Opinion ID: 1493191
Heading Depth: 1
Heading Rank: 1

Heading: Purpose of Section 7(a) of the Fair Labor Standards Act. [4]

Text: Every statute born of economic and social pressure, attempting to harmonize discordant socio-economic forces, must be viewed in the framework of conditions aimed to be remedied thereby. Consequently, it is vital that the Congressional findings and declaration of policy set forth in the Act be examined with care. The findings of Congress, as set forth in Section 2(a), are that the existence in industries engaged in commerce of substandard labor conditions do not conduce to the maintenance of minimal health, living, and general welfare standards of workers employed therein; that the free flow of commerce is burdened thereby; that unfair competition, labor disputes and disorderly marketing result. The declaration of policy is unequivocally set out in Section 2(b) where it is declared to be the policy of Congress in the exercise of its commerce power to correct and eliminate these burdensome conditions without substantial impairment of employment or earning power. As was stated by the Chief Justice of the United States:    the motive and purpose of the present regulation is plainly to make effective the Congressional conception of public policy that interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions, which competition is injurious to the commerce and to the states from and to which the commerce flows. See United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 457, 85 L.Ed. 609, 132 A.L.R. 1430. The objectives of the Act, as expressed, demonstrate that the Act, comprehensive in its purpose and remedial in character, should be liberally construed. See Bowie v. Gonzalez, 1 Cir., 117 F.2d 11, 16; Fleming v. Hawkeye Pearl Button Co., 8 Cir., 113 F.2d 52, 56; Fleming v. A. B. Kirschbaum Co., D.C., 38 F.Supp. 204, 206. Only in this way can the coordination of our economic life and the elimination of unfair differentials in labor conditions be effectively achieved. [5] The President's message to Congress of May 24, 1937, [6] asserted the necessity for governmental control over maximum hours, minimum wages, the evil of child labor and the exploitation of unorganized labor. In that message, he expressed the hope that the right of the government to change working hours would decrease unemployment in those groups in which unemployment principally existed. [7] It seems plain from the legislative history of the Act [8] that, in addition to attempting to establish a decent national level of working conditions, [9] one of the fundamental purposes of the Act was to induce worksharing and relieve unemployment by reducing hours of work. [10] In Williams v. General Mills, D.C., 39 F.Supp. 849, 852, the court said: The evil was not so much in the length of time men worked, but with nine, ten or twelve million unemployed in this country, the problem was to cut into that unemployment without financially hurting industry or its employees. It was hoped to cut at least four or five million from the unemployment ranks. This it appears was the big objective of the Wages and Hour and Fair Labor Standards Act. That the overtime provisions of the Act are aimed at re-employment and designed for economic and social purposes, as well as to protect the health or welfare of the employees, seems obvious from the omission of any absolute limitation upon weekly hours of work if properly compensated, and the absence of any limitation upon daily hours. [11] Not only may an employee be worked twenty-four hours per day; but one hundred and twenty-four hours of overtime per week would not violate the law so long as the employee was paid for all such overtime at the required rate. The Act is not, as the company contends, merely a wage statute. Sunshine Mining Co. v. Carver, D.C.Idaho, 41 F.Supp. 60. Of course the argument for shorter hours is partly justified on the grounds of the added satisfaction which the workers would obtain, but one of the primary purposes was to make it possible for more workers to be added to the payroll. [12] One of the impelling forces behind the Act is the effort to promote economic stability through increased purchasing power. [13] These purposes of the Act are accomplished because the overtime provisions of the Act, requiring employers to pay an extra bonus or penalty for such work, distinctly tend to discourage overtime. This is on the theory that the overtime rate established by the Act will be sufficiently expensive to compel employment of new men, and that employers rather than pay overtime will spread employment. [14] A great majority of the courts have recognized that Section 7(a) of the Act plainly imposes a requirement which tends to discourage long hours of labor and that Congress intended [15] it to have just that effect. Otherwise, employers would be permitted to defeat the overtime provisions of the Act as to all employees save those whose wage was near the minimum level. In St. John v. Brown, D.C., 38 F.Supp. 385, 390, the Court said: The `one and one-half times' provision is akin to a penalty, intended to discourage overtime employment and to encourage a greater spread of employment. It must be remembered that Section 206 [6] is a minimum wages Act, and 207 [7] is a maximum hours Act; that they are really two Acts combined in the same bill. In Floyd v. DuBois Soap Co., Ohio App., 38 N.E.2d 919, 921, the Court said: Work for a greater number of hours is incompatible with that general welfare and must be