right of action established by the Merchant Marine Act), the Supreme Court stated that the provision of the Employer's Liability Act that "no action shall be maintained under this act unless commenced within 2 years from the day the cause of action accrued" was one of substantive right, both setting a limit and necessarily implying that the action may be maintained as a substantive right within the 2-year period. Furthermore, said the court, "as a provision affecting the substantive right created by Congress in the exercise of its paramount authority in reference to the maritime law, it must control in an action brought in a State court under the Merchant Marine Act, regardless of any statute of limitations of the State." [Italics supplied.] During the past few years, the State legislatures of the several States have been deluged under a flood of bills designed to shorten the period in which suits may be brought for the recovery of unpaid wages or overtime. Such statutes have as their aim the limiting of the period during which employee suits may be maintained under section 16 (b) of the Fair Labor Standards Act. Thus, for example, attempts were made in the 1944 and 1945 sessions of the New York State Legislature to enact a 1-year statute of limitations for the recovery of unpaid wages and overtime, but fortunately, such attempts have thus far proven unsuc.cessful. The State of Iowa, however, enacted a 6-month statute of limitations on March 19, 1943; Alabama enacted a 1-year statute of limitations on July 6, 1943; Florida enacted a 1-year statute of limitations on May 31, 1943; Georgia enacted a 2-year statute of limitations on March 20, 1943; and Ohio, on June 19, 1943, reduced its period to 3 years. A 6-month statute of limitations is also in effect in Oregon. This trend toward shortening the period during which employee suits may be commenced under the Fair Labor Standards Act is now, apparently, evidencing itself in the national legislature as well as in the various State legislatures. In general, however, the various statutes of limitations which are presently applicable to suits arising under section 16 (b) of the Fair Labor Standards Act provide for a period of 6 years during which such actions may be maintained, although, as pointed out in Smith v. Continental Oil Co., supra, present State statutes of limitations governing section 16 (b) suits provide periods ranging from 6 months to 12 years. In the last-named case, in fact, the United States District Court for the Eastern District of New York took occasion to state that the omission, in the Fair Labor Standards Act itself, of a period of limitations on employee suits "might well be remedied by the Congress in the interest of uniformity." Similarly, on March 19, 1945, Senator Johnson of Colorado introduced a bill (S. 760) to prescribe a 6-month period of limitations during which actions under Section 16 (b) of the Fair Labor Standards Act must be commenced. This bifi, which was referred to the Senate Committee on Education and Labor, reads as follows: "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 16 (b) of the Fair Labor Standards Act is amended by adding at the end thereof a new sentence as follows: 'No action may be maintained under this subsection unless commenced within six months from the date the cause of action accrued.'" Passage of the bill proposed by Senator Johnson of Colorado (which has but one virtue-it prescribes a uniform period for the bringing of employee suits under section 16 (b) of the Fair Labor Standards Act) would, in large measure, nullify the original purpose and intent of Congress in enacting section 16 (b). At the present time, section 16 (b) stimulates employers to pay promptly the full amount of wages due under the Fair Labor Standards Act because, in the event of failure to do so they become subject to employee suits in which the employees may recover not only the difference between the amount of wages that were paid and the amount which should have been paid, but in addition thereto, an equal amount as liquidated damages. A requirement that an employee commence his action for unpaid wages within 6 months (or 1 year) from the date of accrual of his cause of action may well encourage employers to attempt to evade compliance with the provisions of the act. Employers may well be willing to gamble that such suits will not be commenced within the period, or that, if such suits are commenced, the employees' recovery will be so small as to justify evasion and noncompliance with the terms of the Fair Labor Standards Act. To the extent that the courts are freely available to employees who desire to bring suit under section 16 (b), the congressional purpose is effectuated. To the extent that the courts are closed to employees or are open to them only on a very limited basis, viz, during a 6-month or 1-year period, the congressional purpose