Case Name: Ludwig BLAHA et al. v. The UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1975-02-19
Citations: 511 F.2d 1165
Docket Number: No. 241-73
Parties: Ludwig BLAHA et al. v. The UNITED STATES.
Judges: Before DAVIS, NICHOLS and KUN-ZIG, Judges.
Reporter: Federal Reporter 2d Series
Volume: 511
Pages: 1165–1175

Head Matter:
Ludwig BLAHA et al. v. The UNITED STATES.
No. 241-73.
United States Court of Claims.
Feb. 19, 1975.
Stanley B. Gruber, New York City, for plaintiff. Abraham E. Freedman, New York City, attorney of record.
Marc J. Fink, with whom was Asst. Atty. Gen. Carla A. Hills, for defendant. Paul A. Zoss, Washington, D. C., of counsel.
Before DAVIS, NICHOLS and KUN-ZIG, Judges.

Opinion:
ON DEFENDANT'S MOTION AND PLAINTIFFS' CROSS MOTION FOR SUMMARY JUDGMENT.
NICHOLS, Judge:
Plaintiff seamen are members of the National Maritime Union of America (NMU) employed as unlicensed vessel employees of the National Oceanic and Atmospheric Administration (NOA), National Ocean Survey (NOS), Department of Commerce. This suit pits the Commerce Department against the NMU and the Navy Department, on the issue of whether 5 U.S.C. § 5348 requires the Commerce Department to pay a wage increase (denominated a "monthly leave supplement") already agreed to by the NMU, the commercial operators, and the Navy. We have jurisdiction under 28 U.S.C. § 1491. Amell v. United States, 384 U.S. 158, 86 S.Ct. 1384, 16 L.Ed.2d 445 (1966), [Amell I]. We hold that on the peculiar facts and circumstances of this case the Commerce Department is required to pay the same wage increase as approved previously by the Navy for the reasons given below.
The wage agreement that is the cause of the dispute was originally effective between the NMU and the East Coast commercial shipowners on June 16, 1972. It provided, inter alia, as follows:
a) Seamen whose base monthly wages are $515.35 or less for the contract year effective June 16, 1972, shall have added to their base monthly wages for the purpose of computing vacation pay, $15.00 per month for work performed for the period from June 16, 1972 to June 15, 1973; $30.00 per month for work performed for the period June 16, 1973 to June 15, 1974 and $45.00 per month for work performed after June 16, 1974.
b) Seamen whose base monthly wages are between $515.36 and $631.53 for the contract year effective June 16, 1972, shall have added to their base monthly wages for the purposes of computing vacation pay, $25.00 per month for work performed for the period from June 16, 1972 to June 15, 1973; $50.00 per month for work performed for the period from June 16, 1973 to June 15, 1974 and $75.00 per month for work performed after June 16, 1974.
c) Seamen whose base monthly wages are over $631.53 for the contract year effective June 16, 1972, shall have added to their base monthly wages for the purposes of computing vacation pay, $35.00 per month for work performed for the period from June 16, 1972 to June 15, 1973; $70.00 per month for work performed from June 16, 19'73 to June 15, 1974 and $105.00 per month for work performed after June 16, 1974.
As is well known, commercial vessels are kept moving and spend considerable amounts of time at sea. The necessary posts on board must be manned day and night and throughout the week. Accordingly, the "base" wage for a 40-hour week has no reality in relation to the normal earnings of the seaman, which comprise the base pay plus, for watch standers, a normal and predictible amount of overtime which from the management point of view, is unavoidable, however economically it desires to operate the ship. Vacation pay consisting of "base" pay only would put the seaman in a lower earning level during his vacation period and it is the object of the quoted agreement to diminish the impact of this, without eliminating it entirely.
The Navy's Military Sealift Command (MSC), in October 1972, agreed to pay the same wage increase, specified in the contract above, retroactively to June 16, 1972, with respect to Government owned, civilian manned vessels operating in the NMU Atlantic area.
However, NO A refused to pay the supplement (about $31,000 annually for approximately 468 NOS seamen) in any area. The Commerce Department approved this decision in a letter of the Director of Personnel on March 12, 1974. The problem does not occur with respect to Pacific operations for a reason that will appear.
Plaintiffs subsequently brought this suit as an apparent test case under 5 U.S.C. § 5348 (Supp. II, 1972), and 28 U.S.C. § 1491, alleging a non-discretionary duty on the part of the Secretary of Commerce to pay the prevailing commercial rates or, in the alternative, an abuse of discretion in refusing to pay the prevailing commercial rates.
I
Section 5348 (formerly Section 5342, prior to Pub.L. 92-392, § 1(a), August 19, 1972, 86 Stat. 572), provides as follows: § 5348. Crews of vessels
(a) Except as provided by subsections (b) and (c) of this section, the pay of officers and members of crews of vessels excepted from chapter 51 of this title by section 5102(c)(8) of this title shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates and practices in the maritime industry.
