Case Name: James P. MITCHELL, Secretary of Labor, United States Department of Labor, (Arthur J. Goldberg, Secretary of Labor, substituted as party appellant in the place and stead of James P. Mitchell, resigned), Appellant, v. JAX BEER DISTRIBUTORS OF BEAUMONT, INC., et al., Appellees
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1961-05-02
Citations: 290 F.2d 24
Docket Number: No. 18227
Parties: James P. MITCHELL, Secretary of Labor, United States Department of Labor, (Arthur J. Goldberg, Secretary of Labor, substituted as party appellant in the place and stead of James P. Mitchell, resigned), Appellant, v. JAX BEER DISTRIBUTORS OF BEAUMONT, INC., et al., Appellees.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 290
Pages: 24–28

Head Matter:
James P. MITCHELL, Secretary of Labor, United States Department of Labor, (Arthur J. Goldberg, Secretary of Labor, substituted as party appellant in the place and stead of James P. Mitchell, resigned), Appellant, v. JAX BEER DISTRIBUTORS OF BEAUMONT, INC., et al., Appellees.
No. 18227.
United States Court of Appeals Fifth Circuit.
May 2, 1961.
Rehearing Denied May 31, 1961.
Cameron, Circuit Judge, dissented.
Sylvia S. Ellison, Atty., U. S. Dept. of Labor, Washington, D. C., Earl Street, Reg. Atty., U. S. Dept. of Labor, Dallas, Tex., Bessie Margolin, Asst. Sol., of Labor, Harold C. Nystrom, Acting Sol. of Labor, U. S. Dept, of Labor, Washington, D. C., for appellant.
James D. McNicholas, Keith, Mehaffy, McNicholas & Weber, Beaumont, Tex., for appellees.
Before RIVES, CAMERON and JONES, Circuit Judges.

Opinion:
JONES, Circuit Judge.
The appellant, the Secretary of Labor, brought a suit under Section 17 of the Fair Labor Standards Act, to enjoin violations of the minimum wage and record keeping provisions of the Act. The district court held that the Act had been violated but that the violations "were nei ther deliberate nor intentional," and in-junctive relief was denied. Seeking a reversal of that decision, the Secretary has appealed.
The appellee, Jax Beer Distributors of Beaumont, Inc., herein called Jax, is a distributor in Beaumont, Texas, of beer which it purchases from a brewery located in New Orleans, Louisiana. It employed truck driver salesmen, also appel-lees here, who made sales and deliveries of beer to Jax's customers on regular routes. Helpers were employed on these trucks to assist the drivers. The helpers were paid less than forty dollars a week. If they were within the coverage of the wage and hour provisions of the Act, it was being violated. The helpers were hired and fired by the drivers and the drivers directed their work and fixed the hours they were to work. The driver salesmen were compensated by commissions on sales and the helpers were paid by them. The driver salesmen were members of a union and their employment relationship was the subject of an agreement bargained for them by the union. Early in 1958 Jax was informed by Wage and Hour investigators that the helpers were its employees and were covered by the Act and were entitled to be paid the minimum hourly wage as fixed by the Act.
Jax's driver salesmen advised Jax that they regarded the helpers as their employees. Jax brought a suit for a declaratory judgment against the Secretary of Labor, praying for a determination of whether the helpers were its employees. The Secretary filed a motion to dismiss this suit on the ground that there was no jurisdiction. The court granted the motion. This action was commenced. Jax moved for a more definite statement and the motion was denied. Jax answered and the case was tried. The court found that the helpers were employees of Jax, that' they were in interstate commerce, and that the wage provisions of the Act had been violated. The court found that the failure of Jax to comply was neither deliberate nor intentional. The declared desire of Jax to comply if the helpers were its employees was recited in the court's findings. An injunction was denied. The Secretary has appealed, asserting error in denying injunctive relief.
