hours at the base, or minimum wage rate of $3.35 per hour.
13. On March 6, 1981, Mrs. Christman was directed by Mr. Barry Box, Operations Manager for Corporate respondent, to accumulate all overtime hours worked by a Dining Room employee during the first week of the two-week pay period, without entering it in the time records, and credit such hours as straight time in the following week. If any overtime hours remained after the second week, she was directed by Mr. Box to compute them at a two-thirds rate, thereby treating all overtime as straight time. For example, if 9 hours of overtime were worked during the two-week pay period, she would show in the records 6 hours of overtime at time and a half and not include the remaining 3 hours. The net result was that 9 hours of overtime would be paid at the straight time rate.
14. When Mrs. Christman left Corporate respondent's employ in October 1981, she explained the concealment procedure to her successor, Leonard Masker, who continued in the same manner.
15. In November 1981, Mr. Masker inquired of Mr. Box as to whether this procedure should continue and was told by Mr. Box that the true number of overtime hours should not be included but that a two-thirds rate should be utilized to show that some overtime was being paid inasmuch as the U.S. Department of Labor had been aware of prior overtime violations.
16. Mr. Box occupied a position of corporate authority, had supervisory duties over the dining room operation and acted on behalf of the Corporation in willfully and fraudulently devising the plan of overtime concealment.
17. There is no competent evidence in the record indicating that respondent Leroy B. Guccini participated in, or was aware of, this concealment policy.
18. Inasmuch as the time and a half computation was based on the minimum wage of $3.35 per hour ($2.01 salary and $1.34 tips), respondents cannot reduce an overtime award by a tip credit.
19. Respondents cannot claim any more time deductions for the period during which dining room employees were eating meals provided by respondents as (a) there was no policy under which an employee's time would be reduced for this purpose; (b) no records were kept from which the appropriate amount of time could be computed; and (c) the Government allowed some time, acceptable under the circumstances, for such eating period.
The record amply demonstrates a calculated scheme, engineered by a prominent corporate official, to deprive the Lakeview Dining Room employees of the overtime benefits provided for under the Act. In light of the injunction by this court then in effect, the violation by Mr. Box was a flagrant one. His misconduct is imputable to respondents, his statutory employers.
There has been no showing that the Corporation had reasonable grounds for believing that Box's actions did not violate the Act and, consequently, an additional award of liquidated damages under 29 U.S.C. § 216(b) is fully warranted. Marshall v. Brunner, 668 F.2d 748 (3d Cir. 1982). However, as to Leroy B. Guccini, individually, I reach a different conclusion on the liquidated damages issue. I am satisfied that there is no credible evidence linking him to the scheme. Under the Portal-to-Portal Act, 29 U.S.C. § 260, the court has discretion to award no liquidated damages if persuaded that an employer acted in good faith and had reasonable grounds for believing that he was not violating the Act. As to the good faith requirement, I believe Mr. Guccini was a sincere credible witness and accept his testimony that he was unaware of Mr. Box's machinations and thought that the Act and the prior order of this court were being complied with. Objectively, the testimony indicated that Mr. Guccini had nothing to do with the compilation, supervision, or review of the time and payroll records. Additionally, although there were nine separate departments in the resort operation, the Lakeview Dining Room was the only one in which violations were found. If there had been a corporate-wide intention to circumvent the overtime provisions of the Act, then it would be expected that some of the other departments would be similarly implicated. This fact provides corroborative support for my conclusion that Mr. Guccini should be absolved from the award for liquidated damages.
Concerning the computation of hours worked, the petitioner produced the time records kept by Mrs. Christman which indicate the number of hours worked by each employee according to the time the employee signed in for work and signed out when work was completed. While employees were entitled to receive meals during the workday, there was no record showing to what extent employees took advantage of this entitlement and how much time was expended while eating. There was testimony that some employees did not eat meals, especially during busy periods, and that others ate "on the run" while working. Because of the absence of records revealing the actual time spent by employees for meals, it would be pure speculation for me to attempt to reconstruct the appropriate amount of mealtime credit. When records are incomplete, the employer cannot complain of the adverse consequences visited upon him for the failure to maintain precise records as required under the Act. See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 688, 90 L. Ed. 1515, 66 S. Ct. 1187 (1946). The meal credit time allowed by the Department of Labor Investigator, therefore, though not generous, has not been effectively refuted.
Conclusions Of Law
1. This court has jurisdiction of the parties and the subject matter of this action.
2. Failure of respondents to compensate their employees at a rate of time and a half of their regular rate for hours worked over 40 in a workweek violated Section 7 of the Fair Labor Standards Act for which they are legally obligated in the amount of $5,442.24.
3. Respondent, White Beauty View, Inc., through Operations Manager Barry Box, is legally obligated to pay an equal amount of $5,442.24 in liquidated damages.
4. Respondents are adjudged to be in contempt of this court's order of March 9, 1981.
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