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RANKIN v. JONATHAN LOGAN

June 26, 1951

RANKIN
v.
Jonathan LOGAN, Inc.



The opinion of the court was delivered by: MODARELLI

This is an action under the provisions of the Fair Labor Standards Act, as amended, of June 25, 1938, 52 Stat. 1060, Title 29 U.S.C.A. § 201 et seq., to recover overtime compensation, liquidated damages, and counsel fees. Defendant contends the plaintiff is a bona fide executive, and, therefore, exempt from the coverage of the Fair Labor Standards Act by Section 213(a) thereof which declares that the wages and hours requirement shall not apply 'to any employee employed in a bona fide executive * * * capacity,' as that term is defined and limited by regulations of the Administrator, 29 U.S.C.A. § 213(a). Defendant further contends that the act or omission was in good faith, and that he had reasonable grounds for believing that his act or omission was not a violation.

The defendant was engaged in interstate commerce, in the manufacture, sale, and distribution of garments, dresses, and other clothing, in and between the States of New Jersey, New York, Illinois, and other states and countries, and shipped its products through the medium of the United States mails, express carriers, and trucking companies, from its plant at 83 Newark Avenue, Jersey City, New Jersey, to other states and countries.

 I find that the plaintiff was not a bona fide executive under the Administrator's definition. There are six (6) conditions which must be met before an employee is exempt. 29 Code Fed.Regs., Section 541, 1 (Cum.Supp. 1950). If an employee falls short in any one category, he cannot be termed an executive, and the burden of proof is upon the defendant to show that the plaintiff is an executive within the definition set forth in the Administrator's regulations. Walling v. General Industries Co., 6 Cir., 1946, 155 F.2d 711; Kaczanowski v. Home State Bank, D.C. Wis. 1948, 77 F.Supp. 602, 605; Walling v. Morris, 6 Cir., 1946, 155 F.2d 832, 835. This burden the defendant has failed to carry.

 Section 216 of the Fair Labor Standards Act of 1938, as amended in 1947, was further amended by Section 260 of the 1947 Act, which states that: 'if the employer shows to the satisfaction of the court that the act or omission * * * was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation * * * the court may, in its sound discretion, award no liquidated damages * * *.'

 As construed by the courts, this fact requires more than a mere contention that the defendant acted in good faith; there is a requirement of some proof of affirmative action by the employer to the end of determining how the employee should be classified and a consequent classification based upon the advice given.

 In Ferrer v. Waterman S.S. Corp., D.C., 84 F.Supp. 680, 696, the court in construing Section 260 upheld the employer's good faith only after a showing that the defendant relied upon:

 (a) The provisions of Interpretative Bulletin No. 4 to the effect that the collective bargaining agreement complied with the Fair Labor Standards Act.

 (b) The advice of his attorneys.

 (c) The advice of attorneys of other steamship companies.

 (d) Upon the fact that the Unions themselves had submitted the contract and agreed to its terms.

 The court also pointed out that the opinion of an employer's attorney alone may not be sufficient to constitute a defense, though it may bear upon the reasonableness of the defendant's attitude.

 In Alicea v. Porto Rico Gas & Coke Co., D.C., 89 F.Supp. 938, 943, the employer was exempted again only after a showing that he had sought the advice of his attorney concerning the status of his employees, and further that defendant had contacted the Administrator of the Wage and Hour Division in Porto Rico. The court felt that the defendant's conduct was influenced by these consultations.

 In this case, there has been no proof adduced by defendant to show in any way that the employer had a reasonable basis for classifying Rankin as an executive, other ...


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