and shipper members produce, harvest, pack, and ship, approximately 85 percent of all the California fresh deciduous tree fruits, berries, and grapes shipped to market in interstate and foreign commerce. The average annual volume of California fresh deciduous tree fruits, berries, and grapes moved in interstate and foreign commerce is over 750,000 tons, 85 percent of which is marketed in the territory east of the Mississippi River. At the present time this important California industry is faced with what is commonly called the cost-price squeeze. The high cost of labor, material and transportation is responsible. Consumers are resisting the prices being asked for fresh fruit with the result that the volume sold is declining due to a shift in consumer purchases to competitive items. Fresh fruit is a highly perishable commodity. It must be shipped to market when it is ready and sold for whatever price it will bring. A large proportion of the fresh fruit moved to market in interstate commerce is handled on consignment for the grower's account. Under these circumstances all of the charges for packing, loading, cooling, transportation and selling, are deducted from the grower's account sale. This means that the grower is the one who is directly affected by increased costs even though such costs are paid by a commercial packer and shipper or by a cooperative association. Commercial packers and shippers and cooperative associations are subject to compliance with the minimum wage unless they qualify under the "area of production" exemption. We believe that Congress in its wisdom intended to protect the grower's position by providing the "area of production" exemption, but the parenthetical phrase (as defined by the Administrator) has resulted in a definition of "area of production" which is most unsatisfactory to the fresh fruit industry and agriculture in general. The solution is to amend the act with a sensible definition of the "area of production." The present definition promulgated by the Administrator is most unsatisfactory and has created severe hardships and discrimination. There are many country towns in California located in fruit producing areas with populations over 2,500 and some over 50,000. For the Administrator to establish a rule that a fresh fruit packing establishment located in a town of 2,500 population is subject to the minimum wage and another performing the same services for the growers in the same producing area located over one airline mile from that town is discriminatory and without sound reason. We urgently request full consideration of an amendment which would change section 13 (a) 10 by striking out, after the words, "area of production," the parenthetical phrase "(as defined by the Administrator)" and adding to this section a practical and reasonable definition of the "area of production." We support the definition proposed by the United Fresh Fruit & Vegetable Association after consultation with various commodity and agricultural representatives. This definition is as follows: "Area of production" means, with respect to livestock, poultry, or any agricultural or horticultural commodity, the area or areas (the geographical boundaries of which shall be expressed in terms of counties or States, or counties and States) which may be ascertained and designated by the Secretary of Labor, in which such agricultural product is produced in commercial quantities; and such contiguous counties in the same or adjoining States, if it is customary for the product to move from the county in which it is produced to an establishment located in any such contiguous county for the performance of any of the operations in section 13 (a) 10. In the absence of a reasonable and workable definition of the "area of production" the only relief afforded the fresh fruit and vegetable packing industry (a seasonal industry) is the 14-week partial exemption 7 (b) (3) and the 14week total exemption 7 (c) from payment of overtime. We believe that when Congress provided these exemptions it was intended that they be interpreted by the Administrator in a logical and reasonable manner so that employers who were forced to work their employees over 8 hours per day in order to avoid spoilage of highly perishable fresh fruits and vegetables would not be penalized for reasons beyond their control. This industry cannot afford the facilities or secure the personnel to handle peak season volume without working more than an 8-hour day. The Administrator now interprets the 7 (c) exemption to apply literally to the act of packing and operations directly incident thereto to the extent that the handling of a few packages packed at another location precludes taking the 7 (c) exemption during the work week. From a practical operating standpoint this interpretation is utterly ridiculous and is causing extreme hardship. In many instances fruit packed at other locations (at times on the grower's farm) can not be received, cooled and loaded, without causing the packer and shipper to lose his 7 (c) exemption from overtime in the entire establishment for the workweek. We respectfully urge that the 7 (c) and 7 (b) (3) exemptions in the act be retained and that a definition of the 7 (c) exemption be added which will preclude the Administrator from preventing its use by unreasonable and unworkable interpretation. Another problem confronting this industry is the refusal to provide a reasonable basis for employment of beginner or "learner" fresh fruit packers where the packing operation is in subject employment. This industry concurs in the statement of Ernest Falk of the Northwest Horticultural Council on this subject and seriously urges that the act be amended to provide a method whereby beginners or learners can be employed in packing fresh fruits at a sub-minimum wage. Elimination of the agricultural exemption section 13 (a) (6) would wreck this important California industry. Farming and fruit growing is not adaptable to the 8-hour day and 40-hour week. Agricultural production is a living thing which can not be shut off and on like a factory. Work in the orchards and vineyards must be done on schedule and in season. Mother Nature cannot be controlled. Living conditions for farmworkers in California are excellent