Gemsco v. Walling Maretzo v. Same Guiseppi v. Same 370

• Decision Date: 26 February 1945
• Docket Number: Nos. 368,s. 368
• Citation: 324 U.S. 244,89 L.Ed. 921,65 S.Ct. 605
• Parties: GEMSCO, Inc., et al. v. WALLING, Administrator of the Wage and Hour Division, United States Department of Labor. MARETZO et al. v. SAME. GUISEPPI et al. v. SAME. to 370
• Court: U.S. Supreme Court

324 U.S. 244

65 S.Ct. 605

89 L.Ed. 921

GEMSCO, Inc., et al.

v WALLING, Administrator of the Wage and Hour Division,

United States Department of Labor.

MARETZO et al.

v. SAME.

GUISEPPI et al.

v. SAME.

Nos. 368 to 370.

Argued Dec. 5, 1944.

Decided Feb. 26, 1945.

Messrs. Samuel S. Allan and Seymour D. Altmark, both of New York City, for petitioners.

Mr. Archibald Cox, of Washington, D.C., for respondent.

Mr. Justice RUTLEDGE delivered the opinion of the Court.

The issue to be decided in these cases is narrow. It is whether respondent, as Administrator, has authority under Section 8(f) of the Fair Labor Standards Act, 52 Stat. 1060, 29 U.S.C.A. § 208(f), to prohibit industrial homework as a necessary means of making effective a minimum wage order for the embroideries industry. The question arises in proceedings brought to review the order pursuant to Section 10, 29 U.S.C.A. § 210. The cases were consolidated for hearing in the Circuit Court of Appeals, which sustained the Administrator's action, one judge dissenting. Guiseppi v. Walling, 2 Cir., 144 F.2d 608. Because of the public importance of the question and its importance for purposes of administering the statute, certiorari was granted, 323 U.S. 695, 65 S.Ct. 84, limited to the stated issue.¹

One of the Act's primary objectives was 'a universal minimum wage of 40 cents an hour in each industry engaged in commerce or in the production of goods for commerce' and to reach this level as rapidly as was 'economically feasible without substantially curtailing employment.' Section 8(a). Accordingly, Section 6, 29 U.S.C.A. § 206, established basic minimum statutory wages, to be stepped up from 25 cents an hour to 40 cents generally² during the seven years from the section's effective date, October 23, 1938. Limited flexibility was provided in accordance with the declared purpose to reach the 40 cent level earlier if 'economically feasible.' Cf. 83 Cong.Rec. 9256. Section 8 empowers the Administrator to convene industry committees which, after investigation, report to him their recommendations concerning minimum wages³ and reasonable classifications. Section 8(a), (b), (c), (d). The Administrator is then required by order to approve and carry into effect the committee's recommendations, after notice to interested persons and opportunity to be heard, if he finds they 'are made in accordance with law, are supported by the evidence * * * and * * * will carry out the purposes' of the section; otherwise he must disapprove them. Section 8(d).

The Act's scheme is therefore a combination of 'statutory' minimum wages fixed by Section 6 and what may be termed 'committee' wages,⁴ fixed by order made pursuant to Section 8. The former prevail in the absence of special administrative action; the latter, when such action has been taken to prescribe for a specific industry a higher level than the generally prevailing statutory floor. The order in this case, entered on approval of the committee's recommendations, after notice and extensive hearings,⁵ prescribed a minimum wage of 40 cents an hour, an increase of 2 1/2 cents over the previously prevailing 'committee' rate.⁶ Petitioners have not contested this, the primary, term of the order.

In this statutory setting stands Section 8(f), the crucial provision which in material part is as follows:

'(f) Orders issued under this section shall define the industries and classifications therein to which they are to apply, and shall contain such terms and conditions as the Administrator finds necessary to carry out the purposes of such orders, to prevent the circumvention or evasion thereof, and to safeguard the minimum wage rates established therein. No such order shall take effect until after due notice is given * * *.' (Emphasis added.)

