requirement merely provides that an employer who pays a certain straight time rate for a particular job must, if the job is performed during overtime hours, pay not less than one and one-half times the straight time rate. Penn Packing has not failed to satisfy this requirement; the requirement simply cannot be reconciled with the facts of this case. In such a situation we believe that an employer satisfies the provisions of 29 U.S.C. § 207(g)(2) when he meets all requirements other than the one in question, agrees with his employees to pay an hourly rate in excess of the applicable minimum wage and scrupulously adheres to the requirement that he pay one and one-half times that rate during overtime hours. In so holding, we in no way depart from the settled doctrine that to qualify for an exemption under the Act, an employer must meet all of the requirements of the exemption. We merely hold that, because under the unusual circumstances of this case the employer is unable either to literally comply or fail to comply with the requirement in question, he may qualify for the exemption if he satisfies all other requirements of 29 U.S.C. § 207(g)(2) and does not violate the spirit of this particular requirement, i. e., that an employer cannot pay one rate during straight time hours and a lower rate for the same work during overtime hours.
We come then to the government's second contention, that if the exemption is applicable, the rate upon which overtime should have been based was $3.00 per hour, the rate which Penn Packing had paid to the outside employees who previously did the cleanup work. This question turns upon whether $3.00 was the established hourly rate for the cleanup work. We conclude that it was not. The collective bargaining agreement between Penn Packing and the employee's union does not establish any rate for cleanup work. The rate was never paid to any regular employee of Penn Packing, but only to part-time employees and only on weekends. The rate is an inflated one for the type of work which was done and reflects, we think, the fact that the rate was paid to part-time employees who were sure of only a limited number of hours' work and had to work during weekends and would likely not have felt it worth their while to work at a lower rate.
We do not believe that payment of $3.00 per hour under these circumstances made that rate the "established rate" for general cleanup work. Consequently we see no reason why the parties could not agree in good faith to a base rate less than the $3.00 per hour previously paid to the outside employees.
The government has also attempted to show that Penn Packing did not pay its employees overtime compensation for the cleanup activity, but that the $2.75 or $3.00 per hour was a flat rate. We disagree. The government's only evidence in this regard was the payroll records which in some instances broke down overtime compensation into a base rate of $1.8325 and a total rate of $2.75 per hour but in a majority of instances indicated only payment of $2.75 per hour without breaking it down into a base rate plus overtime. This factor is not significant, however, if the employees understood that the $2.75 per hour which they received included overtime compensation. "The important objective is assurance that the employees and the employer are aware that overtime compensation in a specific amount is included in the contract." Wirtz v. Harper Buffing Machine Company, 280 F. Supp. 376, 381 (D. Conn. 1968); Nunn's Battery & Electric Co. v. Goldberg, 298 F.2d 516 (5th Cir. 1962). As the evidence demonstrates beyond question that the employees when they made their agreements with Penn Packing were aware that they were receiving a base rate plus overtime or a rate which included time and one-half overtime compensation, the method of compensation was valid.
Although we have concluded that Penn Packing satisfied the requirements of the 29 U.S.C. § 207(g)(2) exemption with respect to the seven employees who performed weekend cleanup work, we reach a contrary conclusion with respect to Howard Kessler.
Kessler, in addition to his regular employment as a salesman, was employed by the company on Friday evenings checking in truckdrivers. Kessler testified that he was compensated for this work at a flat rate of $2.50 per hour. He further testified that there was no understanding on his part that the $2.50 included overtime compensation. This method of compensation therefore violated the overtime requirements of the Act. Wirtz v. Harper Buffing Machine Company, supra.
The government also contends that Penn Packing violated the Act's record keeping requirements. This contention arises from defendant's alleged failure to comply with its duty to (1) record the exact date of the agreements between defendant and its employees regarding the cleanup work
and (2) to record the number of overtime hours worked at each hourly rate, i. e., to break down the employees' overtime hours into overtime hours worked at their regular jobs and overtime hours devoted to the cleanup activity. We find no violations.
