Source: https://caselaw.findlaw.com/us-supreme-court/323/557.html
Timestamp: 2019-04-21 11:20:46+00:00

Document:
Mr. Enoch E. Ellison, of Washington, D.C., for petitioner.
Mr. Justice ROBERTS delivered the opinion of the Court.
The parties agree that the principal question presented is whether Section 23 of the Independent Offices Appropriation Act, 1935,1 in so far as it provides for overtime compensation for services in excess of 40 hours per week, applies to Government employes of the Canal Zone whose compensation is fixed on a monthly basis. The Court of Claims answered in the affirmative. 2 If we take the same view, a subsidiary inquiry is whether that court adopted the right method for calculating the overtime compensation.
The Court of Claims held that he was engaged in one of the 'trades and occupations' whose compensation is 'set by wage boards or other wage- fixing authorities' covered by the Act. We think this conclusion is right and do not understand the petitioner now to contest it. The court further held that the statute embraced those employes of the Canal Zone whose wages are paid on a monthly basis. This the Government contests, relying on the words of the Act, on administrative practice and on legislative history. A statement of the background of the legislation and its application seems necessary to decision.
In 1923 Congress adopted the 'Classification Act'3 classifying the employment and fixing the compensation for different classes of employes of certain departments of the Government. It excluded from the terms of the Act certain occupations, including apprentices, helpers or journeymen in a recognized trade or craft and skilled or semi-skilled laborers, among others. Admittedly certain employes of the Panama Canal, including the respondent, were not covered by this Act. Their compensation was to be fixed by the President, or by his authority, under the Act of August 24, 1912;4 specifically it was set by the Governor of the Panama Canal on the advice of a wage board.
The Act of March 28, 1934, with which we are here concerned, was the last of the so-called Economy Acts intended to decrease expenses by reduction of compensation [323 U.S. 557, 560] and suspension of privileges of federal employes. By the first such Act, approved June 30, 1932,5 a regular schedule of reduction of salaries, by a system of furloughs or reduction of the work week, was established.
By the Act of March 20, 1933,6 Congress superseded the furlough system and provided for a reduction, not to exceed 15%, in the compensation of all employes. By the Act of March 28, 1934, this reduction was cut to 10% for a portion of the fiscal year 1934, and to 5% for the fiscal year 1935. Possible reductions in compensation imposed on federal employes were not, however, limited to those prescribed in the cited statutes. Men were discharged and rehired in lower classifications at the lower wages applicable and were furloughed without pay, in order to keep within appropriations.
When the bill which became the Act of March 28, 1934 was under consideration, a representative of a labor organization appeared before a subcommittee of the Senate Committee on Appropriations and advocated legislation to prohibit certain discriminatory reductions in the wages of per diem Navy Yard workers. He pointed to the continuance of the practice of furloughing them one day in each two weeks, thus reducing the hours worked to 40 per week, and showed that this, in addition to the 15% reduction of pay required by the economy act then in force, actually cut their base pay over 22%. He also complained of other practices which had the effect of reducing their compensation. He expressed the fear that if Congress abolished the 15% level cut, wage boards would at once take action to reduce existing wage scales. He proposed a provision which would prohibit reduction of wages below the wage scales which were in effect June 1, 1932, but sug- [323 U.S. 557, 561] gested no provision concerning hours of work or overtime pay. The draft he submitted was not embodied in the bill as reported.
The amendment was adopted without further reference to it in either House of Congress. The President vetoed the bill, which was passed over his veto. On that occasion a Senator inquired whether certain language in the President's veto message referred to the provisions of Section 23 and the reply was that the Senator interrogated did not know whether this was so. We shall shortly see that the section did substantially more than Senator Thomas stated in his brief explanation.
Notwithstanding this ruling the Governor attempted to reduce the monthly employes' compensation by putting them on an hourly basis. This he did by dividing the monthly salary paid June 1, 1932, by 224, the number of hours he estimated they worked per month made up of eight hours per day for six days per week, sixteen hours per month for occasional overtime and an allowance for occasional work on Sundays and holidays. This computation showed they had been worked 52 hours per week. Having thus ascertained what he deemed their hourly wages, he added 20% to the hourly wage, so that they would receive the same amount for a forty-hour week as they would theretofore have received for a forty-eight hour week, despite the fact that they had been working and had been paid for more than forty- eight hours according to his computation of their prior hourly earnings. The net result was substantially to reduce their monthly earnings. After complaint by the employes, the Governor submitted [323 U.S. 557, 563] his action to the Comptroller General and requested reconsideration of the earlier decision. 9 That official reaffirmed his prior decision and disapproved the recomputation of monthly wages which the Governor had adopted. He ruled that the proper procedure was 'to continue the payment of the same monthly rates of compensation even though there may have been a reduction in the number of hours per week and no overtime compensation is authorized,' and added that 'This is the general rule that has been adopted under the 40-hour week statutory provision for all employees paid on a monthly or annual basis.' The Governor's submission and the Comptroller General's ruling make it clear that both understood that employes paid on a monthly basis could not be regularly worked more than forty hours a week. Several passages in his decisions also indicate that the Comptroller General was of opinion that monthly employes should not be paid overtime. The rulings were definitely that employes whose weekly wages would be reduced by reducing their work hours must have those wages restored to the 1932 wage level, and that employes who had not had their weekly wages cut because they were paid by the month and were worked 52 hours per week should not have their wages cut as a result of 23 by the reduction of their work week to 40 hours.