I. The narrow issue turns upon the scope properly to be given the emphasized portions of the section. Respondent says that this authorizes him to take whatever action he finds necessary to prevent circumvention or evasion of the order so that the wage rate it establishes may be safeguarded; and that in this case his findings, amply sustained by the evidence, show prohibition of industrial homework is necessary to accomplish this end. As applied in this case, he has construed 'necessary' not as meaning 'helpful,' 'consistent,' or 'convenient,'⁷ but as connoting that the prohibition is absolutely essential to achieve those purposes. He says the wage rate cannot be maintained unless industrial homework is prohibited, with the comparatively minor exceptions the order allows.⁸ His findings and indeed his express conclusions therefore necessarily determine that regulation, by measures short of prohibition, cannot accomplish the relevant purposes of the order and of the statute.⁹

Petitioners do not dispute the Administrator's findings of fact or that the evidence fully sustains them. Nor indeed do they question his conclusions in any respect except that he has no legal authority to make the prohibition. ¹⁰ The petition for certiorari conceded, as does also the brief, that the prohibition was included solely because respondent found 'he could not (otherwise) enforce the minimum wage rate as to the home workers employed in the industry.' The brief states further that petitioners, 'during the entire course of the proceedings, * * * challenged only the statutory authority' of the respondent to include the prohibition.

In this sharply chiseled state of the issue, the accuracy of the Administrator's findings and conclusions and the sufficiency of the evidence to sustain them must be taken not only as true but as conceded, apart from the single question of authority to include the prohibition notwithstanding it is so buttressed in fact.¹¹ The posture of the case therefore compels acceptance of the Administrator's position that, without the prohibition, the wage rate cannot be maintained, and that circumvention and evasion cannot be prevented.

Furthermore, upon the findings that is true not only with reference to the employees who are themselves homeworkers. It is true also as to all other employees in the industry.¹² According to the best available estimates, the number of homeworkers at peak employment (April 1, 1939, to July 15, 1942) ranged from 8,500 to 12,000, whereas the number of factory workers as of June, 1942, was 18,500. The number of wage earners per factory in 1939 employed in some 1,431 establishments averaged between 12 and 13 workers.¹³ Not only therefore is it im- possible for the Administrator, without the prohibition, to follow the statute's mandate (Section 8(d)) to 'carry into effect' the recommendations of the committee as to 8,500 to 12,000 homeworkers, who generally are part-time pieceworkers.¹⁴ He neither can do so as to factory workers, who generally are full-time workers.

Hence, if the prohibition cannot be made, the floor for the entire industry falls and the right of the homeworkers and the employers to be free from the prohibition destroys the right of the much larger number of factory workers to receive the minimum wage. This is true not merely as a matter of inference from evidence having only prospective and predictive value. It is proved conclusively by the Administrator's experience in attempting by regulatory methods to secure compliance with the previously prevailing¹⁵ lower 'committee' rate.¹⁶ His experience is borne out by that of state and federal authorities prior to the Fair Labor Standards Act.¹⁷ Attempts to maintain minimum wages by regulating homework have failed generally of their purpose. This failure, after fair trial, is responsible for the Administrator's resort to prohibition in the present order.

The case therefore comes down squarely to whether or not minimum wages may be effectively prescribed and required in this industry. If homework can be prohibited, this is possible. If it cannot, the floor provided by the order cannot be maintained and, further, what is more important, it inevitably follows that no floor, whether of 'statutory' or of 'committee' wages, can be maintained.¹⁸

In this light petitioners' position is, in effect, that the statute cannot be applied to this industry. Their argument is not put in these terms. It comes to that. So do state it is to answer it. The industry is covered by the Act. This is not disputed. The intent of Congress was to provide the authorized minimum wage for each employee so covered. Neither is this questioned. Yet it is said in substance that Congress at the same time intended to deprive the Administrator of the only means available to make its mandate effective. The construction sought would make the statute a dead letter for this industry.

The statute itself thus gives the answer. It does so in two ways, by necessity to avoid self-nullification and by its explicit terms. The necessity should be enough. But the Act's terms reinforce the necessity's teaching. Section 8(d) requires the Administrator to 'carry into effect' the committee's approved recommendations. Section 8(f) commands him to include in the order 'such terms and conditions' as he 'finds necessary to carry out' its purposes. These duties are backed up by other provisions.¹⁹ When command is so explicit and, moreover, is reinforced by necessity in order to make it operative, nothing short of express limitation or abuse of discretion in finding that the necessity exists should undermine the action taken to execute it. When neither such limitation nor such abuse exists, but the necessity is conceded to be well founded in fact, there would seem to be an end of the matter.

II. Petitioners' objections are not procedural. They have not contended that the provision of the order forbidding homework is a definition or classification of the industry or, either for that reason or any other, must be submitted to the industry committee and made only upon its recommendation. Such a position would have nullified their argument that the statute confers no...