defendant reasonable grounds to believe it was not violating the Act between June 15, 1940 (no date in June was given so I have taken the medium of the 15th), and May, 1, 1943?
It is a settled principle of law that where a person deals with an agent, it is the duty of said person to ascertain the agent's authority. The burden is on the party relying on the acts of the agent to establish the Act, upon which reliance is placed, and that the act upon which he relies was within the agent's authority. An agency is a warning to one dealing with said person, that he does so at his peril, whether the agent has the authority which he assumes. Ferro Concrete Construction Co. v. United States et al., 1 Cir., 112 F.2d 488, certiorari denied 311 U.S. 698, 61 S. Ct. 136, 85 L. Ed. 452; 54 Fed.Dig.,Principal and Agent 147(2).
The statements of the inspectors that no change need be made, or their passive actions of saying or doing nothing relative to the method used by the defendant, to compute overtime compensation, at first impression, indicates the defendant acted in 'good faith' and reasonable ground existed to believe no violation existed. This impression is met by the consistent and repeated interpretations issued by the Administrator to the effect that computation of overtime had to include incentive bonus earnings.
Under any stretch of imagination I cannot bring my mind to the conclusion that the defendant had such reasonable ground to believe it was doing right and that 'good faith' existed, such as would exonerate the defendant from any liability for liquidated damages. The plaintiffs are, therefore, entitled to liquidated damages in an amount equivalent to that which is found to be due for overtime compensation for the period from October 24, 1938 to June 15, 1940.
However, I believe some reasonable ground existed to so believe, and, in the exercise of the discretion imposed by Section 11 of the Portal-to-Portal Act, for the period between June 15, 1940, and May 1, 1943, liquidated damages will be imposed in an amount equivalent to fifty percent of the amount which it is subsequently determined the plaintiffs are entitled to recover for overtime compensation.
The question then arises as to the amount of attorneys' fees to which counsel for the plaintiffs are entitled. This determination is attended with some difficulties. The case has required a great deal of time and research, and in addition to the services performed which I believe should be considered, the amount of recovery must also be evaluated. Kerew v. Emerson Radio and Phonograph, D.C., 76 F.Supp. 197; Baker et al. v. California Shipbuilding Corporation, D.C., 73 F.Supp. 322.
The only fees to which the attorneys for the plaintiff are entitled will be a reasonable fee awarded by the Court. Any agreement between the plaintiffs and their counsel for an additional fee on a contingent basis, or any other understanding, would be contrary to the purpose of Congress to have the employee collect and return unpaid wages and liquidated damages. Harrington, Appellant, v. Empire Construction Co., 4 Cir., 167 F.2d 389; Skidmore et al. v. John J. Casale, Inc., 2 Cir., 160 F.2d 527; Aucoin v. Mystic Waste Co., D.C., 55 F.Supp. 672; Hutchinson v. William C. Barry, D.C., 50 F.Supp. 292.
The entry of an amount of attorneys' fees will, therefore, be deferred until disposition is made of the various questions which I have heretofore stated.
Judgment for entry of costs will also be deferred for the same reason.
Counsel are directed to collaborate and endeavor to prepare appropriate findings of fact, conclusions of law, and judgment in accordance with and in conformity to the views expressed in the foregoing conclusions of the Court on or before September 15, 1948. If this is not possible, the matter will be referred to a Master on September 15, 1948, for the purpose of determining the questions which exist as to the amount of liability.