Pye v. Atlantic Co., 223 N.C. 92 (1943)

April 28, 1943 · Supreme Court of North Carolina

223 N.C. 92

C. A. PYE, SR., v. ATLANTIC COMPANY, a Corporation.

(Filed 28 April, 1943.)

Master and Servant § 65—

In an action by plaintiff to recover from defendant wages and damages, under tbe Federal Fair Labor Standards Act of 1938, where plaintiff’s evidence, in tbe most favorable light to him, showed that he was in the management of a recognized department of defendant’s establishment, that he customarily and regularly directed the work of others employed therein, whom he hired and fired and exercised substantial discretionary powers, without sufficient evidence that his manual and clerical duties exceeded 20 per cent of his work week hours, such services bring plaintiff within the exemptive provisions of sec. 13, as-the term “employed in a dona ft&e executive capacity” is defined by administrative regulation, and he is not entitled to recover.

Appeal by plaintiff from Blacksiock, Special Judge, at 19 October, 1942, Extra Civil Term, of MeckleNburg.

Affirmed.

The defendant is a corporation engaged in the manufacture, sale and distribution of beer and ale, with resident home office in Atlanta, Ga., and maintaining a branch office in Charlotte, N. C., from which it ships its products to its branches in North Carolina, South Carolina and Georgia, in barrels and crates by truck. It also does some local business by delivery immediately from the platform of the Charlotte building.

The plaintiff was for three years prior to 6 March, 1942, employed by defendant in the distribution of its products. He now brings action under tbe Fair Labor Standards Act of 1938, 52 Stat., 1060, see. 7 (a), 29 U. S. C. A., secs. 201-219 — referred to as tbe Wages and Hours Law-— to recover overtime wages for work done for tbe defendant beyond tbe schedule of maximum hours fixed in tbe Act, and for a like amount of liquidated damages for failure and refusal to pay overtime wages.

Tbe defendant contends that during all this period tbe plaintiff was under tbe exemption provided in section 13 (a) (1) as a “bona -fide executive,” and not covered by tbe Act.

We summarize tbe evidence pertinent to these contentions:

Tbe plaintiff testified that tbe bottling, loading and shipping was all carried on in one large room, in one corner of which was tbe bottling machinery and in tbe back a storage space filled up with beer or ale, or advertising matter, or anything to be shipped out of tbe place. At first plaintiff bad a shelf on one side of tbe room on which be made and kept bis records; but later a little enclosure was made for bis comfort and convenience in tbe same room. The brewing department was separated from it by a partition. Tbe bottling was carried on in tbe room in which plaintiff stayed.

Tbe plaintiff supervised tbe loading and unloading of beer and ale, directing tbe quantity and kind to be put on each truck, inspected bottles and crates to see if broken bottles bad been removed by employees, and that crates were in shape to carry tbe bottles, and that these were properly labeled and assorted as to color. During tbe loading be, for the most part, operated tbe conveyer controls. Tbe actual loading was done sometimes by defendant’s employees and sometimes by employees of tbe truck company which, under contract, hauled away tbe products. It was plaintiff’s duty to keep a record of tbe beer and ale shipped away and empty crates and bottles returned, and make a form report thereof to tbe manager.

Tbe defendant bad a considerable local “platform” trade from tbe plant, and on occasions during the day plaintiff, rather than interrupt employees from their routine tasks, carried out crates and delivered them to customers. On occasions, tbe plaintiff bad swept and mopped tbe floors — ,“all of us would put in there and take tbe ‘squeejee’ and broom” and start mopping up.

Tbe plaintiff bandied and distributed tbe advertising matter for tbe company and kept a record of materials, such as glue and caustic, received and used. He estimated that about 25% or 30% of bis time was spent in manual labor and tbe rest in clerical duties. Including bis 12-ho.ur shifts on weekdays and a 3-hour shift on Sundays, be testified that be worked 75 hours per week.

Plaintiff further testified that there was no special supervision over tbe shipping department except from tbe Manager’s office “except my looking after tbe routine work they gave me to do”; that he had the checking and handling of all the merchandise that came to or went out of the plant; that he had under his supervision one Negro part of the time, and part of the time as many as two. There were at times as many as three or four — at one time twelve working on eight-hour shifts. Plaintiff gave instructions in the shipping department. They worked under him. There would be an average of eight or nine men working under plaintiff, but not all at one time. Plaintiff worked a crew and a half, and another man a crew and a half. “When I did not have laborers enough in the shipping department to do the work that was piled up on me, if I could pick up an extra man for four or five hours cor half a day, I would do so and cut the time off of a later date on some man that I did not need on that day, since I was instructed not to allow my pay roll to go beyond a certain number of days a week. I hired men in my department, and as to firing men in my department, I have fired them.” Plaintiff testified that he issued vouchers for the men temporarily hired by him during the three-year period.

Plaintiff made a list for the bottling .department of what was needed to fill his orders, made from orders on his file. He testified that he was in charge of the shipping department, whether it consisted of “one or two men, whatever there were.”