Apparently relying on the Comptroller General's statement that employes on a monthly wage basis were not entitled to overtime, the Governor continued to work the respondent forty-eight hours a week but paid him no overtime. This in spite of his knowledge that the forty hour week limitation was also applicable to the respondent if other parts of 23 were so applicable. In his second submission to the Comptroller General he stated his understanding of the latter's decision that monthly employes [323 U.S. 557, 564] could not be worked more than forty hours a week. There is no evidence that the question of the legality of working the respondent overtime without paying him for it was ever submitted to the Comptroller General.
It seems evident that the Governor's action cannot be justified. If 23 applied in the case of the respondent, his work week should have been forty hours. If, in spite of 23, his monthly stipend covered every day and every hour of the month whether service was rendered or not, as the Comptroller General had said, so that respondent could not be paid for overtime, then he should not have been regularly worked overtime.
With this outline of the situation, we are brought to a consideration of the Government's contention that 23 has no application to the respondent's compensation.
We are clear that the Comptroller General was right in ruling that the statute applied not only to per diem or hourly emplyes but also to employes paid on a monthly basis, such as respondent, whose compensation was fixed by a wage board. We are also clear that, on the face of the statute, if the Governor, in the teeth of the statutory provision, worked such employes more than forty hours a week, the overtime provision of 23 required payment [323 U.S. 557, 566] at one and one-half straight time pay for the extra hours worked.
The Government seeks to avoid such a construction of the Act by invoking asserted administrative practice and legislative history. It relies heavily on the statement made to the subcommittee, to which we have heretofore referred. With respect to this statement, we think it enough to say that the spokesman was complaining about discriminations against employes paid by the day or the hour but he nowhere suggests the propriety of distinguishing between such employes and those paid on a monthly basis but worked more than forty hours per week. He advocates setting the June 1, 1932, standard as a minimum subject only to percentage reductions provided by the Economy Act. He envisages the fact that if the work week is reduced to forty hours and the June 1932 standard is thus reestablished, the result will be an increase in wages to the employes concerned. The considerations of equity on which he relies apply quite as much to employes paid by the month as to those paid by the day or hour. Moreover, as above stated, the draft he submitted was not adopted. On the contrary, one differently worded became 23 of the statute.
The Government next relies on the fact that, prior to the adoption of 23, no overtime was paid to employes who were on a monthly or annual basis. But, as we shall see, the full application of the principle of a work week limited to specified hours, and payment of overtime for extra hours, was gradually adopted by the Congress, and the fact that the old practice was abolished piecemeal can have little weight in determining whether, as respects the employes embraced in its terms, 23 abolished the distinction amongst those embraced in trades and occupations whose compensation was fixed by wage boards. Moreover, the section essayed to deal only with a special class of employes whose working conditions are more [323 U.S. 557, 567] nearly comparable to those of men employed in private industry. There may, therefore, have been valid reason for establishing, as respects all of these employes, a different rule from that generally followed in Government departments.
The Government also relies on the prior practice in the Canal Zone, but we think this inconclusive. By the Act of August 24, 1912,11 the President was empowered to appoint employes of the Canal Zone. The Act provided that 'the compensation of such persons shall be fixed by the President, or by his authority, until such time as Congress may by law regulate the same' ( 4). By Executive Order of February 2, 1914, the President established overtime for per diem and hourly workers but forbade overtime for those paid on a monthly or annual basis. Congress did undoubtedly legislate further on the subject in 23 of the Act of 1934. The administrative practice prior to the adoption of the section is, therefore, of no moment.
The Governor's attempt to reduce the compensation of the respondent by working him overtime and not paying him for his overtime, in the teeth of the statute and the Comptroller General's ruling, certainly cannot be accorded weight in construing the statute.
