of motor carriers. Immediate controversy arose as to whether this power included all employees of motor carriers or only certain types and classes of those employees. That controversy was not decided authoritatively until some time after the enactment of the Fair Labor Standards Act, and has not yet been decided completely and in detail, The question became one of increasing importance when the Fair Labor Standards Act became effective, as that statute contained a provision exempting from the operation of section 7, which is the section which provides requirements concerning hours of service and overtime pay

any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935.

From the outset, the Wage and Hour Division took these positions: (1) that the Commission's power was limited to those employees whose activities affected safety, and (2) that even as to the latter class of employees the provisions of the Fair Labor Standards Act applied until such time as the Commission had actually prescribed hours of service. In 1939, the Commission, in Ex parte No. MC-28 (13 M. C. C. 481) determined that its jurisdiction was limited to employees whose functions involved safety considerations. That ruling was appealed to the courts, was set aside by a three-judge District Court, but was upheld in May 1940 by the Supreme Court in a 5-to-4 decision (United States v. American Trucking Associa tions, Inc., 310 U. S. 534. The question as to whether the Fair Labor Standards Act applied to those employees whose activities did affect safety, in the absence of the establishment of hours of service for them by the Commission, was not decided by the Supreme Court until May 1943 in Southland Gasoline Co. v. Bayley (319 U. S. 44), nearly 5 years after the Fair Labor Standards Act became effective. Before that there had been conflicting decisions on the point in separate circuit courts of appeals.

From October 1938 until the Commission's decision in March 1941 there had still been no determination as to what classes of employees, except drivers, were within the Commission's jurisdiction. Every carrier had to guess for himself at his peril. On the latter date, the Commission decided that, in addition to drivers, mechanics, loaders and driver's helpers were subject to its jurisdiction. But even that did not settle the matter. We now have questions pending in the courts as to what particular kind of mechanics, for example, the Commission meant, whether those only who worked directly on motor vehicles, or all mechanics of every kind employed by them. We have instances of cases in which the courts have exercised their own judgment, independently of the Commission's decision, as to whether given employees were or were not engaged in work which affected safety. All of these years of delay and doubt naturally gave rise to a veritable flood of litigation which still goes on. The carriers throughout the years have had to depend upon their best judgment, lacking any authoritative decisions, as to whether any given employee was or was not subject to the Fair Labor Standards Act. If his judgment were erroneous in the light of subsequent determinations, he was confronted with double penalties and attorney's fees, and his good faith and high intentions were of no moment. If, in all good faith,

he made a settlement with any of his employees' status, even though the settlement was then entirely satisfactory to the employees, he subsequently found that releases were of no efficacy and he was still liable for further outlays.

In addition to the many problems created by the confusion and doubt which arose out of these duplicating and overlapping statutes, there are others which, generally speaking, the motorbus industry shares with other industries. One of them, peculiar to the passenger transportation industry, may be mentioned. It grows out of the use of redcaps in terminals. For many years it had been industry practice for this type of employee to obtain all or a major portion of his compensation from tips given by the passenger served. In practically every instance of this kind, no records were kept and consequently no information is now obtainable as to the amount of compensation received by any individual redcap during any given period. Whether such persons were or were not subject to the Fair Labor Standards Act was not settled until March 1942 when the Supreme Court, in Williams v. Jacksonville Terminal Co. (315 U. S. 386), decided that redcaps were carrier employees and that as to them the carriers or ter-minals companies were subject to the Fair Labor Standards Act.. It was also decided in that case that tips received by redcaps might be included in computing the wages received. That also had been an open question ever since 1938.

In all of these various circumstances, it is readily apparent how very unjust it is to the carriers to have them subject to assertions of claims for overtime and penalties without some reasonable period of limitations.

Mr. SPRINGER. I beg your pardon, what is that reference, 315-Mr. SCOTT. 315 United States 386, Williams v. Jacksonville Ter-minal Co.

Mr. FEIGHAN. Is that the redcap case?

