that the time should come when we can say that our liability has ceased, in fairness to us, in fairness to the Government. And the bill can be equally fair to the employees.

Mr. FEIGHAN. Thank you very much.

STATEMENT OF JAMES W. HALEY, REPRESENTING THE NATIONAL COAL ASSOCIATION

Mr. HALEY. Mr. Chairman and members of the committee; my name is James W. Haley; I appear here as the representative and regular attorney of the National Coal Association. The National Coal Association is the trade association of bituminous coal producers, with a membership comprising about 80 percent of the commercial production of bituminous coal in the United States and with members in each of the major coal-producing States in the Nation.

The bituminous-coal-mining industry is very much interested in the subject matter of H. R. 2788 and is convinced that legislation along the lines of H. R. 2788 is not only desirable but essential, due to the intolerable situation in which the industry finds itself through no fault of its own, and, indeed, in spite of its best efforts to avert some of the difficulties and uncertainties about which we now complain.

If the chairman will indulge me the latitude, I should like to respectfully suggest that H. R. 2788 be modified along the lines suggested by Mr. Smethurst. I think the bill would more nearly accomplish the desired purposes if amended along the lines suggested by Mr. Smethurst.

It would be nothing more than good law, good business, and good sense for Congress to enact a general statute of limitations which would put a time terminal on potential liabilities which Congress itself has created. Absence of such a statute of limitations permits an unsettled field of future business responsibility which not only cannot be accurately foretold, but cannot even be suspected.

Typical of the laws to which the proposed legislation being considered here should apply is the Fair Labor Standards Act of 1938. This is not the only law as to which the bituminous coal mining industry believes the proposed statute of limitations should apply, but is probably the most important and is certainly technically typical of the problems confronting the industry. The following brief references to actual situations involving the Fair Labor Standards Act illustrate the acute necessity for a general statute of limitations along the lines suggested in the bill now being considered by this committee. In the first place, attention is invited to the matter of undergroundtravel time in the bituminous coal mining industry. The Fair Labor Standards Act became law in 1938. At that time, and for decades prior thereto, such travel had not been considered by either employees or employers in the bituminous coal mining industry as time worked which required payment of additional compensation. Moreover, for several years after enactment of the statute there was no suggestion on the part of employers, employees, or the governmental agency administering the act that such travel was time worked requiring additional compensation. As a matter of fact, all declartions from mine employees, mine operators, and Government were to

the contrary, to the effect that such travel was not time worked. Under such circumstances was it not reasonable and proper to proceed on this basis? Obviously, to have done otherwise would have been unreasonable and improper.

Accordingly, mine operators and the mine worker's union in good faith negotiated wage agreements of national scope in keeping with the then unanimous view of the law, that travel time was not time worked. No question was even raised about the matter until a Government inspector, in the course of a routine check, brought the matter to issue, in the case of an individual company. The whole idea was so repugnant to both the miners and operators that they jointly petitioned the Administrator, who readily agreed with them, and announced to the world that the official position of the Government was that underground-travel time in the bituminous coal mining industry was not time worked under the Fair Labor Standards Act. This view of the matter then continued without further question until early in 1943, 42 years after enactment of the statute, when the union seized upon the pay-for-travel-time theory as a device by which an upward adjustment of wages might be rationalized under the economic-stabilization program, the Fifth Circuit Court of Appeals having at about that time, in Tennessee Coal & Iron Co. v. Museoda, 135 Fed. 2d 320 (later affirmed by the Supreme Court of the United States, 321 U. S. 590), held that underground-travel time in iron-ore mines should be considered time worked under the statute. This claim of the United Mine Workers was prosecuted in the negotiations, and although the law by no means clearly required it, the coal operators finally, as a last resort, entered into an agreement providing for payment for travel time. The law still being completely unsettled, one of the coal companies instituted suit in order to resolve the question. The suit thus entered in 1943 was decided in favor of the union by the Supreme Court of the United States on May 7, 1945, in a 5 to 4 decision, Jewell Ridge Coal Corporation v. Local No. 6167. Petition for rehearing in the case is still pending before the Supreme Court.

Thus it is seen that potential liabilities arising out of an act of Congress passed in 1938, and, theoretically at least, springing from that date, were not even suspected until 1943, and did not approach visible form until 1945, almost 7 years later. This is, we submit, an intolerable situation. In the interim, many contracts were negotiated, and the parties thereto were satisfied. Should not Congress now act to preserve this field of understanding to businessmen and workmen in order that they may work out agreements that will be workable, effective, and reasonably conclusive?