The Government produced at the trial of the case in the court below certain letters from the Navy Department, the Government Printing Office, and the Bureau of Engraving and Printing of the Treasury Department stating that they had interpreted 23 as applying only to per diem and hourly employes, and that no overtime had been paid to employes working on a monthly or yearly basis. These letters do not state, however, that these branches regularly worked such employes overtime, as did the Governor of the Canal Zone, without paying for overtime work. [323 U.S. 557, 568] Such evidence as there is in the record would seem to indicate the contrary.
The Secretary of the Navy submitted certain questions respecting 23 to the Comptroller General immediately after the enactment of the section. One was whether per-annum or per-month employes who worked in excess of 40 hours a week 'because of an extraordinary emergency' should be paid overtime. The Comptroller answered in the negative referring to his decision rendered the Government Printing Office12 in which he said that the regular hours of work of employes on an annual basis were required by 23 to be fixed at not to exceed forty per week. In the same opinion rendered to the Public Printer he had ruled that such employes were not entitled to overtime. There is no evidence that the Secretary of the Navy or the Public Printer conceived that they could work per annum and per month employes more than forty hours a week without extra compensation except in cases of extraordinary emergency or that they ever pursued a practice like that of the Governor of the Panama Canal. It would seem, therefore, that the hours of monthly paid mechanical employes in the departments in question were reduced to 40 without any pay cut. Such action would be in accordance with the rulings of the Comptroller General. Thus the administrative construction of the Governor seems to stand alone and in contradiction to that of other heads of departments and offices of the Government, and, in this respect, worked a discrimination against the respondent and those in his class as contrasted with other employes who stood in the same relation. Certain it is that the Comptroller General never ruled that the standard of 40 hours a week with overtime could be disregarded in practice.
Finally, the Government argues that related legislation indicats Congress did not intend 23 to apply to em- [323 U.S. 557, 569] ployes paid by the month or by the year. We think, however, that, on analysis, the course of legislation, considered as a whole, fails to sustain the contention. As we have said, adoption of the principle of limitation of working time and extra pay for overtime, in respect of Government employment, has been of gradual development.
In 1888 Congress prescribed an eight hour day with payment for overtime for letter carriers of the United States Postal Service,15 who receive annual salaries.
In 1911 provision was made for overtime pay of employes of the Customs Service required by the nature of their service to work after 5 P. M. 16 Such overtime pay was to be reimbursed the Government by the steamship companies whose business required such services.
In 1919 the Secretary of Agriculture was authorized to pay employes of the Bureau of Animal Industry, employed in industrial establishments in the inspection of meat, for overtime work. 17 Here again the Government was to be reimbursed by the establishment which required the working of overtime, but the compensation paid the inspectors was on an annual salary basis. [323 U.S. 557, 570] In 1940 an Act was passed18 making the regular working hours of the Navy Department and the Coast Guard, and their field services 'eight hours a day or forty hours per week' during the period of the national emergency. The Act set a different method of paying the overtime to monthly, per diem, hourly and piecework employes than that applied to employes paid by the year, but it is to be noted that the forty hour week and the overtime rate of one and one-half times the regular rate was applied to monthly employes.
The Government lays great stress on a report of the Committee on Naval Affairs reporting this legislation to the Senate. 19 In that report the Committee said, referring to the forty hour per week limit, and the payment for overtime: 'In this regard, the provision for the payment of compensation (for overtime) to per annum and per month employees is a departure from the practice heretofore followed.' ... A similar statement was made in the House report. 20 The difficulty that arises in giving weight to these statements of the Congressional Committees is that the facts already recited show the reports were wrong in fact and apparently were based upon an inaccurate statement which was credited by the Committees.
Finally, in 1942, by Joint Resolution, Congress provided for overtime pay for Government employes generally23 including employes of Government- owned or controlled organizations and those of the District of Columbia whose positions are subject to the Classification Act of 1923. The resolution embodies a proviso excluding 'those whose wages are fixed on a daily or hourly basis and adjusted from time to time in accordance with prevailing rates by wage boards or similar administrative authority serving the same purpose, ....' From this proviso the Government argues that Congress believed that up to that time [323 U.S. 557, 572] those whose monthly compensation was fixed by wage boards had not been entitled to overtime and that the resolution granted it to them for the first time. Whatever Congress may have thought or intended in respect of the proviso, we cannot ignore the fact that 23 of the Act of March 28, 1934, on its face, applied to such monthly employes, that the Comptroller had so ruled, and that, so far as appears, the departments concerned had acted with that understanding, save only the Governor of the Panama Canal who, although so advised, had acted in the teeth of the statute.
