*1 propriate that we now occasion state believe wrongly Certainly also was decided. our democratic form government, functioning under the historic Bill of high Rights, responsibility has a to accommodate itself views of religious unpopular however minorities, and unorthodox those views be. First Amend- put right freely religion ment does not to exercise position. fear, however, opin- subordinate We Gobitis case do exactly these and ions that. THE ADMINISTRATOR OF AND WALLING, WAGE HOUR S. OF LA- U. DEPARTMENT DIVISION, BOR, v. A. BELO CORPORATION. H. Argued 6, April
No. 622. 1942. Decided June *2 Solicitor Fahy, General with whom Messrs. Arnold Baum, Gardner, Warner W. Irving J. Levy, Mortimer B. Wolf, Hyman, George Jacob D. Searls, B. Walter T. Nolte, and Norman S. Altman were on the brief, petitioner. Purnell,
Mr. Maurice E. with whom Eugene Mr. P. Locke on the brief, for respondent. Byrnes delivered the opinion of the Court.
Mr. Justice This is a proceeding by the Administrator of Wage and Hour Division the Department of Labor to restrain the respondent corporation alleged from violation of the sought
Fair Labor Act.1 The to Standards Administrator by respondent, the use under certain prevent contracts with its deemed agreements employees, the time and a half for Administrator violative of over 15 (a) (1) as provisions (a)2 implemented by § §§ (2).3 by injunction is requirements the Act author- Enforcement of and the 17. “The courts of the States United ized district United § jurisdiction, possessions of the Territories and shall have courts States subject provisions (relating to shown, of section 20 cause supplement opposite party) notice the Act entitled 'An Act existing against monopolies, restraints and and for other laws unlawful (U. C., approved 15, 1914, amended 1934 edi- purposes,’ October S. 381), violations of section 15.” 52 tion, title sec. restrain Stat. *3 1069; 29 U. C. 217. S. § 2 except provided in (a) shall, “Sec. No otherwise any employees engaged is in section, who commerce employ this of his goods of production the for commerce— or in during forty-four (1) longer than hours the first for a workweek section, year of from the effective this date forty-two during (2) longer than the second for a workweek year date, from such or forty expiration
(3) longer hours after the for workweek a year date, from the second such of compensation in such receives for unless specified one one- of at rate not less than and excess above employed.” 1063; which 52 rate at Stat. half times he 29 C. 207. U. S. § 3 expiration (a) twenty one and After the of hundred “Sec. 15. Act, of of enactment this shall be unlawful days from the date any person— transport, transportation, deliver, in (1) ship, offer for or sell knowledge ship, deliver, shipment sell with
commerce, or or to intended, any goods delivery in thereof in commerce or sale any employee employed in violation of section production of any regulation or order of the Admin- 7, inor violation section 6 or except provision 14; that no Act section issued under istrator liability any upon transporta- common carrier any impose shall any goods course of its business not in commerce tion carrier, provision no of this and Act shall common such produced publisher Texas is the respondent, corporation, Morning and the News and other periodicals, Dallas It has some of radio station WFAA. operator owner departments mechanical Those employees. bargaining agreement and are collective work under a dispute. others, par- present involved irregular business, in the work ticularly newspaper those October Act, 24, date of hours. Prior to effective two or three of paying all but had been respondent minimum required more than employees these approximately received vacations They the Act. bonuses at the end year special full pay; weeks each at two one week’s earn- amounting to year approximately con- during periods illness, sometimes and full ings; At months. tinuing for weeks sometimes were carried trial, superannuated permitted were full of pay. Employees rates payroll deductions affairs without personal to attend absences long work required from When were pay. they time off suc- given compensating week, they were any for them at re- carried Life insurance was ceeding weeks. expense. spondent’s Act Labor Standards enactment of the Fair
After the date, respondent effective endeavored before its but requirements to meet adjust compensation system of its em- each negotiating contract with the Act *4 departments. mechanical ployees except those stating terms letters in the were form These contracts following is The employees. agreed which were letter: typical any goods for obligation accept carrier from any common excuse transportation; any 7, or or section of section 6 any provisions (2) to violate issued Administrator order any regulation provisions of 1068; C. 29 U. S. 14; .” 52 Stat. . . § section under
