Court Opinion

ID: 6903293
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:57:09.304594+00
Date Added: 2024-06-11T16:06:14.518648
License: Public Domain

JOHNSEN, Circuit Judge
(concurring separately).
On September 8, 1939, the President proclaimed the existence of a national emergency with respect to “the strengthening of our national defense within the limits of peace-time authorizations.” Proclamation 2352, 3 CFR, 1939 Supp., pp. 59, 60.
The Congress took cognizance of the emergency and sought to “expedite” the strengthening of our national defense, by grants of additional powers to the President, the Secretary of War, the Secretary of the Navy, and the Secretary of the Treasury, “during the national emergency declared by the President * * * to exist,” for the purpose of facilitating the obtaining of necessary implements, munitions, etc., for the. military, naval, ' and coast' guard services.
Two measures, popularly known as the National Defense Acts, were enacted in June and July, 1940. The first of these, Act of June 28, 1940, 54 Stat. 676, Ch. 440, 50 U.S.C.A.Appendix § 1151 et seq., had relation primarily to the' naval and the coast-guard services, but it contained the following general provision: “During the national emergency declared by the President on September 8, 1939, to exist, the provisions of the law prohibiting more than eight hours’ labor in any one day of persons engaged upon work covered by Army,. Navy, and Coast Guard contracts shall be-suspended.” 54 Stat. 678, 679, § 5(b), 50‘ U.S.C.A.Appendix, § 1155(b). The second, of the National Defense Acts, Act of July 2, 1940, 54 Stat. 712, ch. 508, 50 U.S.C.A. Appendix, § 1171 et seq., 5 U.S.C.A. § 189a had application to the War Department.
Under subsection (a) of § 1 of this Act, the Secretary of War was given power, without the necessity of resorting to advertising, to provide, among other things, for the purchase or manufacture of military equipment, munitions, and supplies,, and for shelter, “under such conditions as: he may deem necessary”. He was similarly-empowered to purchase or to construct, munitions plants, as well as to provide-“Government-owned facilities at privately owned plants”. Subsection (b) expressly-authorized him to operate any such plants: acquired or constructed and any facilities, so furnished, “either by means of Government personnel or through the agency of selected qualified commercial manufacturers; under contracts entered into with them”.. There was a further general provision in section 1, authorizing him to make such contracts or such amendments or supplements to existing, contracts, “as he may deem necessary to carry out the purposes specified in this section.”
These were extraordinary powers, intended to be granted for a limited period, only, and designed to accomplish an emergency purpose. The scheme, which is-involved in the present situation, of producing munitions in government-owned plants, “through the agency of selected qualified commercial manufacturers,” on the basis of cost plus a fixed fee for carrying on the operations, with title to both the-materials used in the products manufactured' resting at all times in the United States, was admittedly a novel and revolutionary' set-up in the field of American industrial' life. The “Statement of Labor Policy,” is-*727sued jointly by the War and Navy Departments on June 22, 1942, with the approval of the President of the American Federation of Labor and the Chairman of the Congress of Industrial Organizations, characterized it in this language: “The industrial units thus created are unique. * * * These •plants embody a new and tripartite relationship among Government, labor, and management.”
The commercial operating agency was not economically affected by the production costs and so had no direct concern about the wages and overtime rates that might be paid in the plant. These questions therefore were matters which the Government of necessity 'was required to resolve. If it could be said to have been the intention of Congress to make the Walsh-Healey Public Contracts Act, 49 Stat. 2036, 41 U.S.C.A. § 35 et seq., govern the hybrid relationship involved, the scale of minimum wages and the rate of overtime pay were matters over which the Secretary of Labor had generally the power of determination and control.
I can see some sound reasons to doubt that the National Defense Acts could have intended to permit of any possibility of a slowing of the Secretary of War’s and the Secretary of the Navy’s emergency defense efforts through a necessary resort to the normal processes of investigation, determination, etc., by the Secretary of Labor, as the latter would have the power to compel them to do under the Walsh-Healey Act. Moreover, Congress did not expressly declare that the unique hybrid relationship, which it was permitting to be created as an .emergency measure, was within the operation of the Walsh-Healey Act. In fact, it .specifically refused to make a general declaration that all contracts made by the Secretary of War under section 1 of the Act of July 2, 1940, should be subject to the provisions of the Walsh-Healey Act. The Conference Committee Report on the Bill had contained the following statement (Cong.Rec., Vol. 86, Part 8, p. 8901): “The conference agreement * * * provides that instead of all contracts under the section being subject to the provisions of the WalshHealey Act, no such contract which would otherwise be subject to such Act should be exempt from its provisions solely because it was entered into without advertising.” And pursuant to the conference agreement, section 1 of the Act, on final passage, was made to contain the simple proviso, “That no contract entered into pursuant to the provisions of this section which would otherwise be subject to the provisions of the (Walsh-Healey) Act * * * shall be exempt from the provisions of such Act solely because of being entered into without advertising pursuant to the provisions of this section.”
