Mr. FELLOWS. Are you not always in doubt on what the Supreme Court would hold? Mr. MAGGS. I have had doubts on some questions, but on others, no. I have had the misfortune to lose two cases during the last term in that court, each by a 5-to-4 decision. Mr. FELLOWS. You see, they were wrong twice. Mr. FEIGHAN. Would you care to comment upon some of the border line cases that have been brought to the attention of the committee by the testimony of the proponents? Mr. MAGGS. Mr. Chairman, I think that there are undoubtedly a few cases where the imposition of the liability for the extra 100 percent on employers is harsh. The statement has been made several times that most employers in this country do try to comply with the law. I think that is probably true as to most employers; I do not think it is true of most of the employers who are found to have violated the law. I think that by far the greater number of employers who have been found to violate the law, deliberately did not comply, using the word "deliberately" in the sense that many of them have taken no pains to find out what the law was so they could get away with lower wages perhaps than their competitors had to pay. If you have the whole line-up of employers found to have violated, on the one hand, I think there is a very small segment of employers who really have some justification for acting the way they did. There were some employers who followed a lower court's opinion, perhaps, that they assumed was good law, and later on some other court decided the other way and the conflicting decision was carried to the Supreme Court and the case was decided against them. Then there are unquestionably some cases where the Administrator has announced how he has interpreted the law; of course, the employer is not governed by it, and the Administrator is very careful, whenever he makes such a statement to say, "Remember what I say is not binding on the courts, remember I cannot control the employees' suits, and if you accept my interpretation you may find yourself stuck later." I In the cases where the Administrator has announced such an interpretation, where the employer has failed to comply with the law because the Administrator said that in his opinion it did not apply, I think that is pretty harsh on the employer to be held liable for the extra 100 percent; I think he should be held liable for their wages. think he should be held liable for the unpaid wages, because the statute after all was passed to give a right to the workers, and merely because an Administrator makes a mistake is no reason why, it seems to me, the worker should be deprived of his right to the wages Congress said that he should have. But to have the employer liable for the extra 100 percent when he was told Mr. CHELF. That is the damage angle. Mr. MAGGS. Yes. I think that far more than three-fourths of the violations are cases where the employer has no appealing claim for relief from the liability for the 100 percent-of course I cannot demonstate the correctness of my estimate. Then in between that end and the small group of employers that do have a justifiable complaint that the law is harsh-in between the two groups is another group which the proponents of this legislation, in my opinion, have improperly thrown in with the group that does have a just claim that the law is a bit harsh. The group of cases I am now talking about are those where the Administrator has told the employer what he thinks the law is, but the employer thought the Administrator was wrong; he thought the court would decide for him and against the Administrator's interpretation. So he goes along and gets one district court to decide for him, and maybe goes along and gets another, and eventually the matter reaches the Supreme Court which says that the Administrator was right in the first place. In cases of that kind I am not so sure that the employer has an appealing claim. After all the Administrator told him at the start what the court eventually decided was right. But the employer wanted to see whether he could not win out and prove that the Administrator was wrong. The Congress intended that this liability for the extra 100 percent should be an inducement to employers to pay the wages specified in the act. Mr. FEIGHAN. Are there no further questions? We appreciate very much your painstaking presentation of the matter, Mr. Maggs. Mr. MAGGS. I am very glad to have had the opportunity to do so. May I say that most of the painstaking was by my Assistant Solicitor, Mr. Louis Sherman, who dug into the statutes. Mr. CHELF. You have had a very able assistant. Mr. MAGGS. Thank you. Mr. FEIGHAN. Is there anyone else who would like to present a statement for the record? If so we would be glad to have it. This will conclude the hearings on the bill. STATEMENT OF REUBEN S. HASLAM, ASSOCIATE COUNSEL, LAW DEPARTMENT, NATIONAL ASSOCIATION OF MANUFACTURERS, WASHINGTON, D. C. Mr. HASLAM. Mr. Chairman, for the record my name is Reuben S. Haslam; I am associate counsel, law department, of the National Association of Manufacturers. Mr. Smethurst has already made a presentation. It occurred to me that the committee might wish to have the citations to the various court cases which have construed the applicability of the law. I do not know whether Mr. Maggs included the actual citations to the cases in his presentation. But, for example, in Louisiana they have a 1-year statute, which has been on the books of Louisiana for 137 years. And in the State of Texas they have a 2-year statute—I do not know just when that statute was enacted. but the thought just occurred to me that the committee might be interested in having that for your record, and if so I will be glad to supply it. Mr. FEIGHAN. We will be glad to have it. Thank you very much. Mr. HASLAM. Thank you. (The