The responsibility for determining whether an injunction shall issue in a wage and hour case where a violation has been established rests initially and primarily upon the district court and a strong showing of abuse of discretion must be made to reverse the trial court. Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207, 79 S.Ct. 260, 3 L.Ed.2d 243; United States v. W. T. Grant Co., 345 U.S. 629, 73 S.Ct. 894, 97 L.Ed. 1303; Mitchell v. Strickland Transportation Co., Inc., 5 Cir., 1959, 267 F.2d 821; Mitchell v. Empire Gas Engineering Co., 5 Cir., 1958, 256 F.2d 781; Mitchell v. Bland, 5 Cir., 1957, 241 F.2d 808; Mitchell v. Hodges Contracting Co., 5 Cir., 238 F.2d 380. It is settled that in a clear case of abuse of discretion it is our «duty to hold that a denial of injunctive relief is error. Goldberg v. Thompson, 5 Cir., 1961, 287 F.2d 421; Mitchell v. Blanchard, 5 Cir., 1959, 272 F.2d 574; Mitchell v. Hausman, 5 Cir., 1958, 261 F.2d 778; Mitchell v. Raines, 5 Cir., 1956, 238 F.2d 186; Lenroot v. Kemp, 5 Cir., 1946, 153 F.2d 153.
This Court, in the Hodges Contracting Co. case set forth some of the criteria to be considered by the district court in determining whether an injunction should issue, and these were quoted in the Haus-man opinion where the district court's conclusion that no injunction was necessary was reversed as an abuse of discretion. In the Hausman case it was held that the question of coverage had been clearly established by a decision of this Court and that continued non-compliance thereafter with protestations that there was no coverage was not in good faith. On such facts it was held, in Hausman, that the district judge was not justified in accepting assurances of future compliance and the district court was directed to issue an injunction.
We think the case before us is a stronger one than Hausman for holding that there was an abuse of discretion. This Court had previously held in Stewart-Jordan Distributing Co. v. Tobin, 5 Cir., 1954, 210 F.2d 427, certiorari denied Stewart-Jordan Dist. Co. v. Mitchell, 347 U.S. 1013, 74 S.Ct. 866, 98 L.Ed. 1136, that the helpers of drivers of beer delivery trucks, although controlled and paid by the drivers, were nevertheless employees of the distributor and, interstate commerce being shown, were entitled to the benefits and protection of the wage and hour provisions of the federal statute. In Hausman there was a contention made of a belief that the particular employment was not covered by the Act, although it was decided that the belief was not held in good faith. Here, the coverage was not seriously contested. Jax sought to excuse non-compliance on the ground that the drivers were asserting that the helpers were their employees and not those of Jax. At the beginning of the trial counsel for the Secretary stated his position and outlined the matters he expected to prove. Counsel for Jax then stated:
"Your Honor, we don't believe it is necessary for the Government to prove all of these things. We admit the employment, and the Fifth Circuit has held under facts identical to this that there is employment. There is no question about that.
"As a brief preview, however, to this particular item, the Wage and Hour Department investigated all of our position approximately two years ago and at that time came to us and asked us to pay truckdriver-salesmen helpers back wages. At that time our truckdriver-salesmen contended with us — told us that as far as they were concerned these boys were working for them and were their employees, and so we were on one hand confronted with the Government's contention that they were our employees, and on the other hand we were confronted with our truck-driver-salesmen that these truck-driver helpers were their employees."
Jax thus, by admitting employment, admitted noncompliance since interstate commerce and sub-standard wages were not in issue. The district court was justified in finding that "The defendant repeatedly has violated Section 6, 11(c), and 15 of the Fair Labor Standards Act from February 1, 1956, until the time this case came on for trial." The trial took place on December 15, 1959. A further finding that the violations were knowingly and deliberately committed could have been made.
As was held in Mitchell v. Hausman, supra, so it must be held here that the district court exceeded the limits of its broad discretion in denying the injunc-tive relief sought by the Secretary. The judgment of the district court is reversed and the cause is remanded with directions to grant an injunction.
Reversed and remanded.
. "The district courts, together with the # District Court for the District of the Canal Zone, the District Court of the Virgin Islands and the District Court of Guam shall have jurisdiction, for cause shown, to restrain violations of section 215 of this title: Provided, That no court shall have jurisdiction, in any action brought by the Secretary of Labor to restrain such violations, to order the payment to employees of unpaid minimum wages or unpaid overtime com pensation or an additional equal amount as liquidated damages in such action." 29 U.S.C.A. § 217.
. Tilbury v. Mitchell, 5 Cir., 1955, 220 F.2d 757, certiorari denied Tilbury v. Rogers, 350 U.S. 839, 76 S.Ct. 77, 100 L.Ed. 748.