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Marshall v. Brunner

decided: January 14, 1982.

RAY MARSHALL, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, APPELLEE
v.
RUTH A. BRUNNER, EXECUTRIX OF THE ESTATE OF ROBERT BRUNNER, DECEASED, AND RUTH A. BRUNNER, INDIVIDUALLY AND AS SUCCESSOR TO ROBERT BRUNNER, APPELLANT; RAY MARSHALL, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR APPELLANT V. RUTH A. BRUNNER, EXECUTRIX OF THE ESTATE OF ROBERT BRUNNER DECEASED, RUTH A. BRUNNER INDIVIDUALLY AND SUCCESSOR TO ROBERT BRUNNER APPELLEE



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Before Seitz, Chief Judge, Garth, Circuit Judge and Cahn, District judge*fn*

Author: Garth

Opinion OF THE COURT

The Secretary of Labor, in a complaint that charged Brunner*fn1 with violations of the Fair Labor Standards Act of 1938, sought an injunction against future violations of the Act, back pay for Brunner's employees, and the imposition of liquidated damages in an amount equal to the back pay. After a trial on the merits, the district court, 500 F. Supp. 116, entered judgment granting the Secretary's request for an injunction against future violations of the Act and for recovery of back wages totalling $112,437.05. The court declined to award any liquidated damages. Both Brunner and the Secretary appeal.

While these appeals present questions involving the coverage of Brunner's enterprise within the ambit of 29 U.S.C. ยง 203(s), the issue with which we are most concerned is whether the district court committed legal error when it concluded that an award of liquidated damages in favor of the Secretary was not justified.

We affirm all rulings of the district court, except its decision refusing to award liquidated damages.

I.

Brunner was engaged in the business of collecting garbage, trash, and scrap metal from homes and a number of commercial enterprises in thirteen municipalities in Allegheny County. The Wage and Hour Division of the Department of Labor conducted an investigation of Brunner's business through January of 1977. The investigation uncovered evidence of extensive violations of the minimum wage, maximum hours, child labor, and record keeping provisions of the FLSA. During the investigation, officials of the Wage and Hour Division and Brunner's own counsel specifically warned Brunner about the importance of complying with the Act's record keeping requirements and its prohibitions against child labor. Despite this advice, the time cards which Brunner then began keeping were inaccurate and Brunner also employed other measures to conceal the lengthy hours that the employees actually worked. In addition, Brunner continued to employ minors in violation of the Act. (Fdgs. 23-28, A.234-36). On May 27, 1977 the Secretary filed this suit.

At trial, Brunner maintained that the Company was not required to comply with provisions of the FLSA because it was a local enterprise whose employees were not engaged in commerce, did not produce goods for commerce, and did not handle goods that had been moved in, or produced for, commerce. The district court rejected this argument, and concluded that the Company was subject to the FLSA and that it had violated the minimum wage, maximum hours, child labor, and record keeping provisions of the Act. From the evidence, the district court concluded that Brunner's employees worked an average of 56 hours during a five-day workweek and were not paid the applicable minimum wage or time-and-one half for hours worked in excess of forty hours per week.

As a consequence, the district court enjoined Brunner from violating the Act, and awarded $112,437.05 in back pay to the affected employees. The district court, however, refused to assess Brunner with liquidated damages in the same amount. These appeals*fn2 followed.

II.

The coverage of the Fair Labor Standards Act extends to employees employed in "an enterprise engaged in commerce or in the production of goods for commerce."*fn3 Section 203(s) of the Act provides that such an enterprise is one

which has employees engaged in commerce or in the production of goods for commerce, or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person, ...*fn4 (emphasis added).

The parties' stipulations reveal that Brunner used "trucks, truck bodies, tires, batteries, and accessories, sixty-gallon containers, shovels, brooms, oil and gas" that had been manufactured out of state and had moved in interstate commerce. (App. at 21-22). The district court thus concluded that Brunner is subject to the Act, since its ...


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