WALLING, WAGE AND HOUR ADMINISTRATOR, v. PORTLAND TERMINAL CO.
No. 336
Supreme Court of the United States
Argued January 17, 1947. Decided February 17, 1947.
330 U.S. 148
E. Spencer Miller argued the cause and filed a brief for respondent.
This is аn action brought by petitioner against respondent in a Federal District Court to enjoin an alleged violation of
For many years the respondent railroad has given a course of practical training to prospective yard brakemen. This training is a necessary requisite to entrusting them with the important work brakemen must do. An applicant for such jobs is never accepted until he has had this preliminary trаining, the average length of which is seven or eight days. If accepted for the training course, an applicant is turned over to a yard crew for instruction. Under this supervision, he first learns the routine activities by observation, and is then gradually permitted to do actual work under close scrutiny. His activities do
The Fair Labor Standards Act fixes the minimum wage that employers must pay all employees who work in activities covered by the Act. There is no question but that these trainees do work in the kind оf activities covered by the Act. Consequently, if they are employees within the Act‘s meaning, their employment is governed by the minimum wage provisions. But in determining who are “employees” under the Act, common law employee categories or employer-employee classifications under other statutes are not of controlling significance. See N. L. R. B. v. Hearst Publications, 322 U. S. 111, 128-129. This Act contains its own definitions, comprehensive enough to require its application to many persons and working rela
Without doubt the Act covers trainees, beginners, aрprentices, or learners if they are employed to work for an employer for compensation. This is shown by § 14 of the Act which empowers the Administrator to grant special certificates for the employment of learners, apprentices and handicapped persons at less than the general minimum wage.* The language of this section and its legislative history reveal its purpose. Many persons suffer from such physical handicaps, and many others have so little experience in particular vocations that they are unable to get and hold jobs at standard wages. Consequently, to impose a minimum wage as to them might deprive them of all opportunity to secure work, thereby defeating one of the Act‘s purposes, which was to increase opportunities for gainful employment. On the other hand, to have written a blanket exemption of all of them from the Act‘s provisions might have left open a way for wholesale evasions. Flexibility of wаge rates for them was therefore provided under the safeguard of administrative permits. This section plainly means that employers who hire beginners, learners, or handicapped persons,
Section 3 (g) of the Act defines “employ” as including “to suffer or permit to work” and § 3 (e) defines “employee” as “any individual employed by an employer.” The definition “suffer or permit to work” was obviously not intended to stamp all persons as employees who, without any express or implied compensation agreement, might work for their own advantage on the premises of another. Otherwise, all students would be employees of the school or college they attended, and as such entitled to receive minimum wages. So also, such a construction would sweep under the Act each person who, without promise or expectation of comрensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit. But there is no indication from the legislation now before us that Congress intended to outlaw such relationships as these. The Act‘s purpose as to wages was to insurе that every person whose employment contemplated compensation should not be compelled to sell his services for less than the prescribed minimum wage. The definitions of “employ” and of “employee” are broad enough to accomplish this. But, broad as they are, they cannot be interpreted so as to make a person whose work serves only his own interest an employee of another person who gives him aid and instruction. Had these trainees taken courses in railroading in a public or private vocational school, wholly
Accepting the unchallenged findings here that the railroads receive no “immediate advantage” from any work done by the trainees, we hold that they are not employees within the Act‘s meaning. We have not ignored the argument that such a holding may open up a way for evasion of the law. But there are neither findings nor charges here that these arrangements were either conceived or carried out in such a way as to violate either the lеtter or the spirit of the minimum wage law. We therefore have no case before us in which an employer has evasively accepted the services of beginners at pay less than the legal minimum without having obtained permits from the Administrator. It will be time enough to pass upon such evasions when it is contended that they have оccurred.
Affirmed.
MR. JUSTICE FRANKFURTER, concurring.
In this case, as well as in the companion case, No. 335, post, p. 158, we have a judgment of two courts based on findings with ample evidence to warrant such findings. It was solely on this ground that I agreed to affirmance in Tennessee Coal Co. v. Muscoda Local, 321 U. S. 590, and on this basis alone I think the judgments in both these cases, Nos. 335 and 336, should be affirmed.
I, too, would affirm this judgment. But my reason is not that stated in the Court‘s opinion.
