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WALLING v. ALASKA-PACIFIC CONSOL. MINING CO.

March 21, 1944

WALLING, Adm'r, Wage and Hour Division, Dept. of Labor,
v.
ALASKA-PACIFIC CONSOL. MINING CO.



The opinion of the court was delivered by: BLACK

This is an action instituted in January, 1942, by the Administrator of the Wage and Hour Division, United States Department of Labor, against the defendant company for an injunction to restrain alleged violations of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., the plaintiff contending that the defendant in numerous respects has been refusing to pay overtime at one and one-half times the regular rate and has been keeping inadequate records.

Prior to the trial numerous issues were presented to the court upon numerous motions, pre-trial conferences and briefs. After the trial the matter was submitted upon written argument.

 The cause went to trial upon the acknowledgment of the defendant of the constitutionality of the Act and that it was engaged in the production of gold intended for, and which was actually shipped in, interstate commerce and that it and its employees were subject to the Act.

 To my mind the evidence at the trial unquestionably established that the defendant from the first day the Act became effective in 1938 and continuing to the trial was endeavoring to comply with the Act.

 Defendant conducted its mining operations in a quite isolated location in Alaska and for such reason was confronted with problems very different than those encountered by similar concerns in the states. Similarly, the interests of its employees differed materially from what would be expected in the United States proper.

 The defendant at the time the Act went into effect by notice and in meetings, with the employees advised them unmistakably what rate it intended to pay for the regular hours and for overtime hours and as to the number of regular hours and overtime hours each day as well as to the effect that the board and lodging was to be extra compensation for overtime hours.

 The evidence further establishes that the employees from time to time agreed to the schedules of pay and hours and to the conditions of employment and that payment at all times from then to the time of trial was made in accordance with such agreements as the company had with its employees. The books and records of the company were kept in accordance with its understandings with the employees and payments were made in accordance therewith. Each month each employee received a slip with his pay check, which slip was retained by the employee and specified the number of regular hours and the agreed rate and the number of overtime hours and the agreed rate which was at least one and one-half times the regular rate. Every month the men thus fully advised signed a receipt to the company acknowledging full payment.

 Until about the time this case was instituted the defendant agreed with certain employees whom it mistakenly considered exempted as executives for monthly compensation for services not exceeding fifty-six hours a week and agreed that such monthly compensation should cover regular time and overtime at one and one-half the regular rate. But there was no specification as to what the regular rate was. At about or shortly after the inception of this action such employees were placed upon an hourly basis with time and one-half for the overtime hours. And until the fall of 1941 the defendant paid its cookhouse employees upon a monthly basis with no provision as to overtime, it having been the understanding of the defendant that plaintiff construed the Act as not applying to cookhouse employees. At any rate in the fall of 1941 when the defendant learned the contraryit placed the cookhouse employees upon the same basis of regular hours and overtime as in force generally with its men.

 In 1941 in connection with what was described as water tunnel construction and raises therefrom the defendant in good faith pursuant to agreements with certain employees provided for payment of bonuses to them dependent upon the footage driven in addition to payment of substantial wages which defendant and the men agreed included overtime. But in connection with water tunnels and raises plaintiff contended that the wage with overtime plus the bonus should be divided by the number of hours worked and that such would constitute only the average regular hourly wage. In other words, the plaintiff contends that the defendant in spite of the agreements with the men that they were being paid overtime has actually paid no overtime at all.

 However, in any event before the institution of this action such water tunnel and raises were completed and the bonus system was thereafter not employed.

 But beginning in 1942 after the beginning of the action the defendant as to a portion of its tunnel work connected with prospecting or development entered into contracts with certain of its employees pursuant to written bids by those of its employees who desired to bid on certain work under which the employees contracted to drive the tunnel at so much a foot, which in practice has resulted in payment to the men under such contract system of about $15 a day on the average during the life of such contracts. In connection with such contracts the men agreed with the company that their base pay was to be $0.40 an hour for forty hours and $0.60 for each of the sixteen overtime hours each week, but that the men should have as much more than that as they were able to make pursuant to the terms of their contracts, which, as above stated, have been very profitable to the men and quite satisfactory to the company. Under such bidding system if the contract price was not sufficient to pay such agreed regular and overtime rates the defendant agreed nevertheless to pay $0.40 an hour for forty hours a week and $0.60 for each overtime hour, regardless of how much the contract price would thereby be increased.

 But plaintiff contends that regardless under the evidence of the desire of the men and the company to enter into such mutually satisfactory arrangements so profitable for the men that the ...


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