Case Name: The Court of Industrial Relations, Plaintiff, v. The Charles Wolff Packing Company, Defendant
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1922-06-10
Citations: 111 Kan. 501
Docket Number: No. 23,702
Parties: The Court of Industrial Relations, Plaintiff, v. The Charles Wolff Packing Company, Defendant.
Judges: Porter, J., concurs in this dissent.
Reporter: Kansas Reports
Volume: 111
Pages: 501–514

Head Matter:
No. 23,702.
The Court of Industrial Relations, Plaintiff, v. The Charles Wolff Packing Company, Defendant.
SYLLABUS BY THE. COUBT.
1. Jurisdiction — Court of Industrial Relations — Authority to Fix Scale of Wages and Hours of Labor for Employees in a Packing House Plant. The court of industrial relations has authority to make an order establishing wages to be paid employees and fixing the hours of labor to be observed in a packing house plant employing approximately three hundred men, where a controversy has arisen over wages and hours of labor and a meeting has been called to take a strike vote, and where instead of voting to strike, the employees have voted to submit the controversy to the court of industrial relations and have submitted that controversy to that court.
2. Same — Jurisdiction of Industrial Court Limited to Matters Embraced in Notice Given. The court of industrial relations cannot make orders to be observed by the operators of a packing house plant beyond the matters embraced within the notice given, unless the operators consent that matters outside the notice may be investigated.
3. Same — Packing Plant Being Operated at Loss — Power of Industrial Court. Under proper circumstances, the court of industrial relations can make an order, temporary in effect, slightly raising the wages of employees in a packing house plant and fixing the hours of labor, although the plant at the time the order is made is being operated at a loss.
Original proceeding.in mandamus.
Opinion filed June 10, 1922.
Writ allowed.
Baxter D. McClain, Randal C. Harvey, and John G. Egan, all of Topeka, for the plaintiff.
D. R. Hite, of Topeka, for the defendant.

Opinion:
The opinion of the court was delivered by
Marshall, J.:
This is a continuation of Court of Industrial Relations v. Packing Co., 109 Kan. 629, 201 Pac. 418. There this court said:
"This is an original proceeding in mandamus to compel the Wolff Packing Company, hereinafter named the defendant, to put in effect a scale of wages to be paid by it to its employees and to establish hours of labor as ordered by the court of industrial relations, hereinafter named the plaintiff." (p. 630.)
The former opinion disposed of a number of legal questions. This is an opinion in the same action and disposes of the questions that arise on the evidence.
1; The evidence, which was taken by A. L. Noble, of Wichita, who was by this court appointed commissioner to take the evidence and make findings of fact and conclusions of law, shows that the defendant was engaged in operating a packing plant in the city of Topeka for the purpose of slaughtering animals for food; that the defendant employed about 300 workmen in the operation of its plant; that a controversy arose between the defendant and its employees concerning wages, hours of labor, and certain conditions under which the employees worked; that a meeting of the employees was called for the purpose of voting on a proposition to strike on account of the controversy; that at the meeting thus called the employees voted to present the controversy to the plaintiff rather than to strike; and that thereafter a complaint was filed with the plaintiff. It is now insisted that the evidence does not show such an emergency as gives to the plaintiff jurisdiction to make any order on the complaint that was filed.
On the former hearing it was contended by the defendant that the pleadings did not allege that such an emergency existed as gave to the plaintiff the extraordinary power of regulating the wages to be paid by the defendant to its employees. This court in the syllabus to the former opinion said:
"The petition filed in this action alleged that such an emergency existed as justified the court of industrial relations in making an investigation." (If 5.)
What was said in the former opinion is approved. The defendant's plant is a small one, and it may be admitted that, if it should cease to operate, the effect on the supply of meat and food in this state would not greatly inconvenience the people of Kansas; yet, the plant manufactures food products and supplies meat to a part of the people of this state, and, if it should cease to operate, that source of supply would be cut off. The plant comes within the operation of the law, and the court of industrial relations has power to make the orders provided by law under the circumstances named in the statute. The petition alleged facts which showed that such an emergency as the law contemplates existed and gave to the plaintiff authority to inquire concerning the matters alleged in the complaint. The evidence established facts sufficient to give to the court of industrial relations authority to make proper orders thereunder.
