317 U.S. 501 (1943), 142, Endicott Johnson Corp. v. Perkins

Docket Nº:No. 142
Citation:317 U.S. 501, 63 S.Ct. 339, 87 L.Ed. 424
Party Name:Endicott Johnson Corp. v. Perkins
Case Date:January 11, 1943
Court:United States Supreme Court

Page 501

317 U.S. 501 (1943)

63 S.Ct. 339, 87 L.Ed. 424

Endicott Johnson Corp.



No. 142

United States Supreme Court

Jan. 11, 1943

Argued November 20, 1942




1. Upon an application by the Secretary of Labor to a federal District Court for enforcement of a subpoena duces tecum, issued by the Secretary in pursuance of an investigation of alleged violations of the Walsh-Healey Public Contracts Act and requiring the production of payroll and similar records relating to plants of the contractor other than those specified in the contract, the District Court, in the circumstances of this case, was without authority to proceed to hear and determine whether the Act and contract covered such plants, and it was its duty to order enforcement of the subpoena. P. 506.

2. The delegation to the Secretary of Labor of the subpoena power, as here exercised, was within the authority of Congress. P. 510.

12 F.2d 208 affirmed.

Certiorari, post, p. 607, to review the reversal of orders of the District Court, 37 F.Supp. 604 and 40 F.Supp. 254, refusing enforcement of subpoenas duces tecum issued by the Secretary of Labor pursuant to the Walsh-Healey Public Contracts Act.

JACKSON, J., lead opinion

MR. JUSTICE JACKSON delivered the opinion of the Court.

This case concerns the validity of a subpoena issued by the Secretary of Labor in administrative proceedings against the petitioner under the Walsh-Healey Public Contracts

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Act.1 The petitioner successfully resisted the Secretary's petition for enforcement in the District Court,2 whose judgment was, in turn, reversed by the Circuit Court of Appeals for the Second Circuit.3 We granted certiorari because of the importance of the questions in the enforcement of the Act, and because of probable conflict with a holding of the Circuit Court of Appeals for the Sixth Circuit.4

The Walsh-Healey Act requires tat contracts with the Government for the "manufacture or furnishing of materials, supplies, articles, and equipment in any amount exceeding $10,000" shall represent and stipulate, inter alia, for the payment of "not less than the minimum wages as determined by the Secretary of Labor" (§ 1(b)), and that

no person employed by the contractor in the manufacture or furnishing of the materials, supplies, articles, or equipment used in the performance of the contract shall be permitted to work in excess of eight hours in any one day or in excess of forty hours in any one week

(§ 1(c)); but provides that the Secretary may allow exemptions from the minimum wage provisions, and permit increases in the stipulated maximum hours on payment of wages at "not less than one and one-half times the basic hourly rate received by any employee affected." (§ 6.)

The Act provides for liquidated damages for violations of required stipulations in the contract (§ 2), and, further, that, "unless the Secretary of Labor otherwise recommends," no government contract shall be awarded to the

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firm or subsidiaries of the firm which he finds to have defaulted in its obligation under the Act "until three years have elapsed from the date the Secretary of Labor determines such breach to have occurred." (§ 3.)

The Secretary is directed

to administer the provisions of this Act" and empowered to "make investigations and findings as herein provided, and prosecute any inquiry necessary to his functions.

(§ 4.) And, that he may the better and the more fairly discharge his functions, he is authorized to hold hearings "on complaint of a breach or violation of any representation or stipulation" and

to issue orders requiring the attendance and testimony of witnesses and the production of evidence under oath. . . . In case of contumacy, failure, or refusal of any person to obey such an order,

the District Court of the United States

shall have jurisdiction to issue to such person an order requiring such person to appear before him or representative designated by him, to produce evidence if, as, and when so ordered, and to give testimony relating to the matter under investigation or in question, and any failure to obey such order of the court may be punished by said court as a contempt thereof.