is frustrated and thwarted. Moreover, it is quite likely that the volume of employee suits will fall off considerably if the amount which can be recovered is limited to the sums which should have been paid them in the preceding 6-month or 1-year period, thus further hindering effectuation of the policy and purpose of the act. Furthermore, a 6-month or 1-year period of limitation does not represent in any way a reasonable period for the bringing of suits under section 16 (b). It cannot be overlooked, in this connection, that employees employed under contracts which provided specifically for the payment of premium compensation for the working of overtime hours in excess of 40. in a week would be enabled to sue on such contracts under the applicable State statute of limitations whereas other employees, employed under like conditions, but without specific mention of overtime compensation being made in their contracts, would be discriminated against since, with respect to the latter class of employees, the Federal 6-month or 1-year statute of limitations would apply to section 16 (b) suits. For the reasons set out above, it is recommended that the National Lawyers Guild exercise every effort in opposition to S. 760 and H. R. 2788. It is also recommended, in view of the growing tendency of State legislatures to prescribe short statutes of limitations which affect employee suits under the Fair Labor Standards Act, that the National Lawyers Guild put itself on record as favoring— and press for adoption of- -an amendment to section 16 (b) of the Fair Labor Standards Act prescribing a uniform 6-year period of limitations for employee suits under the Fair Labor Standards Act of 1938. EXECUTIVE COUNCIL CALIFORNIA STATE FEDERATION OF LABOR, Hon. FRANCK R. HAVENNER, DEAR CONGRESSMAN: Your attention is directed to H. R. 2788 introduced by Representative Gwynne, of Iowa, which provides for a 1-year statute of limitations in all actions to recover damages, provided that if the State has a shorter statute it shall apply. The apparent purpose of this bill is to deal with actions for liquidated damages arising under the Fair Labor Standards Act (title 29 U. S. C. A.). We believe this bill is harsh legislation, unfairly discriminating against the rights of the workers. Instead of inserting an amendment into the Fair Labor Standards Act itself dealing subsequently with any problem therein involved, this bill provides an amendment general in terms and unlimited in scope. Instead of providing a reasonably long period of time, such as 3 years, this amendment proposes to limit the right to sue to at most, 1 year from the date the cause of action accrues. The harshness of this restriction is clear when one realizes that while most employers have legal counsel to advise them promptly and completely as to their rights, employees generally are without the means to obtain or the opportunity to secure such aid. As contrasted with this the reason for such a statute of limitations is basically to require actions to be commenced while evidence is still available. Certainly, the evidence required in this type of case is and will continue to be available for many years since most of it will be contained in the various books of the employers. Instead of providing a uniform statute applicable to all workers, alike, this bill will allow State statutes to apply where they are shorter than the Federal statute. As a result State statutes which contain 3-month or 6-month provisions will apply and workers in such States will be exposed to even a more summary cutting off of their rights contrary to the conditions prevailing, in the Federal courts or in State courts in other jurisdictions. In essence this bill will cause many rights to be cut off even before the individual who possesses such rights becomes aware of their existence. Any legislation which produces such harm cannot be justified as being for the public good. Accordingly, we respectfully urge that you use every effort to defeat this particular measure. Yours sincerely, 78034-45-ser. 9- -15 O. J. HAGGERTY, Secretary. Hon. FRANCK R. HAVENNER, M. C., SAN FRANCISCO LABOR COUNCIL, House of Representatives, Washington, D. C. DEAR CONGRESSMAN HAVENNFR: We are informed that Congressman Gwynne, of Iowa, recently introduced H. R. 2788, which seeks to reduce the statute of limitations as applied to claims for back wages under the Federal Fair Labor Practices Act from 3 years to 1 year. By unanimous vote of the San Francisco Labor Council, we are instructed to call your attention to this legislation and urge that you oppose this amendment. One of the most bitter fights of the recently adjourned session of the California Legislature was a fight on this same issue in which efforts were made to enact State legislation along this line. The senate and assembly bills seeking to accomplish this purpose were both roundly