Another matter that may be properly mentioned in connection with the discussion of this subject is that there is a presumption that the plaintiff made its order under proper circumstances. That presumption is not conclusive; it is rebuttable; yet, the presúmption exists and whatever weight it has must of necessity be placed in support of the order made by the court of industrial relations, although, in an action to compel compliance with an order of that court, the court trying the action must determine the matter for itself.
2. The plaintiff has filed a large number of exceptions to the report of the commissioner, both as to matters of fact and matters of law. The commissioner reported, as one of his conclusions of law, that the orders contained in paragraphs 1, 5, 6, 7, 8, 10, 12, 13, and 16 of the order of the plaintiff were made without jurisdiction and are unenforceable. This makes it necessary to set out those orders. The plaintiff ordered that—
"1. In this industry the principles of the open shop, as now and heretofore existing by agreement of the parties, are approved by the court and shall continue.
"2. Employees, whether organized or unorganized, shall receive wages as shown in schedules hereinafter set out.
"3. A basic working day of eight hours shall be observed in this industry; but a nine-hour day may be observed not to exceed two days in any one week without penalty: Provided, however, That if the working hours of the week shall exceed forty-eight in number, all over forty-eight shall be paid for at the rate of time and one-half; furthermore, in cáse a day in excess of the eight-hour day shall be observed more than two days in any one week, all over eight hours, except for said two days in said- week, shall be paid for at the rate of time and one-half, even though the working hours of the week may be forty-eight hours or fewer.
"4. No guarantee of time per week is specifically ordered; but sufficient work shall be offered to the regular employees in each and every month so that the monthly earnings of regular workers will be sufficient to constitute a fair wage under the Kansas industrial law, as heretofore defined by this court.
"5. The management of the industry shall, whenever possible, notify the workers in case the plant is not to operate the following day, by bulletins posted at the time clock prior to the closing hour, and if that be impossible, then by signal from the steam whistle the following morning, to make it unnecessary for workers to come to the plant when there will be no work.
"6. Hours of beginning work shall be set by the management and may be changed when necessary; but reasonable notice shall be given the employees of changes.
"7. The seniority rule as heretofore observed in the industry may continue.
"8. Reasonable rules and regulations in regard to conduct about the plant may be made from time to time as the same may be necessary, and reasonable notice of all such shall be given by posting at the time clock or personal notice to employees.
"9. Women workers shall receive the same wages as men engaged in the same class and kind of work.
"10. Toilets and dressing rooms used by the women workers shall be in charge of a woman.
"11. Piece-work rates shall be.paid in accordance with piece-work schedule herein set out.
"12. Minor details in regard to work and wages cannot be set out in an order of this court; but whenever differences arise at any time they should be taken up by the grievance committee of the employees and the management, and reasonable time shall be allowed for consideration and adjustment of the differences.
"13. The total working time for women employees, inclusive of overtime, shall not exceed fifty-four hours in any one week and not more than nine hours in any one day.
"14. Workers paid by the week or day, if employed within the plant and not within the office or sales department, shall be subject to hours of work and overtime as other employees under the terms of finding' No. 3 hereof.
"15. The temporary order heretofore made in this case shall stand and be complied with by the respondent company, beginning on the date of said temporary order and continuing until May 1, 1921, the date of this order.
"16. The respondent company shall, within a reasonable time, furnish a suitable room for its employees in which to eat their midday lunch, well ventilated and apart from those portions of the packing house in which the work of slaughtering animals and dressing and preparing the packing products are carried on, and apart from toilets and dressing rooms.
"17. The following schedule of minimum wages shall be paid by the respondent company to its respective employees, to wit: [The details of the schedule are immaterial.]
"18. The establishing of the above minimum-wage schedule shall not in any way be construed as restricting or preventing the respondent from paying a higher wage when the same is deemed advisable.
"19. In departments operating twenty-four hours a day and seven days a week, each employee therein shall be entitled to one day off each week. In other departments work performed on Sunday and legal holidays shall be paid for at the rate of time and one-half.
"This order shall take effect and be in force on the 1st day of May, 1921, and shall continue until changed by the court, or changed by agreement of the parties with the approval of the court."
