which was held unconstitutional by the ional by a lower State court, and of Oregon. We understand final judicial or legislative States clearly provide a 3ity for a 3-year period. Inrequires employers to keep uld not have a uniform statute east 4 years, preferably 6 years. ntroversy, a study of the Federal at a 1-year statute of limitation is ated-damage provisions in the Fair i as a penalty rather than compensatute would be the 5-year Federal stateitures.

w, which affects railway employees and ersonal injuries, turns on the testimony of vailable at the final trial, and it prescribes a ne case of the Fair Labor Standards Act emost instances on pay roll records, which can be od of time. Thus, the employer has the means the adverse effects of the passage of time insofar

therhood of Railroad Trainmen that the bill should present form. May we suggest to the committee that to report a bill to the Congress on the subject matter itations be made for 6 years after the cause of action 1-year period as provided in H. R. 278; also, that the ter time be fixed in any applicable State statute," on lines d from the bill.

the committee for permitting me to appear, and trust that y be of some value to the committee in its deliberations on this

ure.

om Al. Philip Kane for National Federation of Telephone

HOBBS,

WASHINGTON 5, D. C., June 27, 1945.

tirman, Subcommittee for H. R. 2788, Committee on the Judiciary,
House of Representatives, Washington, D. C.

AR MR. HOBBS: The National Federation of Telephone Workers, for which in general counsel, has requested me to advise the Committee on the Juiary of its opposition to H. R. 2788, introduced by Mr. Gwynne of Iowa and titled "A bill to amend title 28 of the United States Code in regard to limitaions of certain actions and other purposes."

The National Federation of Telephone Workers believes that this bill as written may be applied to actions by employees under the Fair Labor Standards Act and, if this position is correct, the bill appears to be unduly restrictive of the rights of action accorded employees in the telephone industry.

In order to understand the effect of this bill one must appreciate the fact that there are several thousands of telephone companies in the United States. It is true that 90 percent more or less, of the telephone business is controlled by companies associated with the Bell System and comprising the American Telephone & Telegraph Co. The remaining 10 percent of the business is divided among many thousands of companies, some of which are small and some relatively large enterprises. An understanding must also be had of the status of the unionization of the workers in the telephone industry. There are, roughly, 600 000 persons employed by the Bell System. Of this number something in excess of 200,000 belong to unions affiliated with the National Federation of Telephone Workers, which is an independent union, not connected with either the American Federation of Labor or the Congress of Industrial Organizations. The American Federation of Labor represents only a few thousand workers in the Bell System. The Congress of Industrial Organizations represents fewer still. A great many of the telephone workers are entirely unorganized. The National Federation of Telephone Workers is the dominant labor union in the telephonic communications labor field. Up to now its activities have largely

In view of the important nature of the interests which the statute protects and apart from any other considerations, the period of limitation set is entirely too short to carry out the purposes of the statute. When this fact is considered, together with the superior position of the employer to obtain knowledge of the law and his coverage under it and the economic subjection of the employee, it can hardly be open to question that the proposed statute of limitation, insofar as it affects suits under the Fair Labor Standards Act, is a radical departure from the broad purposes and policies of the act.

A considerable number of our Federal laws create rights of action for damages, which expressly provide periods of limitation. These laws would not be affected by H. R. 2788, in view of the exception contained in line 6 of the bill. Among the Federal laws which do not expressly provide for a period of limitation and which would, therefore, appear to come within the purview of H. R. 2788 are

(1) The Clayton Antitrust Act, which permits private parties to recover triple damages for injuries resulting from violations of the antitrust laws (15 U. S. C., sec. 15).

(2) The Copyright Infringement Act (17 U. S. C., sec. 25), which authorizes the copyright proprietor to sue for such damages as the copyright proprietor may have suffered due to the infringement, as well as all the profits which the infringer shall have made from such infringement.

(3) The Perishable Agricultural Commodities Act (7 U. S. C., sec. 499 (e)) which gives farmers and other persons causes of action against commission merchants, dealers, or brokers who violate the sections of the act relating to unfair and fraudulent conduct.

(4) The Trade-mark Act (15 U. S. C., sec. 96), which contains provisions similar to those of the Patent Act with respect to the infringement or registered trade-marks.

(5) The act penalizing unfair competition in import trade (15 U. S. C., sec. 72), which also provides for triple damages in the event of violation. This act makes it unlawful to import and sell articles at a price substantially less than the actual market value or wholesale price of such articles at the time of exportation to the United States.

(6) The Civil Rights Act (8 U. S. C., sec. 43). (7) The Seaman's Act (46 U. S. C., sec. 596).

