sentatives of the stevedore industry, and also representatives of the Labor Department, tried to arrive at some language which would take care of their particular situation.

At that time we did agree to language which would take care of the longshore industry, and, I believe, under H. R. 858, the language that we agreed to is incorporated in that bill

Mr. McCONNELL. That is right.

Mr. MASON. And now it is incorporated in the committee print which extends it to all other industries, so naturally there is a need for some change. We certainly do not want to be confronted with cases like the Belo case where certain employers would have an opportunity to circumvent the law by setting straight time hours at, maybe, 3 or 4 hours a day, and overtime after that, which would, in effect, be fictitious and at the same time be violating the spirit of the act. So that is the reason for the additional changes we have suggested.

Mr. McCONNELL. Then you have agreed among yourselves that the wording should be put in "in accordance with regulations issued by the Secretary of Labor under section 4 (c)"?

Mr. MASON. I understand that the National Federation of Shipping testified the other day, and also suggested a change, which is contrary to what we agree to with respect to a straight time workday or workweek. That is what we are trying to avoid and I trust that Members of the Congress realize the problem that we would be finally confronted with if you accepted the amendment that was offered by the National Federation of Shipping.

Mr. McCONNELL. Do you have a committee print there? Let us get this clarified. I am confused here. You seem to vary on this thing. Now, on page 23, what do you mean there?

Mr. MASON. I felt personally that I thought it was covered, that the Secretary would have the authority to set up rules and regulations under the act without that change, but in order to be sure we agreed to include that in this particular section.

Mr. McCONNELL. You have agreed?

Mr. MASON. Yes; and I discussed it with representatives of the National Federation of Shipping, and they did not appear to have any objections to it, because it did not affect them in any way.

Mr. McCONNELL. Now, is there any other change here? On page 9 of this other man's statement-I do not know what page that would be here. That would be 5, would it not? That is on page 22, on line 6, is that not correct? No, line 16, dealing with Saturdays and Sundays.

Mr. HENLE. There is no change suggested in that subsection 6. The change that is suggested comes on page 24, and is in terms of a brief change to section 7 (f), and the insertion of a new 7 (g).

Mr. McCONNELL. That is the one that comes under section (f), line 8, on page 24.

And you are agreed with the CIO's position on that, or vice versa? Mr. MASON. We agree to that change. It does not affect the longshore industry, because they have premium pay for Saturdays, Sundays, and holidays as such, but if it applies to all other industries we certainly want it incorporated in the act.

Mr. McCONNELL. As I get it, the wording applies to all industries. Mr. MASON. Mr. Waldman is here to testify for the International

Longshoremen's Association with respect to overtime on overtime, and with your permission, Mr. Chairman, he will proceed.

Mr. KELLEY. Does Mr. Waldman have a statement to read?

Mr. WALDMAN. Yes, sir.

Mr. KELLEY. Mr. Waldman, do you want to read your statement, or do you wish to go over it and discuss it briefly? Do you insist upon reading it?

Mr. WALDMAN. I do not insist upon anything, Mr. Chairman, but I would like to give to the committee the benefit of my experience and knowledge of this problem as reflected by my statement.

Mr. KELLEY. We are a little pressed for time, but I want you to do it the best way you can.

Mr. WALDMAN. Thank you very much.

TESTIMONY OF LOUIS WALDMAN, GENERAL COUNSEL OF THE INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, AFL

Mr. WALDMAN. Mr. Chairman and gentlemen of the committee: My name is Louis Waldman and I appear on behalf of the International Longshoremen's Association, AFL, representing the workers in the longshore industry throughout the United States and Canada. except for a small area on the Pacific Coast. The International Longshoremen's Association consists of approximately 75.000 members joined together in some 400 separate local unions.

Let me state my qualifications. For over 35 years I have been a close student of labor and social legislation. As an active participant in the labor movement, as a legislator and as a lawyer, I have had occasion to deal with the subject of social and labor legislation, including the Fair Labor Standards Act. During the past 25 years, I have specialized, as a lawyer, in the field of labor relations, and I have represented a large variety of unions, A. F. of L., CIO, and independent, and I have appeared for the International Longshoremen's Association before the Supreme Court in the Bay Ridge case.

My statement to you will be confined to sections 7 (d) (6) and (7) of the committee print and its equivalent, H. R. 858, which seeks to solve the problem of overtime on overtime by amending section 7 of the Fair Labor Standards Act.