Mr. Justice Jackson, writing the decision in the Jewell Ridge case, for himself, the Chief Justice, and Mr. Justice Roberts and Mr. Justice Frankfurter, said:

If the Fair Labor Standards Act entitled each individual miner to travel time, not according to the terms of his collectively bargained agreement, but according to the time actually spent, as the Court now holds, these Government agreements violated that law, the present agreements do also, and heavy liabilities both for overtime and penalties are daily being incurred by the entire industry.

It should also be realized that in the absence of a statute of limitations along the lines of the one we are discussing today, reliance upon

The

a Government interpretation, even a Supreme Court decision, may lead an employer down an unknown road to financial disaster. so-called Belo contracts under the Fair Labor Standards Act are a case in point. The so-called Belo contracts came into valid being as a result of the Supreme Court decision in Walling v. Belo Corp. (316 U. S. 624), decided June 8, 1942. But the decisions of the Court on June 4, 1945, in Walling v. Youngerman-Reynolds Hardware Company, Inc. and Walling v. Harnischfeger Corporation, may well place in jeopardy a number of the arrangements put into operation as a result of the Belo decision. The question is: Should Congress permit a great number of private claims to come into being now and date their births back into the indefinite past merely due to such vicissitudes of life and Government as changes in political or economic outlook, changes in personnel of the Supreme Court, et cetera?

Another field for possible future liability in the bituminous-coalmining industry comes to mind. In the coal industry there are probably several thousand bosses paid on the day or shift basis. These bosses meet all the tests for the executive exemption prescribed by the Administrator of the wage-and-hour law as those tests have been officially interpreted. One of the tests is that the employee must be "compensated for his services on a salary basis at not less than $30 per week"; and the Administrator has specifically ruled that the day and shift-paid bosses meet this salary test where there is a bona fide weekly guarantee of at least $30. Having qualified for the exemption these employees are not subject to the overtime-pay requirements of the statute. But what if 3 years from now, in 1948, the Supreme Court rules that the Administrator had no authority to say these men met the qualifications for executive exemption. Should such a turn of events properly expose the coal companies to possible liability for back overtime pay extending over a period of 10 years?

I am sure there is agreement that there is no hardship involved in requiring that a claim be asserted within a reasonable time. Indeed, that is the only way to avoid hardship. Within some reasonable limitation employers should know where they stand from a time standpoint as to claims arising out of Federal laws.

Congress is strongly urged to adopt legislation along the lines of H. R. 2788.

Mr. FEIGHAN. Thank you.

STATEMENT OF RANDOLPH BARTON, JR., ON BEHALF OF THE BALTIMORE ASSOCIATION OF COMMERCE

Mr. BARTON. Mr. Chairman, the Baltimore Association of Commerce, of which I am and long have been, not only general counsel, but a director, chairman of a committee on State legislation, and member of a committee on national legislation, believes the bill now under consideration to be of such especial importance that, while its views on other important legislation pending before Congress are usually expressed either through direct correspondence or through the Chamber of Commerce of the United States or members of the Maryland congressional delegation, it has in this instance sent representatives here personally to evidence its keen realization of the importance of the passage of this bill.

While the bill covers various causes of action created by Federal laws, an enumeration of these being included in the very admirable remarks of the Honorable John W. Gwynne, when on March 28, 1945, he called the special attention of the House of Representatives to this bill which he had introduced, and the reasons in support of it, and while the Baltimore Association of Commerce entirely concurs in Mr. Gwynne's emphasis on the necessity of such legislation as to all the causes of action which are covered, its particular interest is in its application to rights of action given by the Fair Labor Standards Act of 1938, section 216 (see Labor 29, U. S. C. A.), which section is set out in full on page 6 of the pamphlet containing Mr. Gwynne's remarks.

On page 1 of this pamphlet Mr. Gwynne shows that he also regards this feature of his act as of predominant importance and, in fact, indicates that it was a situation resulting from a decision of the United States court in the northern district of Iowa-Mr. Gwynne's own State-which primarily led to his introduction of this bill.