(8) Public Contracts Act (41 U. S. C., sec. 36).

(9) Smith-Connally War Labor Disputes Act (50 U. S. C., sec. 1501).

The proponents of this legislation have limited their criticism to the Fair Labor Standards Act and abuses growing out of employee suits drawn under section 16 (b) of the Fair Labor Standards Act for the purpose of recovering liquidated damages for violation of its minimum-wage and overtime-pay provisions.

H. R. 2788 fixes limitation for suits for such highly diverse actions under the laws, to which I have just referred, that wholly apart from all other considerations it is unsound to limit these highly diverse causes of action by a single statute of limitation. The bill provides that the applicable State statute shall apply if it is shorter than the period in this bill. This provision demonstrates the purpose of the measure not only to permit existing State attacks upon federally protected rights but to invite further attack. Moreover, it is sharply at odds with the principles governing statutes of limitations which clearly state that such statutes should uniformly apply to a particular subject matter. The nonuniformity of the enforcement process is alarming, in view of the fact that it was the purpose of the Fair Labor Standards Act to establish a uniform Federal wage-and-hour policy and not to permit low standards of one area to place the employers of another area at a competitive disadvantage.

Enactment of H. R. 2788 would bar the already injured employee from recovering compensatory and liquidated damages unless suit was filed within the 1-year period. From infomation received from the Department of Labor, we are advised that there are 26 jurisdictions in which the courts have applied statutes of limitations to employee suits brought under section 16 (b) of the act or the State legislatures have enacted special statutes to prescribe specific periods of limitation for claims of the type which arise under the Fair Labor Standards Act.

Only six States have a 1-year period of limitation-Alabama, Colorado, Florida, Louisiana, North Dakota,. and South Carolina. Five States have a 2-year period of limitations-Georgia, Iowa, Minnesota, Texas, and Wyoming. Two States, New York and Oregon, have a 6-year period of limitations. The Oregon

Legislature enacted a 6-month statute, which was held unconstitutional by the Federal district court. It was held constitutional by a lower State court, and is now on appeal to the Supreme Court of the State of Oregon. We understand that out of 26 States, which have given the problem final judicial or legislative consideration, 2 States provide a 6-year period; 11 States clearly provide a 3year period; and 2 more have some judicial authority for a 3-year period. Inasmuch as the Fair Labor Standards Act now requires employers to keep records for 4 years there is no reason why we should not have a uniform statute of limitation limiting the cause of action to at least 4 years, preferably 6 years. While we have no desire to promote stale controversy, a study of the Federal and State statutes of limitations reveals that a 1-year statute of limitation is entirely too short a period. If the liquidated-damage provisions in the Fair Labor Standards Act were even considered as a penalty rather than compensation for underpayment, the applicable statute would be the 5-year Federal statute of limitations for penalties and forfeitures.

The Federal employers' liability law, which affects railway employees and which relates to damage suits for personal injuries, turns on the testimony of witnesses, who may or may not be available at the final trial, and it prescribes a 3-year period of limitations. In the case of the Fair Labor Standards Act employee suits, the case turns in most instances on pay roll records, which can be preserved for an indefinite period of time. Thus, the employer has the means of protecting himself against the adverse effects of the passage of time insofar as evidence is concerned.

It is the view of the Brotherhood of Railroad Trainmen that the bill should not be reported out in its present form. May we suggest to the committee that in the event it is decided to report a bill to the Congress on the subject matter that the statute of limitations be made for 6 years after the cause of action accrues instead of the 1-year period as provided in H. R. 278; also, that the phrase “unless a shorter time be fixed in any applicable State statute," on lines 10 and 11, be deleted from the bill.

I desire to thank the committee for permitting me to appear, and trust that our statement may be of some value to the committee in its deliberations on this important measure.

Letter from Al. Philip Kane for National Federation of Telephone Workers

Mr. SAM HOBBS,

WASHINGTON 5, D. C., June 27, 1945.

Chairman, Subcommittee for H. R. 2788, Committee on the Judiciary,

House of Representatives, Washington, D. C.

DEAR MR. HOBBS: The National Federation of Telephone Workers, for which I am general counsel, has requested me to advise the Committee on the Judiciary of its opposition to H. R. 2788, introduced by Mr. Gwynne of Iowa and entitled "A bill to amend title 28 of the United States Code in regard to limitations of certain actions and other purposes."

The National Federation of Telephone Workers believes that this bill as written may be applied to actions by employees under the Fair Labor Standards Act and, if this position is correct, the bill appears to be unduly restrictive of the rights of action accorded employees in the telephone industry.

