## Facts

- Overnight Motor Transportation Co. operated as an interstate motor carrier.
- Missel worked as a rate clerk performing office and incidental duties not connected with safety of operation.
- Missel was paid a fixed weekly salary regardless of hours worked: $25.50 per week until Nov. 1, 1938, and $27.50 per week thereafter.
- His hours fluctuated widely; available records showed an average workweek around 65 hours with peaks up to 80 hours.
- Overnight paid no additional amounts for hours beyond forty, believing its pay method satisfied the Fair Labor Standards Act (FLSA).
- Missel sued under the FLSA for unpaid overtime compensation, an equal amount as liquidated damages, and attorney’s fees.
- The district court entered judgment for the employer without taking evidence on the overtime amount; the Fourth Circuit reversed and directed judgment for Missel, with further proceedings on amounts due.

## Issues

1. Whether Missel was “engaged in commerce” and covered by the FLSA’s overtime protections.
2. How to determine the “regular rate” under FLSA § 7(a) when an employee receives a fixed weekly salary for fluctuating hours.
3. Whether a flat weekly salary for irregular hours satisfies § 7(a) if the total compensation exceeds the statutory minimum wage plus overtime calculated on the minimum.
4. Whether FLSA § 16(b), requiring an additional equal amount as liquidated damages for overtime violations, is constitutional when noncompliance results from uncertainty about coverage.

## Decision

- The Supreme Court affirmed the judgment for Missel and rejected the employer’s compliance theory.
- Missel’s rate-clerk work for an interstate carrier constituted being “engaged in commerce,” bringing him within § 7 coverage.
- In a fixed-salary, fluctuating-hours arrangement, the “regular rate” is computed week by week as weekly salary divided by hours actually worked that week.
- Overnight’s plan violated § 7(a) because it paid no overtime premium for hours over forty based on Missel’s actual regular rate.
- Section 16(b) liquidated damages were upheld as constitutional even when the employer’s failure to comply stemmed from uncertainty about coverage.

## Legal Principles

- FLSA overtime requires payment at not less than one and one-half times the employee’s actual “regular rate,” not an overtime calculation pegged to the statutory minimum wage.
- A fixed weekly salary for fluctuating hours does not satisfy § 7(a) unless the employee also receives the required overtime premium for hours over forty.
- For each week in a fixed-salary/fluctuating-hours job, the regular rate equals (weekly salary) ÷ (hours worked that week); the overtime premium owed is computed from that regular rate.
- Congress may require overtime premiums to discourage long workweeks and encourage the distribution of work, even where the employee’s total pay exceeds minimum wage requirements.
- FLSA § 16(b) liquidated damages (an additional amount equal to unpaid overtime) are a valid statutory remedy and may be imposed despite an employer’s good-faith uncertainty about coverage.

## Conclusion

The Court held that a flat weekly wage for fluctuating hours must still include overtime pay calculated from the employee’s actual week-by-week regular rate, and it sustained mandatory liquidated damages for FLSA overtime violations even when the employer acted under uncertainty about the statute’s reach.


Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 (1942)