Court Opinion

ID: 6891727
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:43:08.749511+00
Date Added: 2024-06-11T16:05:51.500688
License: Public Domain

GARRECHT, Circuit Judge
(dissenting).
My associates have agreed to affirm the lower court in this case. Their determination is based on the decision of the Supreme Court in the case of Walling v. Belo Corp., 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716. In that case, decided in June, 1942, the Court (by a 5-4 decision) approved a wage plan based upon written agreements between the parties which appeared to a majority of the Court to be a true statement of the understanding. A careful analysis of the Belo-case reveals that the Court was extremely careful to limit its decision to the precise facts and evidence in that case. It did not intend to set up a formula for other employers to follow in the future to facilitate evasion of the Act.
Since the Belo case, the Supreme Court has rejected similar, though not identical, wage plans as unrealistic and artificial.1. And just recently, in the case of Walling v. Uhlmann Grain Co., decided October, 1945, 151 F.2d 381, the Seventh Circuit Court of Appeals (which, relying on the Belo decision, had originally approved the wage plan in the Harnischfeger case — later reversed by the .Supreme Court), upon a factual situation most similar to the case at bar, stated that in its opinion the Harnischfeger and Youngerman-Reynolds cases “ef-r fectively remove all grounds for relying upon the Belo case as controlling * * *. If the Supreme Court has not repudiated its holding in the Belo case, it has come so close as to leave no room for its application except upon an identical state of facts.” 151 F:2d p. 383.
In the case before us the evidence precludes a conclusion that the contract nomenclature represented a true statement of the understanding between the parties in the light of the Fair Labor Standards Act. It is important that we analyze the contracts in the light of all the evidence. Several days after the Supreme Court decided the Belo case the company notified each employee of that decision and proceeded to set out a wage plan whereby the employees’ regular salary was denominated a “guaranty” and a formula was devised to calculate an alleged “hourly rate.” In a' mimeographed bulletin outlining the rules to be followed by field employees (those here under consideration), the company stated that “irregular hour field employees are now working and will continue to work on a monthly minimum salary basis; however, for contract purposes, the monthly salary is reduced to an equivalent weekly salary.” When a “contract” employee was absent from work he was docked for days off, not at the alleged “hourly rate,” but at a figure determined by reducing the monthly base salary to a daily rate and and multiplying by the number of days lost. Thus, the absentee was docked not on the basis of his alleged “hourly rate” but on the basis of the proportionate amount of his monthly or weekly salary.
In my judgment, the contracts fixing “weekly guarantees” were for weekly wages, for variable hours. That is a realistic conclusion. The arbitrary hourly rates written into the contracts are fictitious and unrelated to the facts and the evidence. It is clear here that the employees received the same weekly wages in many weeks during which they worked no overtime, and it is fantastic to presume that the weekly wages in those weeks in which they worked only a few hours — much less than 40— plight have included extra compensation for overtime. It is clear also that the “basic hourly rate was fixed so that each employee * * * may work a total of 84 hours in any single workweek before receiving compensation in excess of the guar*625anteed weekly salary” [Exhibit C], although that arbitrarily chosen 84 hour week bore no relation to the regular or usual number of hours worked by the employees under consideration.
In order to determine the true regular hourly rate in these cases, we have only to divide the weekly wage (or guaranty as the contracts term it) by the number of hours worked in each week, thus arriving at the regular hourly rate for each workweek. The hourly rate may vary for each workweek — in relation to the number, of hours worked. That is not inconsistent with the provisions and purposes of the Act. In my opinion the “hourly rates” fixed in the contracts in this case were fictitious and calculated merely to retain the employer’s prestatutory costs. In passing this Act Congress intended that it shall be costly for an employer to work his employees more than the maximum hours fixed therein. To approve a scheme calculated to pay the very same weekly wage regardless of the number of overtime hours worked would be to encourage circumvention of the Statute and its purposes.
In my opinion the case should be reversed.

 Walling v. Youngerman-Reynolds Hardware Co., decided June, 1945, 325 U.S. 419, 65 S.Ct. 1242; Walling v. Harnischfeger Corporation, decided June, 1945, 325 U.S. 427, 65 S.Ct. 1246; Walling v. Helmerich & Payne, decided November, 1944, 323 U.S. 37, 65 S.Ct. 11.