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GOLDBERG v. ARKANSAS BEST FREIGHT SYSTEM

July 20, 1962

ARTHUR J. GOLDBERG, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
ARKANSAS BEST FREIGHT SYSTEM, INC., DEFENDANT.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

On November 1, 1961, plaintiff filed his complaint in the United States District Court for the Eastern District of Arkansas, Western Division, seeking judgment permanently enjoining and restraining defendant and all persons acting or claiming to act in its behalf and interest from violating the provisions of Sections 15(a)(2) and 15(a)(5) of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. §§ 215(a)(2) and 215(a)(5).

The defendant, Arkansas Best Freight System, Inc., is a corporation organized and existing under and by virtue of the laws of Arkansas with its principal business office in the City of Fort Smith, Sebastian County, Arkansas. It also owns, operates and maintains branch terminals at Little Rock, Ark., Shreveport, La., and elsewhere. It is a common carrier of motor freight, licensed by the Interstate Commerce Commission, and is now and at all times pertinent herein has been engaged in the transportation of goods in interstate commerce to and from its principal establishment in Fort Smith, Arkansas, its branch terminals located in Little Rock, Arkansas, Shreveport, Louisiana, and in eight other states.

On December 18, 1961, defendant filed its answer in which it admitted that it had employed and was then employing several hundred employees in its several places of business, but denied that it had violated the provisions of Sections 6 and 7 of the Act, 29 U.S.C.A. §§ 206 and 207, or any of the provisions of any regulation or order of the Administrator issued under said Act. Denied that it violated any of the provisions of Sec. 11(c) of the Act, or any regulation or order made or continued in effect under the provisions of Sec. 11(d) of the Act, 29 U.S.C.A. § 211(c) and (d). Denied that it had violated Secs. 15(a)(2) and 15(a)(5).

Jurisdiction of the action is conferred upon the court by Sec. 17 of the Act, 29 U.S.C.A. § 217.

On January 19, 1962, the court for the Eastern District of Arkansas, Western Division, by order, transferred the case to this court.

By use of discovery procedures and stipulation of counsel, the parties have narrowed very substantially the issues first raised by the complaint and answer. Originally, there was involved the question of whether 16 employees of the defendant were exempt from the provisions of Sections 6 and 7 of the Fair Labor Standards Act. By stipulation it was agreed that through changes in the character of the employment, or increases in salary, or other facts, five, Charles Cox, Carl L. Mizell, William Bonn, David Stubblefield, and William Duff, of the 16 employees were exempt from the provisions of the Act at the time of the trial; that one, E.E. Barrentine, was not involved for the reason that he was no longer employed by defendant; that five other employees, Morris H. Voan, Prentice Shelby, Fred Parker, Ralph Abbott, and James O. Smith, classified as over-the-road dispatchers were not presently exempt and that the defendant would comply with the Act as to them; that another, Dave Roberts, is not now exempt but defendant agreed that it would comply with the Act as to him or the position he presently occupies. As a result, there was left for determination only the issues of whether Jerry Trantham, parts manager at Little Rock; Sam McCright, equipment control manager at Little Rock; Herman Reed, city dispatcher at Little Rock; and Paul Pope, city dispatcher at Fort Smith, were exempt from the provisions of the Act.

At the trial the defendant claimed exemption for Trantham and McCright under the provisions of Sec. 13(a) of the Act as administrative employees, with an additional exemption claimed for McCright under Sec. 13(b)(1), commonly known as the Motor Carrier Exemption, which exempts from coverage of certain portions of the Act employees whose hours are subject to regulation by the Interstate Commerce Commission.

Exemptions were claimed for the two city dispatchers, Herman Reed of Little Rock and Paul Pope of Fort Smith, as administrative employees and also under the motor carrier exemption,

In its brief the defendant states:

    "The defendant must concede at the outset that
  it does not believe the claim of motor carrier
  exemption is applicable in the case of either
  [any] of these four employees, since neither
  [none] of them falls within the category of
  employees considered entitled to this exemption,
  that is, drivers, drivers' helpers, loaders and
  mechanics."

However, the defendant does earnestly and strongly contend that each of the four employees is exempt under the administrative exemption as set forth in 29 C.F.R., Sec. 541.2, 29 U.S.C. App. pp. 551-552.

By Sec. 13 of the Act, 29 U.S.C.A. § 213(a), the maximum hours and minimum wage requirements are made inapplicable, inter alia, to "any employee employed in a bona fide * * * administrative * * * capacity * * * (as such terms are defined and delimited [from time to time] by regulations of the Administrator) * * *."*fn1

The applicable regulations as set forth on page 4 of plaintiff's brief are as follows:

    "The term `employee employed in a bona
  fide * * * administrative * * * capacity' in
  section 13(a)(1) of the act shall mean any
  employee:
    "(a) Whose primary duty consists of the
  performance of office or nonmanual field work
  directly related to management policies or
  general business operations of his ...

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