Court Opinion

ID: 9449588
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:16:22.802865+00
Date Added: 2024-06-11T17:31:53.921696
License: Public Domain

RIDGE, Circuit Judge
(dissenting).
Since it appears to me, from the memorandum opinion of District Judge Henley (unreported), that he did not enter judgment in favor of appellant, for and on behalf of the employees for whom this action was brought for unpaid “minimum wages” and “overtime compensation” due them under the Fair Labor Standards Act, 29 U.S.C.A. § 201, etc., because he considered common law tests of employment and the theory of individual immunity under the corporate entity doctrine to be applicable, and not because the evidence did not establish appellee Thompson to be an “employer” within the purview of Section 203(d) of the Fair Labor Standards Act (29 U.S.C.A. § 203 (d)) I most respectfully dissent from the majority opinion. It was Judge Henley’s conclusion that “(s)uch personal liability should be imposed only where in ordinary civil litigation the corporate entity would be ignored and personal liability for corporate debts imposed on the individual involved.”
The District Court specifically found appellee Thompson to be President and principal stockholder of Pure Ice Company, who “kept himself in ignorance as to what (was) going on at the plant * * *” and that Thompson “has seemed to feel that he has no personal responsibility, either to keep his operations outside the scope of the (F. L. S. Act) or to bring about compliance with the Act where coverage exists.” The Court found that Thompson “always left that up to the managers” of the several corporations of which he was the dominant officer and controlling stockholder, and “never bothered (himself) with such matter,” without making any determination as to Thompson’s duties as an officer to the corporate entity or his responsibility for corporate conduct of Pure Ice Company. All the record reveals is that appellee Wanda Lee, not a stockholder, officer or ever formally appointed manager of appellee Pure Ice Company, without authority of anyone, merely “stepped into (her) husband’s shoes who had been appointed manager” of that Company, after he left for parts unknown, and appellee Vance M. Thompson, as President and principal stockholder thereof, acquiesced in her so doing. “Her managerial functions were rather limited * *
An “employer” as defined in Section 203(d) of the Act (29 U.S.C.A. § 203(d)) is specifically made “liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages” (29 U.S.C.A. § 216(b)). The right of action thereby created has nothing to do with the doctrine of piercing the corporate *264veil. The legislative purpose thereof was to create a civil remedy for violations of the F.L.S.A. and to make “employers” as defined in Section 203(d), supra, liable therefor. This, on the same theory that those who “willfully violate” the provisions of Section 206 or 207 of the Act (29 U.S.C.A. §§ 206, 207) are subject to criminal prosecution under § 216(a) (29 U.S.C.A. § 216(a)). Many officers of a corporation, considered to be “employers” within the ambit of § 203(d), supra, have been prosecuted criminally and convicted for violations of the Act. There is no reason for not holding them civilly liable under Section 216(b) thereof, supra, if they are found to be an “employer” within the purview of that statute. Cf. Mitchell v. Stewart Brothers Construction Company, 184 F.Supp. 886 (D.C.Neb.1960); and Goldberg v. Dix Box Company, et al. (D.C.S.D.Cal.1962), 45 L.C. 31.325. See also, Chambers Construction Company v. Mitchell, 233 F.2d 717 (8 Cir. 1956); Hertz Drivurself Stations, Inc., v. United States, 150 F.2d 923 (8 Cir. 1945); Mitchell v. L. W. Foster Sportswear Company, Inc., et al., 149 F.Supp. 380 (D.C.E.D.Penn.1957).
The provisions of Section 203(d) of the Act, read in the light of Sections 206 and 207 thereof, are to make “employers”, i. e. “any person acting directly or indirectly in the interest of an employer in relation to an employee(’s)” wages and hours of work, civilly liable in damages for violations of the Act. Such provisions must be construed in the context of the history of federal absorption of governmental authority to control “wages” and “hours of work” and the right to hire and fire is not within the ambit of those sections of the Fair Labor Standards Act, supra. Cf. Rutherford Food Corp. v. McComb, 331 U.S. 722, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947); Walling v. Portland Terminal Company, 330 U.S. 148, 67 S.Ct. 639, 91 L.Ed. 809 (1946); United States v. Rosenwasser, 323 U.S. 360, 65 S.Ct. 295, 89 L.Ed. 301 (1945); Kirschbaum v. Walling etc., 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638 (1941).
The District Court found:
“In November, 1960, an inspection of both plants (controlled by Thompson) was made by a representative of the Department of Labor who found violations of the overtime and record keeping provisions of the Act. Those violations were called to the attention of both Mrs. Wanda Lee and Vance M. Thompson and it was explained to them what was necessary to bring the company into compliance with the law. Nothing was done to remedy the situation, and when a second investigation (made on October 24, 1961) disclosed that the violations were continuing, these suits were filed.” (Par. added.)
From the record and findings of fact as made in the case at bar, absent any showing or finding as to restricted powers of Thompson, as President of Pure Ice Company, Inc., the legal presumption should be that he was vested with power to control and compel that Company’s compliance with the mandates of the Fair Labor Standards Act.
The conclusion of the District Court, that failure on the part of Thompson to perform duties imposed upon him by the Act made him subject to “be enjoined along with the corporation * * * ” but that “it does not follow from the fact that he may be subject to injunction that he is also personally liable for wages,” is a conclusion of law that I consider to be a misinterpretation of Section 203(d) of the Act that should be corrected by this Court. I would reverse and remand this case for further proceedings in accordance with the concepts hereinabove expressed.