Walling v. Belo Corp.
316 U.S. 624 (1942)

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U.S. Supreme Court

Walling v. Belo Corp., 316 U.S. 624 (1942)

Walling v. Belo Corp.

No. 622

Argued April 6, 1942

Decided June 8, 1942

316 U.S. 624

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

1. Nothing in the Fair Labor Standards Act bars an employer from contracting with his employees to pay them the same wages that they received previously, so long as the new rate equals or exceeds the minimum required by the Act. P. 316 U. S. 630.

2. An employer whose employees worked irregular hours and were paid fixed weekly salaries entered into contracts with them, individually, which, in each case, specified a basic rate of pay per hour, for the maximum hours fixed by the Act, and not less than one and one-half times that rate per hour for overtime, with a guaranty that the employee should receive each week for regular time and overtime not less than an amount specified. Under this plan, the employee worked more than the statutory maximum regular hours before he became entitled to any pay in addition to the weekly guaranty, but, when he worked enough hours to earn more than the guaranty, the surplus time was paid for at 150% of the "basic," or contract, rate. His compensation equalled or approximated that which he was receiving when the Act went into effect, and exceeded the minima which the Act prescribes.

Held:

Page 316 U. S. 625

(1) That the rate per hour so agreed on was the "regular rate" within the meaning of § 7(a)(3) of the Act where it provide that, for overtime, the employee shall receive compensation "at a rate not less than one and one-half times the regular rate for which he is employed." P. 316 U. S. 630.

(2) The intention of the parties to fix the amount per hour specified in the contract was consistent with their intention to guaranty the specified weekly income. P. 316 U. S. 631.

(3) The Act does not prohibit paying more for overtime than 150% of the basic rate. P. 316 U. S. 632.

(4) The contract conforms to the intention of the Act. Overnight Motor Transportation Co. v. Missel, ante, p. 316 U. S. 572, distinguished. P. 316 U. S. 634.

121 F.2d 207 affirmed.

Certiorari, 314 U.S. 601, to review the affirmance of a decree of the Circuit Court of Appeals which dismissed a bill brought by the Administrator of the Wage and Hour Division, Labor Department, to enjoin the respondent from adhering to a wage system, based upon contracts with its employees, which plaintiff attacked as contrary to wage and hour provisions of the Fair Labor Standards Act. In the District Court, this case was tried with another in which the present respondent obtained a declaratory judgment against certain of its employees. See 35 F.Supp. 430, 36 F.Supp. 907.

MR. JUSTICE BYRNES delivered the opinion of the Court.

This is a proceeding by the Administrator of the Wage and Hour Division of the Department of Labor to restrain the respondent corporation from alleged violation of the

Page 316 U. S. 626

Fair Labor Standards Act. [Footnote 1] The Administrator sought to prevent the use by respondent under certain contracts with its employees of wage agreements deemed by the Administrator violative of the time and a half for overtime provisions of section 7(a), [Footnote 2] as implemented by section 15(a)(1) and (2). [Footnote 3]

Page 316 U. S. 627

The respondent, a Texas corporation, is the publisher of the Dallas Morning News and other periodicals, and the owner and operator of radio station WFAA. It has some 600 employees. Those in the mechanical departments work under a collective bargaining agreement, and are not involved in the present dispute. The others, and particularly those in the newspaper business, work irregular hours. Prior to the effective date of the Act, October 24, 1938, respondent had been paying all but two or three of these employees more than the minimum wage required by the Act. They received vacations of approximately two weeks each year at full pay; special bonuses at the end of the year amounting to approximately one week's earnings, and full pay during periods of illness, sometimes continuing for weeks and sometimes for months. At the time of the trial, 28 superannuated employees were carried on the payroll at full rates of pay. Employees were permitted absences to attend to personal affairs without deductions from pay. When they were required to work long hours in any week, they were given compensating time off in succeeding weeks. Life insurance was carried for them at respondent's expense.

After the enactment of the Fair Labor Standards Act, but before its effective date, respondent endeavored to adjust its compensation system to meet the requirements of the Act by negotiating a contract with each of its employees except those in the mechanical departments. These contracts were in the form of letters stating terms which were agreed to by the employees. The following is a typical letter:

Page 316 U. S. 628

"The Fair Labor Standards Act which goes into effect on October 24, 1938, provides for the following minimum wages and maximum hours of employment:"

"First year -- 25

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