The Phoenix index., 1941-06-07
Cen Fleming y
Making Appeal
For Decision
Appeal Ruling
Of 5th District 4
Appellate Court E.


,(SNS)-The Supreme Court
has been asked to review the
question of whether tips are
wages under the Fair Labor
Standards Act in a memo
randum filed by the Solici-
tor General in behalf of Gen
eral Philip B. Fleming, Ad-
ministrator of the Wage and
Hour Division, Department of
Labor.
The Administrator, as friend oj
the court, has intervened in the
suit brought by red caps employed
at the Union Terminal Company,
Dallas Texas, against the terminal
company for restitution of wages
under the Wage and Hour law.
The Circuit Court of Appeals for
the Fifth District last month found
that the tips received by red caps
constituted wages paid to them,
reversing the judgment of the court
below which had found in favor OF
the red caps and awarded them
$77,753.98 in back pay and liqui-
dated damages.
The memorandum was submitted
in support of a petition for writ
of certiorari which seeks to bring
this case before the Supreme Court
as a test case and thus judicially
settle "a question which affects the
method of compensation of the
more than 5000 red caps employed
in railroad terminals throughout
the country. Over fifteen suits by
red caps against railroads on this
question involving. several million
dollars are now pending.
Indirectly affected are all work
ers who receive all or part of their
remuneration in the form of tips
A recent government survey esti.
mates their number throughout the
country to be approximately 888,
500 Most of these are walters
who are not covered by the Wage
and Hour Law. Many of them are
under state minimum wage orders
The red caps maintain that tips
cannot be considered as part OF
wages paid, but that the statutory
minimum wage Of 80 cents an hour
should be paid by the terminals
without regard to tips. The ter
minals on the other hand take the
position that tips can be consider
ed part of the 30 cents minimum
wage. Under a so-called account.
ing and guarantee plan the Dallas
Terminal had required the red
caps to report the amount of tips
received and the number of hour.
worked and at the end of the week
had paid the difference if tips did
not equal the minimum wage.
VIOLATES WAGE ACT
This accounting and guarantee
plan was put into operation by the
Dallas Terminal Company at the
time the Wage and Hour Law be-
came effective in October 1888.
Similar plans were used by numer-
Gus terminal companies to pay
their red caps These plans have
since been abandoned in favor OF
ten dents a parcel plan utiliz-
ing tickets.
The memorandum points out
that from the beginning the plan
was source of dissatisfaction and
that it violates the Wage and Hour
Law 1t cites the interest of Con-
gress in the question of tips as
wages as shown by resolution
passed by the Senate authorizing
an investigation by the Admins
traitor Of this question.
The memorandum states that 'fn
view of the long-continued admin
astrative concern with the prob
lem the evident interest of Con-
gress in its solution and the large
number of pending suits which in
volve the same issue as that hero
presented, the Importance of de-
terminative decision of this case
by this Court seems manifest
NOT PAYMENT OF WAGES
1t contends that the duty impos-
ed by the Wage and Hour Law up
On the Terminal Company to pay
wages to the red caps is not dis
charged by permitting the red
caps to retain the tips they re-
ceive from passengers. Such tips
are not the property of the termi-
nal company. but belong to the
red caps, it is argued. 1t points
out that the red caps themselves
had never consented to this ac-
counting and guarantee plan OF
compensation, nor had they by con-
tinuing to work under this plan
waived their original right to
ownership of tips and further
more. the passenger who pays the
tip intends such tip to be the prop
erty of the red cap.
The Solicitor General contends
that the action of the terminal
company in allowing the red caps
to keep their property did not con-
stitute the payment of wages with