The conclusion of law reached by the commissioner was based on the fact that the complaint filed with the plaintiff did not allege anything to give the court jurisdiction to make orders concerning the subjects mentioned in paragraphs 1, 5, 6, 7, 8, 10, 12, 13, and 16 of the order. An examination of the complaint reveals that nothing was said concerning any of these matters.
The plaintiff urges that those matters were embraced within the complaint because they were embraced within the contract between the defendant and its employees and that a copy of the contract was attached to the complaint. The plaintiff also contends that the defendant waived its right to object to those parts of the order being put into effect because the defendant insisted on the contract being introduced in evidence and because the defendant, through its attorney, stated to the court of industrial relations that he was "authorized to make a proposal to the court, that it is -not prepared to accept the terms of the order of March 21, 1921, making the eight-hour day as the basic day, with time and one-quarter for the ninth hour and time and one-half thereafter, but as a counter proposal the Charles Wolff Packing Company proposes to adopt the forty-eight-hour week, meaning thereby that employees shall be paid the regular schedule for forty-eight hours' work, and all time employed over forty-eight hours' work shall be paid for at 'the rate of time and one-half; the employees, if working less than forty-eight hours, shall be paid at the regular schedule for the time actually engaged, but the company does not consent to the fixing of any guaranty of hours per week." On the hearing before that court, the defendant unqualifiedly agreed to make the wages of women the same as those of the men for the same kind of work. That agreement was put into effect, and there is now no controversy about that portion of the order. Other than the agreement concerning the wages of women, it does not appear that the defendant submitted for the consideration of the plaintiff anything except what was contained in the complaint. An examination of the complaint reveals that the only questions named in it were wages and hours of labor.
Section 10 of chapter 29 of the Laws of 1920, the court of industrial relations act, reads:
"Before any hearing, trial or investigation shall be held by said' court, such notice as the court shall deem necessary shall be given to all parties interested by registered U. S. mail addressed to said parties to the post office of the usual place of residence or business of said interested parties when same is known, or by the publication of notice in some newspaper of general circulation in the county in which said industry or employment, or the principal office of such utility or common carrier is located, and said notice shall fix the time and place of said investigation or hearing. The costs of publication shall be paid by said court out of any funds available therefor. Such notice shall contain the substance of the matter to be investigated, and shall notify all persons interested in said matter to be present at the time and place named to give such testimony or to take such action as they may deem proper."
The notice served on the defendant was a copy of the complaint with a copy of the contract between the defendant and its employees. Such a notice as is required by the statute was not given to the defendant concerning the subjects named in paragraphs 1, 5, 6, 7, 8, 10, 12, 13, and 16 of the order of the court of industrial relations, and the defendant did not voluntarily submit to an inquiry into those mattérs. It follows that the court had no jurisdiction to make any order concerning any of them. However, it should be stated that if, in the course of its investigation, matters that ought to be considered should come to the knowledge of the court, it may investigate them and make orders concerning them after taking the necessary steps to acquire jurisdiction.
3. The commissioner found and the evidence shows that for some time prior-to the making of the order by the plaintiff, the'defendant had been operating its plant at a loss, but the evidence does not show what was the cause of the loss. The order made by the court of industrial relations slightly raised the wages of the employees over the wages that were in effect at the time the order was made.
The stock of the defendant's plant is largely held by the Allied Packers, a Delaware corporation with headquarters at Chicago, 111., operating six other meat-packing plants situated in eastern cities and in Canada. A portion of the proceeds arising from the defendant's plant is paid over to the Allied Packers. How much does not appear.
Section 8 of chapter 29 of the Laws of 1920, the court of industrial relations act, provides that—
. "If either party to such controversy shall in good faith comply with any order of said court of industrial relations for a period of sixty days or more and shall find said order unjust, unreasonable or impracticable, said party may apply to said court of industrial relations for a modification thereof and said court of industrial relations shall hear and determine said application and make findings and orders in like manner and with like effect as originally. In such case the evidence taken and submitted in the original hearing may be considered."
The court of industrial relations, in its opinion on which the order was based, said:
"Any order made by this court, after having been put into force and effect for a period of sixty days, may be reviewed at-the instance of'either party and -additional evidence introduced to show its practicability, its impracticability, its reasonableness or its unreasonableness. The order made in this case at this time will be made in view of that provision of the law. The business condi tions of the day are unusual and unstable, and sixty days or ninety days may bring about such changes as would require a revision of any order made herein."