(b) Vessel employees of the Panama Canal Company may be paid in accordance with the wage practices of the maritime industry.
* $ $ $ *
The operative words of Section 5348:
shall be fixed and adjusted from time to time as .nearly as is consistent with the public interest in accordance with prevailing rates and practices in the maritime industry,
have remained unchanged since their enactment as part of the Classification Act of 1949, Pub.L. 81-429.
The legislative history under the 1949 Act is very brief on this section:
The major prevailing-rate groups excluded from the bill are those mentioned in paragraphs (7), (8), and (9) of section 202. These are the trades, crafts, and labor employees, and officers and members of crews of vessels. (U.S.Code Cong. Serv., 81st Cong., 1st Sess., 1949, at 2368).
The legislative history under the 1972 amendments is equally brief:
Crews of vessels
Section 5347 is a restatement of existing law relating to crews of vessels of the United States who are paid in accordance with practices of the maritime industry. However section 5347(b) has been amended to make vessel employees of Panama Canal Company subject to wage practices of the maritime industry and not merely authorize such pay, as is the case under existing law. (U.S.Code Cong. & Admin.News, 92d Cong., 2d Sess., 1972, at 2985).
However, the Navy provides considerable additional background into the statute and its operation. See, Appendix One to this opinion. Counsel for defendant has annexed this Navy statement to his brief, following a policy which we believe is of long standing and commendable, to allow a Department to advise the court of its position when that is contrary to the one the Attorney General has decided to take. Another time, it might be better for the agency statement to be signed and dated. The one we have here affords ample internal evidence of its authority and authenticity, and we rely on it heavily for its history of operation under the statute to be construed.
II
This is not the first time that this statute has been before the court. In Benevento v. United States, 461 F.2d 1316, 198 Ct.Cl. 772, cert. denied, 409 U.S. 1038, 93 S.Ct. 516, 34 L.Ed.2d 486 (1972); Beatteay v. United States, 198 Ct.Cl. 989 (1972); Benham v. United States, 198 Ct.Cl. 990 (1972); Daniels v. United States, 407 F.2d 1345, 187 Ct.Cl. 38 (1969); and Amell v. United States, 390 F.2d 880, 182 Ct.Cl. 604, cert. denied, 393 U.S. 852, 89 S.Ct. 88, 21 L.Ed.2d 122 (1968), [Amell II], the broad Government discretion in fixing pay under Section 5348 was repeatedly upheld against seamen's challenges. These cases, except the last, involved the selection of the segment of the maritime industry to be treated as the model for comparison.
Counsel for defendant suggested in oral argument a difference between Commerce Department and Navy vessels in that the former spent more time in port, relatively, when night and day, week in and week out, watch standing was not required. This, if true, might make a difference, but must be disregarded here for lack of documentary substantiation, and because it is not shown to have caused or been relevant to the difference in the position of the two agencies, as stated by their own representatives.
The Navy in Appendix One asserts that seamen on both coasts work normal 56-hour weeks if they are "watch standers" as opposed to "day workers." However, despite similar working conditions, different terminologies and contracts have been used by the West Coast and East Coast unions. On the West Coast, pay rates are negotiated on the basis of a 56-hour week, and leave is paid accordingly. The East Coast, for unexplained reasons, adheres to the conception used for shoreside jobs, describing the 56-hour normal work week for seamen in terms of 40-hours "straight time" and 16-hours "overtime". The effect of this variation in terminology was that until the 1972 contract, East Coast seamen received less vacation pay than West Coast seamen, for similar jobs with otherwise similar take-home pay. The former having their vacation pay computed on the basis of 40-hours weekly pay; the latter on the basis of a 56-hours weekly pay, that absorbed the overtime premium and distributed it over all the hours worked. The wage supplement granted the seamen on the East Coast by the contract helps realign their pay to be more nearly compatible with what West Coast seamen are paid for vacation pay. Both Government and commercial seamen take paid vacations of substantial length.
The Commerce Department does not tender any substantial issue as to relevant fact. It does not dispute the detailed submission by the Navy and by the NMU. It makes a semantic argument as to the statutes, which we have some difficulty in following, but will do our best to state. It seems to say that as used in Federal personnel law, "pay" means "base pay," whereas a broader term is required when Congress alludes to overtime, night and holiday differentials, etc. See 5 U.S.C. § 6301 and ff. (leave); 5 U.S.C. § 5544 (Wage Board overtime). The statutory leave for seamen "on extended voyages" is two days for each thirty days "of that service", 5 U.S.C. § 6305, plus regular leave accrual under § 6303. The inference seems to be that since the number of days on leave are fixed by statute, not by collective bargaining, the compensation per day must be statutory also, and the statute in default of express provisions, by implication selects the base pay as the statutory vacation rate.
