Source: http://openjurist.org/513/f2d/961/brennan-v-kroger-company
Timestamp: 2016-12-08 05:22:45
Document Index: 470323318

Matched Legal Cases: ['§ 301', '§ 1671', '§ 306', '§ 1676', '§ 304', '§ 304', '§ 304']

513 F2d 961 Brennan v. Kroger Company | OpenJurist
513 F. 2d 961 - Brennan v. Kroger Company HomeFederal Reporter, Second Series 513 F.2d.
513 F2d 961 Brennan v. Kroger Company 513 F.2d 961
22 Wage & Hour Cas. (BN 221, 76 Lab.Cas. P 33,232
Peter J. BRENNAN, Secretary of Labor, United StatesDepartment of Labor, Plaintiff-Appellant,v.The KROGER COMPANY, a corporation, Defendant-Appellee.
Argued Jan. 9, 1975.Decided April 9, 1975.
Bobbye D. Spears, Deputy Assoc. Sol., U. S. Dept. of Labor, Washington, D. C., for plaintiff-appellant.
William L. Sweet, Jr., Fort Wayne, Ind., for defendant-appellee.
Before FAIRCHILD, Chief Circuit Judge, TONE, Circuit Judge, and PERRY, Senior District Judge.*
This is an appeal from an order of the District Court granting summary judgment in favor of defendant below, The Kroger Company (hereinafter "Kroger") and against plaintiff below, Peter J. Brennan, Secretary of Labor, United States Department of Labor (hereinafter "the Secretary"), in an action brought by the Secretary to enforce Title III of the Consumer Credit Protection Act, § 301 et seq. (P.L. 90-321, 82 Stat. 163), 15 U.S.C. § 1671 et seq. (hereinafter "the Act"). By § 306 of the Act, 15 U.S.C. § 1676, the Secretary, acting through the Wage and Hour Division of the Department of Labor, is charged with enforcing Title III of the Act.
In June 1970, Kroger, a retail food dealer engaged in interstate commerce, hired one Johnnie Boyd as a railroad car gang employee. On September 22, 1970, an order (hereinafter "the first order") was entered by the Justice of the Peace Court, Wayne Township, Allen County, Indiana, directing Kroger to apply the earnings of Boyd to the satisfaction of a judgment previously entered against him. The next day Kroger was served with the order and immediately thereafter began to withhold from Boyd's wages the maximum amount permitted by Indiana law. A month later, on October 22, 1970, the same Justice of the Peace Court entered a second order, directing Kroger to apply the earnings of Boyd to the satisfaction of another judgment, based on a debt unrelated to the debt which gave rise to the first order. Service on Kroger of the second order was accomplished on October 23, 1970, and, as a result, Kroger discharged Boyd effective October 31, 1970 in accordance with company policy and as permitted by the collective bargaining agreement then in force. The Justice of the Peace Court entered two distinct orders based on two separate debts and both orders were properly served on Kroger. Since the maximum amount permitted by law was being withheld from Boyd's wages pursuant to the first order, no actual withholding whatever was made from Boyd's wages pursuant to the second order. By their terms, both of the orders were in the nature of continuing liens against the earnings of Boyd, and the order which was first in time was entitled to full satisfaction before any withholding could be made for the purpose of satisfying the second order.
Thereafter Kroger moved for summary judgment, arguing that service of a second court order which under Indiana law created a continuing lien against the earnings of Boyd amounted to a second subjection to garnishment within the meaning of the Act, and that the restriction of § 304(a) was therefore inapplicable. The Secretary, on the other hand, contended that since there was not nor could there be any actual withholding under the second order until a first order had been fully satisfied, Boyd had been discharged because his earnings had been subjected to garnishment for only one indebtedness, in violation of § 304(a). In granting Kroger's summary judgment motion, the District Court equated service of the second order with subjection to garnishment within the meaning of the Act.