I appear in support of these proposals.

These provisions have become necessary because of the decision of the United States Supreme Court in the case of Bay Ridge Operating Co. v. Aaron (334 U. S. 446). This decision is a serious obstacle to free collective bargaining, and threatens to upset long-standing overtime arrangements, not only in the maritime field, but in a large number of other unionized industries. Any attempt to belittle the significance to the American economy of the Bay Ridge case or to the Fair Labor Standards Act as it is now limited by the Bay Ridge case. is a disservice to the entire range of labor law and to the labor movement itself.

The Bay Ridge case was before three courts. Twelve able and learned judges passed on it. But they split three different ways on the simple industrial question of what is overtime.

For this committee to understand both the purposes and the nature of the amendment proposed, a brief statement of the implications of the Supreme Court decision becomes necessary.

Four judges, Judge Simon J. Rifkind, United States district judge, who tried the case, and the three dissenters in the Supreme Court, Justices Frankfurter, Jackson, and Burton, gave full weight to the collective agreement between the workers and their employers and held that the collective agreements set a regular rate and an overtime rate, and that both the regular rate and the overtime rate were in full compliance with the requirements of the Fair Labor Standards Act.

Eight judges gave no weight to the collective agreements, and held, in effect, that workers and their employers could not, through a bona fide collective agreement, meet the requirements of the Fair Labor Standards Act by setting up a regular rate and an overtime rate of one and one-half times the regular rate.

The union and the employer, said the court, may agree that certain hours are overtime hours, to be paid for at overtime rates, but unless these hours are hours in excess of hours actually worked, the Supreme Court held that the rates agreed upon as overtime are actually nothing more than the regular rates, and that overtime must be pyramided on overtime in determining the wages due to an individual employee.

In other words, the Supreme Court, by creating a condition that when a union and an employer agree on an overtime rate it is not an overtime rate; it is a shift differential, notwithstanding the fact that both the employer and the union have submitted that they, who made the contract, and they who lived by it, intended it to be an overtime

rate.

Three out of eight judges, the three judges of the circuit court of appeals which reversed the trial court's decision-Judges Swan, Frank, and Augustus N. Hand, in my own United States District Court of Appeals, Second District, set up one formula for finding the regular

rate.

Five out of the eight, the majority of the Supreme Court-Chief Justice Vinson and Justices Black, Murphy, Reed, and Rutledge affirmed the circuit court's reversal, but differed with the circuit court with respect to the formula to be used in arriving at the regular rate

of pay.

Gentlemen, the effect of that decision is that only one kind of collective agreement is possible within the provisions of the FLSA, and that kind of collective agreement is one which provides for, in substance, that all time worked in any calendar week by any workman in excess of 40 hours shall receive time and a half, the rate he receives during the first 40 hours.

Now, I admit, as a student of labor, and as a man who has drafted hundreds of collective-bargaining contracts, there are unions which do have that kind of provision, but those are the newer unions which are less secure, the unions with a small or short history of collective bargaining, but most of the A. F. of L. unions, and most of the old unions, unions with a quarter of a century of history, have gone way beyond the formula set up by the Supreme Court. As to those unions the Bay Ridge decision is a long step backward, notwithstanding what many misguided people may think it to be.

The rule of excessivity created by the Bay Ridge decision places collective bargaining in a strait-jacket by denying to it the flexibility of agreeing to overtime terms more favorable than those based on excessivity. And yet every student of labor-management relations and collective bargaining knows that excessivity is only important as a standard; it certainly ought not be made by law, as the Bay Ridge case

does, the sole standard in employer-employee collective-bargaining arrangements.

The Bay Ridge decision creates a further drastic limitation on collective bargaining. It prevents a union from agreeing with employers on overtime arrangements to govern the workers as a group, for it makes excessivity applicable to each individual worker, ignoring the group interest and the industrial pattern. All of these limitations are to be found in a careful reading of the majority opinion of the Supreme Court, and all of them ignore the importance of a well-established collective-bargaining contract.

These limitation are contrary to the free traditions of collective bargaining and to the movement and philosophy which inspired the Fair Labor Standards Act and similar laws.

No wonder Justice Frankfurter with his rich background in labor relations law declared in his dissent in the Bay Ridge case:

No time is a good time needlessly to sap the principle of collective bargaining or to disturb harmonious and fruitful relations between employers and employees brought about by collective bargaining.

says the minority, speaking of the majority

is written quite in the abstract. It treats the words of the Fair Labor Standards Act as though they were parts of a crossword puzzel. They are, of course, the means by which Congress sought to eliminate specific industrial abuses. The Court deals with these words of Congress as though they were unrelated to the facts of industrial life, particularly the facts pertaining to the longshoremen's industry in New York.

And the trial judge, Mr. Chairman, Judge Rifkind, for many years an associate and partner of Senator Robert F. Wagner and no stranger to the Fair Labor Standards Act and its purposes, fully appreciated the danger of accepting the rule of excessivity in the face of a collective-bargaining agreement, reached between a strong union, like the International Longshoremen's Association, and the shippers and stevedoring companies in the maritime industry. What he said is most pertinent to the facts I am submitting to you in support of the proposed amendment:

It is clear

said Judge Rifkind

that the application of either of plaintiffs' formulas (based on the rule of excessivity) to the Nation's wage bill retrospectively would create havoc with established labor relations, put collective bargaining in the category of a device for obtaining money under false pretenses, and probably strain the resources of a substantial proportion of American industry.

Such catastrophic results are inevitable once we accept plaintiffs' underlying premise that, in determining the "regular rate" intended by Congress, we must close our eyes to the contract in good faith negotiated between employer and employees and look only to the actual work pattern. Upon such a premise. genuine collective bargaining cannot live.

I underscore, gentlemen, that the man who wrote that last sentence was one of the important authors of the National Labor Relations Act at the time he was still Senator Wagner's partner.

The Fair Labor Standards Act, as now limited by the Bay Ridge decision, may be of benefit to some, particularly those without responsibility in the labor movement; but it is a great injury to many, and, in

the long run, to all of labor. For every worker who may thus gain a few cents, thousands will be the losers.

In the longshore industry, for example-and I want to illustrate the point in terms of hours and in terms of money-the collective agreement provides that the hours from 8 a. m, to 12 noon and from 1 p.m. to 5 p. m., from Monday to Friday, shall be considered regular, straight-time hours, and all other hours shall be considered overtime, to be paid for at the rate of time and one-half.

Take this simple example: Assume a longshoreman works 30 straight-time hours and 20 overtime hours-that is, 6 hours during the straight-time period and 4 hours during the overtime period under the contract. His pay under the contract would therefore be the equivalent to that receivable for 60 straight-time hours-that is, 30 plus 20 plus half of 20 is 60 hours.

Under the rule of excessivity, an employee would first work 40 straight-time hours before he would be entitled to any overtime. Thus our longshoreman would only receive in pay the equivalent of 55 straight-time hours, a loss of 5 hours' pay in 1 week. And, gentlemen, bear in mind this significant industrial fact: that there are thousands of such longshoremen in our industry who fit this example that I have given you, and hundreds of thousands, if not millions, of workers in other industries similarly situated. They are the better organized, the older trade-unionists of our country.

To more vividly illustrate our example, we shall translate it into dollars and cents. The most recent contract between the ILA and the New York Shipping Association provides for a straight-time or regular rate of $1.88 and an overtime rate of $2.82, the overtime rate being one and one-half times the straight-time rate.

Under this contract, our longshoreman, if we continue to assume that he works 30 straight-time hours and 20 overtime hours, would receive $56.40 for 30 straight-time hours and $56.40 for 20 overtime hours, a total of $112.80 per week. That would be his pay for that

week.

Under the rule of excessivity, which we would have to follow if the FLSA stands unamended, our longshoremen would receive $75.20 for 40 straight-time hours and $28.20 for 10 overtime hours, a total of $103.40 per week.

Our longshoreman would lose $9.40 per week.

Studies which have been recently made show that in other industries, as in the longshore industry, there are agreements providing for overtime rates before a specified starting time, or after a specified quitting time, or before the regular, normal starting time, or after the regular, normal quitting time. Other agreements provide for overtime payments outside of a specified workweek-for example, on Saturday and Sunday, where the workweek is specified as running from Monday through Friday. There are varying patterns of overtime pay. All of them, so carefully worked out by American industry and American labor, are held by the Bay Ridge decision to be not patterns of overtime pay but merely agreements setting forth a regular rate of pay for the workers for undesirable hours.

For casual employment, as we call it in the industrial world, such provisions are especially favorable to the workers. Here I will pause, Mr. Chairman, to read you a paragraph of a finding made by one of