defeated on the floors of these respective houses. With kindest regards and best wishes, we are, JOHN F. SHELLEY, President, San Francisco Labor Council. AMERICAN FARM BUREAU FEDERATION, Hon. SAM HOBBS, Chairman, Judiciary Subcommittee, House of Representatives, Washington, D. C. MY DEAR CHAIRMAN HOBBS: Seven years ago the board of directors of the American Farm Bureau Federation passed a resolution recommending an amendment to the Fair Labor Standards Act and other applicable Federal laws to provide a limitation on the time when actions may be brought. Today the American Farm Bureau Federation reiterates its recommendation for a statute of limitations on causes of action to recover damages. The American Farm Bureau Federation supports the principles of the bill H. R. 2788, which was introduced by Congressman Gwynne, of Iowa, amending title 28 of the United States Code to provide, except as otherwise provided in any cause of action, that no action shall be maintained unless such action is commenced within 1 year after such cause of action accrued, unless a shorter time is fixed by any applicable State statute. Although at common law there was no fixed time for the bringing of actions, ever since the reign of Henry VIII limitations have been created by statutes. Such statutes of limitations rest on reasons of sound public policy in that they tend to promote peace and the welfare of society, to safeguard against fraud and oppression, and to compel the settlement of claims within a reasonable period after their origin. They are founded upon the general experience of mankind that claims which are valid are not usually allowed to remain neglected if the right to sue thereon exists. Therefore in order to encourage promptness in the bringing of actions, statutes have been enacted restricting to definite periods the time within which actions may be brought. The enactment of H. R. 2788 will assure promptness of action and adjudication of the rights of interested parties. The American Farm Bureau Federation urges the enactment of the proposed legislation. I will appreciate it very much if you will include this statement in the hearings of your subcommittee. Sincerely yours, EDWARD A. O'NEAL, President. The Honorable CARL HINSHAW, HAMMOND LUMBER CO., Pasadena, Calif., June 7, 1945. House of Representatives, Washington, D. C. DEAR MR. HINSHAW: Our company, like thousands of others-companies and individuals-has a very definite interest in the enactment into law of the Gwynne bill (H. R. 2788). At the risk of stating something in respect of which you may be fully informed, this bill would impose a definite Federal statute of limitations on suits for money damages under various Federal laws, including the Fair Labor Standards Act. Today such actions can be brought years later, when huge potential liability may have accrued. Mr. L. Metcalfe Walling, Administrator of the Fair Labor Standards Act, is very much alive to the necessity of legislation such as proposed in this bill; indeed item (5) of his recommendations in his annual report for 1944 reads in effect, that a "reasonable" statute of limitations with respect to employee wage claims should be enacted. Under present laws many employers are in the dark as to whether their operations are of an interstate character, and even if they are so classified they do not know what constitutes a workday under the act, hence may become liable for huge sums under the retroactive feature of the said act. I believe that the majority of Federal statutes creating a liability contain within themselves reasonable limitations' as to the time within which an action to enforce such liability must be brought. I am informed that a subcommittee of the Judiciary Committee of the House will hold a hearing on this measure on June 11. I am very much aware of the calls on a Congressman's time, nevertheless if you can find it possible to say a word at this hearing in support of this measure it will be much appreciated by a large segment of the country. Thanking you for any aid you may render in the premises, I am, Yours sincerely, H. W. MCLEOD, Vice President. EASTERN ROCK PRODUCTS, Hon. HADWEN C. FULLER, House Office Building, Washington, D. C. DEAR CONGRESSMAN: Action by Chief Administrator L. Metcalfe Walling of the Federal Wage and Hours Division, in reversing a previous ruling creates a very serious situation for many businesses who, under previous and original rulings, did not operate under the provisions of the law. This corporation is an example of one subjected to such dangerous consequences. The original ruling provided that manufacturers of commodities used within the State were not subject to the provisions of the law. For instance, stone and sand produced by us used in State highways did not leave the State, but the structure in the construction of which these materials were used is an artery of Interstate