At trial, the government introduced payroll records of Anthony Foglia for the week of September 22, 1966 and of Gerald Friedman for the week of August 8, 1965. In each instance there is a notation of the total number of overtime hours worked and the total amount of overtime compensation. Neither the hours nor the compensation is segregated according to the kind of work performed during those hours. However, we cannot conclude from this evidence that Penn Packing violated the Act's record keeping requirements. The government did not prove that these employees were performing weekend cleanup activity at the time represented by these payroll records. There is no indication that the employees performed two or more kinds of work during overtime hours for those weeks. Thus we are left to speculate whether those payroll records are insufficient under the Act or whether they accurately reflect the fact that only one kind of overtime work was performed.
Had the government proved, for example, that Foglia performed his regular job and weekend cleanup activity during 1966 and that his payroll records consistently failed to indicate the performance of two types of work, we could conclude that the records are insufficient. However, the government has shown only that for one week there is no indication of two kinds of overtime work. This is insufficient evidence of a violation.
In addition, as previously stated, the parties stipulated as to the amount of back wages, if any, which are due to Penn Packing employees. In order to compute this, the parties had to know the number of hours of cleanup work performed by the employees. Consequently it would appear that Penn Packing's records did indicate the overtime hours of its employees which were devoted to cleanup work.
The final question presented is whether an injunction should issue against Penn Packing to bar future violations of the Act. This question is addressed to the sound discretion of the trial Court. Wirtz v. Atlas Roofing Mfg. Co., 377 F.2d 112 (5th Cir. 1967). In determining whether to issue such an injunction, relevant factors for the Court's consideration are:
"the employer's previous actions of non-compliance or litigation, the moral and business responsibility of the employer, the extent of which promises of future compliance are something more than empty, idle words unmatched by the institution of effectual corrective procedures, or are undependable contritions under pressure of legal action, whether litigious contention is the legitimate good faith quest for legal determination or the mere pretense, for past or future actions, to thwart effective compliance." Mitchell v. Hodges Contracting Co., 238 F.2d 380, 381 (5th Cir. 1956); Goldberg v. Cockrell, 303 F.2d 811, 813 (5th Cir. 1962).
In this case the actions on the part of Penn Packing have been consistent with a good faith effort to comply with the provisions of the Act. We have found violations only with regard to two employees, Brown and Kessler, and in each case defendant could sincerely and reasonably have believed that its method of compensation did not violate the Act. Moreover, the government originally charged Penn Packing with failing to pay proper compensation to employees in addition to those which we have discussed. Defendant stipulated to the amount of back wages owed to those employees and paid them that amount to comply with the provisions of the Act. Accordingly, we have no reason to believe that defendant will not comply in the future and we will not issue an injunction. Wirtz v. Old Dominion Corporation, 286 F. Supp. 378 (E.D. Va. 1968); Wirtz v. Sullivan, 326 F.2d 946 (5th Cir. 1964).
Conclusions of Law
1. The Court has jurisdiction of the parties and the subject matter of this action.
2. Allan Brown and Howard Kessler are not "administrative personnel" within the meaning of Section 13(a)(1) of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 213(a)(1).
3. Penn Packing violated Section 7(a)(1) of the Act as amended 29 U.S.C. § 207(a) (1) by failing to pay Brown and Kessler overtime compensation for hours worked in excess of the statutory maximum.
4. Penn Packing violated Section 7(a)(1) of the Act as amended 29 U.S.C. § 207(a) (1) by failing to pay adequate overtime compensation to Howard Kessler for his secondary employment on Friday evenings.
5. Penn Packing's compensation of employees Brown, Foglia, Friedman, Roccia, Rose, Staniec and Wojiechowski was valid under the exemption provided by Section 7(g)(2) of the Act as amended 29 U.S.C. § 207(g)(2).
6. Penn Packing did not violate the Act's record-keeping requirements.
7. No injunction should issue against Penn Packing.
The Government shall within 30 days submit an order in accordance with this opinion.