628 goes into Act which effect Labor Standards
“The Fair following for the minimum 1938, provides 24, October employment: hours of wages maximum hour minimum per “First year—25$ week per 44 hours maximum hour minimum per “Second year—30$ 42 week per hours maximum **4 per “Third hour minimum year—40$ per
40 week hours maximum may work except that more than the number of specified above, provided that overtime hours rates shall minimum one and one-half times the be a basic rate. “In order to conform our arrangements to reducing the Act scheme of without amount of each we money you week, receive advise that from 1938, your after October basic rate 24, will for the per . 67 . . . cents hour first forty-four . . and that for time week, forty-four over each will you week receive each each work not less one one-half time such than basic rate above men- on our tioned, part you shall receive time and weekly, for such overtime as the necessities of business demand, a sum not less $40. . . inas cases, example, In most the specified hourly rate guaranteed fixed was weekly wage. l/60th during was year the first under result Act, when statutory maximum of was the em ployee required work hours before he became 64% any pay entitled addition to guaranty.5 misstatement, here, In later tins letters immaterial was corrected. minimum for the first hours remains 30 until cents October 24,1945. See the Act. 6§ $29.48; cents equals 44 hours at 67 hours at the statutory (150%X$.67) $1.00 equals minimum $10.50; $29.48 $10.50 $39.98. plus equals
629 contract enough at the worked employee the When time was surplus the guaranty, than the rate to earn more wage. for at the the paid in pay, received increase employee If the an readjusted. were these con- embodied eighteen system For months the of em- satisfaction apparent was tracts followed then advised that was Respondent ployer employees. Act and that arrangement was violation 30 from to 60 in an amount of liable employees was to its director regional It was informed thousand dollars. office in the Administrator’s Dallas and an official complaint precipi- had Washington employee’s that an give officials declined tated the These investigation. employee. the name declaratory suit
Respondent thereupon brought District District Northern judgment Court three of its joining regional director and Texas, The employees employees defendants. defendant the other affected they and all answered regional system approved it. director moved he to dismiss on two one of which was that grounds, repre- to dismiss employees. none of the motion was sented In the Supp. petitioner denied. F. 430. meantime, enjoin respondent suit continuing instituted this from operate wage system upon based its contracts with The two suits were consolidated and tried employees. entered together. declaratory The District Court judg- bill for in- respondent ment and dismissed the Supp. F. junction. 36 907. appealed
Petitioner to the Circuit Court Appeals of its complaint. from the dismissal That Court affirmed judgment Court. F. 2d District It contracts “actual found that the were bona fide contracts and that employment” “they to, were intended and did, fix really rates at which each *6 impor- because of the employed.” granted We certiorari in the Act. question tance the administration of the pur It is no that the true, petitioner doubt as contends, pose respondent’s arrangement employees its was far of the possible, payment as as the same total permit, the But in the weekly wage nothing Act as before. contracting with employer employees Act bars from wages they them the that received same previously, minimum equals rate or exceeds the long so the new the Act.6 required by beyond requires
The Act for each hour work that maximum, employees paid must be “not statutory less regular which one-half times the rate at he than one and meaning of the employed.” upon is This turns case regular Re- employed.” words “the rate which he is at justify any provides: provision of this Act shall 6 Section 18 “No reducing him in excess wage paid by in which is justify any employer applicable Act, minimum in under this increasing him which are shorter hours of maintained applicable under this Act.” Whatever maximum hours legal certainly prohibition it is not a language, effect of this rely upon finding Circuit it. Court does not Administrator weekly Appeals respondent’s incomes of effort maintain that gains good support pre-Act faith its at their level was for very respondent that at the when from the circumstance Wage wage policy the and Hour Administrator mulating new declared: forces, But I cannot feel, are included the Act.