Mr. SCOTT. Yes. As has been shown by other witnesses, in the absence of a Federal limitation statute, the statute of the State of the forum probably applies. These have no uniformity, running as high in some cases as 12 and 15 years. Our people are and always have been earnest in their effort to comply with the Fair Labor Standards: Act to the full extent it applied to them. If they have not complied in certain cases it has been because of lack of authoritative and definitive utterances as to the nature and extent of their liability. They have not been clairvoyant, but they have done the best they could under all of the circumstances. They should not now be continuously exposed to stale and vexatious claims, extending back as far as the effective date of the Wages and Hours Act, when they are unable for lack of records and other evidence adequately to defend themselves. Finally, I think it should be said, in addition that the intercity motorbus industry is predominantly made up of small enterprises. We estimate that there is a total of approximately 2,300 intercity motor carriers of passengers in the United States. Of these, only 278. were class I carriers, within the ICC accounting rules, on December 31, 1944. Class I carriers under those rules are those whose gross annual income exceeds $100,000. The potential liability of these small carriers, if extended back to 1938, which might well be the case under many State statutes, would aggregate an amount which many, if not

most, of the smaller carriers could not pay. Congressman Gwynne has aptly called this sort of thing "hidden bankruptcy." That should not be permitted in any industry, but it should particularly be prevented in an industry which constitutes such an important part of our modern transportation system and which is so affected with a public interest that it has been subjected to strict regulation in almost every particular, including the fares it may charge. The potential demands against us, extending back over a period of 7 years, baffle our "every honest effort to counteract them." We feel that, in all justice, we should be given the protection of a reasonable statute of limitations, which this bill provides. For these reasons, we respectfully urge favorable action in the bill here under consideration.

Mr. FEIGHAN. Thank you, Mr. Scott.

Mr. Jones? Mr. Johnson?

Mr. BAHR. Here.

Mr. Chalfont? Mr. Bahr?

Mr. FEIGHAN. If you will come forward, please?

STATEMENT OF HENRY BAHR, REPRESENTING THE NATIONAL LUMBER MANUFACTURERS ASSOCIATION

Mr. BAHR. My name is Henry Bahr, and I am acting secretary and general counsel of the National Lumber Manufacturers Association. The lumber industry is particularly interested in this bill from the standpoint of the application of the proposed limitation to claims arising under the wage-and-hour law. It offers a promise of at least partial relief from an ever-present threat of sudden bankruptcy now hanging over the head of many operators.

One has only to look at the decisions of the Supreme Court during the current term to realize that this is a threat that no employer can hope to escape. The highest degree of conscientious effort to comply with all of the requirements of the wage-and-hour offers no protection whatever from the fatal effect of a judicial reversal of longestablished legal principles.

Collective bargaining agreements, no matter how favorable to workers, are meaningless; bona fide releases of claims are of no effect; what yesterday was a worker's personal business is today hours worked these are but highlights of recent rulings which emphasize the futility of trying to determine one's honest duty under this law on the basis of common principles of law and equity.

The lumber industry, which has met the unprecedented war requirements of the past 5 years now finds that it is the focal point of tremendous new pressures arising out of the needs of reconversion. The Chairman of the War Production Board has expressed concern over the fact that lumber production is declining in the face of a growing need for lumber to aid in the resumption of construction and other civilian activities. He recently stated that

lumber's availability may well be the deciding factor in the partial reconversion period following VE-day.

Yet, many operators in this industry are faced with such heavy contingent liabilities under wage-and-hour law on issues as yet unsettled that, harassed as they are by the multitude of other problems confronting them, they are almost ready to shut down. There are many operations that will certainly close if, as a result of an adverse

ruling in pending litigation, they are forced to pay hundreds of thousands of dollars in retroactive wage and damage payments for a period running back as far as 1938.

Let me point out here that the issues which confront us under this law do not involve substandard wages or exploitation of labor. The major current wage-hour controversy in this industry centers around travel time of woods workers in the west coast area where the average wage of loggers is $1.38 an hour. The workers are highly unionized and the type of travel time involved has not been considered working time either as industry practice or under collective-bargaining agreements.

Mr. FEIGHAN. May I interrupt there?

Mr. BAHR. Yes, sir.

Mr. FEIGHAN. Have any regulations been suggested so far as provisions for travel time in your industry?