citations referred to were subsequently furnished and appear below :) NATIONAL ASSOCIATION OF MANUFACTURERS, Congressman MICHAEL A. FEIGHAN, House of Representatives, Washington 25, D. C. DEAR CONGRESSMAN FEIGHAN: At the conclusion of the hearings on H. R. 2788, you indicated that you would like to have for the record the citations to court decisions applying State statutes of limitations to employee suits brought under the wage and hour law. Although I am not at all certain the following citations are complete, it is my opinion from a rather complete analysis of the various reported cases under the wage and hours law that these cases do represent substantially all of those to which Mr. Maggs referred in his testimony before your committee. * In Texas, a 2-year statute of limitations governing actions for "debt not evidenced by a contract in writing" and actions upon "open accounts" other than accounts between merchants has been applied (see Notz v. Ippolito, 1 W. H. cases 673, Duncan et al v. Montgomery Ward & Co., Inc., 1 W. H. cases 880, and Owin v. Liquid Carbonic Corp., 1 W. H. cases 890-all decided by United States District Court, Southern District of Texas). In Louisiana a 1-year statute of limitations covering "wages (overtime included)" has been held to apply (see Divine v. Levy et al., 2 W. H. cases 294, United States District Court, Western District of Louisiana; and Loggins v. Steel Construction Co., 2 W. H. cases 169, United States Circuit Court of Appeals, Fifth Circuit). In California a 3-year statute covering "an action on a liability created by statute, other than a penalty of forfeiture * *" has been held applicable * to employee suits under the wage-hour law (see Abram v. San Joaquin Cotton Oil Co., 2 W. H. cases 477, United States District Court, Southern District of California). ** * ** In Washington a 3-year statute has been held applicable. Employee suits being construed as "an action upon a contract express or implied, (see Cunningham v. Weyerhaeuser Timber Co., 6 W. H. R. 1173). It will be noted that none of the decisions refer to "special" statutes that have been enacted since the effective date of the wage and hour law. The statute in Louisiana, I have been informed, has been in effect for 137 years. I trust the above contains the information you wish to have included in the record. If at any time we can furnish you with any additional information, please do not hesitate to communicate with us. Very truly yours, REUBEN S. HASLAM, Associate Counsel. Mr. FEIGHAN. I have some statements here which will be left with the clerk to be inserted in the record. That concludes the hearing. (At 11:40 the hearing adjourned.) (The following statements were submitted for the record:) STATEMENT IN OPPOSITION TO THE BILL H. R. 2788 BY THE LIBERAL PARTY OF THE STATE OF NEW YORK David Barr, of New York, a member of the national legislative committee of the Liberal Party of the State of New York, appears on behalf of the Liberal Party of the State of New York, in opposition to the bill as introduced. The Gwynne bill, proposing to limit to 1 year the time in which suits for damages may be brought under Federal statute, unless specifically otherwise provided, aims directly at the Fair Labor Standards Act. It shoots straight at the heart of the act by seriously undermining its enforcement. The bill not only sets a statute of limitations at the Federal level at 1 year but proposes to make even that period subordinate to any shorter period provided in any applicable State statute. There is confusion already in the diversity of State statutes of limitations ranging in length, as applied to suits under fair labor standards acts, from 6 months to 6 years. This diversity is already a serious threat to enforcement and therefore the basis for unfair competition as between law-abiding employers and their competitors of the other kind. The conflict at the State level should be remedied. A bill of this sort at the Federal level cou'd do just that. But it doesn't. It sets a destructive short period at the Federal level and invites even shorter periods at State levels. Experience and necessity in the enforcement of the act by the Wage and Hour Administration points to a need for a Federal statute of limitations of at least 3 years. The mechanics of enforcement with the limited staff available for investigation dictates the need for at least that period. There are now about 580.000 establishments covered by the jurisdiction of the Wage and Hour Administration. Working at peak of efficiency, its investigating staff can now cover by inspection not more than 50,000 establishments a year. This means that at best an establishment inspected today need not expect to be investigated again (unless its record is already bad) for another 10 years. Enforcement, therefore, depends on complaints and suits brought by the aggrieved worker. Since, in spite of the existing protection of the law, a suit by such a worker during his employment often marks the end of his job, he usually waits until he leaves that job and already has another. By limiting the time in which he can bring such a suit to 1 year from the time in which his claim accrued, it can be readily seen how most of those lawsuits would be automatically wiped out. The worker has, therefore, been cheated irrevocably and the employer has had a picnic by underpayment or overtime work without overtime pay as against his competitors in the same business who have been law abiding in their wage practices. For the immediate future of tremendous uncertainty during the reconversion period, to undermine the enforcibility of this minimum wage law is to add another seriously disturbing element to our present and postwar wage and employment problems. The Gwynne bill should be amended to establish a reasonable