the option price. Cf. Palmer v. Commissioner, 302 U. S. 63, 73.

It is true that respondent gave notice of his exercise of the option and paid the option price in 1938. But at that time Western, under its contract with Hawley, had a right to receive but a part of the stock subject to respondent's option; its right to the remainder was conditioned upon its making further payments of Hawley's indebtedness. Respondent's option contemplated delivery to him of Hawley's stock only if and when Western became entitled to receive the stock from Hawley. In fact deliveries of the stock were made to respondent upon each occasion only a day or two after Western received it from Hawley.

The Tax Court found that respondent received compensation "when [he] exercised his option and received the stock." We take it that the Tax Court regarded fulfillment of the conditions upon the right of Western to receive the stock, and therefore of the conditions upon the derivative right of respondent to receive it under his option, as prerequisite to the effective exercise of the option; and that the taxable compensation to respondent intended to be secured by the option was in fact received by respondent as and when the shares of stock were delivered to him, since prior to that time there was no certainty that he would receive the stock. This conclusion of the Tax Court finds ample support in the record, and we concur in it.

We do not have before us a case where by the exercise of an option in one year the taxpayer acquires an unconditional right to receive the stock in a later year. We express no opinion upon the question whether, in such a case, compensation would be received and would be taxable in the earlier or the later year.

The petition for rehearing is denied.

MR. JUSTICE ROBERTS adheres to his dissent.

Syllabus.

BROOKLYN SAVINGS BANK v. O'NEIL.

NO. 445. CERTIORARI TO THE COURT OF APPEALS OF NEW YORK.*

Argued February 5, 6, 1945.-Decided April 9, 1945.

1. In the absence of a bona fide dispute between the employer and the employee as to liability, an employee's written waiver of his right to liquidated damages under § 16 (b) of the Fair Labor Standards Act does not bar a subsequent action by the employee to recover such liquidated damages. P. 707.

2. The legislative policy behind the provision of § 16 (b) for liquidated damages, as evidenced by the legislative history of the provision and by other provisions and the structure of the Act, shows that Congress did not intend that an employee should be allowed to waive his right to liquidated damages. P. 706.

3. Exceptional circumstances of the kind held to justify a waiver agreement such as was upheld in Fort Smith & Western R. Co. v. Mills, 253 U. S. 206, are not here involved. P. 709.

4. The right of the employee to liquidated damages under § 16 (b) does not depend on whether the employee is compelled to sue for minimum wages due. P. 711.

5. Absence from the Fair Labor Standards Act of a specific provision prohibiting waivers of rights under the Act is not to be construed as permitting such waivers. P. 712.

6. An employee's release and waiver of rights to minimum wages and liquidated damages under the Fair Labor Standards Act, in consideration of a sum known by both employer and employee to be less than the statutory minimum wages due, is void. P. 713. 7. It is unnecessary here to determine questions of the validity and effect of agreements between employer and employee in settlement of claims arising under the Act where there is a bona fide dispute between the parties. P. 714.

*Together with No. 554, Dize v. Maddrix, on certiorari to the Circuit Court of Appeals for the Fourth Circuit, argued February 6, 1945, and No. 421, Arsenal Building Corp. et al. v. Greenberg, on certiorari to the Circuit Court of Appeals for the Second Circuit, argued February 2, 5, 1945.

Opinion of the Court.

324 U.S.

8. The question of the right to interest on sums recoverable under § 16 (b) of the Fair Labor Standards Act is one of federal, not local, law. P. 715.

9. An employee recovering minimum wages and liquidated damages under § 16 (b) of the Fair Labor Standards Act is not entitled to interest on the sums so recovered. P. 715.

293 N. Y. 666, 56 N. E. 2d 259, affirmed. 144 F.2d 584, affirmed.

144 F.2d 292, reversed in part.

CERTIORARI, 323 U. S. 698, 702, to review decisions in three cases under the Fair Labor Standards Act.

Messrs. Homer Cummings and Sedgwick Snedeker, with whom Messrs. Joseph V. Lane, Jr. and Carl McFarland were on the brief, for petitioner in No. 445; Mr. Hyman Ginsberg, with whom Mr. Harry Leeward Katz was on the brief, for petitioner in No. 554; Mr. Robert R. Bruce, with whom Messrs. Kenneth C. Newman and John J. Boyle were on the brief, for petitioners in No. 421.

Mr. Max R. Simon for respondent in No. 445; Mr. Paul Berman, with whom Messrs. Eugene A. Alexander, III, and Theodore B. Berman were on the brief, for respondent in No. 554; Mr. Aaron Benenson, with whom Mr. James L. Goldwater was on the brief, for respondent in No. 421.

Solicitor General Fahy, Messrs. Robert L. Stern, Douglas B. Maggs, George M. Szabad, Albert A. Spiegel and Miss Bessie Margolin filed a brief in Nos. 445 and 554, and with Mr. Jerome H. Simonds a brief in No. 421, on behalf of the Administrator of the Wage and Hour Division, U. S. Department of Labor, as amicus curiae.

MR. JUSTICE REED delivered the opinion of the Court.

The writs of certiorari granted in these three cases present questions as to the interpretation of Section 16 (b) of the Fair Labor Standards Act of 1938, 52 Stat. 1060, at 1069, which provides that an employer who violates the

697

" 1

Opinion of the Court.

minimum wage and maximum hour provisions of the Act shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Cases No. 445 and No. 554 raise the question whether an employee subject to the terms of the Act can waive or release his right to receive from his employer liquidated damages under § 16 (b). Case No. 421 presents the issue of whether in a suit brought pursuant to the provisions of § 16 (b) the employee is entitled to interest on sums recovered as wages and liquidated damages under that section. Since these three cases involve similar problems relating to the interpretation of § 16 (b) and the Congressional policy behind its adoption, all three cases will be dealt with in one opinion. See also No. 462, post, p. 720.

No. 445.

The petitioner, Brooklyn Savings Bank, owned and operated an eleven-story office building in which the respondent was employed as a night watchman during a two-year period from November 5, 1938, to August 30, 1940. Since a substantial portion of that building was

1 Section 16 (b) provides:

"Any employer who violates the provisions of section 6 or section 7 of this Act shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for and in behalf of all employees similarly situated. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action."

den osed to the produenon of goods for ecmerce the respondent ve emned to frente rogersation under the provisios of of the Far Labor Standards Act.3 #2 Sun 1082 No me apesar vs paid at that time. However in November. 1942 over two years after the respondent had left peritoners service, the petitioner ecmputed the statutory cerme ecompensation due the respondent and offered him a check for $423.16 in return for a release of a of his rights under the Act. The respondent signed the release and took the check. Since this sumo did not include any payment for liquidated damages provided for in § 15. b) of the Act, the respondent sbsequently instituted the present proceeding in a New York City Municipal Court to recover liquidated damages dze him under 16 (b). The complaint was dismissed on the grounds that respondent failed to prove a cause of action and also that the respondent "released any claim for liquidated damages or counsel fees." The Appellate Term reversed, per curiam, holding that respondent was employed in the production of goods for commerce within

2 The New York Appellate Term held that the Fair Labor Standards Act applied to the petitioner's operation of its building. This holding was affirmed by the Appellate Division and the Court of Appeals. See notes 5 and 6. Petitioner did not raise this issue in his petition for certiorari.

*Section 7 (a) provides:

"No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce

(1) for a workweek longer than forty-four hours during the first year from the effective date of this section,

(2) for a workweek longer than forty-two hours during the second year from such date, or

(3) for a workweek longer than forty hours after the expiration of the second year from such date,

unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed."