Mr. MALONEY. Certainly, sir: that is their answer, as far as the future is concerned. I do not know what position they will take on this matter which I have just suggested. that the benefits of this bill be made retroactive, but I may say that insofar as the parties to the collective-bargaining agreement on the east coast are concerned. I happen to be personally familiar with that, and they are both awaiting congressional action in order that they may get back to the traditional contracts that have existed in the stevedoring industry since 1914. Mr. GWINN. That has all been subject to collective bargaining! Mr. MALONEY. Yes, sir. Mr. GWINN. This legislation is designed to do away with collec tive bargaining; is it not? I mean the effect of the minimum wage and hour law to be administered by Government commissioners is to do away with collective bargaining? Mr. MALONEY. I would not say that at all. sir. As I understand it, this sets a minimum in certain fields, and the collective bargaining process is encouraged by national policy to improve on that. Mr. GWINN. What sense will there be for collective bargaining a all in the minimum wage category if Government employees become the arbiters of what minimum hours and wages are to be? Mr. MALONEY. Well, sir. speaking solely as to those provisions on the committee print and H. R. 855. to which I have addressed myself. I do not see any interference by Government agencies in collective bargaining. Mr. GWINN. They take the place of collective bargaining? Mr. GWINN. When the department of Government says. “We are going to hold hearings to determine what is a fair wage and hour." does that not substitute Government bargaining for voluntary collective bargaining between workers and contractors? Mr. MALONEY. I cannot agree with that, sir. I can see if they said that the parties could not enter into an agreement unless they were approved by the Government agency. I certainly think that we would not go along with that, but when we are free to improve on the national standards, then I see no real restriction. Mr. GWINN. How are you free when the Government says itself it is going to determine these matters! Mr. MALONEY. We have had no such difficulty in the past— Mr. GWINN. I know: under the new legislation. Suppose you have a 75-cent minimum, and they are going to hold hearings as to whether or not it should be a dollar, possibly? Mr. MALONEY. Bear in mind, sir, our straight-time rate is $1.88. That is the minimum rate paid in the stevedoring industry for straight-time work, so that I would not-speaking solely for the field with which I am familiar-I would not anticipate difficulty. Mr. GWINN. Well, you would if it goes on up to $2. Mr. MALONEY. If they get up to $2. by that time I would think we would be pretty well in excess of that if the industry follows the pattern of moving ahead. Mr. GWINN. How can you have two groups determining what fair wages and hours will be, one a Government group and another a labormanagement group? Mr. MALONEY. I cannot see where we would have two groups making such a determination in our case. Mr. GWINN. This law provides for it. Mr. MALONEY. Well, I cannot Mr. GWINN. Read it over again and see if you do not find that. Mr. MALONEY. I may say, sir, the only time we have had any interference with the free process of collective bargaining in the stevedoring industry was when the Supreme Court said that the contract does not mean what the parties think it means. That is the first time we have had our freedom restrained, and that is what we are asking you to correct. Mr. LESINSKI. In other words, the Supreme Court was writing the bill, instead of Congress? Mr. MALONEY. Exactly, sir. We have rewritten the whole pattern of employment in the stevedoring industry, a pattern that goes back to 1914. Mr. GWINN. Well, that is what this Government Commission is going to do. You are not even going to get to the Supreme Court. The Commission is going to decide these things. It is provided for in this bill. Read it over again. Mr. MALONEY. I will, sir. Mr. GWINN. All right. Mr. LESINSKI. Mr. Smith? Mr. SMITH. In regard to the retroactive provisions, I believe we had testimony last week to the effect that if the retroactive provisions were not added into the bill there would be 3 or 4 million dollars the Government would owe under the interpretation of the Supreme Court. Mr. STEVENSON. I do not think it was that high, but up to a million dollars. Mr. SMITH. By war contracts in stevdoring there was an enormous sum the Government would have to pay if the retroactive provision was not added into the bill. Mr. MALONEY. That comes about from the fact most of the suits were filed before the statute of limitations was cut down to 2 years by the Portal-to-Portal Act, and the great liability is in the 6 years. A large part of it will be on the Government agencies, but even a greater part falls on the contracting stevedore, and all the recent liability going back to the end of the war falls on the contracting stevedore. Mr. LESINSKI. Mr. Stevenson. TESTIMONY OF H. D. STEVENSON, CHAIRMAN, BOARD OF DIRECTORS, NATIONAL ASSOCIATION OF STEVEDORES, AND PRESIDENT, M. P. SMITH & SONS CO., INC., NEW YORK, N. Y. Mr. STEVENSON. My name is H. D. Stevenson; my office is at room 2206, 90 West Street, New York City; my telephone number is Rector 2-2437, in New York. I am appearing as a witness at this hearing as chairman of the board of directors of the National Association of Stevedores and also as president of M. P. Smith & Sons Co., Inc., to discuss that feature of the committee draft of a bill to amend the Fair Labor Standards Act of 1938 insofar as the draft seeks to outlaw overtime-on-overtime. I wish at first to present my statement on behalf of the members of the National Association of Stevedores and after that is completed to present information showing the impact of this problem on M. P. Smith & Sons Co., Inc., as a member of the stevedoring industry. I might state at the outset that I was called to Washington during the recent war and for more than 1 year I served as manager of stevedoring operations for the War Shipping Administration without compensation. Following my resignation as manager of stevedoring operations, I served as stevedoring consultant to the Administrator for the duration of the war. The National Association of Stevedores is a membership corpora tion organized in 1933. It currently numbers among its membership approximately 127 employer stevedores with offices on all coasts of the United States and in Hawaii. Our membership is responsible for the stowage and discharge of over 70 percent of all of the deep-water general-cargo tonnage in all of the ports of the United States. The purpose of the association is to further the interests of the stevedoring industry. It may be well to consider for a moment the function of the stevedore in our economy. Commodities of all kinds are mined, produced, fabricated, or manufactured all over the United States for export, and they are also grown on farms for export. When these commodities are forwarded to the various ports of America, the stevedore is responsible for their proper stowage aboard the transshipping vessel. Also when a ship arrives at an American port, the stevedore dis charges the cargo from the vessel for delivery to the consignee. Some indication of the importance of our function in the over-all operation of our merchant fleet may be gleaned from the fact that the highest item of expense in the voyage account of a cargo vessel is the cost of stevedoring. The cost to the United States Government of handling cargoes during the years of World War II may be obtained by the members of this committee through a perusal of the several appropriation acts passed during the war years. It is my belief that the cost exceeded $1,000,000,000. No accurate figures are available to show the total stevedoring bill in America in the normal peacetime year. It would suffice to say that the cost runs into many millions of dollars. From a union standpoint, our industry is highly organized. On the east and Gulf coasts and in a few west coast ports, all of our employees are members of the International Longshoremen's Association, affili ated with the American Federation of Labor. The balance of the west coast ports work under contracts made by the International Longshoremen and Warehousemen's Union, affiliated with the Congress of Industrial Organizations, and the contracting stevedores. And these contracts are not of recent origin. In the port of New York, the International Longshoremen's Association has represented the longshoremen for over 30 years. The International Longshoremen and Warehousemen's Union on the west coast have been party to collective bargaining agreements with employing stevedores for over 15 years. I think it appropriate at this time to state that longshore work is casual work. No one can know with complete certitude when work is available. Ships may be delayed. Even when docked, inclement weather may prevent loading or discharging operations. The contract between the International Longshoremen's Association and the stevedores covering the longshoremen on the east and Gulf coasts provides for a straight-time rate payable for all hours worked between 8 a. m. and 12 noon, and 1 p. m. and 5 p. m. Monday through Friday. All other hours are considered overtime and are paid for at 11⁄2 times the straight-time rate. With minor exceptions which are unimportant here, this situation prevailed for some years prior to the passage of the Fair Labor Standards Act in 1938. Now in 1944 lawsuits were instituted in the Federal district court in New York to determine whether the provisions of our contract with the International Longshoremen's Association relating to wages and hours were in accord with the Fair Labor Standards Act. Because of the substantial liability to which the war contracting agencies of our Government might be subjected, these suits were defended by the Attorney General of the United States. The district court agreed with the contracting stevedores. It was held that our contract executed in good faith and adhered to by the industry did not violate the law. The circuit court of appeals reversed the lower court and. the Supreme Court of the United States affirmed the circuit court by a 5 to 3 decision. During the pendency of these actions and up to September 1947 an avalanche of additional suits were instituted in the port of New York and elsewhere. In one of these actions there are over 4,000 plaintiffs and over 125 defendants. The number of actions now pending in New York City alone exceeds 100. No one can tell with any degree of definiteness the potential liability involved, but it is our considered opinion that without remedial legislation, almost every contracting stevedore in New York faces bankruptcy. This committee has before it a draft of a bill to amend the FairLabor Standards Act. I understand that section 7, paragraphs (6) and (7) of this proposal is designed to eliminate overtime-on-overtime. I am advised by counsel that subject to certain technical amendments, the section will dispose of the problem as far as the future is concerned. However, there is no language in the committee draft which will dispose of the existing lawsuits. What I should like to state to you gentlemen is this: We desire that a law be passed eliminating overtime-on-overtime covering the pending lawsuits as well as the future in order that our collective-bargaining agreements with the International Longshoremen's Association will be validated. The Congress in 1935 passed the Wagner Act. By the terms of this law, Congress stated as a matter of public policy that the free flow of commerce would be enhanced by encouraging the practice of collective bargaining between employers and unions representing their employees. Obeying this requirement was no novelty to our industry.. We have been party to a collective bargaining agreement with the International Longshoremen's Association in the port of New York since 1916. We have lived up to our agreements with the International Longshoremen's Association. For so doing we now face a demand for overtime on top of overtime which, if successful, will mean bankruptcy to all but one company in our industry. Under our agreements we have been required to pay 111⁄2 times the day rate for all work performed after 5 p. m. and before 8 a. m. We have fulfilled that requirement. Now the Supreme Court says that our agreement to pay overtime daily is an agreement to pay a differential for night work. You can imagine the surprise of the representa Mr. MALONEY. Certainly, sir; that is their answer, as far as the future is concerned. I do not know what position they will take on this matter which I have just suggested, that the benefits of this bill be made retroactive, but I may say that insofar as the parties to the collective-bargaining agreement on the east coast are concerned, I happen to be personally familiar with that, and they are both awaiting congressional action in order that they may get back to the traditional contracts that have existed in the stevedoring industry since 1914. Mr. GWINN. That has all been subject to collective bargaining? Mr. MALONEY. Yes, sir. Mr. GWINN. This legislation is designed to do away with collec tive bargaining; is it not? I mean the effect of the minimum wage and hour law to be administered by Government commissioners is to do away with collective bargaining? Mr. MALONEY. I would not say that at all, sir. As I understand it, this sets a minimum in certain fields, and the collective bargaining process is encouraged by national policy to improve on that. Mr. GWINN. What sense will there be for collective bargaining a all in the minimum wage category if Government employees become the arbiters of what minimum hours and wages are to be? Mr. MALONEY. Well, sir, speaking solely as to those provisions on the committee print and H. R. 858, to which I have addressed myself, I do not see any interference by Government agencies in collective bargaining. Mr. GWINN. They take the place of collective bargaining? Mr. GWINN. When the department of Government says, "We are going to hold hearings to determine what is a fair wage and hour," does that not substitute Government bargaining for voluntary collec tive bargaining between workers and contractors? Mr. MALONEY. I cannot agree with that, sir. I can see if they said that the parties could not enter into an agreement unless they were approved by the Government agency, I certainly think that we would not go along with that, but when we are free to improve on the national standards, then I see no real restriction. Mr. GWINN. How are you free when the Government says itself it is going to determine these matters? Mr. MALONEY. We have had no such difficulty in the past Mr. GWINN. I know; under the new legislation. Suppose you have a 75-cent minimum, and they are going to hold hearings as to whether or not it should be a dollar, possibly? Mr. MALONEY. Bear in mind, sir, our straight-time rate is $1.88. That is the minimum rate paid in the stevedoring industry for straight-time work, so that I would not-speaking solely for the field with which I am familiar-I would not anticipate difficulty. Mr. GWINN. Well, you would if it goes on up to $2. Mr. MALONEY. If they get up to $2, by that time I would think we would be pretty well in excess of that if the industry follows the pattern of moving ahead. Mr. GWINN. How can you have two groups determining what fair wages and hours will be, one a Government group and another a labormanagement group? Mr. MALONEY. I cannot see where we would have two groups making such a determination in our case. |