“Clerical we all any difficulty practical there because going is be see where there certainly earning any any consequence plant of is your force clerical wages weekly an hour divided than 25 cents on basis of more hour, they 25 cents an it seems to they are well above work. If half for question much time and a about me there would not that figure wage that you in that time and could overtime, because given as remuneration 44 had consideration been a half over pay.” week’s for their full Birming- Industrial Council before the States Speech Southern Wage Reporter Hour September 29, 1938. 3 Alabama, on ham, under the that illustra spondent contends and to which we contract, is out above shall set tive argues, an hour. Petitioner throughout, is 67 cents refer rate mentioned in the cents that however, is, in ef agreement that the meaningless and regard to without fluctua weekly salary $40 fect, Treating worked each week. the number tions weekly salary, urges he one a fixed the contract as any single quotient rate for week is the regular hourly the number of divided hours ac em week.7 Under this formula the worked tually thus deter entitled to ployee *7 and to not less than first 44 hours8 each week mined for the that rate for hour thereafter. times each one and one-half stage dispute to which this question In its initial interpretation a question law, question rise is gives it “regular But is that term rate.” statutory agreed of the may establish employee matter law as a us, before such “regular In case contract. rate” given example reg- made, has been effort an hour. The diffi- 67 cents an specified ular has been rate guaranty. The $40 inclusion of the from the culty arises parties set 67 whether the intention problem is inten- squares with-their an hour as cents income of The Adminis- $40. guarantee tion objectives inherently are is these two position trator’s that fix the the intention to and that inconsistent guarantee intention is cents overridden rate at 67 week. per $40 when an agree. place, employee In the first cannot We he is admit- single week, more than works 54% guarantee. The record more the $40 entitled to tedly 7 interpretation Act, as set of the Administrator’s This has been the Interpretative 21, 1938 and re- issued October Bulletin No. forth November, vised in 8 year Act; now 40 hours. passage For the of the first case, that in such a the employee paid
shows is the rate x hour (150% $.67) $1.00 an each hour of overtime. it situation, then, clearly In this is the guaranty that be- and the cent inoperative comes fixed by controlling. that contract is although In the second it place, perfectly true that employee when the works during less than 54% week his is determined guaranty, $40 it does dispose problem say of the this. simply The ques- tion remains whether $40 contemplates compensation for overtime as well as basic pay. says that employee to receive 67 cents an hour first hours and less than one one-half “Not time such basic rate” each hour over 44. if Consequently, given might works 50 hours in a it week, reasonably be $29.48 said consists of for the first 44 x (44 $.67) plus $10.52 for the remaining six hours x $1,753 (6 $1,753). sure, To be is more than $.67. But the Act prohibit does not paying re- more; quires only that the overtime rate be “not less than” 150% of the basic It is also true under rate. this formula the per overtime rate vary from week to week. But nothing the act forbids such fluctuation. gist objection Administrator’s to this inter-
' pretation is that both the basic rate and the overtime rate *8 are so “artificial” that the parties to the contract cannot fairly supposed be have intended it be that so construed. It cannot be that the flexibility denied of the overtime rate is but considerable, flexibility may this well have been in- tended it if was the means of securing uniformity in weekly income. Moreover, under the in- Administrator’s in the terpretation, rate example given $40 is by divided the number of hours worked each week. Since the number of hours worked fluctuates so drastically from to week, “regular” week this rate is certainly “irregular” in mathematical sense. And inasmuch itas cannot be calculated until the workweek has completed, been say it “regular” difficult to is in is that the sense that or employee either knows what it or plan is can the basis of it. artificiality urged by the method the .Adminis- is trator accentuated the nature his counter-proposal plans weekly wage of two of an employee vary from whose hours week to week be may stabilized. officially of these is known approved plans One as the plan” “time-off explained Interpretative and is Bulletin plan No. 4. Under this be placed must an rate with upon hourly basis no mention of a guaranty. must pay days spaced be at intervals of two weeks longer. If pay period is set two at weeks and the employee during is to work overtime required the first he is week, given during sufficient time off the second week keep paycheck his level. In a constant view, our this counter-proposal far exceeds technicality plan adopted by respondent. operation Moreover, to pro- ceiling vide a but not a wage. floor the pay Since hour no and there is guaranty, pay period which an few hours, wage may works fall far below level aimed at.
The other officially arrangement is known approved as “pre-payment plan,” explained and is also Bulletin. Under arrangement No. 4. the same plan, virtually as that which we using have been can example stand. That is to say, an employee promised 67 cents an hour for the $1.00 first for each over hours, 44,9 $40 a week. in any week in However, earnings which the employee’s at the stated rates equal do not guaranty, the balance necessary to the guaranty fulfill must be treated as a loan him. If respondent’s contract, It should be above, noted set out does not $1.00 fix as the provides for overtime. Instead it be “not than one shall less and one-half” times 67 cents.
634 earnings in his at any succeeding hourly week the stated guaranty, rates exceed the the excess is withheld employer as a loan. But if his repayment earnings guaranty any succeeding do not exceed the week, and receiving to work, check he does not return pay is to make an effort employer presumed to collect the amount to the paid previous a excess week. If employer does not recover this excess then amount, just practical purposes operates for all the plan as does plan followed respondent this case. About “guaranty difference is that one called is a plan,” while other called “pre-payment plan.” is In the opinion the Administrator, plan” the “pre-payment is the “guaranty plan” lawful; unlawful.