Federal statute of limitations not subject to decrease by State statute, at least insofar as it relates to the Fair Labor Standards Act. STATEMENT OF E. C. BASSETT, ASSISTANT TO NATIONAL LEGISLATIVE REPRESENTATIVE, BROTHERHOOD OF RAILROAD TRAINMEN Mr. Chairman and members of the committee, my name is E. C. Bassett, and I am assistant to the national legislative representative of the Brotherhood of Railroad Trainmen, with offices at 10 Independence Avenue SW., Washington. The Brotherhood of Railroad Trainmen is an international organization, with general offices in the Standard Building, Cleveland, Ohio. Mr. A. F. Whitney is president. The Brotherhood of Railroad Trainmen is the largest of the railroad-trainservice labor organizations. We have in membership approximately 215,000 members and represent railroad conductors, flagmen, brakemen, train baggagemen, dining-car stewards in road passenger and freight service; and in yard service, yard conductors, yard brakemen or switchmen, switchtenders, yardmasters, and car retarder operators. We also represent operators on intercity busses. The Brotherhood of Railroad Trainmen is opposed to H. R. 2788, a bill which proposes, except as otherwise provided, a statute of limitations of 1 year for all actions to recover damages under United States laws, unless a shorter period is fixed by any applicable State statute, and that public actions to recover money damages may be enforced if brought within 2 years after cause of action accrued, except when the United States is not the real party at interest. The proposed amendment to title 28 of the United States Code, as written, would create more confusion than now exists and would not cure any of the evils complained of. The brotherhood's opposition to this bill is based upon general principles and particularly the effect it would have upon poorly paid employees who come under the Fair Labor Standards Act. The Fair Labor Standards Act (29 U. S. C., sec. 216 (b)) provides that any violator of the act shall be liable to the 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. The wholly unfair character of the proposed limitation period is emphasized by the fact that the only authoritative source that the employee has, as to whether he is being treated in accordance with the act, is the investigation by the fair-labor-standards investigator. In many instances the investigators do not reach the plant until 3 or 4 years after the violations have occurred. Even assuming that the employee would dare risk his employer's displeasure by suing for damages, his primary sources of information as to his rights are uncertain and slow. The whole relationship of the investigation machinery of the administrator to the employee's right is destroyed by a 1-year period of limitation. Unwilling to risk economic reprisal by his employer, the employee waits until the Administrator, as a result of an investigation, may influence the employer to make a voluntary settlement under the statute. An employee may wait for an inspection and find that his right for action has been eliminated. Assuredly, a year's time is far too short for permitting the employee to take advantage of the inspection machinery. The Administrator's inspection staff is limited, and, consequentlly, inspectors do not get around to inspecting a particular business for a number of years. The tendency also of Congress is to reduce the appropriation for the enforcement of the Fair Labor Standards Act from time to time. ects and entirely considered, nowledge of the employee, of limitation, act, is a radical ugh I am not at all certain the following citations are cor alifornia a 3-year statute covering “an act` ashington a 3-year statute has been hel FEIGHAN. I have some INT IN OPPOSITION TC Barr, of New Yo eral Party of the f the State of N - bill, proposing brought under rectly at the F et by seriously ill not only s poses to make pplicable St is confusio in length, to 6 years. e the basis mpetitors d. A bill It sets a periods at : ience and Iministratio Fears. The i ation dictate establishmen ation. Work. -etion not mor blishment in of action for damlaws would not be d in line 6 of the bill. for a period of limitain the purview of H. R. private parties to recover s of the antitrust laws (15 6. see. 25), which authorizes gas as the copyright proprietor well as all the profits which the s Act (7 U. S. C., sec. 499 (e)) es of action against commission e sections of the act relating to 96), which contains provisions et to the infringement or registered - in import trade (15 U. S. C.. mages in the event of violation. This articles at a price substantially less le price of such articles at the time 2.13). 596). Pe. 36). 8798 Act (50 U. S. C., sec. 1501). Live limited their criticism to the Fair ng out of employee suits drawn under ards Act for the purpose of recovering minimum-wage and overtime-pay pro for such highly diverse actions under the **** at wholly apart from all other consideraghly diverse causes of action by a single 7es that the applicable State statute shall " P vi to permit existing State attacks upon further attack. Moreover, it is sharply Satutes of limitations which clearly state apply to a particular subject matter. The ess is alarming, in view of the fact that Standards Act to establish a uniform Fedruit low standards of one area to place petitive disadvantage. e already injured employee from recovamages unless suit was filed within the ved from the Department of Labor, we actions in which the courts have applied brought under section 16 (b) of the acted special statutes to prescribe specific the type which arise under the Fair Labor of limitation-Alabama, Colorado, Flor uth Carolina. Five States have a 2-year Minnesota, Texas, and Wyoming. Two 16-year period of limitations. The Oregon 19% |