Evening star., 1940-04-29
Ruling upsets
Little Stee|'s'
Wage Writ
High Court UphoIds
WoIsh-HeoIey Pay
Determinations
By ]. A. FOX.

BY j. A. FOX.
The Supreme Court said today
that wage determinations by the
Secretary of Labor under the Walsh
Healey Act are not subject to review
by the courts.
The ruling upset an injunction
granted by the Court of Appeals
of the District to seven "little steel"
companies, which had declared that
prevailing wage" area established
by the Secretary of Labor was ar
bitrary and capricious.
The decision Of the Supreme Court,
delivered by Justice Black, was
sharply critical of the lower court
and said the steel companies had no
standing to prosecute the suit.
Quotes From Earlier Ruling.
1.-THE case before us makes 1t
fitting to remember that the in
reference of the courts with the
performance of the ordinary duties
of the executive departments of the
Government would be productive Of
nothing but mischief and we are
quite satisfied that such power was
never intended to be given to
them,'" the opinion said, quoting
from an earlier ruling of the court.
Justice McReynolds dissented, but
wrote no opinion.
The case has been hanging fire for
about year and defined for the
first time the powers Of the Secre-
tary of Labor under the Walsh
Healey Act. This act provides that
as prerequisite to bidding for Gov
ernment contracts involving $4,000
or more the bidder must agree to
pay what the Secretary of Labor de-
termines to be the prevailing wage
in the locality where the contract Is
being executed.
The fight was stirred over the
action Of the Labor Department
creating a wage area of 13 States,
part Of a 14th and the District of
Columbia, for the production Of
steel and fixing the minimum pay
for laborers at 621a cents an hour.
The previous level had been from
521a to 561a cents an hour.
SCtCu NUuuP0ulCS 1uVUttCus
The seven steel companies in
volved in the protest we're Lukens
Steel Co., Alan Wood Steel Co.,
South Chester Tube Co., Central
Iron & Steel Co., Harrisburg Steel
Corp, Eastern Rolling Mill Co. and
the Atlantic Wire Co. Their plants
are located in Eastern and Central
Pennsylvania. Connecticut and
Maryland.
These steel companies said that
the word locality" had been mis-
interpreted by the secretary and
that the. ruling had disregarded we'll
defined and long established wage
differentials existing in the States
where the plants were situated.
They complained that invitations
to bid on five Navy contracts con-
tanned the prevailing wage provision
and unless an injunction was is
sued, the stipulation would be in
cluded in every steel contract after
May l, 1899.
They said that as practical mat
ter they would have to raise the
wages Of workers on nom Govern
ment work as well as Government
work and that by paying the mini
mum wage probably would be un-
able to compete with larger COM
panies. If they did not pay it, they
added, then they would lose sub
stantial contracts.
In February of last year, District
Court granted the steel concerns a
temporary restraining order against
the Labor and Navy Departments,
but later vacated it. The Court of
Appeals then issued the injunction.
The Government at that time
contended that the steel companies
had no standing to maintain the
action since no legal rights had been
invaded and contended that to re-
strict a prevailing wage locality
to a small geographic unit would
contradict the intention of Congress
and defeat the purposes of the act.
The injunction granted by the
Court OF Appeals was directed
against six members of the cab
met.
No Feasible Alternative.
Gas result of this judicial ac-
tion," the Supreme Court said, Fed
eral officials had no feasible alter
native except to make contracts for
imperatively needed supplies for the
War and Navy Departments with
out inclusion of the stipulation
which Congress had required. The
Public Contracts Act so far as the
steel industry is concerned has been
suspended for more than a year,
with no bond or security to pro-
tect the public's interest in the
maintenance Of wage standards con-
templated by Congress should the
suspension ultimately prove unwar-
ranted or unauthorized"
Like private individuals and busi-
ness" Justice Black said. "the Gov
ernment enjoys the unrestricted
power to produce its own supplies,
to determine those with whom 1t will
deal, and to fix the terms and con-
ditions upon which 1t will make
needed purchases" He added that
'ft has done so in the Public Con-
tracts Act"
I This act, the court continued, was
to impose obligations upon those
favored with Government business
and to obviate the possibility that
any part Of tremendous national ex-
penditures would 60 to forces tend
ing to depresss wages and purchasing
power and offending fair social
standards Of employment"
The act. the courts opinion added,
"does not represent an exercise by
Congress Of regulatory power over
private business or employment" and
"the Secretary's responsibility is to
superior executive and legislative
authority"
"Our decision that the complain-
ing companies hack standing to sue
does not rest upon q mere formality, ("
the court concluded. "We rested
upon reasons deeply rooted In the
diVer6fonG Of constitutional an,