Parenthetically, it may be observed that there, of course, would be contracts made by the Secretary of War, in fields apart from that of the operation of the government-owned munitions plants, which normally and regularly would be subject to the provisions of the Walsh-Healey Act, except as it might be sought to be contended that they had been taken out of the operation of that Act because they had been made without advertising. The proviso quoted above would preclude the making of any such argument.
Beyond the failure expressly to provide that the hybrid relationship involved in the operation of a government-owned munitions plant should be governed by the Walsh-Healey Act, the Act of July 2, 1940, as I have already pointed out, further used such terms in relation to the scope of the Secretary of War’s contracting powers as, “under such conditions as he may deem necessary” and “as he may deem necessary to carry out the purposes specified in this section”. If a test of these powers should have arisen in a situation indicating the impossibility or impracticality, in attempting to make prompt defense preparations, of having the wage scales and overtime rates fixed in these plants except by War Department action, I should doubt that any court would have difficulty in seeing in the nature and the language of the Act, as I have discussed them above, a reservoir of power in the Secretary of War so to act, independent of the wage and hour provisions of any other statute.
The Secretary of War’s actions, under this concept of the statute, might perhaps be subject to the control of an Executive Order issued by the President, and, of course, they necessarily would be so after *728the War itself began in 1941. The only-other limitation that probably would exist on the Secretary’s power was the clear indication of a congressional policy to have overtime rates paid for work in excess of 40 hours per week, a-s reflected in the express command in section 4(b) of the Act, 5 U.S.C.A. § 189a, applicable to any direct operation of defense plants by the Secretary of War himself, that “the regular -Working hours of laborers and mechanics employed by the War Department, who are engaged in the manufacture or production of military equipment, munitions, or supplies shall be eight hours per day or forty hours per week during the • period of any national emergency declared by the President to exist: Provided, That under such regulations as the Secretary of War may prescribe, such hours may be exceeded, but compensation for employment in excess of forty hours in any workweek, computed at a rate not less than one and one-half times .the regular rate, shall be paid to such laborers and- mechanics.”
But I do not think it necessary to discuss this aspect of the question further in the present case. Whether the Secretary of War had power generally under the Act of July 2, 1940, to fix wage -scales and overtime rates and rights for the employees in the hybrid relationship involved in these munitions plants, as I have referred to above, without regard to the provisions of the Walsh-Healey Act, I agree that the provisions of the Walsh-Healey Act' are in any event controlling of the employees’ rights here. If the Secretary of War had -such plenary powers under the Act of July 2, 1940, as I have discussed, the provisions of the Walsh-Healey Act are nevertheless controlling in the present situation, because the War Department, in its contract with the operator of the plant, specifically made the provisions of that Act applicable to the wage and overtime rights of the employees, as the Secretary of War would have the right to do under the circumstances.
If the Act of July 2, 1940, did not give the Secretary of War such plenary powers in the defense situation as I have discussed, the Walsh-Healey Act, and not the Fair Labor Standards Act; still clearly is controlling here, as a matter of general application in the field involved. In the enactment of the Walsh-Healey Act, Congress, I think, intended to constitute such employees as would be engaged in producing supplies or goods directly for the Government under an express contract, as a special legislative -class, and, through the force of the Government’s contracting power, to control their hours of labor, their rate of minimum pay, and their overtime rights, to the extent that it deemed it necessary in this field. It did not relate its jurisdiction in the field to any test of commerce, and the question of commerce therefore, in my opinion, has nothing to do with the rights of the class.
The Walsh-Healey Act establishes a special and complete labor policy of its own. It is intended to prevent any working of a covered employee for more than eight hours a day or forty hours a week, except with the permission of the Secretary of Labor. 41 U.S.C.A. § 35. Unless the Secretary of Labor permits overtime work to be done, the employer may not allow his employees to engage in any. If the Secretary permits overtime work, he has the right to fix the rate that shall be paid therefor, “which rate shall be not less than one and one-half times the basic hourly rate received by any employee affected”. Id., § 40. Minimum wages must be paid the employees of “not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular or similar industries or groups of industries currently operating in the locality in which the materials, supplies,- articles, or equipment are to be manufactured or furnished under said contract”. Id. § 35. Where the contracting party otherwise has been engaged generally in commerce or in the production of goods for commerce, his wage scale presumably will have met the standards prescribed by the Fair Labor Standards Act, but manifestly the minimum wages determined by the Secretary of Labor to-be applicable in the performance of some Government contract may exceed the Fair Labor Standards Act’-s requirements.