discouraged by requiring the employer to pay at the higher rate for all time in excess of the maximum. Similarly in Fleming v. Carleton Screw Products Co., D.C., 37 F.Supp. 754, [16] at page 758, the Court said: [Section 7] does not purport to regulate wages but imposes a penalty on overtime work, regardless of what the rate of pay may be, thus making overtime work more costly to the employer and creating more employment by limiting the hours of labor. See also Williams v. General Mills, D.C., 39 F.Supp. 849, 851; Sunshine Mining Co. v. Carver, D.C.Idaho, 41 F.Supp. 60; Drake v. Hirsch, D.C., 40 F.Supp. 290; Fleming v. Pearson Hardwood Flooring Co., D.C., 39 F.Supp. 300; Abroe v. Lindsay Bros. Co., Minn., 300 N.W. 457; Haddad v. Beckerman Shoe Corp., 4 Wage Hour Rept. 329 (C. P. Berks Co., Pa.); Angel v. Dayton Veneer & Lumber Mills, 4 Wage Hour Rept. 471 (M.D.Ga.); Wilkerson v. Swift & Co., 4 Wage Hour Rept. 305 (N.D.Tex.); [17] Thornberg v. Eastern T. & W. N. C. Motor Transportation Co., Tenn., 157 S.W.2d 823; Wagner v. Estate of Abe Field, 4 Wage Hour Rept. 329 (Super. Ct.Ind., Allen Co.); McMillan v. Wilson & Co., 4 Wage Hour Rept. 409 (D. Minn., Ramsey Co.); [18] Hargrave v. Mid-Continent Petroleum Corp. (D.C.D.Okla.), 42 F.Supp. 908; Boylan v. Linden Mfg. Co., 4 Wage Hour Rept. 158 (C.C.Mich., Ingham Co.); McLenden v. Bewley Mills, 4 Wage Hour Rept. 30 (N.D.Tex.); Graves v. Armstrong Creamery Co., 154 Kan. 365, 118 P. 2d 613. Furthermore, we think it is not without significance that the Supreme Court of the United States in sustaining the constitutionality of Section 7(a) in United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 462, 85 L.Ed. 609, 132 A.L.R. 1430, relied heavily on prior cases dealing with maximum hour statutes. The Supreme Court in the Darby case said: Nor is it any longer open to question that it is within the legislative power to fix maximum hours. Holden v. Hardy, 169 U.S. 366, 18 S.Ct. 383, 42 L.Ed. 780; Muller v. Oregon, 208 U.S. 412, 28 S.Ct. 324, 52 L.Ed. 551, 13 Ann.Cas. 957. That Section 7(a) was designed to regulate hours of work is not only implicit in the Darby opinion, but by its separate discussion of Sections 6 and 7 and its reliance upon prior maximum hour decisions, the Supreme Court seems already to have given its imprimatur to the maximum hour interpretation which we here adopt. [19] Certain it is that the Wage and Hour Division considers Section 7(a) was directly aimed at a regulation of hours. As stated by Administrator Elmer F. Andrews in picturesque language, the primary purposes of the Act are to fix a floor for wages, a ceiling for hours, and a break for children. [20] The interpretation urged upon the Wage and Hour Division was that the overtime provisions of the Act applied only to employees paid the basic minimum wage rate and that the Act essentially was only a poor man's minimum wage law. [21] This interpretation was rejected, and the official interpretation is that the overtime provisions of the Act extend to all employees whatever may be the wage paid. [22] A similar interpretation was urged upon this Court, and we reject it too. Since the overtime provisions of the Act were designed to spread employment opportunities by making overtime more costly, it is obvious that this purpose cannot be achieved if the overtime provisions are to be restricted to those workers at the minimum wage level. A vast majority of the courts have recognized in consequence that the Act does apply to employers paying in excess of the minimum wages prescribed in the Act. E. g., Fleming v. Carleton Screw Products Co., D.C., 37 F.Supp. 754; St. John v. Brown, D.C., 38 F.Supp. 385; Allen v. Moe, D.C., 39 F.Supp. 5; Drake v. Hirsch, D.C., 40 F.Supp. 290; Sunshine Mining Co. v. Carver, D.C.Idaho, 41 F.Supp. 60; Floyd v. DuBois Soap Co., Ohio App., 38 N.E.2d 919, affirming Floyd v. DuBois Soap Co., Com.Pl. Hamilton Co., 6 Ohio Supp. 76; Thornberg v. Eastern T. & W. N. C. Motor Transportation Co., Tenn., 157 S.W.2d 823. We are not unmindful of the fact that several courts have rejected the maximum hour interpretation of Section 7(a) which we here adopt and are wedded to a minimum wage theory of that Section. See Fleming v. A. H. Belo Corp., 5 Cir., 1941, 121 F.2d 207, certiorari granted, 62 S.Ct. 137, 86 L.Ed. ___; A. H. Belo Corp. v. Street, D.C., 36 F.Supp. 907; Reeves v. Howard County Refining Co., D.C., 33 F. Supp. 90; Bumpus v. Continental Baking Co., No. 211, W.D.Tenn., April 29, 1941, [23] Fleming v. Atlantic Co., D.C., 40 F.Supp. 654; Fleming v. Stone, D.C.N.D.Ill., 41 F.Supp. 1000; Gurtov v. Volk, Mun.Ct. N.Y.1939, 170 Misc. 322, 11 N.Y.S.2d 604. In the Belo case, the Court said at pages 211 and 212 of 121 F.2d: Section 7, the section in question, does not at all fix maximum hours.    The purpose of the act is to establish and gradually raise minimum wages, that the overtime provisions in it are inserted not at all to discourage or limit overtime but as a part of the scheme to raise substandard wages.   . (Italics ours.) We are unable to agree with the Circuit Court of Appeals for the Fifth Circuit that the overtime provisions of the Act are merely part of a scheme to raise substandard wages. Rather we conclude that the purpose of Section 7(a) is to eliminate long hours of labor by requiring employers to pay extra compensation for overtime work. Otherwise the guarantees of the Act become only a promise to the ear to be broken to the hope, a teasing illusion like a munificent bequest in a pauper's will. [24]