Plaintiff, according to general instructions, used his judgment whether in certain cases of urgent calls or in case of shortage of products, which orders should be filled in preference to others, and the quantity to be shipped to certain customers.. He had instructions to fill telephone or telegraph orders first, and to fill long haul-orders ahead of short-haul orders, which he did.

In connection with hiring and firing men, plaintiff testified as follows :

“When I first came to this job there were some Negroes working there in connection with the shipping. After a year or so, one or two of them were fired. The manager fired one, I think, and I think I fired one. I have consulted with the manager in connection with hiring or firing employees. If a man had been there a year or so, I had some hesitancy in letting him go without mentioning it to the manager and I always consulted him when necessary about letting what we considered an “old” man go, who had been working there a long time, and as a rule he would tell me what he thought best. I have talked with the manager about hiring men to work in the shipping department and he would say, 'Well, that’s up to you. You can use your own judgment about his work and see how it is, and if he is all right, it’s all right with me.’ The manager himself would hire and fire Negroes in connection with the shipping.”

Plaintiff was corroborated as to the character of his services by A. H. Leonard, a former employee of the defendant.

Upon this evidence, tbe court below took tbe view tbat tbe plaintiff was an executive witbin tbe meaning of tbat term in tbe exempting provisions of section 13, as defined by tbe Administrator; and upon motion of tbe defendant on tbe conclusion of all tbe evidence, rendered judgment as of nonsuit, from wbicb tbe plaintiff appealed.

Franlc W. Orr and Frank H. Kennedy for plaintiff, appellant.

Stewart & Moore for defendant, appellee.

Seawell, J.

Sections 6 (a) and 7 (a) of tbe Fair Standards of Labor Act provide a schedule of minimum wages and maximum hours for those employed in interstate commerce. There is no question tbat plaintiff was so employed or tbat bis evidence as to overtime work was sufficient to go to tbe jury. But defendant insists tbat under plaintiff’s own evidence, be should be regarded as employed in a “bona fide executive capacity” witbin tbe exemptive features of section 13, and therefore not entitled to overtime wages.

Section 13 authorizes tbe Administrator to define and delimit tbe terms used in tbe exemption clause, and acting under tbat authority, be issued regulations (October, 1940) defining tbe term “employee employed in a bona fide executive capacity” as follows:

“Tbe term 'employee employed in a bona fide executive capacity’ in section 13 (a) (1) of tbe Act shall mean any employee

“(A) whose primary duty consists of tbe management of tbe establishment in wbicb be is employed or of a customarily recognized department or subdivision thereof, and

“(B) who customarily and regularly directs tbe work of other employees therein, and

“(C) who has tbe authority to hire or fire other employees or whose suggestions and recommendations as to tbe hiring or firing and as to tbe advancement and promotion or any other change of status of other employees will be given particular weight, and

“(D) who customarily and regularly exercises discretionary powers, and

“(E) who is compensated for bis services on a salary basis at not less than $30 per week (exclusive of board, lodging, or other facilities), and

“(E) whose hours of work of tbe same nature as tbat performed by nonexempt employees do not exceed twenty per cent of tbe number of hours worked in tbe workweek by tbe nonexempt employees under bis direction; provided tbat tbis subsection (E) shall not apply in tbe case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment.”

Our attention is called to tbe fact that paragraph (E) of this definition has been field invalid by some Federal District Courts whose decisions are cited in the brief; but the paragraph is inapplicable here since the plaintiff received more wages per week than the minimum — $30— fixed in the definition.

Upon careful examination we have come to the conclusion that the plaintiff’s evidence, taken in the light most favorable to him, sufficiently shows that he was in the management of a recognized department of the defendant’s establishment, that he customarily and regularly directed the work of others employed therein, that he had and exercised the authority to hire and fire other employees in that department, and in the performance of these duties and others customarily and regularly exercised substantial discretionary powers.

The proportion of time spent by plaintiff in what he designates as manual and clerical duties are conclusions of the witness. ¥e have no means of determining what time was spent in nonexempt employment, because the duty of supervision and management of his department— and the performance of that duty — appear to have been unbroken, except where, as a matter of convenience, plaintiff assisted in some work which was regularly in the routine of other employees. The clerical work alone, according to the evidence, was not sufficient to take him out of the definition of the Administrator as a percentage of performance of nonexempt services.

Perhaps we might have some concepts of a more expansive nature as to what an “executive” is or ought to be — of degree and importance, since we have come to associate that term with “big business” and worthwhile compensation. If the Administrator, official definer and delimiter of the term, had similar views, he failed to capture them within the web of his thesis. He has taken the more practical view that the definition and classification must be put on a functional basis, related to the business in which the employee is engaged, and the service he performs, which would make the importance of his position relative to the business in which he is employed.

Valid definitions within the delegated power speak with authority, and become the dictionary of the law.

We are led to the conclusion that the nature of plaintiff’s services, as disclosed in his evidence, brings him within the exemptive provisions of S. 13, as its terms are officially defined by administrative regulation, and that he is not entitled to recover.

The judgment of nonsuit is

Affirmed.