James D. Hodgson, Secretary of Labor, United States Department of Labor v. Yb Quezada, Individually and D/B/A La Bonita Food Products

This action was initiated by the Secretary of Labor under Section 17 of the Fair Labor Standards Act, 29 U.S.C. § 217 , to enjoin appellee from violating the Act’s overtime and bookkeeping requirements and to restrain the continued withholding of overtime compensation. The parties eventually agreed to the entry of a consent judgment directing in part that appellee pay $11,000 in settlement of amounts due for overtime. Conflicts developed, however, over the eventual disposition of the unclaimed portion of the settlement. The appellee argued that sums unclaimed after two years should revert back to the employer. The Secretary took the position that such sums should be deposited in the Treasury of the United States on behalf of future claimants to the settlement.

After initially accepting the Secretary’s position, the District Court reversed itself and entered the following order:

We begin by noting that the restraint embodied in Section 17 serves at least two important purposes: it serves to increase the effectiveness of the Act by depriving a violator of any gains resulting from his violation, and it protects those employers who comply with the Act from unfair…

(dissenting) :

I respectfully dissent.

Had the district judge refused to order payment for overtime due, we would properly reverse his decision. Wirtz v. Malthor, Inc., 391 F.2d 1 (9th Cir. 1968). But here, the narrow question concerns the ultimate beneficiary of unclaimed overtime funds. I am persuaded that the Secretary’s plan is superior to that proposed by the employer. However, as the Secretary conceded, the district court has broad discretion in framing equitable relief. Therefore, the question is whether the plan adopted by the district court was so violative of the statutory scheme that there has been an abuse of discretion. I do not believe there has been and, therefore, I would affirm.

498 F.2d 5 21 Wage & Hour Cas. (BN 819, 74 Lab.Cas. P 33,090 James D. HODGSON, Secretary of Labor, United States Department of Labor, Appellant, v. YB QUEZADA, Individually and d/b/a La Bonita Food Products, Appellee. No. 72-2896. United States Court of Appeals, Ninth Circuit. June 7, 1974. John M. Orban, Associate Regional Sol., Jeannie J. Meyer, Donald S. Shire, Counsel for Secty. of Labor, Jacob I. Karro (argued), John K. Light, U.S. Dept. of Labor, Washington, D.C., for appellant. Robert F. Walker (argued), of Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for appellee. Before WALLACE and SNEED, Circuit Judges, and EAST, District Judge 1 OPINION SNEED, Circuit Judge: 1 This action was initiated by the Secretary of Labor under Section 17 of the Fair Labor Standards Act, 29 U.S.C. 217, to enjoin appellee from violating the Act's overtime and bookkeeping requirements and to restrain the continued withholding of overtime compensation. The parties eventually agreed to the entry of a consent judgment directing in part that appellee pay $11,000 in settlement of amounts due for overtime. Conflicts developed, however, over the eventual disposition of the unclaimed…