Sidney v. Martin Iron Works

VALLÉE, J. Appeal by plaintiff from an adverse judgment in an action for damages for the alleged breach of a contract of employment.

[296]On July 6, 1943, plaintiff and defendant entered into a written contract whereby defendant employed plaintiff as superintendent of its machine shop, valves and gates department and sheet metal department for one year at a salary of $100 a week. The contract also provided for the payment to plaintiff of a percentage of the net profits from the operations of these departments. The complaint alleged that the salary was paid to March 2, 1944, and that on that date defendant arbitrarily terminated the contract and failed to pay plaintiff for the period from March 2 to July 1, 1944. Affirmatively the answer alleged that the contract was void as violative of the Salary Stabilization Act of 1942.

The court found that for a long time prior to July 6, 1943, defendant had in its employ one McCarty who had been employed as, and held the position of, superintendent of defendant’s machine shop, valves and gates department and sheet metal department; that McCarty had performed substantially the same duties as those performed by plaintiff after July 6, 1943, under the contract; that the employment and job classification of McCarty on July 6, 1943, and prior thereto, was the same as that of plaintiff after July 6,1943; that McCarty’s total compensation had been $250 a month. The court also found that the compensation required to be paid to plaintiff under the contract was in excess of $5,000 a year and that the same had not been approved as required by an act of Congress known as the Salary Stabilization Act of 1942. The court concluded and adjudged that the contract was illegal and void and that plaintiff was not entitled to recover.

Plaintiff claims that the recited findings are not supported by the evidence. The contention is without merit.

The Salary Stabilization Act of 1942 authorized the President to stabilize wages and salaries and provided that no employer should pay and no employee should receive wages or salaries in contravention of the regulations promulgated by the President. (50 U.S.C.A. App. §§ 961-71.) Pursuant thereto the President by executive order established the Office of Economic Stabilization and the office of director thereof. (7 Fed.Reg. 7871.) On October 27, 1942, the director issued regulations which delegated jurisdiction of salaries in excess of $5,000 a year to the Commissioner of Internal Revenue. (7 Fed.Reg. 8748.) On December 2, 1942, the Commissioner of Internal Revenue issued what was called T.D. 5186, freezing all salaries in excess of $5,000 a year at the rates in effect on October 3, 1942, and providing that no increase thereof