We turn now to the legislative history of Title III.1 After taking many hours of testimony and studying hundreds of pages of discussion and data on the subject of garnishment, the House Banking and Currency Committee, and particularly Congresswoman Leonor Sullivan's Subcommittee on Consumer Affairs, decided that garnishment was a serious national problem and that at least a minimum national standard should be established for the garnishment of wages.2 In the hearings on H.R. 11601, the proposed Consumer Credit Protection Act, Congressman Frank Annunzio was moved to say:
. . . There are four titles to H.R. 11601. If we lose all the titles and retained only the garnishment section we would be doing more for the consumers of America than has been done at any time during the history of this country. The record bears this out.3
Representatives of three major steel corporations Inland, United States, and Republic testified in subcommittee hearings that garnishment deductions from the wages of their employees was a heavy, unwanted administrative expense.4 These corporations, along with trade union groups, endorsed restrictions on wage garnishment.5 In a letter to Congresswoman Sullivan, Secretary of Labor Willard Wirtz stated that there was a widespread opinion among judges, lawyers, economists and bankruptcy referees that there is a correlation between consumer bankruptcies and wage garnishments, and that a study in 1965 by the Administrative Office of the United States Courts showed that bankruptcies were highest where wage garnishments were least restricted.6
In their report on H.R. 11601, the House Committee on Banking and Currency stated that as originally introduced, Title II of the bill (now Title III of the Act) would have provided for a blanket prohibition against the garnishment of wages, but testimony before the committee showed that a total prohibition would unduly restrict honest and ethical creditors and that, accordingly, the committee adopted an amendment (introduced by Congressman Seymour Halpern) which would restrict instead of prohibit garnishment, while prohibiting an employer from discharging any employee by reason of a single garnishment of the employee's wages. The committee stated that testimony and evidence received by the committee clearly established a causal connection between harsh garnishment laws and high levels of personal bankruptcies, and that four United States Referees in Bankruptcy had testified eloquently to this causal connection and had endorsed the need for restricting the garnishment of wages.7
It is obvious to us that Congress, in enacting Title III, intended to protect employees from the adverse effects of garnishment proceedings and discharges based thereon. The far-reaching consequences of discharge because of garnishment are well summarized in Johnson v. Pike Corp. of America, 332 F.Supp. 490, 496 (C.D.Cal.1971), where the court said:
We agree with the District Court that under Indiana statutes governing garnishment and proceedings supplementary to execution, an obligation is imposed upon an employer upon mere service of a second order an obligation to record the order, to monitor the employee-debtor's payroll account and, upon the discharge of superior liens, to insure that withholding is instituted for any non-discharged subordinate liens. We do not believe, however, that this obligation under state law should be used as a premise for concluding that, under federal law, the employee's "earnings have been subjected to garnishment."
Finally, we recognize the venerable principle that when faced with a problem of statutory construction, courts give great deference to the interpretation of the administrator who is charged with the administration or enforcement of a statute. See, e. g., Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965), reh. denied, 380 U.S. 989, 85 S.Ct. 1325, 14 L.Ed.2d 283. In regard to § 304(a) of the Act, the Administrator of the Wage and Hour Division of the Department of Labor, who under the Secretary is charged with enforcing Title III, has said:
Wage-Hour Administrator Opinion Letter No. 1136 (WH-89), Oct. 26, 1970, CCH Lab.L.Rep. P 30,703.
Although it cannot be argued that an administrative interpretation of a statute is controlling, nonetheless the Administrator's interpretation is entitled to great weight and should be followed unless there are compelling indications that it is wrong. See Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969). We find no compelling indications that the Administrator was wrong when he said in the above-quoted paragraph:
. . . (A)n individual's earnings are "subjected to garnishment" within the meaning of section 304(a) of the CCPA when the employer (garnishee) is bound to withhold compensation . . . There would be no subjection to garnishment before this time. . . . (emphasis added.)
In agreeing with the Secretary, as we do, that the Administrator's views support a construction that an actual withholding of wages must occur before earnings are deemed "subjected to garnishment", we do not imply an acceptance of the Secretary's intimation that the above-quoted ruling of the Administrator was a contemporaneous construction of the Act (Brief of Appellant at 28). The opinion letter was written some twenty-nine months after the passage of the Act and is too far removed in time to be considered contemporaneous. See Brennan v. General Telephone Co. of Florida, 488 F.2d 157, 160 (5th Cir. 1973).
Examination of the legislative history of Title III of the Act was greatly facilitated by the prior efforts of Miss Charlotte Stillwell, Reference Librarian, Cook County Law Library, Chicago, Illinois. In a three-volume work entitled "Legislative History of the Consumer Credit Protection Act", Miss Stillwell has gathered a most comprehensive collection of House and Senate documents pertaining to the legislative history of the Act
114 Cong.Rec. 1840 (1968)
Hearings on H.R. 11601 Before the Subcomm. on Consumer Affairs of the House Comm. on Banking and Currency, 90th Cong., 1st Sess. pt. 1, at 540 (1967) (hereinafter cited as Hearings)
114 Cong.Rec. 1833 (1968)
H.R.Rep.No.1040 (on H.R. 11601), 90th Cong., 1st Sess. (1967) (hereinafter cited as H.R.Rep.No.1040), U.S.Code Cong. & Admin.News, 90th Cong., 2nd Sess. (1968) at, p. 1978
Secretary of Labor letter of Sept. 6, 1967, printed in Hearings at 794
H.R.Rep.No.1040, U.S.Code Cong. & Admin.News, 90th Cong., 2nd Sess. (1968) at p. 1978