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Abbott v. Holderman

Decided: July 12, 1957.


Clapp, Francis and Stanton. The opinion of the court was delivered by Clapp, S.j.a.d.


By this proceeding brought under R.R. 4:88-10, 138 employers seek a declaratory judgment invalidating the New Jersey Minimum Fair Wage Standards Mandatory Order No. 11, effective October 9, 1956, governing women and minors in mercantile occupations. The order prescribes a minimum wage of $1 an hour generally and 85 cents an hour for students and learners. Overtime rates are fixed at one and a half times the employee's regular rate, for hours in excess of 48 a week after January 1, 1957, for hours in excess of 45 a week after July 1, 1957, and for hours in excess of 40 a week after January 1, 1958. Order No. 8, made in 1948, affecting retail trade occupations, superseded by Order No. 11, provided a minimum wage of 60 cents an hour in nine counties of the State, with overtime at 90 cents an hour after 40 hours a week; and a minimum wage of 55 cents an hour in the other counties with overtime at 82 1/2 cents an hour after 44 hours a week.

Petitioners' first point is that Order No. 11 should be set aside because, it is claimed, two of the three employer members of the wage board which recommended the order, were not selected in accordance with N.J.S.A. 34:11-40. The statute provides in part:

"A wage board shall be composed of not more than three representatives of the employers in any occupations, an equal number of representatives of the employees in such occupations and not more than three disinterested persons representing the public, one of whom shall be designated as chairman. The commissioner [of labor and industry] after conferring with the director [apparently known today as the director of the bureau of wages and hours] shall appoint the members of the wage board, the representatives of the employers and employees to be selected so far as practicable from nominations submitted by the employers and employees." (Italics added.)

Petitioners attack the appointment to the board of: Jules J. Schwartz, Director of Industrial and Public Relations for Food Fair Stores, Inc., one of the largest employers in the State engaged in a retail business, with stores from West New York to Atlantic City; and Reese Davis, the operator of a drug store in Morristown, employing, from the affected class, three women and no minors. The third employer representative, the one to whom no objection is taken, is Philip W. Schindel. Parenthetically we might note, while mentioning the composition of the board, that the three public members are: Rabbi Ely E. Pilchik, the chairman of the board; Dr. Arthur Lesser, professor of economics at Stevens Institute; and Dr. Howard Ludlow, assistant professor in the School of Business Administration, Seton Hall University.

The ground of petitioners' attack is that Schwartz and Davis were not "selected so far as practicable from nominations submitted by the employers" (N.J.S.A. 34:11-40, supra). On September 21, 1955, the Commissioner of Labor and Industry gave notice that he was about to appoint the wage board. During the previous summer, in anticipation of this, his subordinate, the Director of the Wage and Hour Bureau, had asked Schwartz (whom he had seen six years before in connection with some matters, but not since) to have Food Fair Stores, Inc. nominate himself (Schwartz) or some one else to serve on the board as an employer member. To that end the Director had even prepared a nominating petition and had it signed on Schwartz' behalf. However Schwartz did not want to serve, and the petition itself was

lost or destroyed. Schwartz suggested the appointment of a subordinate of his, to whom the Commissioner wrote on October 21, 1955, asking him to serve. Thereafter Schwartz heard that the proposed wage order might result in the loss of the 45-hour work week, provided for in Food Fair's North Jersey labor contract; and much upset over this, which he thought would have a very definite adverse effect upon his company, he in a telephone conversation with the Director agreed to serve in his subordinate's place. The Director then on his own undertook to have prepared in Schwartz' behalf a second nominating petition, dated a month later, signed by four individuals, at least three of whom did not know Schwartz.

The attack upon Davis' appointment is based upon the fact that the Director, who incidentally had known Davis' father and uncles well, secured on his own initiative Davis' agreement to serve, and thereafter, also on his own initiative, obtained a letter nominating Davis, signed by another Morristown employer known to the Director. It is to be noted, too, that a couple of months earlier a representative of the Wage and Hour Bureau had called on Davis and ascertained that the minimum wage he paid was $1 an hour.

