Sindicato Puertorriqueno de Trabajadores v. Hodgson

• Decision Date: 21 July 1971
• Docket Number: No. 24057.,24057.
• Citation: 448 F.2d 1161
• Parties: SINDICATO PUERTORRIQUENO DE TRABAJADORES, affiliated with Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, et al., Petitioners, v. James D. HODGSON, Secretary of Labor, United States Department of Labor, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

448 F.2d 1161 (1971)

SINDICATO PUERTORRIQUENO DE TRABAJADORES, affiliated with Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, et al., Petitioners, v. James D. HODGSON, Secretary of Labor, United States Department of Labor, et al.

No. 24057.

United States Court of Appeals, District of Columbia Circuit.

Argued March 5, 1971.

Decided July 21, 1971.

COPYRIGHT MATERIAL OMITTED

Mr. Laurence Gold, Washington, D. C., for petitioners. Mr. J. Albert Woll, Washington, D. C., was on the brief for petitioners.

Miss Carin Ann Clauss, Atty., U. S. Department of Labor, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of Court, with whom Miss Bessie Margolin, Associate Sol., and Mrs. Helen W. Judd, Atty., U. S. Department of Labor, were on the brief, for respondents.

Before FAHY, Senior Circuit Judge, and LEVENTHAL and ROBB, Circuit Judges.

FAHY, Senior Circuit Judge:

The case is before us on petition pursuant to Section 10(a) of the Fair Labor Standards Act, 29 U.S.C. § 210(a), under which a "person aggrieved by an order of the Secretary of Labor issued under section 208 * * * may obtain a review of such order in the United States Court of Appeals." The order of the Secretary establishes a scale of minimum wage rates for several classifications of agricultural workers in Puerto Rico which are described in the order. Petitioners are Sindicato Puertorriqueno de Trabajadores, a labor organization representing agricultural employees in Puerto Rico,¹ and several employees in Puerto Rico's agricultural industry representing themselves and their class. Petitioners primarily seek modification of the Secretary's order by substituting for its minimum wage rates the rate of $1.30 per hour for all classifications, which is the minimum, under Section 206(a) (5), for agricultural employees in the continental United States. For reasons stated in this opinion we do not disturb the rates fixed, though we do remand the case to the Secretary for further proceedings should petitioners initiate a request to that end.

The statutory scheme under which the order was made is now outlined. Section 208(a) of the Act provides that the Secretary of Labor² "shall from time to time convene an industry committee or committees, appointed pursuant to section 205 * * * to recommend the minimum rate or rates of wages to be paid under section 206 * * * by employers in Puerto Rico" engaged in the production of goods for commerce. Under Section 205(b) the committee is to be composed of an equal number of disinterested members representing the public, employers in the industry, and employees in the industry. The committee must be convened at least once every two years until wage rates in Puerto Rico meet the minimum standards for the continental United States. (Section 208(a)). The committee is to investigate conditions in the industry, hear witnesses, and receive such evidence as may be necessary or appropriate to "enable the committee to perform its duties and functions." (Section 208 (b)).³ The committee's duty under Section 208(b) is to

recommend to the Secretary the highest minimum wage rates for the industry which it determines, having due regard to economic and competitive conditions, will not substantially curtail employment in the industry, and will not give any industry in Puerto Rico or in the Virgin Islands a competitive advantage over any industry in the United States outside of Puerto Rico and the Virgin Islands.

The policy of the Act with respect to industries in Puerto Rico, set forth in Section 208(a), is "to reach as rapidly as is economically feasible without substantially curtailing employment the objective of the minimum wage prescribed in paragraph (1) of section 206(a) * * * in each such industry." The committee in performing its functions and duties is required to consider competitive conditions in the industry, wages for like or comparable work established by negotiated labor agreements, and minimum wage standards voluntarily maintained for like or comparable work. (Section 208(c)(1), (c)(2), (c)(3)). Finally, the committee is authorized to "recommend such reasonable classifications within any industry as it determines to be necessary for the purpose of fixing for each classification within such industry the highest minimum wage rate" not in excess of that prescribed by Section 206(a). (Section 208(c)).