The same misapprehension with respect to the effect and administration of the Act of 1934 seems to have prevailed when the War Overtime Pay Act of 194324 was adopted. That Act, by a sweeping provision, granted overtime pay to all civil employes of the Government and all employes of Government-owned or controlled corporations, except those in the Government Printing Office, and the Tennessee Valley Authority. It specifically included officers and employes whose wages are fixed on a monthly or yearly basis by wage boards or similar authorities, and excluded employes whose wages are fixed on a daily or hourly basis by wage boards.
We think this summary of the legislation on the subject is not conclusive or even strongly persuasive as an aid to the construction of the Act under consideration as of the time when Congress adopted it. It seems that there was no very clear and general policy with respect to the payment of overtime until the exigencies of the war called for compensation of Government employes as a class on a basis similar to that adopted in private industry. When the time came to make such general provision, the more or less haphazard dealing with the subject theretofore seems not to have been clearly in mind. [323 U.S. 557, 573] We conclude that the Court of Claims properly held that 23 applies in respondent's case and that he is entitled to recover for the overtime he was required to work.
Mr. Justice MURPHY concurs in the result.
The CHIEF JUSTICE, Mr. Justice JACKSON and Mr. Justice RUTLEDGE dissent.
[ Footnote 1 ] Act of March 28, 1934, c. 102, 48 Stat. 522, 5 U.S.C. 673c, 5 U.S. C.A. 673c.
[ Footnote 3 ] 42 Stat. 1488, 5 U.S.C. 661 et seq., 5 U.S.C.A. 661 et seq.
[ Footnote 4 ] c. 390, 37 Stat. 561, 48 U.S.C. 1305, 48 U.S.C.A. 1305.
[ Footnote 5 ] 47 Stat. 382.
[ Footnote 6 ] 48 Stat. 8, 13.
[ Footnote 7 ] 78 Cong.Rec. 2977.
[ Footnote 8 ] See 14 Comp.Gen. 158.
[ Footnote 9 ] See 14 Comp.Gen. 165.
[ Footnote 10 ] Compare Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 , 62 S. Ct. 1216; Walling v. Helmerich & Payne, Inc., 323 U.S. 37 , 65 S.Ct. 11; St. John v. Brown, D.C., 38 F.Supp. 385; Allen v. Moe, D.C., 39 F.Supp. 5; Nelson v. St. Joseph & G.I.R. Co., 199 Mo.App. 635, 205 S.W. 870.
[ Footnote 11 ] Supra Note 4.
[ Footnote 12 ] 13 Comp.Gen. 265.
[ Footnote 13 ] Act of January 13, 1883, 22 Stat. 402.
[ Footnote 14 ] See 44 U.S.C. 40, 44 U.S.C.A. 40.
[ Footnote 15 ] Act of May 24, 1888, 25 Stat. 157; cf. United States v. Post, 148 U.S. 124 , 13 S.Ct. 567. See also 39 U.S.C. 117, 39 U.S.C.A . 117.
[ Footnote 16 ] Act of Feb. 13, 1911, 5, 36 Stat. 901, 19 U.S.C.A. 267. See United States v. Myers, 320 U.S. 561 , 64 S.Ct. 337.
[ Footnote 17 ] Act of July 24, 1919, 41 Stat. 241, 7 U.S.C. 394, 7 U.S.C.A. 394.
[ Footnote 18 ] Act of June 28, 1940, 54 Stat. 676, 678, 50 U.S.C.A.Appendix, 1155. This Act expired June 30, 1942.
[ Footnote 19 ] S. Rep. No. 1863, 76th Cong., 3d Sess., pp. 11, 12.
[ Footnote 20 ] H. Rep. No. 2257, 76th Cong., 3d Sess., pp. 3, 4.
[ Footnote 21 ] Act of October 21, 1940, 54 Stat. 1205, 5 U.S.C.A. 29 note. This Act expired June 30, 1942.
[ Footnote 22 ] 86 Cong.Rec. 13557.
[ Footnote 23 ] 56 Stat. 1068, 5 U.S.C.A. 29 note.
[ Footnote 24 ] Act of May 7, 1943, 57 Stat. 75, 1, 50 U.S.C.A.Appendix, 1401.
[ Footnote 25 ] The Government relies on the Act of June 30, 1906, 34 Stat. 763, 5 U.S.C. 84, 5 U.S.C.A. 84. That statute, however, was not addressed to the problem of a standard work-week of a limited number of hours and the calculation of overtime for hours worked in excess of the limit.
[ Footnote 26 ] See St. John v. Brown; Allen v. Moe, supra, Note 10.

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