Reeves v. International Telephone & Telegraph Corp.

357 F. Supp. 295, 21 Wage & Hour Cas. (BNA) 40, 1973 U.S. Dist. LEXIS 13840
CourtDistrict Court, W.D. Louisiana
DecidedApril 27, 1973
DocketCiv. A. 13234
StatusPublished
Cited by16 cases

This text of 357 F. Supp. 295 (Reeves v. International Telephone & Telegraph Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reeves v. International Telephone & Telegraph Corp., 357 F. Supp. 295, 21 Wage & Hour Cas. (BNA) 40, 1973 U.S. Dist. LEXIS 13840 (W.D. La. 1973).

Opinion

OPINION

DAWKINS, Chief Judge.

This action was instituted by Reeves, a microwave field engineer, against International Telephone & Telegraph, his former employer, for 'overtime pay allegedly due under the Fair Labor Standards Act. 29 U.S.C. § 201 et seq.

I. T. & T. is a well known world-wide diversified corporation with substantial earnings. It also is a conglomerate of huge scope, owning stock control over many varied corporations having no connection with the field of electronic communication. (Witness the Ditta Beard Affair of 1971-72.)

There has been no disagreement as to jurisdiction having been conferred upon this Court by the provisions of 28 U.S.C. § 1337.

Defendant contends that plaintiff, as a microwave field engineer, was employed by it in a bona fide executive, administrative, or professional capacity within the meaning of 29 U.S.C. § 213(a)(1) and the regulations issued thereunder; and that he therefore is exempt from the overtime compensation benefits of 29 U.S.C. § 207. We hold otherwise; and our reasons follow:

This decision, the transcript, and evidence upon which it is based are limited to the issue of whether the plaintiff was employed in a bona fide executive, administrative, or professional capacity. All other issues have been pretermitted, by agreement of the parties, until resolution of this question.

Title 29 U.S.C. § 213(a)(1) provides, in pertinent part, the following:

“(a) The provisions of sections 206 and 207 of this title shall not apply with respect to—
“(1) Any employee employed in a bona fide executive, administrative, or professional capacity, . . . (as such terms are defined and delimited from time to time by regulations of the Secretary) . . . .”

It should be foremost in our consideration of this action that exemptions contained in the Fair Labor Standards Act are to be narrowly construed against the employer. Brennan v. Great American, Inc., 477 F.2d 292, 1973 (5th Cir.); Shultz v. Louisiana Trailer Sales, Inc., 428 F.2d 61 (5th Cir., 1970) cert. den’d 400 U.S. 902, 91 S.Ct. 139, 27 L.Ed.2d 139.

The is.sue is clear — if Reeves’ employment does not fall within the scope of the exemptions, then he is covered by the Act and entitled to compensation for overtime pay.

We turn now to the regulations issued by the Administrator of the Wage-Hour Division as directed by the Act. They are found at 29 CFR § 541.0, et seq. These regulations establish certain basic criteria which an employee must meet to be considered exempt under the Act. The regulations provide two standards by which an employer’s claim of exemption may be determined, i. e., the “streamline test” or the “long test.” In applying the “long test,” a court may decide that an employee is exempt from the Act’s coverage only if the conditions of the employee’s employment are such as to satisfy the requirements as set *298 forth in Sections 541.1, 541.2, and 541.3. However, if an employee was paid on a salaried basis of not less than $150 per week at the time of his employment, then the employer’s contention that he is exempt may be determined by the use of the “streamline test” (at present this minimum rate is $200 per week). Therefore, we first must determine whether Reeves was employed on a salary basis, and, if so, was this salary basis at a rate of not less than $150 per week?

Of course, as noted, the burden clearly is upon the employer affirmatively to show that the plaintiff-employee is within the scope of the exemption. Great American, Inc., supra; Idaho Sheet Metal Works, Inc., v. Wirtz, 383 U.S. 190, 86 S.Ct. 737, 15 L.Ed.2d 694 (1966); Louisiana Trailer Sales, Inc., supra.

The Secretary’s interpretations of the General Regulations Subpart A are found at Subpart B of Title 29 CFR, beginning at Section 541.99. Section 541.-118 provides strong guidance for determining when an employee will be considered to be paid on a salary basis within the meaning of the Regulations:

“ . . . [I]f under his employment agreement he regularly receives each pay period on a weekly, or less frequent, basis a predetermined amount constituting all or part of his compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed . . . the employee must receive his full salary for any week in which he performs any work without regard to the number of days or hours worked.”

Of course, defendant urges that plaintiff here made in excess of $150 weekly on a salary basis as required under the interpretation just quoted. The evidence readily bears out defendant’s contention as far as that minimum figure is considered alone. When plaintiff began working for defendant, he was compensated at a monthly salary of $700, or $161.54 a week. Adams, personnel director of defendant during plaintiff’s tenure, testified he had sent plaintiff a letter confirming defendant’s offer of $700 for employment as a microwave engineer. Adams further testified that plaintiff would receive this $161.54 per week, whether he worked 40 hours or not. Gradually, Reeves received yearly increases — not hourly increases — $8400 per year to $9,000, and from $9,000 to $9,500.

He participated in I.T. & T.’s long-term disability insurance plan and also in its hospital and life insurance plan. The carrier for the latter plan for salaried employees was Equitable Life Assurance Society, whereas Travelers Insurance Company was the carrier for those employees paid at an hourly rate. Reeves participated in Equitable’s plan. The former plan was available only to salaried employees and not to persons employed on an hourly basis. Moreover, all witnesses testified that microwave engineers were employed on a salaried basis unless there was a special agreement providing otherwise. Reeves alleges that such a special agreement was entered into; however, Adams says that he had no authority to enter such agreement, which he denies he did enter in the first place with Reeves.

Of course, plaintiff contends he was employed on an hourly basis. He points out that there were over 120 entries from the employer’s pay roll ledger showing an hourly rate of pay; that he was required to keep hourly records, and that he worked for a certain number of hours and was paid a certain wage based on those hours.

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357 F. Supp. 295, 21 Wage & Hour Cas. (BNA) 40, 1973 U.S. Dist. LEXIS 13840, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reeves-v-international-telephone-telegraph-corp-lawd-1973.