The Secretary is directed to make

findings of fact, after notice and hearing, which findings shall be conclusive upon all agencies of the United States, and, if supported by the preponderance of the evidence, shall be conclusive in any court of the United States, and the [63 S.Ct. 341] Secretary of Labor . . . shall have the power, and is hereby authorized, to make such decisions, based upon findings of fact, as are deemed to be necessary to enforce the provisions of this Act

(§ 5.)

Pursuant to her authority under the Act, the Secretary, in 1937, defined by rulings the coverage of the Act. She provided, inter alia, that

employees engaged in or connected with the manufacture, fabrication, assembling, handling, supervision, or shipment of materials, supplies, articles, or equipment used in the performance of the contract

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might be employed overtime at "one and one-half times the basic hourly rate or piece rate received by the employee."5 Stipulations as to minimum wages were made to "apply only to purchases or contracts relating to such industries as have been the subject of a determination by the Secretary of Labor."6 Thereafter, and on December 21, 1937, she made a determination of minimum wages to be paid employees "engaged in the performance of contracts . . . for the manufacture or supply of men's welt shoes." On September 29, 1939, and after the completion of the contracts involved in this case, the Secretary issued rulings specifically dealing with "integrated establishments."7

From the pleadings in the District Court and admitted statements in affidavits filed, there appear the following facts:

Between October 26, 1936, and June 8, 1938, petitioner was awarded several contracts for boots, shoes, gymnasium shoes, and arctic overshoes. Each was for an amount in excess of $10,000, and each contract included representations, and stipulations in accordance with the Act and the

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Secretary's rulings thereunder set out above. Bids for and awards of the contracts designated the places of manufacture, and manufacture elsewhere was forbidden.8 In the plants so specified, notices required by the contract were posted,9 and there the petitioner admitted an obligation and apparently intended to comply with the Act and contract. The violations claimed in those plants are minor, if [63 S.Ct. 342] any; petitioner offered to adjust any violation found there, and it has willingly furnished complete records and information as to those plants and those employed in them. But there ended, the petitioner claims, both the investigatory power of the Secretary and its obligation to make its records available.

The Secretary did not agree, and instituted an administrative proceeding against petitioner charging violation

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of the stipulations in the contract by virtue of payments by petitioner of less than the minimum wages determined by her on December 21, 1937, for the "manufacture or supply of men's welt shoes," and of failure to make required additional payments for overtime work, in other and physically separate plants owned and operated by the petitioner. In those plants, it manufactured parts such as counters and rubber heels, tanned leather for uppers and soles, and made cartons for packaging shoes for the Government, as well as for its civilian customers. The subpoena in question issued in this proceeding called for records chiefly relating to payrolls in such plants, and as to them the petitioner refused to comply.

To obtain the compliance to the subpoena which petitioner refused, the Secretary had resort to the District Court as provided by § 5, alleging the foregoing facts and that,

following an investigation by representatives of the Department of Labor, and it having appeared to the plaintiff upon the basis of such investigation that defendant

had violated there stipulations of the contracts, she commenced such proceeding, and that "plaintiff has reason to believe, and said amended (administrative) complaint alleges, that the persons employed" and alleged to have been underpaid

in its Calfskin Tannery, Upper Leather Tannery, Sole Leather Tannery, Paracord Factory, Sole Cutting Department (Johnson City), Sole Cutting Department (Endicott), Counter Department (Johnson City), and Carton Department (Johnson City) were employed by it in performance of the contracts specified,

and that such allegations were denied by the answer in the administrative proceedings.

The Corporation pleaded to the District Court its ownership and management of the plants in question and that the rubber heels and soles, the counters, cartons, and all except a portion of the leather soles "used in the manufacture" of the government footwear "were manufactured"

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in its several separate plants or departments. It also set forth in full its answer in the administrative proceeding and reasons why it considered "arbitrary, artificial, unreasonable, discriminatory, and capricious" the ruling of the...

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