Floyd v. Du Bois Soap Co.

OPINION By MATTHEWS, PJ. The appellant and appellee were engaged in interstate commerce on June 25, 1938, when the Pair Labor Standards Act of Congress became a law. Act of June 25th, 1938, c. 676, 52 Stat. 1060, 29 U.S.C.A. §201, et seq. The constitutionality of this Act was upheld in United States v Darby Lumber Co., 312 U. S. 100, 61 S. Ct. 451, 85 L. Ed. 609, 132 A. L. R. 1430. The appellee was an employee receiving a wage of $31 per week of 78 hours, and continued to so work until January 8, 1939, when his wage was increased to $33 per week of 78 hours. He was paid the stipulated wage. This action is to recover for work in excess of the maximum work week as provided by that Act at the rate of one and one-half of the stipulated regular rate and a sum equal thereto as liquidated damages, and attorney’s fee for services in the case. The trial court divided the weekly wage by the number of hours of work to determine the regular rate and then multiplied the number of hours of overtime by one-half of that sum to determine the amount due for overtime and then added an equal amount as liquidated damages and rendered judgment for the total and allowed plaintiff’s attorney a fee of $50 for services. It is from that judgment that this appeal was taken. The validity of the judgment is challenged on two grounds: (1) The first ground is that no state court has jurisdiction of a cause of action arising under the Pair Labor Standards Act of Congress. By section 16 (b) of that Act, it is provided that: “Any employer who violates the provisions of §6 (206) or §7 (207) of this Act (title) shall be 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. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for and in behalf of all employees similarly situated. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C.A., §216 (b). The language of this section is certainly broad enough to include all courts both state and federal upon which had been conferred jurisdiction of actions of that description. And there is no constitutional objection to state courts entertaining jurisdiction to enforce causes of action arising under the Constitution and laws of the United States. Indeed, unless Congress confers exclusive jurisdiction of the cause upon the federal courts, it is the duty of the state courts to uphold and enforce the federal law as the supreme law of the land. Claflin v Houseman, 93 U. S. 130, 23 L. Ed. 833, [342] and Robb v Connolly, 111 U. S. 624, 4 S. Ct. 544, 28 L Ed. 542. But, it is said that Congress has conferred exclusive jurisdiction upon the Court of the United States in cases “for penalties and forfeitures incurred under the laws of the United States”, U. S. Judicial Code, §256. 28 U.S.C.A. §371; 28 U.S.C.A. §41(9), and that plaintiff’s action is one to enforce a penalty. Congress has full power to limit jurisdiction of causes of action created by it to the federal courts and to exclude state courts from entertaining them, even though the jurisdiction conferred by the state law makes them appropriate for that purpose. It is, therefore, just a problem of determining the intention of Congress. As we view it, the determination of whether this added liability would be considered a penalty in equity or in any case m which the distinction between compensation and penalties is important, or under the criminal law, is beside the point. In this statute, Congress has called it “liquidated damages” and has authorized any court of competent jurisdiction to enforce it. Congress avoided referring to the liability as a penalty. If it had done so, U. S. Judicial Code, §256, 28 U.S.C.A. §371, would have been applicable, and in the absence of any other Congressional expression would have conferred exclusive jurisdiction upon the federal courts. But Congress chose to call this added liability “liquidated damages” and to confer jurisdiction to enforce it upon any court of competent jurisdiction, without any restriction. It, therefore, appears to us that this liability is not a penalty or forfeiture within the meaning of §256 of the Federal Judicial Code, 28 U.S.C.A. §371. It is our conclusion that the court of common pleas, being a court of general jurisdiction in both law and equity under the state law, was given jurisdiction of this cause by Congress in § 16(b) of the Fair Labor Standards Act. This conclusion is supported by Forsyth v Central Foundry Co., 240 Ala. 277, 198 So. 706; Tapp v Price-Bass Co., 177 Tenn. 189, 147 S.W. 2d 107; Hart v Gregory, 218 N. C. 184, 10 S.E. 2d 644, 130 A.L.R. 265; Stringer v Griffen Grocery Co., Tex. Civ. App., 149 S.W. 2d 158; Hargrave v Mid-Continent Petroleum Corp., D.C., 36 F. Supp. 233; Campbell v Superior Decalcominia Co., D.C., 31 F. Supp. 663. See also, annotation to case of United States v Darby Lumber Co., 132 A.L.R. 1430, at page 1452, et seq., and Robertson v Argus Hosiery Mills, 121 F. 2d 285, 286, decided June 25, 1941, by the United States Circuit Court of Appeals, Sixth Circuit, in which the court answered the argument of jurisdiction based on §41(9), 28 U.S.C.A., by saying: “We are not in accord with this contention. The Fair Labor Standards Act * * * describes the additional equal amount * * * as ‘liquidated damages’. Under familiar principles of law the conception of penalty is thus excluded from the provision. We see no reason for delving beneath this unequivocal term in order to spell out a meaning at variance with the intent expressed.” (2) The other question raised is whether the court used the correct formula in determining the “regular rate” per hour, as that phrase is used in §7(a) as applied to the express terms of this employment providing for compensation fixed by the week and not by the hour. When the purpose of this Act is considered, the intention of Congress does not seem doubtful. That purpose was to fix a minimum wage and also a maximum work week. It is true that employment for a greater number of hours per week than that specified in the act is not expressly prohibited and penalized as a criminal offense. It is equally true that Congress has in express terms stated the maximum work-week compatible with the welfare of those engaged in interstate commerce, and of the public, and seeks to enforce it by the provision for compensation at one and one-half times the regular rate. Bowie v Gonzalez. 1 Cir., 117 F. 2d 11. Congress had the right to choose the means of enforcing its declaration [343] of public policy and was not confined to any one method. It could have enforced its policy either by positive fiat, or, as in this statute, by a less stringent method. Bunting v Oregon, 243 U. S. 426, 37 S. Ct. 435, 61 L. Ed. 830, Ann. Cases 1918A, 1043. Therefore, in determining the regular rate per week under an employment by the week, we must consider that Congress has fixed the number of hours of work per week that is compatible with the general welfare. 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. For this purpose, Congress has defined the work-week and no private convention contrary thereto can have any validity. The employment by the week was legal, and the provision for weekly compensation was also legal, and in accordance with the declared policy of Congress, but the provision for 78 hours of work, at the same rate of pay, was not. The parties must be considered as contracting for the statutory number of hours per week at the rate per week for that number of hours, at the rate determined by dividing the weekly compensation, i. e., $31, prior to January 8, 1939, and $33 thereafter, by 78, the number of actual hours which the employee worked per week, to determine the regular rate per hour. That is the basis used by the trial court, and we think it is the correct one. In no other way could the coercive effect of the provision for one and one-half times the regular rate for overtime be brought into operation as clearly intended by Congress. Judge Mack, the trial judge, so construed the act in a well-reasoned opinion, Floyd v Du Bois Soap Co., Common Pleas, 6 Ohio Sup. 76. 33 Abs 358. This conclusion is supported, among other cases, by Fleming v Carleton Screw Products Co., D.C. 37 F. Supp. 754; McLendon v Bewley Mills, 4 Wage & Hour Rep., 30 (in both of which colorable attempts to adjust a pre-existing weekly, wage, so as to avoid paying the increased pay for overtime was disregarded); St. John v Brown, DC., 38 F. Supp. 385 (in which the same court refused to make an allocation of the weekly wage for the same purpose); and Fleming v Pearson Hardwood Flooring Co., D. C. 39 F. Supp. 300. For these reasons, the judgment is affirmed. HAMILTON, J., concurs.