Opinion
Civil Action No. 280.
November 8, 1944.
Charles A. Reynard, of Cleveland, Ohio, and Irving J. Levy and George E. Duemler, U.S. Department of Labor, both of Washington, D.C., for plaintiff.
Warner, Norcross Judd, of Grand Rapids, Mich., for defendants.
Action by L. Metcalfe Walling, Administrator of the Wage and Hour Division, United States Department of Labor, against Associated Truck Lines, Inc., to enjoin violations of the Fair Labor Standards Act.
Bill dismissed.
Findings of Fact.
1. This is an action brought to enjoin defendant from violating section 15(a)(2) and (5) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq.
2. Defendant is a corporation organized and existing under the laws of Michigan, with its principal office and place of business at Grand Rapids, Michigan, within the jurisdiction of this court.
3. Defendant is engaged, as a common carrier in interstate commerce, in the business of transporting goods by motor vehicle in the states of Michigan, Ohio, Indiana and Illinois. It owns and operates a number of branch establishments consisting of terminals and garages in the states aforesaid.
4. Defendant regularly employs approximately six hundred persons, about ninety-six of whom are employed as rate, tracing, filing, manifest and O.S.D. Clerks, dispatchers and general office employees, whose duties consist generally of computing rates on shipments, picking up freight bills, collecting charges due, making out manifests and reports on damages, auditing inbound freight, tracing shipments, taking telephone orders, billing shippers, soliciting business, expediting freight movements, arranging for proper equipment at terminals, routine correspondence, and general office work.
5. During the period of October 24, 1938, to November 7, 1942, forty-eight employees employed as rate, tracing, filing, manifest and O.S.D. Clerks, dispatchers and general office employees were employed on a straight salary basis for all hours worked in each work week. This group is the principal subject of this litigation.
6. During such period, the defendant worked many of such forty-eight employees in excess of the applicable maximum hour provisions of the Fair Labor Standards Act without additional overtime compensation, and failed to keep records showing the home address, the hourly rate of pay and the breakdown between straight time wages and total weekly overtime of many of these forty-eight employees.
7. Six of these forty-eight employees were employed by defendant with titles of Terminal Managers, Office Manager, or Chief Dispatcher. While defendant has consented, for the purposes of this suit, to a decision as though such six employees were subject to the Fair Labor Standards Act, at all times during such period the defendant in good faith considered such employees executives, and therefore exempt under the Act.
8. Since the filing of this suit on November 7, 1942, defendant has audited its books and made restitution to its employees of amounts shown to be due on past unpaid overtime, has expanded its payroll department and improved its payroll procedure to obviate the recurrence of such errors. Defendant, on or about July 5, 1943, entered into written contracts with all employees who were, or conceivably might be, subject to the Fair Labor Standards Act. Defendant has entered into similar contracts with all employees whose wages have been changed, and all new employees. The form of such contract is:
"Associated "Truck Lines, Inc. "Employment Contract
"Dated ________.
"To ______.
"You are hereby notified that from and after ____, your basic rate of pay will be ____¢ per hour for the first 40 hours each week, and that for time over 40 hours each week you will receive for each hour of work not less than one and one-half times such basic rate above mentioned, with a guarantee on our part that you will receive weekly for regular time and for such overtime as the necessities of the business may demand, a sum not less than $____.
"The weekly guaranteed amount is subject to adjustment for vacations, absences and any other conditions not within the control of the company.
"Associated Truck Lines, Inc. "By ________ "Accepted: __________________________ Name __________________________ Home Address __________________________ City State __________________________ Social Security Number."
Conclusions of Law.
1. The court has jurisdiction of the parties and of the subject matter of this suit.2. Plaintiff has failed to sustain the burden of proof resting upon it to establish such want of good faith on the part of the defendant and such probability of further violations of the provisions of the Fair Labor Standards Act as to justify this court in issuance of injunction as prayed.
3. An order will be entered dismissing the bill of complaint.
The findings of fact and conclusions of law filed herewith obviate necessity for extended opinion. The case is presented upon stipulated facts. The dispute concerns inferences logically deducible therefrom.
The primary issue is whether or not plaintiff has sustained the burden of proof to establish such lack of good faith as to justify issuance of the writ of injunction against violation of section 15(a)(2) and (5) of the Fair Labor Standards Act, 29 U.S.C.A. § 215(a) (2, 5), as prayed in the complaint.