But the contract this case carries out the Congress. intention of the specifies It hourly a basic and not less time and a half that rate for every of overtime work beyond the maximum hours It fixed the Act. is entirely unlike Missel case, In ante, the contract in p. case, there is no stated wage provision and no for overtime. Under the in that case, engages decision who a worker irregular for a fixed hours and works (in him year when the maximum workweek hours), employee $46.38. owes Missel See case. same under For the the Belo contract, cents, $50.48. worker would receive is a There difference but is the agree- compensation, and it parties ment of is within the letter and the intention law. problem presented by this case is difficult—difficult provide we are asked to rigid
because definition of “reg- Congress when has failed to provide ular rate” one. Pre- Congress refrained from attempting such a defi- sumably, nition because to which relationships were apply unpredictable. the Act would so various and *10 Congress And that it to do, which was unwise for this Court employer employees not do. have should When and mutually has agreed upon arrangement an which proven it inflex- and an satisfactory, upset approve we should not of the finds interpretation artificial Act which ible and elim- no text and which as matter support practical steady to with possibility employees income inates Where the irregular question hours. is as close afford Congressional to follow the lead and to one, it is well scope agreements among the indi- possible the fullest actually based policy who are affected. This viduals recognition problems special common sense upon a where confronting employer and businesses day from week from hours fluctuate week to and the work of a employees security value the day. Many such family They income. want to on a operate payments homes and make commitments budget, to Congress nothing has said and insurance. automobiles objective. this desirable This Court should not. prevent
Affirmed. dissenting: Reed, Mr. Justice have holds, employees “When
The Court has proven mutually arrangement which upon agreed it and an inflex- upset approve should satisfactory, we of the Act which finds no interpretation artificial ible and elim- matter practical and which as its text support income to steady possibility inates recognized by the Court Yet hours.” irregular meaning of upon “turns the contract validity of ” employed,’ he is rate which the words it is said the by Congress, left undefined phrase and flexible. Not undefined also should leave courts that the Belo typical conclusion assume the Court’s does byAct Labor the Fair Standards conforms half for over- time and a wages provision but, opinion just time, announced, Court ap- proves this type long contract for “so as the new hiring, equals or exceeds the minimum required by the Act.” In deciding, gives “regular so Court phrase rate” an interpretation as inflexible and artificial as that which it condemns. interpretation that, Court’s the absence bad form any payment of contract which assures the
faith, required the minimum complies *11 with may the Act be to be assumed correct. But since compensated overtime hours must be “at rate not regular less one and one-half times the at which employed,” (a) regular he is (3), rate cannot left § be “definition,” without or for “flexible” unfound this case. so found, And once must be applied to the circumstances litigation. of No all-inclusive will this definition be at- tempted. possibilities variation in of contracts are Certainly, too great. however, Court does not mean to say that the employer and may capriciously wages select a certain paid, unrelated to figure, and regular “That is the say employment.” Every con- tract statute, to contain assumed, rate,” and for “regular each contract it a legal, not a object conclusion. What that rate is factual, here is inquiry. for case, our Once determined this that con- precedent becomes a clusion for other similar contracts in one whether wish so, sense, not, and we it or a definition applied to be the administration of the Act. Court accepts This the view the Fair Labor Stand- only put wages ards Act was intended a floor under ceiling but over hours. The also limitation purposes—the spreading turn had two of work extra high regular for no matter how compensation overtime, Overnight Transportation Motor Co. v. may be. wage ante, Missel, at pp. must Since § equal (a) regular rate, least time and a half may permitted not be employees employers specifies, requirement. statutory to contract avoidance to the easily hour conform per for a Contracts in other requirements, compensation but contracts for their to find the analysis terms compel forms today in Court salaries, agrees Fixed as this rate. hourly on the basis are be reduced to rates case, Missel’s contains time. Belo’s contract of a week as the unit of wage con wage weekly fixed both hourly elements then Are the contracts point. come tracts. We hours, with weekly wages for variable here involved half such rates for over and a for rates with contends the Act has left respondent If the time? latter, such him free to limited agreed upon, regular rates as we must ap As a requirements. court, minimum judgment, and, my contracts the nature of these praise wages hours, for variable agreements are they compensation per additional provision with a num excess an ascertainable contingent upon work number of hours of work required hours—the ber of *12 wage of the hourly earned under the terms con wages the guaranty.1 the Until these are ex equal hours tract has stipulated wage per hour no demonstrable ceeded, the effect. they were drawn to with comply contracts stated
