Bay Ridge Operating Co., Inc. v. Aaron, 334 U.S. 446 (1948)
Bay Ridge Operating Co., Inc. v. Aaron
No. 366
Argued January 12, 1948
Decided June 7, 1948 *
334 U.S. 446
CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE SECOND CIRCUIT
Syllabus
A collective bargaining agreement between a longshoremen’s union and employers, affecting employment in interstate and foreign commerce, provided for "straight time" hourly rates for work done during certain daytime hours on weekdays and "overtime rates," approximately 150% of "straight time" rates, for work done during all other hours and on Sundays and holidays. It made no provision for a differential in pay for work in excess of 40 hours per week. Longshoremen work irregular hours, and frequently work for several different employers during a single week. Respondent longshoremen, some of whom had worked only outside "straight time" periods and had been paid "overtime rates," sued to recover additional overtime compensation allegedly due them under the Fair Labor Standards Act for work in excess of 40 hours per week.
Held:
1. The "straight time" rate provided for by the agreement does not constitute the "regular rate" which § 7(a) of the Fair Labor Standards Act requires to be used in computing the statutory minimum payment ("not less than one and one-half times the regular rate") for work in excess of 40 hours. Pp. 459-477.
2. Walling v. Belo Corp., 316 U.S. 624, distinguished. Pp. 462-463.
3. Contract declarations, even though the result of collective bargaining, are not conclusive as to what is the "regular rate" within the meaning of § 7(a). Pp. 463-464.
4. Determination of the "regular rate" for each individual must be drawn from what happens under the employment contract. P. 464.
5. The "regular rate" is to be found by dividing the number of hours worked into the total weekly compensation received, less the amount of any "overtime premium." Pp. 464-465.
6. "Overtime premium," deductible from total compensation received in computing the "regular rate," is any additional sum received by an employee for work because of previous work for a specified number of hours in the workweek or workday, whether the hours are specified by contract or statute. Pp. 450, n. 3, 465-471.
7. Where an employee receives a higher wage or rate because of undesirable hours or disagreeable work, such wage represents a shift differential, rather than an overtime premium, and must enter into the determination of the "regular rate" of pay. The extra pay provided in "overtime" rates under the agreement in this case represents a shift differential, and not an overtime premium. Pp. 466-471.
8. The fact that the contract "overtime" rates were designed to concentrate the work of the longshoremen in the straight time hours is irrelevant to the determination of the respondents’ "regular rate" of pay. P. 470.
9. The purpose of the overtime compensation requirement of § 7(a) is not only to spread employment, but also to compensate an employee in a specific manner for the strain of working longer than 40 hours. P. 470.
10. It is unnecessary in this case to determine what were respondents’ "regular working hours," since regular working hours under a contract, even for an individual, have no significance in determining the rate of pay under the statute. Pp. 471-474.
11. Since the so-called "overtime" rates paid under the contract in this case actually represented a shift differential, and had no relation to the number of hours previously worked during the week, their payment did not meet the requirements of § 7 of the Fair Labor Standards Act. Pp. 474-476.
12. Each respondent is entitled to receive compensation for his hours worked in excess of 40 at 1 1/2 times his regular rate, computed as the weighted average of the rates worked during the week. P. 476.
13. In computing the amount to be paid, the employer may credit against the obligation to pay statutory excess compensation the amount already paid to each respondent which is allocable to work in those excess hours. The precise method of computing this credit and finding the exact amount due respondents is left to the District Court on remand. Pp. 476-477.
14. On remand, the District Court may consider any defense which the employers may have under the Portal-to-Portal Act, and may allow any amendments to the complaint or answer or any further evidence which the court may deem just. P. 477.
162 F.2d 665 modified and affirmed.
Respondents sued petitioners to recover unpaid overtime compensation allegedly due under the Fair Labor Standards Act. To the extent that the judgment of the District Court was adverse, 69 F.Supp. 956, respondents appealed, and the Circuit Court of Appeals reversed. 162 F.2d 665. This Court granted certiorari. 332 U.S. 814. Modified and affirmed, p. 477.