It should be brought out immediately that no one is charged with a corrupt motive or with the slightest attempt to obtain any commitment to any wage order; nor is there even any contention on petitioners' part that the voices of Schwartz and Davis weakened when advancing the employers' views or that they did not honestly and according to their best judgment press throughout for the employers' interests. We think adequate proof on this matter is furnished by their acts during the various meetings of the board. For example, at one meeting of the board, Davis differing with several members wanted a minimum wage of 85 cents an hour for women, minors and students. At the next meeting Davis and Schwartz joined with Schindel in submitting an extensive statement to the board, representing the employers' viewpoint and arguing for a minimum wage of 75 cents or 80 cents. A motion by Schindel and Davis followed (which they later

withdrew), calling for a minimum wage of 80 cents an hour in certain counties in the State and 70 cents an hour elsewhere. Subsequently Schwartz, Schindel and Davis voted against a $1 per hour minimum (and certain other proposals). Schwartz then moved, with Schindel seconding him (Davis absent), for a 70 cents rate for students under 21. Later, however, after a recess, in which there was considerable discussion, Schwartz and Schindel (Davis absent) both changed their entire position; they joined in two votes (Davis still being absent) approving provisions (except for minor matters) like those embodied in the final order. At the next meeting, five days later, Schindel moved, with Schwartz seconding him (Davis not present), to have the Board's final report (except for the modifications referred to) approved in the form prepared by the secretary of the board, the Director, and the motion was adopted by the eight members present. Then a few minutes thereafter, Schindel inexplicably swung around, refusing to sign the report he had just approved and asking to submit a minority report. This brought on a lively discussion, and Schwartz fairly understandably refused to reverse himself also. Davis, however, who had been absent, later joined Schindel in a forthright minority report. Not only is there no criticism of the manner in which Schwartz and Davis represented employers' interests, but the very record demonstrates that it is not subject to fair criticism.

However, petitioners' attack is of a more technical nature. They claim the Commissioner exceeded the power given to him by the statutory clause: "the representatives of the employers * * * to be selected so far as practicable from nominations submitted by the employers * * *." We think this clause impliedly puts upon the Commissioner, in making a selection, a duty to provide fair representation for the diverse interests among employers. In our view the statute seeks not only representation on the board for the employer bias (in contrast to the disinterestedness demanded of public members -- cf. Thomas v. Ramberg , 245 Minn. 474, 73 N.W. 2 d 195 (Sup. Ct. 1955)), but also some balance among the various employer biases affected. It goes without

saying that with only three appointments to be made, the balancing of these biases can be achieved only in a very rough fashion. Cf. Opp Cotton Mills v. Administrator , 312 U.S. 126, 150, 151, 61 S. Ct. 524, 85 L. Ed. 624, 638, 639 (1941); Golding, "Industry Committee Provisions of the Fair Labor Standards Act," 50 Yale L.J. 1141, 1160 (1941).

In the present case the State Chamber of Commerce and the Retail Merchants Association and, at their bidding, 38 employer organizations and individual employers each separately wrote to the Commissioner, nominating identically the same slate of three persons. No other nominations were forthcoming from the employers; petitioners contend that since it was practicable -- viz. (as they construe the word) possible -- to appoint the three, the Commissioner was required to do so. He did appoint one of the three, Schindel, who was employed by the Limited Price Variety Stores Association (an association of such stores as the red front 5, 10 and 25 cent stores), and who theretofore had been a personnel director in a large department store in Newark and had had a wide experience in department stores. The other two nominees duplicated this background: one was a personnel director in another large department store in Newark and the second was the owner of three small limited price variety stores in Keyport.

The Commissioner therefore had reason to want more diversification and on that basis to include, as he did, Davis as a representative of the suburban drug business, and Schwartz as a representative of the large food chains. In the previous summer the Director had suggested to the State Chamber that it nominate persons of a certain type, and as indicative of the type he went on to name two persons, an executive of the A. & P. Stores and an executive of a Morristown department store. But the Chamber would not go along. Subsequently when he called the Chamber, expressing his unhappiness as to the three ...

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