I have never understood that the Fair Labor Standards Act was intended or fitted to regulate labor relations, except to substitute its own minimum wage rate for any that was substandard and an overtime rate for hours above the number it set. It, of course, like other statutes, can and should be applied to strike down sham and artifice invented to evade its commands.
But the сomplex labor relations of this country, which vary from locality to locality, from industry to industry, and perhaps even from unit to unit of the same industry, were left to be regulated by collective bargaining under the National Labor Relations Act. It would be easy to demonstrate from the Act‘s legislative history that such was the intention of Congress аnd that it had good grounds to believe this the tenor of the legislation. Organized employees on one side, free of employer domination or coercion, and employers on the other side best know the needs and customs of their trades; they know something of the strain their industry can stand; and after all, it is they who feel the effеcts. Given thus the machinery to change customs that had outlived their time or, in the alternative, to adjust wage rates to take account of those customs, it was, I think, our duty to pay at least some deference to the customs and contracts of an industry and not to apply the Fair Labor Standards Act to put industry and labor in a legal strait jacket of our own design.
From the beginning it was apparent that there were but two ways of giving real force and meaning to this Act without throwing all industry and labor into strife and litigation. One was to give decisiveness and integrity in borderline cases to collective bargaining. Cf. J. I. Case Co. v. N. L. R. B., 321 U. S. 332; Order of Railroad Telegraphers v. Railway Express Agency, Inc., 321 U. S. 342.
This Court has foreclosed every means by which any claim, however dubious, under this statute оr under the Court‘s elastic and somewhat unpredictable interpretations of it, can safely or finally be settled, except by litigation to final judgment. We have held the individual employee incompetent to compromise or release any part of whatever claim he may have. Brooklyn Savings Bank v. O‘Neil, 324 U. S. 697; cf. D. A. Schulte, Inc. v. Gangi, 328 U. S. 108. Then we refused to follow the tеrms of agreements collectively bargained. Jewell Ridge Corp. v. United Mine Workers, 325 U. S. 161. No kind of agreement between the parties in interest settling borderline cases in a way satisfactory to themselves, however fairly arrived at, is today worth the paper it is written on. Interminable litigation, stimulated by a contingent reward to attorneys, is necessitated by the present state of the Court‘s decisions.
In the view that the judicial function should pay some deference to findings of fact as to customs of industry in applying this Act, I favored affirmance of the award to miners in the case of Tennessee Coal Co. v. Muscoda Local, 321 U. S. 590, because two lower courts had made findings of fact that under the contracts and conditions in those partiсular iron mines the employees were entitled to have counted as working time certain periods spent in travel. The judgment was supported, too, by the rulings of the Administrator. Those reasons were rejected by a majority of the Court which went on to lay down rules of decision which take no account of contract оr custom.
“But in any event it is immaterial that there may have been a prior custom or contract not to consider certain work within the compass оf the workweek or not to compensate employees for certain portions of their work. The Fair Labor Standards Act was not designed to codify or perpetuate those customs and contracts which allow an employer to claim all of an employee‘s time while compensating him only for a рart of it. Congress intended, instead, to achieve a uniform national policy of guaranteeing compensation for all work or employment engaged in by employees covered by the Act. Any custom or contract falling short of that basic policy, like an agreement to pay less than the minimum wage requirements, cannot be utilized to deprive employees of their statutory rights.” 325 U. S. at 167; Tennessee Coal Co. v. Muscoda Local, 321 U. S. 590, 602.
The same doctrine was then pressed into other fields of industry by the decision in Anderson v. Mt. Clemens Pottery Co., 328 U. S. 680, which declared certain time spent on the premises of the Pottery Company must be compensated “regardless of contrary custom or contract.” 328 U. S. at 692.
The claimants now before us ask to participate in the judicial largess. They believe that they are entitled to be paid for the time that they spent on the railroad‘s premises, under the railroad‘s direction, performing railroad labor, in order to learn to qualify for railroad jobs when the railroad might need them. The Court does not even attempt to distinguish the foregoing cases on which their claim is based.
This case again requires us to make a choice between grounds of decision similar to the choice that was open to us in the cited cases and I think it is timely for the Court to reconsider its approach to cases under this Act. We may purport to find grounds for denying these claims in an interpretation of the Act, although Congress never intended to regulate the subject at all. Or we can use as valid ground for denying these claims the concurrent findings by two lower courts of a good faith understanding of the parties, following a long-established custom of an industry whose lаbor relations have long been subject to collective bargaining. I concur only on the latter ground.