NMU points to specific practice where NO A has paid for overtime hours less than § 5544 would require, although that section tells exactly how overtime pay shall be calculated in relation to base pay. By its own terms it does not apply to § 5348 employees. See below. On the other hand, NO A pays for non-overtime Sunday work, a bargained rate, better than § 5544 and § 5546 would require, 50% instead of 25% over base pay. It would appear, therefore, that Commerce has regarded "pay" under § 5348 as more than "base pay", and we are given no clear consistent statement as to just what the "pay" under § 5348 does and does not include. We suggest the Commerce view that vacation pay is base pay only, really arises because that is what they are used to in the shoreside environment, and the semantics are but later rationalizations.
We think Congress meant to authorize Government agencies owning and operating ships, with civilian crews, to adopt private industry pay practices in their totality, as to differentials, overtime, premiums, or any other general pay practice that entered into and became a part of the seaman's take-home pay, subject of course to the "public interest" exception to be discussed presently. A partial and selective adoption of some but not all of such practices simply does not make sense with reference to any objective the Congress could conceivably have been seeking to achieve. Adoption of the base pay alone, or the base pay plus regular overtime, would be worthless, because these terms have meaning, and are counters used in bargaining, in the relationship they bear to all the factors in the equation. Bargainers may accept a detriment in one part of the pay package in exchange for a benefit in another, i. e., they may take better premium pay for poorer base pay, or the reverse, as apparently happened in the Pacific. Interpretation of the statute to hold the seamen are bound by the concessions they made but don't get the bonuses they bargained for, is not likely to obtain industrial peace on the sea lanes, or further any other purpose.
Commerce's position is a classic instance of saying to Congress: "We see what you mean but you haven't used the correct words to bring it about." As we said in Anderson v. United States, 490 F.2d 921, 925, 203 Ct.Cl. 412, 420, cert. denied, 419 U.S. 827, 95 S.Ct. 47, 42 L.Ed.2d 52 (1974):
In statutory construction, unless the language is compelling, as it signally here is not, it is well to avoid interpretations no one can believe the Congress could have intended.
Amell [II], supra, is not to the contrary. Union members had voted to put all of a bargained pay increase into their pension fund. The nearest Government equivalent, its retirement system, was outside the reach of § 5348, and we held the Government ship operating agencies were not required to pay the increase directly to the seamen. We considered that fringe benefits outside of take-home pay were not "compensation." In this instance the construction of a perfect equivalent to industry practice is of course frustrated, but that does not warrant further and more extensive frustration imposed by semantic limitations upon the ordinary meaning of a simple word like "pay."
We note also that § 5348 requires the pay involved to accord with "prevailing rates and practices in the maritime industry." The Commerce view does not account for the word "practices" and allows it to add nothing to "rates."
Further the Benevento, Beatteay and Benham cases, supra, which affirmed the Interior Department in using a pay scale that obtained in the fishing industry with no premium pay for overtime whatever, undercut the Commerce Department's attempt to limit the application of § 5348 to base pay. By these cases § 5348 is also the source of any overtime rights the seamen have.
Ill
The Commerce Department's main position, that it would be illegal for it to pay the vacation pay supplement here involved, would, if right, require the conclusion that the Navy is illegally paying the same supplement, absent any showing of relevant differences. Government counsel conceded this. To us, however, the Navy position appears to be a good faith effort to effectuate the policy of the statute, based on an informed and reasoned analysis of the underlying facts. If not the only possible position, it is at any rate well within the scope of discretion which, as our decisions recognize, the statute contemplates the employing agencies will exercise, not only as to the exclusion of practices it is not "consistent with the public interest" to conform to, but as to other questions as well. E. g., Daniels v. United States, supra. Commerce's main position must be rejected.
IV
The Commerce Department retreat position is that it has determined the- payment is inconsistent with the public interest "on several counts." It asserts, in effect, it has discretion and chooses to exercise it in a direction opposite to that of the Navy. This is perhaps only a little less cavalier towards a sister agency with longer experience with the kind of claim we have here, and greater involvement with it. Commerce says that use of two levels of "base pay" fouls up the computation of Government fringe benefits and various forms of employee contributions, i. e., deductions. Moreover, Commerce anticipates its acquiescence in paying the supplement would set a bad precedent for acquiescence in future agreements that may have an impact on Federal employee benefits, although industry practices may not be consonant. Moreover, it is asserted that commercial crewmen are required to use their leave, whereas for Government employees it is for the most part optional.
With regard to the last argument, we suppose if a Commerce Department seaman refuses to take leave, though his services are for the time not needed, he is at any rate hardly likely to be ordered to work overtime. He will, therefore, lose take-home pay and need the supplement just as much as his commercial counterpart.
