Evening star., 1946-12-27
Search for Precedents
On in Portal Pay Case

MI III ] OItOi Wy S0SS
Congress May Find Power to
Wipe Out Wage-Hour Lawsuits
By David Laurence
Lawyers on both sides of the portal
to portal pay controversy seem to be
busy nowadays-one group endeavor-
ing to recover vast sums for labor unions
and the other planning strategy to Sc
cure the retroactive repeal of the
ambiguously worded part of the wage
and hour law that caused the trouble.
Up to now, it has been assumed that
Congress cannot pass q retroactive law.
Several lawyers, however, who have been
studying the question ever since the
Mount Clemens Pottery case decision
fell like bombshell on American indus
try have come to the conclusion that
Congress can wipe out the pending suits
overnight by explicit language.
In search through precedents some
Of the lawyers have found that, despite
the general impression concerning retro
0Se1sC Ao"ot eiiC OuP1OllC SOuIb LOO
only in few cases-and these on tax
questions-supported the idea that there
can be no retroactive lawmaking.
While retroactive legislation Is banned
on crimes, it is apparently not taboo
in matters regulating commerce. The
power of Congress to regulate COM
merce is now specifically recognized by
the Supreme Court to encompass any
serious obstruction to the flow Of COM
merce. Plainly the payment of damages
because Of vaguely written wage and
hour law might be held to be such O
burden.
Could Define Work Week"
1t appears to be conceded that Con-
gress would not be able to wipe out
any portion Of the law by an amend
ment fixing retroactive date for its
operation. But it could define the
work week" as being that which had
| prevailed as matter of custom in
industry or business or as defined in COL
lective bargaining contracts at the time
the wage and hour law went into effect
Likewise, the Congress can adopt .
"windfall tax" which would require 100
per cent of the income from the suits
to be paid as tax. 1t Is not, for
instance, retroactive legislation for Con-
gress to require that sums received In
1947 shall be subject to the so-called
"windfall tax" principle, for the money
would be received in 1947 or subsequent
years II recovered in lawsuits. The
same approach was used with the "un-
just enrichment tax" which the Treas
ury was permitted to collect on all
agricultural adjustment taxes when the
AAA was declared unconstitutional and
many companies had already collected
the processing taxes.
Various proposals apart from the tax
alton angle are being studied by mem
bers Of Congress. For one thing, the
payment of so-called "liquidating dam
ages" which take effect only when
suits are won, can be made subject to
corrective legislation.
Congress could also amend the exist
ing law so that recovery could be con.
fined only to those instances In which
clear understandings prevailed as to
extra work time and where there was
bad faith in the employer employe re-
lationship with reference to compensa-
ton for time ordered beyond the Gus.
tonary starting or finishing time.
Would Narrow Scope. z74ss. .
Qualifications Of this nature would
tend to narrow the scope Of the cases
and recoveries of damage. Also it seems
certain that the new legislation will
tend to validate compromises 80 that
settlements can be made out Of court
not only on disputed matters Of fact
but also on questions Of law. Otherwise,
the courts will be burdened for years
to come with lawsuits, because, under
the present statute, the administrator
Of the wage and hour law is not au-
compromise settlements.
Likewise, a one-year statute of limi-
tations is sure to be adopted by Con-
gress which would supersede the statutes
Of limitations in some States that run
back as far as six or eight years. OBJ
viously such burden on interstate
commerce cannot make for economic
stability. Payments of the portal to
portal" nature will only tend to injure
weaker companies and bring hardship
to those now employed or else will tend
to cause the United States Treasury to
lose revenues because all the payments
are deductible expenses. This means that
Uncle Sam will pay 40 per cent Of the
portal to portal" suits that are included
In business operations in 1947 and 80
per cent of the expense if the deduc-
tions are allowed for 1916 or previous
years in which excess profits tax rates
were in effect.
It seems certain that Congress will
act promptly on this matter lest the en-
tire economic system be deranged. The
portal to portal" havoc can be worse
than mere strikes in disturbing the ma.
tional economy and bringing on re
cession.''
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