In order to understand the effect of this bill one must appreciate the fact that there are several thousands of telephone companies in the United States. It is true that 90 percent more or less, of the telephone business is controlled by companies associated with the Bell System and comprising the American Telephone & Telegraph Co. The remaining 10 percent of the business is divided among many thousands of companies, some of which are small and some relatively large enterprises. An understanding must also be had of the status of the unionization of the workers in the telephone industry. There are, roughly, 600.000 persons employed by the Bell System. Of this number something in excess of 200,000 belong to unions affiliated with the National Federation of Telephone Workers, which is an independent union, not connected with either the American Federation of Labor or the Congress of Industrial Organizations. The American Federation of Labor represents only a few thousand workers in the Bell System. The Congress of Industrial Organizations represents fewer still. A great many of the telephone workers are entirely unorganized. The National Federation of Telephone Workers is the dominant labor union in the telephonie communications labor field. Up to now its activities have largely

centered on the organization of the employees in the Bell System. The great mass of the workers in the independent industry, however, are not organized into labor unions; and it appears that it will be a matter of years before substantial unionization can be completed. In the light of these facts it will be obvious that in many parts of the country and especially in the less populous areas, where problems involving the Fair Labor Standards Act are more likely to arise, the workers will not have the benefit of union information and union assistance in the prosecution of their claims under the act.

This is a most important consideration for the reasons that the great majority of the workers in the less-populous areas are entirely unfamiliar with the provisions of the act which would enable them to file suits against their employers for further compensation due under the act. Lacking the assistance and the bargaining strength of a labor union, those employees who are informed of their rights are very likely to be persuaded to enter into stipulations proposed by their employers or to sign releases upon inadequate consideration at the request of their employers. The employers are likely to give the employees assurances that the workers' rights are less substantial in law than the courts have interpreted them to be. The employees are not in a position fairly and capably to pass upon the validity and legal effect of the defenses which the employers are likely to represent to them as complete defenses to the employees' claims.

For the purpose of illustration I should like to point out that in the case of Strand v. Garden Valley Telephone Company decided by the United States District Court for the District of Minnesota in 1943 the company contended (1) that it came under the "services establishment" exemption of the wage law; (2) that it was not engaged in interstate commerce; (3) that the employees had not sustained their burden of proving the failure to make the payments demanded; (4) that the plaintiffs had released and discharged the defendant; (5) that there had been an accord and satisfaction, and (6) that a stipulation entered into between the Wage and Hour Administrator and the company in a vicla tion proceeding was determinative to the liability to the employees. When we add to the lack of opportunity on the part of the workers to obtain any actual knowledge of their rights and to the fact that they are not adequately represented by informed and active labor unions the further fact that the companies are able by persuasive talk and oily blandishments to have the workers enter into agreements which are entirely unfavorable to their interests, it should be apparent to any observer that a worker may very well be unable to make a fair determination of his rights and to prepare adequately to present them in court within the term of 1 year after the rights arose.

Many of these rights have been in doubt for a long time. Thus, while the act was passed in 1937, there was no authoritative determination of the right of telephone operators to be paid for what is known in the industry as a sleeping tour until quite recently. There must be literally thousands of telephone operators in the country today who are entitled to compensation extending over a long period of time by reason of the fact that their employers have not paid them for the time that they, although sleeping at their posts on all-night tours of duty, were nevertheless required to be available for the purpose of handling calls which would develop during the tours. A great majority of those workers are not yet advised that rights to additional compensation do exist. The National Federation of Telephone Workers has advised its affiliated unions, which in turn have advised their members. Very large segments of the industry have not been reached in this way. The National Federation of Telephone Workers purports to speak for all of the workers in the telephone industry, whether affiliated or not; and it feels that in fairness to the unaffiliated workers of the industry the Congress should be advised that if the Gwynne bill is passed it will bring about an unnecessary and a harmful restriction of the rights of many very low-paid workers. It would further appear that the statute of limitations on simple contracts does not run less than 3 years, and in many States substantially longer periods are provided. It appears to be entirely unreasonable to say that if a fellow worker should borrow $50 from a telephone operator, the statute-of-limitations period on that claim would be 3 years or more, while if the employer refused or failed to pay his employees' wages which were justly due them under the law, the statute-of-limitations period would be only 1 year. This would be a complete departure from the general policy of the law which gives wage claims preferential treatment over debt and other contract claims. In the light of these various objections, the National Federation of Telephone Workers believes that the bill should be defeated, and it requests the subcommittee of which you are chairman to act accordingly.

Very truly yours,

AL. PHILIP KANE.

