Seese v. Bethlehem Steel Co.

• Citation: 168 F.2d 58
• Decision Date: 05 May 1948
• Docket Number: No. 5723.,5723.
• Parties: SEESE et al. v. BETHLEHEM STEEL CO. SHIPBUILDING DIV.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

168 F.2d 58 (1948)

SEESE et al. v. BETHLEHEM STEEL CO SHIPBUILDING DIV.

No. 5723.

Circuit Court of Appeals, Fourth Circuit.

May 5, 1948.

Maurice Braverman, of Baltimore, Md., for appellants.

William L. Marbury, of Baltimore, Md. (Marbury, Miller & Evans and Franklin G. Allen, all of Baltimore, Md., and Cravath, Swaine & Moore, of New York City, on the brief), for appellee.

I. Duke Avnet, of Baltimore, Md. (Edgar Paul Boyko, of Arlington, Va., on the brief), amici curiae.

Tom C. Clark, Atty. Gen., H. G. Morison, Asst. Atty. Gen., Enoch E. Ellison, Sp. Asst. to the Atty. Gen., and Johanna M. D'Amico, of Washington, D. C., Atty., Dept. of Justice, on the brief), for the United States, intervenor.

Before PARKER and SOPER, Circuit Judges, and BRYAN, District Judge.

PARKER, Circuit Judge.

This is an appeal in a suit filed in behalf of one hundred or more employees of the Bethlehem Steel Company to recover overtime pay and liquidated damages under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. There is no allegation or contention that plaintiffs were not paid the minimum wages prescribed by the act, with time and half for overtime, if regard be had to contract, custom or practice; but recovery is asked solely on the ground that plaintiffs were required to be on the premises of defendant before and after working time for the purpose of changing clothes and walking to and from the place where the work was carried on. The contention of plaintiffs is that this time spent on defendant's premises must be counted as working time under the Fair Labor Standards Act and that overtime compensation must be computed with respect thereto, reliance being placed upon the decisions of the Supreme Court in Tennessee Coal Co. v. Muscoda Local, 321 U.S. 590, 64 S.Ct. 698, 88 L.Ed. 949, 152 A.L.R. 1014; Jewell Ridge Co. v. Local No. 6167, 325 U.S. 161, 65 S.Ct. 1063, 89 L.Ed. 1534; and Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515.

While the case was pending in the court below, Congress passed the Portal-to-Portal Act of May 14, 1947, 29 U.S.C.A. § 251 et seq., taking away the right to recover in such case, except for an activity compensable under the express provisions of a contract or by custom or practice, and depriving the Courts of the United States of jurisdiction thereof. A motion was made to dismiss the complaint on the ground that it failed to state a case upon which relief could be granted or of which the court had jurisdiction because it failed to allege contract, custom or practice as a basis of compensation.

The District Judge offered plaintiffs an opportunity to amend the complaint to plead contract, custom or practice within the meaning of the statute if they desired to amend; but they declined to do so, contending that its provisions prescribing such conditions of recovery with respect to existing causes of action were unconstitutional. The judge then held the act constitutional and dismissed the action. Seese et al. v. Bethlehem Steel Co., D.C., 74 F.Supp. 412. The appeal from the dismissal presents squarely the question of the constitutionality of the act, since, unless it was constitutional, a valid cause of action of which the court had jurisdiction was well pleaded. We entertain no doubt that we should pass upon the question of constitutionality thus raised. Nothing would be gained by remanding the case for a finding of facts; and it is manifestly in the public interest that the question of constitutionality raised in the case be promptly determined. Cf. United States v. Petrillo 332 U.S. 1, 67 S.Ct. 1538, 91 L.Ed. 1877.

The Fair Labor Standards Act 29 U.S. C.A. § 201 et seq., is a statute enacted by the Congress under the Commerce Clause of the Constitution, Art. 1, § 8, cl. 3. United States v. Darby 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430. It provides for fixing minimum wages and maximum hours for employees engaged in commerce or in the production of goods for commerce within the meaning of the act. Section 7 prescribes the hours of a maximum work week and forbids employment for any time in excess thereof unless the employee shall be paid time and a half for overtime. 29 U.S.C.A. § 207. Section 16 prescribes criminal penalties and in addition fixes civil liability for violation, providing that any employer violating the act "shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages". 29 U.S.C.A. § 216. The act does not define "work" or "work week" or have anything to say as to whether or not preliminary or incidental activities shall be compensable. This was left to private agreement, and, in the absence of such agreement, was not generally thought to be compensable or to have any relation to the work week prescribed by the act.