Mr. BAHR. Only the general regulation, which is very difficult to interpret as to varying operations. The Wage and Hour Board has been making a study of the subject for the last 4 or 5 years and has recently stated that they couldn't find anything in the lumber industry to distinguish us from the general problem, but were going to do the best they could.

Until late last year the Wage and Hour Division took the position that it was doubtful whether the law required payment for the travel of loggers. Encouraged by the ambiguous rulings in the Tennessee Coal & Iron and Jewell Ridge cases, however, Mr. Walling announced in December that

there no longer exists any reason why the enforcement of the Fair Labor Standards Act as regards travel time in the west coast logging and lumber industry should be further postponed. As far as the administrative enforcement of the act is concerned

he added

this policy will be prospective for all companies which come into compliance immediately.

Now, although Mr. Walling did not consider it fair to apply this new policy retroactively, employees may bring wage suits to recover back overtime pay plus liquidated damages and attorney's fees for a period running all the way back to 1938 in some cases. In any such suit the workers would, of course, have the support of the Division's new ruling.

Further, any employer who wants to exercise his constitutional right of a court determination of this controversial question faces retaliation by the Division in that if the Division's position is upheld, he will be required to make retroactive restitution.

I could elaborate in great detail on the confusion which exists as to what is and what is not compensable travel time. This confusion. exists not only on the part of employers and employees but opinions differ even among the various regional offices of the Wage and Hour Division.

Let me give you, as an example, the unrealistic position taken recently by one of the regional offices of the Wage and Hour Division which will help to illustrate why this issue cannot be determined until, after long litigation, authoritative court rulings can be obtained.

I will use assumed names but the facts are based on actual cases. There are two sawmills located on the outskirts of the town somewhere in the South. These operations are fairly large for the South, although they are small by comparison with west coast mills. Both of the operators are cutting timber to be hauled to the mills from sites located along a public highway about 20 miles distant. Virtually the entire woods crew of one of these operations, which we will call the Jones Lumber Co., lives in town in the vicinity of the sawmill. The workers of this company are supposed to be on the job in the woods at 8 o'clock in the morning. Workers who have an auto and can get sufficient gasoline are free to drive to the job. However, under present-day conditions they prefer to have transportation furnished. Since the company's trucks must go out to the job in the morning, arrangements have been made to pick up the men at a gasoline station which is within a few blocks walk of their homes.

The other company, which we will call the Brown Lumber Co., has a mill a quarter of a mile down the road from the Jones Co., and has recruited a woods crew from small farmers located along the main road leading to its woods operations. Each morning a Brown Co. truck goes down the road and picks up the men at their front gate.

The director of one of the Wage and Hour Division regional offices stated that in the case of the Jones Lumber Co., where the men gather at a central point, compensation must be paid for the time spent by the men in being transported to the job. On the other hand, since the Brown Lumber Co. picks the men up at their front gate this is considered to be transportation furnished for the convenience of the employee and he has ruled that travel time payment is not required. Although the necessity for providing transportation to workers has been greatly increased because of wartime shortages of autos, tires and gas, it has from time immemorial been the accepted practice, both of workers and employers, to compute working time from the moment at which the men are at the job in the woods. The Jones Lumber Co. thus suddenly finds itself confronted with an entirely now theory of working time.

Even under a liberal interpretation of the principles laid down by the Supreme Court in the mining cases almost any attorney will feel that there is considerable doubt as to the legal obligation of the company to treat travel of this character as working time. Suppose, however, that the company does not wish to become involved in litigation; let us assume also that it believes it can afford to absorb this added burden of cost in the future and still stay in business.

After a conference with Wage and Hour Division representatives the company agrees that henceforth it will pay the workers for time spent in travel. The company manager calls in the workers' representative and asks him if the company's proposal is acceptable. The workers hold a meeting, agree to the company's proposal to pay travel time in the future, and offer to execute a release of claims for any retroactive compensation. This release is drawn up by an attorney engaged by the workers themselves and is given to the company

manager.

The company's attorney, however, points out that the workers cannot release their claims to back pay and an equal amount as liquidated damages. With an average crew of 50 men, and the rates of pay