The Congress in enacting § 5348 recognized the unique character of the pay practices in the maritime industry. It saw that the pay practices existing shoreside with respect to Government employees would be a Procrustes bed if applied to Government vessels and to civilians employed as seamen thereon, union members doing the same work as their commercial counterparts. Its solution was to authorize pay practices to conform "as nearly as is consistent with the public interest", not to Government shoreside practice, but to private industry practice afloat:
While it is common to defer to agency expertise in many mat ters, the agency charged with administering a statute may not adopt a position inconsistent with the enabling statute. [Citing cases.] Farrell Lines, Inc. v. United States, 499 F.2d 587, 602, 204 Ct.Cl. 482, 506 (1974).
Commerce manages to create present conflicts between its pay practices and others in three directions: (a) between Commerce and Navy civilian seamen, (b) between Commerce and commercial seamen, and (e) apparently, though the point is not developed in the record, between Commerce's own seamen on the East and West Coasts respectively. (We have shown that the involved supplement is needed to equalize Atlantic and Pacific vacation pay.)
We think the "public interest" exception was written to provide flexibility needed to eliminate anomalies and inequities that might arise from a too literal conformity to industry pay practices. It was not written to authorize a complete frustration of the Congressional scheme. Since Commerce relies so heavily on the imaginary horrible, let us too suggest one: if Commerce can do what it has done with the relatively minor vacation supplement, it can refuse to apply § 5348 in any part, declaring the entire wage scheme resulting from collective bargaining not to be "consistent with the public interest."
This case has much in common with American Export Isbrandtsen Lines, Inc. v. United States, 499 F.2d 552, 583, 204 Ct.Cl. 424, 476 (1974), in which we held that the Maritime Administration, Department of Commerce, abused its discretion in refusing to include in allowable labor costs for subsidy purposes, certain so-called "severance pay" that was called for by a collective bargaining agreement similar to the one at bar. We quoted from the First Circuit as follows:
The process of collective bargaining involves a give-and-take, with one party making a concession on one subject in return for obtaining a concession on another subject. It is difficult, if not impossible, for the parties to make a meaningful judgment as to the kind of bargain they are negotiating if one or more of the key provisions on which agreement turns is subject to invalidation by the Commission.
In view of this factor, we viewed the disallowance as an abuse of discretion in the absence of valid reasons that could be urged in its support.
Conflict with determinations of other agencies is a factor to be considered in review of agency determinations. Farrell Lines, Inc., supra.
NO A issued a wage schedule on November 1, 1972, with retroactive effect to June' 16, 1972. This was apparently its initial reaction to the new collective bargaining agreement of that date. On November 1, the Navy had already agreed to the vacation pay supplement. Counsel for defendant urges here that the first agency to act, perhaps precipitately, ought not to be able to bind the whole Government. We may agree with this, and yet hold the more dilatory agency may be required, to avoid abuse of discretion, to resolve the difference by discussion, or else obtain the decision of a common superior. If it just arbitrarily chooses to go a different way, the onus of abuse of discretion falls on it.
We should not be read as holding that there would have been no abuse of discretion if the Navy had taken the line that NO A subsequently did. Nor do we hold the contrary. The case is not before us and we express no opinion.
Commerce alleged nothing in its decision in support of its position on "public interest" that was not equally applicable to the Navy, nothing of any differences in the way their ships operate, or the amount of time they spend in port, for instance. Instead, e. g., they say they will, if they yield, have a terrible time computing payroll deductions and contributions, life insurance benefits and contributions, retirement benefits, and lump sum payments for accumulated annual leave, in face of two levels of basic pay. The Navy, with the valor of ignorance, apparently, steamed into these mine-strewn waters two and a half years ago, and by now should have been blown-up, if the mines were really there. No instance of this occurring is reported. In stating its position, March 12, 1974, Commerce made no reference to any effort by it to ascertain the Navy experience and see whether it supports the existence of these asserted perils.
Whether there are really two levels of basic pay and other questions if any, that are pertinent, are problems we are compelled to suppose and do suppose the Navy has solved. Should there be some it has not, there remain the Comptroller General, the Civil Service Commission, and this court. In the circumstances we think the reasons assigned for asserting the "public interest" exception are mere rhetoric. We are not required to conjure up reasons to support an exercise of discretion when the agency has supplied none. We hold that Commerce has abused its discretion in making the determination here involved.
Accordingly, the defendant's motion for summary judgment is denied. The plaintiffs' cross motion for summary judgment is granted. Judgment is entered for the plaintiffs and the cause is remanded to the Trial Division for further proceedings under Rule 131(c) to determine the amount, if any, to be awarded to each of the 41 plaintiffs, consistent with this opinion.