After the committee has made its findings of fact and recommendations it is required to file with the Secretary its report, which the Secretary "shall publish * * * in the Federal Register and shall provide by order that the recommendations contained in such report shall take effect upon the expiration of 15 days after the date of such publication." (Section 208(d)). Any person aggrieved by the order is granted the right of review to which we have referred (Section 210(a)). The court "shall have exclusive jurisdiction to affirm, modify, or set aside the order in whole or in part, so far as it is applicable to the petitioner. The review by the court shall be limited to questions of law, and findings of fact by such industry committee when supported by substantial evidence shall be conclusive." (Section 210(a).)

Under the statutory plan thus outlined Industry Committee No. 89-A was appointed by the Secretary on November 1, 1969, to set minimum wage rates for agricultural employees in Puerto Rico.⁴ The Committee held hearings, received and considered evidence, and filed its report on December 12, 1969, with findings of fact and recommendations. The recommendations of the Committee were reached by a 5 to 4 vote of its members, the Chairman and the three labor members dissenting. Upon publication of the report the Secretary provided by the order before us, as required by Section 208(d), that the recommendations of the report be put into effect. The petition for review followed.

Before turning to the merits we outline an unusual situation in the agricultural industry of Puerto Rico. By Act of the Puerto Rican legislature, Law No. 142, approved June 29, 1969, farm workers are guaranteed a minimum income of 80 cents per hour during fiscal year 1969-70, 90 cents per hour during fiscal year 1970-71, and $1.00 per hour during fiscal year 1971-72 and subsequent years. The purpose of the law, as stated by the legislature, is "to guarantee to the agricultural workers a greater income * * * to persuade them to continue working in agriculture in order to ease the shortage of manpower encountered by this industry, without raising the costs of production," with the hope also of "raising the standards of living of the farm workers so that they may enjoy a more rewarding existence." Since the rates before us except for two classifications of workers on dairy farms, are below the amounts provided by Law No. 142,⁵ increases in the minimum wage rates under the Fair Labor Standards Act which do not reach the level of the income set by Law No. 142 are not assumed by the Commonwealth of Puerto Rico but by employers. The difference between the income generated by the rates fixed under the Fair Labor Standards Act and the income guaranteed by Law No. 142 is borne by the Commonwealth of Puerto Rico. Moreover, as the dissenting labor members of the present industry Committee point out, recommendations under the Fair Labor Standards Act can benefit farm workers only if the minimum rates fixed are above those set by Law No. 142.

I

The minimum wage rates established by the present order are in eight classifications, ranging from a low of 58 cents per hour to a high of $1.10 per hour. The schedule of classifications and minimum rates are set forth in the margin.⁶

Petitioners contend primarily that the order is invalid because it fails to meet the standards set by Section 208(b) of the Act. They contend that since the policy of the Act under Section 208(a) with respect to the Puerto Rican agricultural industry is "to reach as rapidly as is economically feasible without substantially curtailing employment" the $1.30 per hour wage objective, and that since the Committee failed to follow the standards of Section 208(b) to achieve the prescribed policy, the court is empowered to and should modify the rates fixed in the order by increasing the minimum wage rate to $1.30 per hour for all classifications, the ultimate goal envisaged by Section 208(a) of the Act.

The essence of petitioners' argument is stated by them as follows:

Establishment of a minimum wage less than that set in §§ 206(a) and 206(b) must be based on a demonstration that no higher figure would be justified. As a matter of economic theory, as well as common sense, detailed statements of the economic situation of the covered employers as a group over a period of time, with special emphasis on gross income and expense figures are a necessary, though not sufficient, condition to such a demonstration.1 For the "highest minimum wage * * * which will not substantially curtail employment" is the function of the covered employers\' ability to pay and of the elasticity of their demand for labor. (Footnote omitted)

The starting point in determining this minimum figure, the argument continues, is to ascertain the employers' income and expense figures, which was not done. The failure to obtain such evidence it is argued is fatal to the order. Furthermore, the petitioners argue, the Secretary's regulations, 29 C.F.R. §§ 511.11 and 511.13, support their position that findings related to such evidence are necessary.

Section 511.11 specifies that among the types of data which may be considered by an industry committee are "(d) financial conditions and trends since promulgation of the present wage order as reflected in profit and loss statements and balance sheets." The Secretary, we think acceptably, construes this regulation as falling short of requiring such data as a sine qua non to the validity of a recommendation and consequent order. So, too, as...