In the three portal to portal cases referred to above, the Muscoda case, the Jewell Ridge case and the Mt. Clemens Pottery case, the Supreme Court decided that the work week prescribed by the act should be construed to include preliminary and incidental activities of the employee, such as walking to work on the employer's premises, changing to work clothes etc. The effect of this construction was to give rise to a flood of claims against employers with respect to matters which up to that time had not been regarded by either employer or employee as compensable or as having any relation to the length of work week prescribed by the act. The Judiciary Committee of the House found that between July 1, 1946, and January 31, 1947, there were 1913 cases involving claims of this sort filed in the federal courts alone, that 398 of these did not claim specific amounts and that the remainder claimed a total of $5,785,204,606.00. Significant was the fact that 62% of these suits were filed during the last month of the seven months period considered. Not only did these suits threaten ruin to numerous employers throughout the country (who under the decisions of the Supreme Court could not make binding settlements with the claimants even with respect to the liquidated damages involved, Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296), but they presaged great loss to the government itself. Claims aggregating $600,000,000 had been filed on contracts entered into by the War Department on a cost plus basis and the Undersecretary of War estimated the potential liability at $1,400,000,000. In five suits against the Maritime Commission the amount claimed was $128,500,000. The suits undoubtedly constituted a serious threat to industrial relations and the principle of collective bargaining in interstate commerce. See H.R. No. 71, February 25, 1947.

In passing the Portal-to-Portal Act of May 14, 1947, Congress, as a part of the act, carefully set forth the facts upon which its action was based and appraised their effect upon interstate commerce and other matters as to which it possessed governmental power, in the following language:

"The Congress hereby finds that the Fair Labor Standards Act of 1938, as amended, has been interpreted judicially in disregard of long-established customs, practices, and contracts between employers and employees, thereby creating wholly unexpected liabilities, immense in amount and retroactive in operation, upon employers with the results that, if said Act as so interpreted or claims arising under such interpretations were permitted to stand, (1) the payment of such liabilities would bring about financial ruin of many employers and seriously impair the capital resources of many others thereby resulting in the reduction of industrial operations, halting of expansion and development, curtailing employment and the earning power of employees; (2) the credit of many employers would be seriously impaired; (3) there would be created both an extended and continuous uncertainty on the part of industry, both employer and employee, as to the financial condition of productive establishments and a gross inequality of competitive conditions between employers and between industries; (4) employees would receive windfall payments, including liquidated damages, of sums for activities performed by them without any expectation of reward beyond that included in their agreed rates of pay; (5) there would occur the promotion of increasing demands for payment to employees for engaging in activities no compensation for which had been contemplated by either the employer or employee at the time they were engaged in; (6) voluntary collective bargaining would be interfered with and industrial disputes between employees and employers and between employees and employees would be created; (7) the courts of the country would be burdened with excessive and needless litigation and champertous practices would be encouraged; (8) the Public Treasury would be deprived of large sums of revenues and public finances would be seriously deranged by claims against the Public Treasury for refunds of taxes already paid; (9) the cost to the Government of goods and services heretofore and hereafter purchased by its various departments and agencies would be unreasonably increased and the Public Treasury would be seriously affected by consequent increased cost of war contracts; and (10) serious and adverse effects upon the revenues of Federal, State, and local governments would occur.

"The Congress further finds that all of the foregoing constitutes a substantial burden on commerce and a substantial obstruction to the free flow of goods in commerce.

"The Congress, therefore, further finds and declares that it is in the national public interest and for the general welfare, essential to national defense, and necessary to aid, protect, and foster commerce, that this Act be enacted. * * *"

The pertinent portions of the Portal-to-Portal Act, granting relief from the provisions of...