STATEMENT OF THE NATIONAL LAWYERS GUILD ON H. R. 2788

(Submitted by Martin Popper, National Executive Secretary)

On March 27, 1945, Congressman Gwynne of Iowa introduced a bill (H. R. 2788) prescribing a 1-year period of limitations, in general, for suits to recover damages, actual of exemplary, under the laws of the United States. This bill, which was referred to the House Committee on the Judiciary, proposes to amend title 28 of the United States Code by adding a new section to be known as section 793, to read as follows:

"SEC. 793. Except as otherwise provided in any action creating a right of action to recover damages, actual or exemplary, no action under the laws of the United States shall be maintained unless the same is commenced within 1 year after such cause of action accrued, unless a shorter time be fixed in any applicable State statute: Provided, however, That public actions to recover money damages may be enforced if brought within 2 years after the cause of action accrued except when the United States is not the real party at interest: Provided, further, That the person liable for such damages shall, within the same period, be found within the United States so that proper process thereof may be instituted and served against such person."

Section 16 (b) of the Fair Labor Standards Act provides that any employer who violates the provisions of section 6 or 7 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. Action to recover such liability may be maintained in any court of competent jurisdiction

*

*

"

In addition, section 16 (b) provides for the payment to the employee of a reasonable attorney's fee and costs.

Neither section 16 (b) of the act, however, nor any other section of the act prescribes any period of limitations during which employee suits must be initiated or maintained. Under the Rules of Decisions Act, the statutes of limitations of the several States, in the absence of Federal legislation, are regarded as "rules of decision" binding on the Federal courts in actions at law instituted in such courts. (Bauserman v. Blunt, 147 U. S. 647; Campbell v. Haverhill, 155 U. S. 610.) The applicability of the State statutes of limitations is not confined to actions arising under State law but extends also to actions arising under Federal statutes if no Federal statute of limitations is avaliable (Campbell v. Haverhill, supra (patent infringement); Chattanooga Foundry and Pipe Works v. City of Atlanta, 203 U. S. 390 (suit for treble damages under antitrust laws). To like effect are the following cases under section 16 (b) of the Fair Labor Standards Act: Reliance Storage & Inspection Co. v. Hubbard, 50 F. Supp. 1012 (W. D. Va.); Cunningham v. Weyerhaeuser Timber Co., 52 F. Supp. 654 (W. D. Wash); Klotz v. Ippolito, 40 F. Supp. 422 (S. D. Tex.); Culver v. Bell & Loffland, Inc., 7 Wage Hour Rept. 36 (modified in 146 F. (2d) 29 (C. C. A. 9)); Bright v. Hobbs, 56 F. Supp. 723 (Md.); Southern Package Co. v. Walton, 7 Wage Hour Rept. 658 (Sup. Ct. Miss. 1944); Sampsell v. Casey Jones, 7 Wage Hour Rept. 1021 (W. D. Va. 1944); Keen v. Mid-Continent Petroleum Corp., 58 F. Supp. 915 (N. D. Iowa); Fullerton v. Lamm, 8 Wage Hour Répt. 113 (C. C. Ore., Lane Co. 1944); Smith v. Continental Oil Co., 8 Wage Hour Rept. 152 (E. D. N. Y. 1945); Kappler v. Republic Pictures Corp., 8 Wage Hour Rept. 183 (S. D. Iowa 1944); Gonzales v. Tuttman, 8 Wage Hour Rept. 212′ (S. D. N. Y. 1945); Cannon v. Miller, 8 Wage Hour Rept.. 216 (Sup. Ct. Wash, 1945). And see Elliott v. John Horrell & Co., 7 Wage Hour Rept. 1012, and Kurth v. E. H. Clarke Lumber Co., 8 Wage Hour Rept. 69 (Ore. 1944)).

Where, however, a Federal statute not only creates a substantive right, but, also, itself prescribes a period of limitations during which the right must be enforced, such period of limitations is controlling both in respect to actions initiated and maintained in State as well as in Federal courts. (Engel v. Davenport, 271 U. S. 33; Eberhart v. United States, 204 Fed. 884, 890.)

Thus, in Engel v. Davenport, supra (involving a complaint by a seaman against a shipowner, under the Merchant Marine Act as supplemented by the Empolyer's Liability Act, for damages for injuries allegedly resulting from the owner's negligence in furnishing a defective appliance, in which it was held that the State courts have concurrent jurisdiction with Federal courts to enforce the

1 28 U. S. C. A. 725 (R. S. 721). "The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decisions in trials at common law, in the courts of the United States, in cases where they apply."