The opinion of the court was delivered by: Robert D. Morgan, District Judge.
DECISION AND ORDER ON CERTIFICATE OF REVIEW
This matter is before the Court on a Certificate of Review of
an order entered by the Referee in Bankruptcy on June 27, 1968,
permanently enjoining International Harvester Company, Farmall
Works, from terminating the Debtor's employment because of a
wage deduction order entered by the Referee on January 24,
1968, under Chapter XIII of the Bankruptcy Act, 11 U.S.C. § 1001-1086.
The relevant, undisputed facts are as follows. Harvey L.
Jackson (herein Debtor), an employee of Farmall Works of
International Harvester (herein International), filed a
petition for relief under Chapter XIII of the Bankruptcy Act.
Included in his debts was one to the Farmall Employees Credit
Union (herein Credit Union) for $3,400, secured by a 1966
Debtor is married and supports one child. His take-home pay at
International was $105 a week at the time of the first meeting
of creditors. The Wage Earner Plan provided for payments of
$216 per month, with secured debts to be paid first, and
contained a provision allocating a minimum of $100 per month to
the Credit Union.
On April 14, 1967, the Referee entered an order confirming the
Plan and appointing a trustee who was to disburse the funds to
the creditors according to the Plan. Sixteen creditors, with
total obligations of $8,469.89, filed claims. Included in the
claims was one by the Credit Union, which accepted the Plan,
for the amount of $3,624.10. Thereafter, the Credit Union filed
a reclamation petition for the automobile. On July 28, 1967,
the Referee entered an order allowing the reclamation petition
and ordered that the car be reclaimed in full payment of the
Debtor failed to make regular payments to the trustee; and on
January 24, 1968, at the request of the trustee, the Referee
entered an order requiring International to deduct $30 each
week from the wages of Debtor and to pay the same to the
trustee. International complied with the order, but thereafter
notified Debtor that his employment would be suspended, and
eventually terminated, unless the wage deduction order was
released under the terms of a provision concerning demands
against wages in International's collective bargaining
agreement, which provision has been in the contract since 1955.
On February 12, 1968, Debtor filed a petition with the Referee
requesting that International be enjoined from suspending or
terminating his employment. On that day the Referee temporarily
enjoined International from terminating or suspending Debtor by
reason of the wage deduction order.
By agreement with the Credit Union, upon request of an employee
in writing, International does make deductions from an
employee's wages or salary and disburse it to the Credit Union;
and at the time of the hearing almost 3200 employees were
having weekly deductions made for the Credit Union, either for
member savings or loan repayments. The Company also makes many
deductions, upon request of the employee, to purchase U.S.
Bonds, as well as tax deductions required by law. Total
employment at the Farmall Works is about 3650.
On June 27, 1968, the Referee permanently enjoined
International from terminating the employment of Debtor because
of the wage deduction order. Petition for Review was filed with
the Referee by International on July 2, 1968. The Certificate
was filed in this Court on July 26, 1968. Oral arguments were
heard by this Court on September 11, 1968, and International
filed an additional written brief and argument at that time.
The ultimate and only real question here is: Does the Referee
have legal authority under these circumstances to enjoin
International from terminating the Debtor's employment because
of the wage deduction order? The Court concludes that he does.
This authority is believed to exist quite clearly under Section
658 and Section 2(a) (15) of the Bankruptcy Act (11 U.S.C. § 1058
and 11(a) (15)).
Section 658 of the Act provides with respect to Wage ...