This new section makes provision for establishing minimum piece rates by regulation or order for homework in Puerto Rico and the Virgin Islands. This is evidence of a Congressional intent to include workers of this type within the Act and a recognition that without this special provision homeworkers in Puerto Rico and the Virgin Islands paid by the piece would be subject to the ordinary statutory provisions relating to minimum wages. The fact that § 6(a) speaks of a minimum rate of pay "an hour," while § 7(a) refers to a "regular rate" which we have defined to mean "the hourly rate actually paid for the normal, non-overtime workweek," Walling v. Helmerich Payne, 323 U.S. 37, 40, does not preclude application of the Act to piece workers. Congress necessarily had to create practical and simple measuring rods to test compliance with the requirements as to minimum wages and overtime compensation. It did so by setting the standards in terms of hours and hourly rates.
The District Court found that even though the former piece rate agreements be considered unlawful the respondent had no apparent intention of resuming their use. It also found no willful intention on the part of the respondent to violate the Act and no evidence of any intention of future violations. It therefore felt that there was no necessity for an injunction. While "voluntary discontinuance of an alleged illegal activity does not operate to remove a case from the ambit of judicial power," Walling v. Helmerich Payne, 323 U.S. 37, 43, it may justify a court's refusal to enjoin future activity of this nature when it is combined with a bona fide intention to comply with the law and not to resume the wrongful acts. Cf. United States v. United States Steel Corp., 251 U.S. 417, 445. We cannot say, therefore, that the District Court abused its discretion in refusing to enjoin the abandoned method of wage payments.
The Supreme Court of the United States has recognized a dual Congressional purpose behind the FLSA: "[T]he Congressional purpose in enacting Section 7(a) was twofold: (1) to spread employment by placing financial pressure 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."Walling v. Helmerich Payne, Inc., 323 U.S. 37, 39 (1944). The FLSA is implemented primarily by a series of statutes, see 29 U.S.C. §§ 201- 219, and a series of interpretive bulletins, see 29 C.F.R. §§ 778.0-778.603.
Plaintiffs argue that Defendant's pay policy is a split-day plan of the type declared illegal by the Supreme Court in 1944. See Walling v. Helmerich Payne, Inc., 323 U.S. 37, 40, 65 S. Ct. 11, 13 (1944). In Helmerich, the defendant paid its employee a daily wage based upon the type of shift worked.
Walling v. Belo Corp., 316 U.S. 624, followed. Walling v. Helmerich Payne, Inc., 323 U.S. 37; Overnight MotorCo. v. Missel, 316 U.S. 572; Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419; Walling v. Harnischfeger Corp., 325 U.S. 427, distinguished. Pp. 20-26. 152 F.2d 622, affirmed.
The fire fighters' argument might support the position that the switch to a new payment system, designed to avoid the effect of the FLSA, would violate the Act, were it to occur subsequent to the Act's effective date. In Walling v. Helmerich Payne, Inc., 323 U.S. 37, 65 S.Ct. 11, 89 L.Ed. 29 (1944), the employer tried to avoid the effect of the Act by artificially lowering the per hour wage according to the "split day" plan, which would operate as follows: Prior to the Act an employee would work 8 hours per day, 6 days per week, at $6.25 per hour. They received no extra pay for overtime. Under the split day plan, the employer would label the first 4 hours of a day "regular" and pay $5.00, and label the last 4 hours "overtime" and pay $7.50. This would produce a system that paid 1.5 times the regular rate for overtime, but still paid the same total amount per week for the same 48 hours.
Walling v. Helmerich & Payne, 323 U.S. 37, 40 (1944).
The regular rate of pay of the respondents under this contract must therefore be found. Overnight Motor Co. v. Missel, 316 U.S. 572, 577, 578; Walling v. Helmerich Payne, 323 U.S. 37, 40; Brooklyn Bank v. O'Neil, 324 U.S. 697, 706; Jewell Ridge Corp. v. Local, 325 U.S. 161, 167. The statute contains no definition of regular rate of pay and no rule for its determination.
Indeed, the Supreme Court has said that "[t]he Act clearly contemplates the setting of the regular rate in a bona fide manner through wage negotiations between employer and employee, provided that the statutory minimum is respected." Walling v. Helmerich & Payne, 323 U.S. 37, 42, 65 S.Ct. 11, 89 L.Ed. 29 (1944). So "[a]s long as the minimum hourly rates established by Section 6 are respected, the employer and employee are free to establish [the] regular rate at any point and in any manner they see fit."
Since the District Court's decision we have declared a split day plan virtually identical to the plan involved here to be a violation of the Act. Walling v. Alaska Pacific Consolidated Mining Co., 9 Cir., 152 F.2d 812; certiorari denied 66 S.Ct. 960; Walling v. Helmerich Payne, Inc., 323 U.S. 37, 65 S.Ct. 11, 89 L.Ed. 29. Here, as in the Alaska Pacific case, (see note 3) the Company's split day plan did not base the regular rate "upon the wages received, nor upon the hours actually spent in the normal nonovertime week, nor was the regular rate paid for the first forty hours actually worked."