Overnight Motor Transportation Co. v. Missel

Background

A rate clerk who worked irregular hours for an interstate trucking company was paid a fixed weekly salary ($25.50, later $27.50) and sometimes worked very long weeks (records show an average of 65 hours and peaks up to 80). He sued for unpaid overtime, liquidated damages, and attorney’s fees. The trial court sided with the employer, but the appeals court reversed and ordered a hearing on amounts owed; the Supreme Court agreed to review the legal questions.

Reasoning

The Court addressed whether the federal overtime law requires extra pay when an employee receives a fixed weekly wage but works varying and sometimes excessive hours. The Court held that the weekly salary must be converted to an hourly “regular rate” by dividing the weekly pay by the actual hours worked that week. When hours exceed the statutory maximum, the employer must pay time-and-a-half based on that weekly regular rate, even if the salary exceeds the statutory minimum. The Court rejected the employer’s argument that freedom of contract or uncertainty about agency regulation excused nonpayment, and it treated court-ordered liquidated damages as compensation rather than a punitive penalty.

Real world impact

The decision makes clear that salaried workers with fluctuating hours are entitled to overtime computed week by week, that employers may owe back overtime plus equal liquidated damages, and that exemptions for safety-related employees did not cover this clerk. The ruling enforces overtime protections for many workers in interstate commerce and requires practical payroll changes by affected employers.

Dissents or concurrances

Justice Roberts dissented; the Chief Justice concurred in the result. The opinions noted disagreement over some legal reasoning but did not change the outcome.