McComb v. Shepard Niles Crane & Hoist Corp.
United States Court of Appeals for the Second Circuit
171 F.2d 69 (1948)
- Written by Kelsey Libby, JD
Facts
Shepard Niles Crane & Hoist Corporation (Shepard) (defendant) employed about 450 people. Starting in 1940, Shepard began making bonus payments to its employees in addition to their regular hourly compensation. Shepard paid the bonuses according to each recipient's straight hourly rate. The bonuses were approved at the discretion of Shepard’s board of directors and distributed at approximate three-month intervals for several years. The bonuses were treated as wages for most legal purposes, but Shepard did not include them as part of the employees’ regular rate for purposes of calculating overtime. The administrator of the Wage and Hour Division of the Department of Labor (the administrator) (plaintiff) sued Shepard to enjoin violation of the overtime requirements set forth in the Fair Labor Standards Act (FLSA) and moved for summary judgment. The district court denied the administrator’s motion and dismissed the complaint, reasoning that the bonuses were not paid pursuant to any promise or official plan. The administrator appealed.
Rule of Law
Issue
Holding and Reasoning (Hand, J.)
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