The Walsh-Healey Act further specifically recognizes that special elements of public interest may exist in the performance off *729such a Government contract, which command consideration, and it accordingly empowers the Secretary of Labor to make exceptions or dispensations with respect to the provisions of the Act in necessary situations, “in the public interest or to prevent injustice and undue hardship” or where otherwise it might “seriously impair the conduct of Government business”. Id. § 40.
All of these provisions set up standards and requirements, which are without any relationship to the Fair Labor Standards Act. And an employee to whom the Walsh-Healey Act has application cannot claim the right to come generally under the Fair Labor Standards Act, for that would nullify the power of the Secretary of Labor to exercise his judgment with respect to some of the elements which Congress recognized that he might find it necessary to give consideration to, in the practical performance of, or in meeting a public need under, a Government contract.
The employees here predicate and seek to recover overtime rights on the basis of the Fair Labor Standards Act. But whatever rights they may have had in the situation, as I have pointed out, are derived from the Walsh-Healey Apt, under the contract incorporating its provisions, and not from the Fair Labor Standards Act. The incongruity of their attempt to invoke the Fair Labor Standards Act is readily apparent, I think, when the fact is taken into account that, under the Walsh-Healey Act, there could be no overtime work unless the Secretary of Labor gave his permission thereto, and that, except during the existence of Executive Order No. 9240, dated September 9, 1942, 40 U.S.C.A. § 326 note, 7 F.R. 7159, as amended by Executive Order No. 9248, dated September 17, 1942, 7 F.R. 7419, which, as a war measure, limited all overtime payments in industries related to the prosecution of the war to not more than one and one-half times the regular wage rates, the Secretary of Labor, as a condition of granting such permission, could require the payment of overtime rates in excess of this amount, if he saw fit. The situation under the Walsh-Healey Act therefore was not one that was subject to the automatic overtime rate of the Fair Labor Standards Act. And whether overtime rights stemming from the Walsh-Healey Act might have been fixed in some situation at one and one-half times, or double, or treble, the regular wage scale, there would be no more right in the one case than in the others to use the Fair Labor Standards Act as a vehicle for their collection.
It must be remembered that Congress provided the Walsh-Healey Act with its own system of sanctions and procedure for accomplishing the objectives and vindicating the rights which it was intended to establish. That the Walsh-Healey Act does not permit of a direct suit by an employee on the contract between the Government and the employer may be an argument sentimentally in favor to why the Fair Labor Standards Act ought to apply, but it is hardly sound rationale legally for holding that it does. Nor does the fact that the munitions produced may have been shipped in interstate commerce weigh in favor of the application of the Fair Labor Standards Act, as against the inexorable fact that the Walsh-Healey Act stands as a special statute, for a specific class, involving indicated factors of consideration in public interest and governmental functioning, not made applicable to the general field of the Fair Labor Standards Act, and to which the commerce test therefore has no relation.
It might further be observed that, if Congress had intended the employees of the approximately 100 government-owned munitions plants, that were established, to have rights beyond those granted by the National Defense Acts or the Walsh-Healey Act, and to be able generally to recover double damages and attorneys’ fees, it hardly seems reasonable to suppose that it would have left the stituation so that those working in some plant, which might by chance be making guns, ammunition, or other supplies entirely for use at some training camp or on some rifle or artillery range, existing within the same state where the plant was located, would be precluded from such benefits on the basis of & commerce test, when it had the power, and there would seem to be no reason not, to have treated them equally with the employees of other such munitions plants. It *730might also be added that, if the Secretary of War had no such plenary powers under the Act of July 2, 1940, to fix wage rates and overtime rights, as I have initially suggested, but he was required to act in relation to such other statutes as existed and to guide his actions by whichever was applicable, the provision which he made in the contract, subjecting it to the obligations under the Walsh-Healey Act and not the Fair Labor Standards Act, could properly be viewed as an administrative interpretation and accorded the weight to which it normally would be entitled, in the emergency situation in which it was necessary for him to resolve the question and to act.
I can see no basis for any right in the situation to maintain an action under the Fair Labor Standards Act, and I agree that the suit should be dismissed.
SANBORN, WOODROUGH and RID-DICK, Circuit Judges, besides joining in the Court’s official opinion, concur also in the foregoing separate opinion.