54 F. Supp. 185 | N.D. Ga. | 1944
The question in this case involves the validity and effect to be given to agreements of accord and satisfaction which are relied upon by the defendant as a defense to the suit of such employees seeking to recover unpaid minimum wages and overtime compensation under the terms of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. In the progress of the cause in response to a motion for production of time records, defendant offered to present a calculation which had lately been made as to the amount of recovery plaintiffs were entitled to obtain in the event the defense of accord and satisfaction was not legally established, and upon the filing of the calculation, plaintiffs moved to dismiss the defense and for summary judgment. The motion was overruled, the court preferring to retain the cause until the circumstances surrounding the execution of the agreements could be ascertained by trial, and also at that time being inclined to the view that the terms of the Fair Labor Standards Act did not prevent the settlement of a bona fide dispute as to the coverage and the amount due for past employment. Experience had shown that by failure of some employers to keep satisfactory time records, employees had in some suits been deprived of any recovery and it could not be determined that settlement of a dispute
Upon consideration of this case three primary questions are presented:
1. Is an agreement of accord and satisfaction sufficient to bar the maintenance of an action for unpaid minimum wages and overtime compensation due under the terms of the Fair Labor Standards Act in the absence of any attack thereon except as being violative of the plain requirements of the statute ?
2. If not sufficient as a defense in and of itself, what is the proper scope of evidence to show the existence or absence of a bona fide dispute as recited in the agreement, and is the determination of the question of a good faith dispute as to a question of law proper to be submitted to the jury for determination?
■3. Is the statutory requirement of the payment of minimum wages and overtime compensation so affected with a public interest and so essential in executing the congressional policy evidenced by the statute, that proof of the existence of a bona fide dispute -as to law and facts, or as to law or facts, sufficient to render improper the processes of the court to an employee who is able to establish that notwithstanding the execution of such agreements, he has not received compensation required to be paid, in other words, in the trial of such a case does proof of the existence of a bona fide dispute at the time of the execution of the agreement, preclude recovery by the employee of an amount subsequently discovered and admitted to be due under the terms of the statute ?
As to the first proposition, in view of the nature of the subject matter concerned and the legislative intent evidenced by the statute, an agreement of accord and satisfaction does not without more afford an effective defense to an employee’s suit. As has been well recognized, the rights provided to the employee are not his alone but are affected with a public interest and they may not be waived or renounced either before or after they become due. Fleming v. Warshawsky, 7 Cir., 123 F.2d 622, 626; United States ex rel. Johnson v. Morley Construction Co., 2 Cir., 98 F.2d 781, 789; Travis v. Ray, D.C., 41 F.Supp. 6, 8; Cudahy Packing Company of Alabama v. Bazanos, Ala.Sup., 15 So.2d 720; Guess v. Montague, 4 Cir., 140 F.2d 500. Certainly standing alone and without aliunde proof of its terms, such agreement has no greater validity than a release or settlement. Such instruments have been uniformly declared insufficient to present a defense. See cases just cited. This is not challenged by the defendant. It relied upon the existence of a bona fide dispute both as to coverage and as to the number of hours worked to support the agreements.
As to the second proposition, manifestly it is proper that evidence be received as to all of the circumstances surrounding the execution of the agreement. Otherwise there would be no question for the jury’s determination. Thus may be presented at the trial the true facts concerning the nature of employment, the time worked, compensation received, and amount due; for the employee is not restricted to proof of such items as fraud in inducement or execution of the agreement. Thus certainly evidence is and should be permissible to contradict the terms of the writing, for otherwise the writing itself would present a defense. The result is that,
In these circumstances, when it appears that the wages specified by the statute are actually due, should the employee be forced, as a result of having executed an agreement, to the hazard of the unpredictable determination by the jury that there was no bona fide dispute and thus he is entitled to recover, or else a determination that though not compensated, there did exist a bona fide dispute which bars recovery of the proven unpaid wages?
The writing itself is not a conclusive defense, and in any trial of the question, if it appears that the payment was not that required by the statute, such an agreement, even if it was at the time a settlement of a bona fide dispute, does not debar an employee who can show that he has not been paid as prescribed by the statute from -maintaining a suit for recovery of the amount to which he is entitled. In view of the subject matter of the agreement and the congressional command that the prescribed minimum wages and overtime compensation shall be paid, the parties may no more reach a. different result by a writing and agreement of accord and satisfaction than they can by a waiver, release or other agreement. Under this Act the courts will permit a full investigation, and if it appears in such a proceeding that the employee has not received the minimum wage provided by the statute, it is the duty of the court to enforce payment in accordance with its terms.
Some general observations applicable to each of the questions above may be in order. “The wages were specified for him by the statute.” Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 583, 62 S.Ct. 1216, 1223, 86 L.Ed. 1682. Even the good faith of the employer in believing the employment not covered is insufficient as a defense. Missel v. Overnight Transp. Co., 4 Cir., 126 F.2d 98, 110. If good faith is not a defense to a suit, it is apparent that it could not afford a basis for a good faith dispute so as to support an agreement of accord and satisfaction. Furthermore, it is not the intent of the statute that a wage claim arising thereunder shall be settled by the determination of the jury on the question of good faith of the employer (and it might be said of the employee) arising out of the question of whether such employer or employee thought the law applicable, for otherwise what the parties might induce the jury to find they believed would be permitted to override what the law really was, and thus in a case in which application of the statute was required the law could be avoided by the determination of the question of fact as to what the parties actually in good faith believed. Such a result is anomalous in a case where statutory wages are set as a matter of national public policy. If the existence of a good faith dispute may be permitted to defeat a claim of an employee who has not been actually- compensated as required by the statute, the effect of the rulings in the Missel cases, supra, that good faith is not a defense in a wage action, could be easily avoided. Numerous decisions, some of which are cited above, recognize the underlying principle that payment in full of at least the statutory stipulated wages is essential to provide a binding discharge from such liability.
Counsel for defendant relies upon the decision by the Court of Appeals of Georgia in David v. Atlantic Company, 69 Ga.App. 643, 26 S.E.2d 650, dealing with an agreement in form identical with those now under consideration. However the question determined by that court did not arise in the same manner as in the present case as the case was submitted in the trial court upon a stipulation disclosing facts somewhat different from those here involved. If it be not distinguishable, with due deference and respect for that court, in passing upon the effect of a Federal statute, this court has an independent responsibility, and if that case is properly construed as dealing with the questions now presented, it can not be followed in determining a matter of Federal law. However if I am incorrect in my view that the Federal statute affects the relations of employer and employee in interstate commerce with a public interest, so as to remove agreements between them from the pale of general contract law, the decision in the David case is manifestly correct and is amply supported by the authorities there cited. For the reasons stated I do not think these principles applicable in a case such as the present.
It follows that the several plaintiffs are entitled to judgment for the amount shown. to be due together with an equal amount as liquidated damages, and an appropriate judgment therefor may be presented.