The established rule is, of course, that in the absence of any Federal limitation on the right of action the time in which any rights given by Federal statute may be enforced by action at law depends upon the limitations statute of the forum in which the suit is brought. As there is at present no Federal limitation on the time in which rights given employees under the Fair Labor Standards Act may be enforced, such actions if brought in Maryland, whether in the State or in the Federal court, are at present governed by the limitations statutes of the State of Maryland.

Until the passage on April 21, 1945, by the Maryland Legislature of the act now known as chapter 518, of the Acts of 1945, and entitled, "Limitations: To add section 19 to article 57 of the Annotated Code (1939 ed.), prescribing period of limitations for actions under the Fair Labor Standards Act of 1938"-there was no Maryland statute of limitations particularly applicable to actions of that kind, and when the question first arose in a suit in the Baltimore city court, entitled August Manhoff, Jr. v. Thomsen-Ellis-Hutton Company," and the defendant pleaded the Maryland 3-year statute of limitations applicable to ordinary suits on contract rights, Judge Frank, sitting in that court, after a full review of the Maryland authorities, on March 15, 1942, sustained a demurrer to the pleas and held that the 12-year period of limitations was the only applicable plea. No appeal was taken from that decision, and the Maryland Court of Appeals has not passed on the question; but on August 14, 1944, Judge Coleman, in the United States district court, in the case of Sallie Bright v. H. Clay Hobbs, et al., trading as Hobbs Manufacturing Company, in a full opinion similarly overruled a plea of 3-year limitations and held applicable only the 12-year limitations plea on the same ground on which Judge Frank had similarly ruled.

At the session of the Maryland Legislature in January 1945 a bill was introduced which, after some amendments, was passed as chapter 518 of the Acts of 1945, above referred to. This bill as originaly introduced provided for a 1-year period of limitations and it had the heartiest support of the Baltimore Association of Commerce; and although opposing interests succeeded in having it amended until the time was extended to 3 years, its passage even in that form, if the bill

was valid, at least cut the time from 12 years to 3. As Mr. Gwynne in his remarks explained, however, the United States District Court for the Northern District of Iowa has held that no State law at all can validly impose a period of limitations on any Federal right of action unless the State gives a cause of action similar to that given by the Federal act. This ruling, if followed, and not reversed on appeal, will make the recent Maryland act ineffective, as Maryland has no Fair Labor Standards Act at this time.

In any event, it certainly is far better that the period of limitations on such an act should be uniform throughout the country and this can only be accomplished by Federal legislation on the subject.

As to the justice, and indeed, the necessity of such legislation, nothing could advantageously be added to the demonstration of these by Mr. Gwynne in his remarks. As he shows, the present law often makes an employer liable on what is really a retroactive law. New "interpretations" bring within the provisions of the act situations which no one up to that time had any reason to suppose were within such provision. It is only necessary to suggest the vast extension in recent years of the rulings as to what constitutes interstate commerce, making the employer liable to the Federal law. As an illustration, an employee of an office building may be held to be within the provisions of the act because some of the tenants of the building are themselves engaged in interstate commerce. An employer may therefore be, and often is, subjected to a claim which no one had ever dreamed existed, making him liable for heavy additional amounts, including penalties, counsel fees, et cetera, running back for many years in the past, and against which he neither could, nor had any reason to make provision. This not only is manfestly unjust, but is often ruinous to businesses of moderate size.

I am not now urging the rights of employers who knowingly, or at least with every reason to know that they are violating a Federal statute, continue to make payments lower than those which the act requires. It is those who unknowingly, and indeed with every reason to be assured that they are not within the act, omit compliance with its terms whose situation I am here stressing.

Certainly if employees have any fair reason to believe that they are within the terms of the act they ought to raise and test the question within a reasonable time. It is only by their asserting rights, and if necessary, bringing suit, that such a question can be judicially determined, and no hardship whatever is imposed on them by limiting their claims for back wages to a reasonable period after their alleged claim arose. Should a later ruling or interpretation hold that they are entitled, they, of course, still have the right to enforce compliance with the act thereafter, and so far as back payments are concerned for the period for which right of action is limited. As it is now, particularly in Maryland, an employer has hanging over him a possible liability for large sums for which he neither has nor had any reason to make provision and the discharge of which unforeseen obligations may be simply ruinous to his business. As an illustration, after this hearing was arranged, my attention was called to a ruling made on May 10, 1945, by the United States District Court for the District of Puerto Rico, reported in United States Law Week at page 2641. In this case the unexpected application of the act to