unless the question pre-

‘vented here is settled. Some employers will pay

overtiine on the basis of the actual regular rates

while others, on the basis of the decision here

“yought to be reviewed, will be enabled to employ

workers beyond the statutory maximum workweek

without the payment of additional wages. The

evil of unfair competition with respect to hours

of work and rates of overtime pay will continue

without the check which Congress intended.’

"Congress clearly intended that employees subject to the

Act should not*be employed in excess of 2,080 hours a year

without the payment of additional compensation. Sec. .

7 (b) (2), as amended (29 U.S. C., Supp. IV, 207 (b) (2));

permits the requirements of Sec. 7 (a) to kg relaxed, in re-

turn for a uniform wage upon an annual basis, only pursuant

to an agreement which embodies tha annual maximum of

working hours, “made as a result of collective bargaining by

representatives of employees certified as bona fide by the

National Labor Relations Board *. * *°.” The pains which

Congress took to ensure that the collective bargaining agent ©

was bona fide strongly negative any purpose to give effect to

individual contracts designed to relax the requirements of

See. 7. (a). Under the contracts in this n employee

may be required to work 4,368 hours a.year (x. 52) without

additional compensation and, of — there has been no

collect ive bargaining.

ee

(

CONCLUSION:

‘For the foregoing reasons: . ft is respect

submitted that this petition for a writ of

tiorari should-be granted.

- » J. Howarp MoGrars, "s]

ata ‘ele er Solicitor General.

Witttam'S. Tyson, irae.

_ Solicitor of Labor;

ie 5

“«~