Laws and orders fixing rates for a period of time for public utilities have been sustained to determine their effect upon the revenue of such utility. (Wilcox v. Consolidated Gas Co., 212 U. S. 19, 55; Northern Pacific Ry. v. North Dakota, 216 U. S. 579; Lincoln Gas Co. v. Lincoln, 250 U. S. 256, 269.)
The defendant's plant is being operated at a loss, and the order of the court of industrial relations increases the wages of its employees. Is the order invalid for that reason? The general schedule of rates charged by a public service corporation cannot be decreased by lawfully constituted regulating bodies when the business of that corporation, otherwise prudently and efficiently conducted, is being operated at a loss. This, so far as state regulation is concerned, is based on the fourteenth amendment to the constitution of the United States prohibiting any state from depriving any person of property without due process of law, and from denying to any person within its jurisdiction the equal protection of the law. Compelling a public service corporation to render service at a loss is a violation of the prohibitions contained in the fourteenth amendment; but rates and wages are not the same. Rates are compensation paid by those who desire the services of public service corporations for the services rendered by such corporations. Wages, for the purposes now under discussion, are that part of the cost of the finished product given to those who perform service in its production. Another way of distinguishing the two, is that rates are the prices paid to public service corporations for their finished product; wages are that part of the cost of the finished product given to those who perform service in its production.
"The operators of a packing plant cannot, by law, be compelled to sell the finished product of their plants at a price that will not allow them a fair return upon the investment, but that does not say that those operating the packing plant cannot be compelled by law to pay a living wage to their employees, notwithstanding the fact that the plant is being operated at a loss. An industry of any kind that cannot be operated except at the sacrifice of its employees ought to quit business. An industry ought not be permitted to recoup its losses out of the wages of its employees, where those employees are in such !i condition that they cannot prevent it. It may be argued that a laboring naan is not compelled to work for any particular employer, and that the laboring man can quit at any time and go elsewhere. So far as the law is concerned, this is true — he has an absolute right to go and seek work in some other place; but actually, and in fact, it is often impossible for a working man to quit the work in which he is engaged and readily find other work. Economic conditions are such that, most of the time, when a working man finds himself out of work, he must remain out of work for days, weeks, and months, during which time he and his family suffer. Many a working man cannot quit when he desires so to do. He must continue to work although his wages are not sufficient to properly feed and clothe himself and his family and educate his children. Public welfare demands that all industries that provide food, clothing, fuel, and transportation shall continue to operate because without their operation suffering must result; but public welfare likewise demands that the working man engaged in the production of the things that minister to the comfort of all, must be paid such compensation for his services as will enable him to live in the manner described in the court of industrial relations act.
The defendant is operating its plant at a loss. Why, does not appear from the evidence. At least, this court is unable to determine why, and for the purpose of this discussion, it is unnecessary to ascertain why. The plant may be badly located on account of transporation facilities. There may have been mismanagement. A part of the money arising out of the operation of this plant may have been taken by the' Allied Packers and used in the operation of the other plants conducted by them. It may have been that the loss was due to unstable conditions in live stock and meat markets prevailing during the time covered by the investigation of the court of industrial relations. The defendant contends that to prevent operating its plant at a loss, it must have its employees work for less than what the court of industrial relations has determined are living wages. In other words, the defendant is trying to prevent loss in its business by putting the loss on its employees. That should not be done if its employees are thereby compelled to work for less than living wages. If the plant cannot operate without so doing, it is only a question of a short time until it must stop. If the plant is badly located on account of transportation to its market or from the source of supply of its raw material, it ought to be moved to where these handicaps will not exist. If the loss is caused by managerial faults, they ought to be corrected. Recoupment of losses caused by either of these matters ought not to be brought about by compelling the working man to labor for less than a living wage.
The defendant should be compelled., to pay the wages fixed in the order made by the court of industrial relations, and should be compelled to establish the hours of labor there fixed, and should look elsewhere to recoup its losses and find the means of operating its plant at a profit.
A peremptory writ of mandamus will issue to compel the defendant to put into effect those parts of the order of the court of industrial relations numbered 2, 3, 4, 9, 11, 14, 15, 17, 18, and 19.