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Walling v. Swift & Co.

October 27, 1942

WALLING, ADM'R OF WAGE AND HOUR DIV., DEPT. OF LABOR,
v.
SWIFT & CO.



Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Michael L. Igoe, Judge.

Author: Minton

Before SPARKS, KERNER, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

The plaintiff, as Administrator of the Wage and Hour Division of the Department of Labor, broght suit against the defendant to enjoin it from violating Sections 7, 15(a)(1) and 15(a)(2) of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A., Section 201. The bill alleged that the defendant in the manufacture of goods for commerce had failed to pay its employees time and a half for overtime in excess of the applicable statutory workweek, and was shipping goods so manufactured in interstate commerce.

The defendant replied, denying the violations and claiming exemption of its employees under Section 7(c) of the Act, which reads as follows: "In the case of an employer engaged * * * in handling, slaughtering, or dressing poultry or livestock, the [overtime] provisions * * * during a period or periods of not more than fourteen workweeks in the aggregate in any calendar year, shall not apply to his employees in any place of employment where he is so engaged."

The defendant is a large packer engaged in handling, slaughtering and dressing poultry and livestock for the consumer's market. In the livestock processing, the defendant processes cattle, hogs, calves and sheep at its Chicago plant, which is the only plant of the defendant involved.

The court found the facts to be as the plaintiff alleged, but that certain employees of the defendant were engaged in the handling, slaughtering and dressing of poultry and livestock within the exemption of Section 7(c). The employees within this exemption worked in some sixteen departments of the defendant's plant engaged in the handling, slaughtering and dressing of livestock. The court therefore granted the injunction as to all employees of the defendant except the employees in the sixteen departments which the court found came within the exemption of Section 7(c). As to the employees under Section 7(c), the court provided: "Except that during a period or periods of not more than fourteen (14) workweeks in the aggregate in any calendar year the defendant may employ any employee engaged throughout each workweek of such period or periods in handling, slaughtering or dressing livestock, as those terms have been construed by this Court, which construction is hereinafter set forth, and any employee engaged throughout each workweek of such period or periods in those portions of the plant of the defendant devoted to handling, slaughtering or dressing of livestock, all of whose work in each such workweek is a necessary part of handling, slaughtering or dressing of livestock, for a workweek longer than forty (40) hours without paying the said employee wages for his employment in excess of forth (40) hours in such workweek at a rate not less than one and one-half times the regular rate at which he is employed. The fourteen (14) workweeks may be taken by the employer as to employees individually rather than as a group so long as each employee for whom the exemption is taken is throughout each of such workweeks engaged in handling, slaughtering or dressing livestock, as those terms are hereinafter construed, or throughout each of such workweeks is engaged in an occupation wholly within the portions of the plant of the defendant devoted to handling, slaughtering or dressing of livestock, which occupation is a necessary part of the handling, slaughtering or dressing of livestock.The defendant may not, however, employ any such employee in or about its plant at the Union Stockyards, Chicago, Illinois, for more than fourteen (14) workweeks in the aggregate in any calendar year unless the said employee receives compensation for his employment in excess of forty (40) hours in such workweek at a rate not less than one and one-half times the regular rate at which he is employed."

No question arises on this appeal as to the limitation of Section 7(c) to the sixteen departments of the defendant engaged in handling, slaughtering and dressing livestock. The plaintiff has challenged here the application of this exemption to the employees who work in these departments that are engaged in handling, slaughtering and dressing of livestock. The contested issue is as stated by the plaintiff in his brief, and we quote: "Whether the fourteen workweeks exemption granted by Section 7(c) of the Fair Labor Standards Act for the handling, slaughtering or dressing of livestock, must be taken by the employer during the same workweeks for all the employees in the place of employment who are within the scope of exemption, or whether, as held by the District Court, the employer may take the exemption as to each employee individually."

As we understand the application as contended for by the plaintiff, it would operate something like this:

Although the defendant processes cattle, hogs, calves and sheep, in the processing of each of which peaks occur which cannot be forecast and may occur in the processing of each of these different animals at the same or different times, if the peak comes on in cattle and runs for the full fourteen weeks, requiring overtime in this department, and no hogs, calves or sheep are killed at all and peaks may thereafter occur in the processing of each of them, the right to work the employees overtime in these departments without liability for time and one-half has been exhausted. In other words, whenever overtime is claimed for a week for any number of employees in the one department, notwithstanding the fact that the other three departments were not working at all, an overtime week is charged up against them also.

Under the application of this exemption as contended for by the defendant and authorized by the decree of the District Court, the defendant could apply the exemption to the individual employees in the exempt departments, but no employee could be worked in the aggregate more than fourteen weeks' overtime without being paid time and one-half therefor.

Let us assume there are one hundred men in the cattle department. Under the plaintiff's interpretation, if overtime were claimed for a week for ten men in the cattle department, it would mean a week claimed for all the men in the cattle department who had not worked overtime, as well as all of the men in the hog, sheep and calf departments who had not worked any overtime, whereas under the defendant's construction and that approved by the District Court's decree, the week's overtime would apply to the ten individuals who worked and to no one else.

Thus it will be seen that the defendant's construction and that of the District Court permits of greater flexibility, and enables the employer, by applying the exemption to the individual employee, to meet the peak in any part of the departments engaged in handling, slaughtering or dressing purltry or livestock. It was the purpose of Congress, in granting this exemption, to enable the employer to avoid the burden of time and one-half for overtime in those seasonal or peak periods when he must work to take care of the product on the market, the amount of which depends upon factors beyond his control. If the plaintiff's contruction is adopted, it is obvious that the processor could not protect himself against all the peaks that might come in his business within an aggregate of fourteen weeks. On the other hand, applying the exemption in accordance with the defendant's contention and that of the District Court, the peaks could be met and no employee within the exempt departments be compelled to work in the aggregate more than fourteen weeks without being paid time and a half for overtime.

Under the application contended for by the plaintiff, discrimination would exist between different packers. For instance, take a packer who employed fifty men and they killed hogs and cattle, and the fifty men worked on both indiscriminately. These fifty men could be exempt for fourteen weeks, or a total of seven hundred man weeks. But if a packer employed twenty-five men killing cattle and twenty-five men killing hogs, and the cattle men worked fourteen weeks overtime, or three hundred and fifty man weeks, the ...


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