Commerce and, under the present and reversed ruling by Mr. Walling, such materials so used are included under articles of Interstate Commerce and producers of same are subject to the law. Mr. Walling's ruling is not retroactive in itself, but this does not prevent suits by employees to collect wages during the period when the original ruling was effective. In our own instance, this reversed decision would make us liable to suits which would bankrupt the corporation and, in view of this unjust situation, we ask your support of legislation which would provide a limitation of time for the bringing of such actions. Specifically we ask your support of the Gwynne bill, H. R. 2788, or any companion legislation which may be introduced in the House for like purpose. Thanking you for any attention you may care to give this matter, we are, Very truly yours, EASTERN ROCK PRODUCTS, By H. V. OWENS, President. OFFICE OF THE ATTORNEY GENERAL, Hon. HATTON W. SUMNERS, Chairman, Committee on the Judiciary, House of Representatives, Washington, D. O. MY DEAR MR. CHAIRMAN: This is in response to your request for my views concerning a bill (H. R. 2788) to amend the United States Code in regard to the limitation of certain actions. The bill would enact a 1-year statute of limitations applicable to all actions under the laws of the United States, except in cases in which a shorter time is fixed by any State statute. The bill would further provide that public actions to recover money damages might be brought within 2 years after the accrual of the cause of action, except when the United States is not the real party in interest. In other words, the bill would prescribe a 1-year period of limitation for all actions under the laws of the United States brought by or in behalf of others than the United States and a 2-year period of limitations in respect to actions by or in behalf of the United States. Under existing law, the United States is not bound by general statutes of limitations. The bill under consideration would, therefore, introduce a drastic change that would have a highly detrimental effect on the rights of the Government. I am not aware of any cogent reason for the proposed legislation and am unable to recommend the enactment of the bill. I have been informed by the Director of the Bureau of the Budget that this legislation is not in accord with the program of the President. Sincerely yours, Hon. HATTON W. SUMNERS, /s/ FRANCIS BIDDLE, Attorney General. OFFICE OF THE ATTORNEY GENERAL, Chairman, Committee on the Judiciary, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is to supplement my letter to you dated May 16, 1945, in which I stated my views concerning a bill, H. R. 2788, to amend the United States Code in regard to the limitation of certain actions. I wish at this time to emphasize the detrimental effect which the enactment of the bill would have upon the enforcement of the antitrust laws of the United States. As you know, those laws provide a variety of remedies to the Government, and in addition permit private persons who have been injured by practices in violation of such laws to maintain civil suits for treble damages against the offending persons (15 U. S. Code 15). The Congress has given these private persons the benefit of the final disposition of any criminal or equitable proceeding growing out of such violation instituted by the Government against the same defendants, by providing that a final judgment or decree to the effect that the defendants have violated the law shall be prima facie evidence against such defendants in the private suit (15 U. S. Code 16). Actions for treble damages, therefore, are frequently brought after the final disposition of the proceedings brought by the Government. In many instances, the facts giving rise to a cause of action upon behalf of a private party may not be recognized as a violation of the antitrust laws until they are subsequently revealed by a comprehensive investigation to be a part of broad scheme. Under existing law an indictment may be found or information instituted under the antitrust laws within 3 years next after the offense has been committed. Under the proposed legislation (H. R. 2788), it will be necessary for the Government to institute proceedings within 1 year after the cause of action has accrued to a private person in order that such person may take advantage of the Government's proceedings. The reach of H. R. 2788 is thus much greater than a mere limitation upon the right of action of a particular party in a particular case. The deterrent effect of the possibility of treble damage suits occupies an important place in the wellrounded antitrust program enacted by Congress. Obviously, H. R. 2788 would lessen the likelihood of treble damage suits being filed, and would also lessen the likelihood of success in such suits. It would thus weaken the entire antitrust program. |