Paragraph 5 of Section V of the stipulation of facts reads:
"Defendant now states that it is complying with the Fair Labor Standards Act, and that it believes that it has remedied all past violations, and that it has no knowledge of any present violations, and does not intend to violate the Act in the future. Plaintiff maintains that the position of defendant expressed in section 5 hereof is immaterial. Plaintiff does not deny such belief on the part of the defendant and offers no evidence in contradiction thereto."
The rule is well settled that the extraordinary writ of injunction will not issue for the purpose of punishing past offenses, but will issue only in those cases where the court is convinced that such relief is necessary to prevent future violations. The record, fairly considered, does not establish that defendant intends to resume violations. The necessary inference from the stipulation is that defendant has no such intention and that proof was not available to establish such intention. It is clear from the stipulation that defendant has violated the act and that the violations continued after the commencement of suit. These facts, however, considered in connection with the portion of the stipulation above quoted, do not establish such a degree of contumacy as to indicate that defendant harbors a secret intent to disobey the law in the future. The case is not one where, after repeated warnings by the administrator prior to suit, the defendant continues violations until long after the commencement of suit, or in which there is proof of expressions of determination not to obey the law except as a last resort. Such facts, if established, might turn the balance to prove such degree of bad faith as to justify the writ.
The foregoing views accord with the weight of authority. In the recent case of Lenroot v. Interstate Bakeries Corp., D.C., 55 F. Supp. 234, Judge Reeves expresses views pertinent to the instant case. After discussing the case of Hecht Co. v. Bowles, 321 U.S. 321, 64 S.Ct. 587, he said [ 55 F. Supp. 237]:
"The entire opinion teems with intimations that since the officers of the petitioner acted in good faith there would be no virtue in granting an injunction. Moreover, an injunction is an extraordinary and radical remedy. The Supreme Court of the United States, in Truly v. Wanzer et al., 46 U.S. 141, loc. cit. 142, 143, 5 How. 141, 12 L.Ed. 88, said, in reference to granting an injunction:
"`There is no power the exercise of which is more delicate, which requires greater caution, deliberation, and sound discretion, or more dangerous in a doubtful case, than the issuing an injunction. It is the strong arm of equity, that never ought to be extended, unless to cases of great injury, where courts of law cannot afford an adequate and commensurate remedy in damages. The right must be clear, the injury impending, and threatened so as to be averted only by the protecting preventive process of injunction.'
"In the more recent case of Packard Paper Box Co. et al. v. O.B. Andrews Co., 1 Cir., 67 F.2d 783, loc.cit. 784, the court said:
"`While the granting or withholding of a preliminary injunction rests largely in the discretion of the trial judge, it is well settled that ordinarily it ought not to be granted unless the plaintiff's probable right to relief appears clear. * * * The mere fact that the grant of an injunction will occasion less harm to the defendant than the refusal of it will occasion to the plaintiff, while of course a circumstance to be considered, is by no means decisive, as was expressly held in International Register Co. v. Recording Fare Register Co., 2 Cir., 151 F. 199, 202.'
"The District Judge of the District of Montana, in Great Northern R. Co. v. Local Great Falls Lodge of I.A. of M. [D.C.], 283 F. 557, loc.cit. 563, epitomized the law when he said:
"`Injunctions go only in cases of urgent necessity, made to appear by competent, material, credible, and preponderating evidence, to guard against injuries, not merely feared by the applicant, but reasonably to be apprehended, and likely to be irreparable. They are extraordinary remedies, granted with great caution, and in the exercise of sound judicial discretion.'"
See also Walling v. Gulf States Paper Corp., 5 Cir., 143 F.2d 301, Walling v. Florida Hardware Co., 5 Cir., 142 F.2d 444; Walling v Fairmont Creamery Co., 8 Cir. 139 F.2d 318; Walling v. Shenandoah-Dives Mining Co., 10 Cir., 134 F.2d 395; Walling v. T. Buettner Co., 7 Cir., 133 F.2d 306; Bowles v Minish, D.C., 56 F. Supp. 153; Brown v. J.C. Penney Co., D.C., 54 F. Supp. 488.
An order will be entered dismissing the complaint.