The reducing” weekly wages. of the Act without the “scheme customarily was written as one-sixtieth hourly rate The the wages. The overtime above maximum weekly of the or one-fortieth hourly was hours set 150% by guaranty then followed a that weekly. This was of and weekly,” regular should “receive for former weekly wage. guaranty This overtime, guar- feature of the dominating contract. Without of low encounter anty, adoption hourly rate would Products Co. v. 126F. 2d 537. Cf. Carleton Screw Fleming, full weight employee bargaining power. guar- The
anty by fixing avoids this conflict the minimum weekly wage. guaranty This controls the wage up to 54% the number hours hours contracted for work, Belo more without than the fixed paying weekly wage. In a hour week rate guar- should be the less, 54% anty by the actually divided worked. guaranty
It obvious that the seems was the heart of the arrangement. The effect of the contract in the illustrative is to 73 cents pay case for work toup (expressed $1.00 the circumlocution of time and cents) half 67 beyond hours, those with a there guaranty that will be worth of work each week. “basic” rate, hours contracted for at the rate basic stated percentage paid for overtime may be varied effect earnings without on provided guaranty and real overtime are kept fixed.2 employee willing, number of hours which must be worked to earn the guaranty can increased suit- adjustment figures rate, able percentages. By hours contracted and overtime such a example significance An will the lack of the other illustrate Varying rates, percentages numbers in the contract. hours and overtime quoted are those substituted for in the Belo contract in the Court’s opinion. arrangements “In order to conform our reducing money you scheme of the Act without amount week, 24, receive each we advise from and October your basic rate will be [50] cents per hour for the first [29] each week, that for time over [29] hours each week you will receive each hour of work not less such than basic [double] you mentioned, part above our shall weekly, receive time and for such overtime as the necessities of the business demand, $40.00.” a sum less 29 hoursX$.50=$14.50. 54.5 hours—29 hours=25.5 hours at per
$1.00 hour=$25.50. plus overtime=$40.00. Time There- *13 employee $1.00 per the receives hour. $.60 The same is true of a basic of for hours and time and 36% thereafter, guaranty two-thirds $40. with of a device, management may avoid many verbal astute disadvantages chief of which is ordinary overtime, a the definite increase the cost labor as soon as hours If statutory worked the intention exceed workweek. the a for over- Congress require is to at least and half fixed beyond (40, time work maximum number hours today’s hours), or 44 intention is frustrated engages a holding. case, employer Under Missel’s an who irregular wage worker for a fixed for in a a 44 him hours a week year and works 54% contract, maximum, $43.86. Under the Belo owes no $40. Because there is increase worker would receive statutory maximum and of labor cost between for has a financial (54%), hours contracted beyond statutory require hours inducement maximum. agree pointed above, out this contract
As up $40.00, fixed pay wage, ment to variable compensation for additional provision but there is 54%, maximum. Where the the contract hours over necessary to entitle the the number hours worked exceed equal hourly contract, employee under is entitled to re aggregate guaranty, to the statutory maximum hours and for the ceive The contracts most that rate for all overtime. guar the basic rate at instances fixed one-sixtieth view, is to make our guaranty, the effect of the anty, but number of precise guaranty, under the contract to earn necessary For by the hours.3 divided quotient Straight Weekly guaranty—$40. Hours worked—54%. Straight wage—$40-H>0==:$.66%. hours—44. contract contract wage—$1.00. Over- contract 44X$.66%=$29.33%. Overtime 10%X$1=$10.66%. Total time contract hours—10%. Statutory regular per rate—40-H54%=$.732 hour. Stat-
paid—$40. 44X$,732=$32.20. Statutory maximum utory hours—44. *14 surplus hours over the same rate con 54% *4 applicable.* tinues to be gives the guaranty It is which character con- these tracts, which determines amount be received employee under terms, except the instances of work beyond It work beyond hours. 54% 54% calls extra from the pay employer. Conse- quently it seems find the proper to rate of employ- ment by using guarantee as the and the dividend max- imum possible without increased contract pay as the objection divisor. The that this permits statutory over- time contract computed overtime pay springs wording making from the guarantee to the hours. This up objection cover overtime loses its force with the determination that the guaranty fixes contract, rather quality than the so-called basic pay. judgment Appeals of the Circuit Court of should and this action remanded to the District be reversed Court proceedings. for further Douglas and Mr. Black, Mr. Justice Justice
Mr. join in Murphy dissent. Justice rate—$1,098. Statutory 10%X$1.098=$11.71. overtime hours=10%. required compensation—$43.91. Total Statutory Regular Hours worked—60. maximum hours—44. Statutory 44X$.732=:$32.20. rate—$.732. hours—16. Over- rate—$1,098. required compensa- 16X$1.098=$17.57. Total tion—$49.77.