and wage rates are as good as, or better than, in any other place in the country. Although conditions of employment are extremely favorable for farmworkers in California, there is a shortage of workers during the peak harvest season. This industry supports the agricultural exemption and is opposed to any modification of it. STATEMENT OF ROBERT E. LEE HALL, GENERAL COUNSEL, NATIONAL COAL ASSOCIATION Mr. Chairman, this statement is submitted on behalf of the National Coal Association, which is the trade organization of bituminous coal mine owners and operators. The production of the members of the association amounts to more than two-thirds of all the commercial production of bituminous coal in the United States. The coal industry endorses the principles of S. 1437 and urges the enactment of this proposed legislation. This bill would amend the Fair Labor Standards Act to provide that the term "employee" does not include an individual who is not an employee under the usual common-law rules applicable in determining the employer-employee relationship. This definition of the term "employee" is already contained in the National Labor Relations Act and the Social Security Act. At the present time it is virtually impossible to ascertain, with any degree of certainty, whether certain independent contractors will be determined to be employees within the meaning of the Fair Labor Standards Act. Even the Labor Department itself is unable to furnish criteria with any substantial degree of certainty or clarity. This causes confusion which can and should be avoided. The confusion is confounded by the difference in definition between the Fair Labor Standards Act and other labor legislation. Frequently the owner of coal reserves will contract with an independent contracting firm, such as a road-building organization which owns heavy earth-moving equipment, for the extraction of the coal deposit. Under these circumstances, the independent contractor then hires employees and proceeds with the work. Under the present state of the wage-hour law it is often impossible to ascertain whether the employees of the independent contractor are in turn the employees of the owner of the coal deposits. Again, it is not unusual in the coal-mining industry for the mine operator to engage trucking firms to transport the coal either to the coal tipple or from tipple to a railhead. Here, again, S. 1437 would enable the mine operator to determine whether the owner-drivers are their employees for the purposes of the Fair Labor Standards Act. The "total situation" test which presently prevails under the Fair Labor Standards Act is so vague that it contravenes the historic principle that we should have a government of law, not of men. PAUL H. DOUGLAS, LAW OFFICES KING, NOBLE & SONOSKY WASHINGTON, D. C., May 15, 1956. Chairman, Subcommittee on Labor Committee on Labor and Public Welfare, Senate Office Building, Washington, D. C. DEAR MR. CHAIRMAN: The National Retail Tea & Coffee Merchants Association last year filed a statement with the subcommittee in support of the retention of section 13 (a) (1) of the Fair Labor Standards Act which, among other things, exempts outside salesmen from the minimum-wage and maximum-hour provisions of the act. The association's statement appears on page 1228 of part II of the transcript of the hearings before the subcommittee. The reasons for the association's position are as valid today as they were last year. In order to conserve the time of the subcommittee the National Retail Tea & Coffee Merchants Association requests that the statement filed last year be incorporated in the present hearings by reference. If the subcommittee has any questions regarding the views expressed in that statement, we will be more than pleased to have a member of the industry appear before the subcommittee. Chairman, Subcommittee on Labor, Committee on Labor and Public Welfare, Senate Office Building, Washington, D. C. DEAR MR. CHAIRMAN: During the course of last year's hearings on proposed amendments to the Fair Labor Standards Act of 1938, I was afforded an opportunity to file a statement with the subcommittee on behalf of the Northwestern Lumbermen's Association. This association represents the 2,300 lumber dealers in the States of North and South Dakota, Iowa, and Minnesota. My statement on behalf of the association appears on page 883 of part II of the transcript of those hearings. The reasons for retention of the present wording of the retail exemption are equally as valid today as they were last year. The association has requested me to remind the subcommittee of its membership's opposition to any change in the present wording of the exemption for retailers as expressed in section 13 (a) (2) of the act. To conserve the time of the subcommittee I suggest that the views expressed in my statement of last year be incorporated in the current hearings by reference. If the subcommittee feels, however, that it would like to question me regarding the views expressed in that statement, I would be most happy to appear before the subcommittee and answer any questions raised. Sincerely, Mr. STEWART E. MCCLURE. JOSEPH T. KING. NATIONAL ASSOCIATION OF MANUFACTURERS, Staff Director, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. DEAR MR. MCCLURE: On behalf of the National Association of Manufacturers I am writing with regard to a number of bills which are the subject of hearings before the Labor Subcommittee of the Senate Committee on Labor and Public Welfare. It is our understanding that these bearings are a continuation of the hearings on most of the same bills held by the subcommittee in the spring of 1955. At that time this association was represented by Thomas O. Moore, Esq.. 78155-56-41 vice president and general counsel of the P. H. Hanes Knitting Co. and chairman of our industrial relations committee. The association's views on the bills then and now under consideration were presented in detail by Mr. Moore on April 27, 1955. Rather than burden the current hearing record with a repetition of that testimony, we respectfully invite attention to the testimony of Mr. Moore on pages 598 and following in part 2 of the printed hearings. While we do not desire to have this material included in the present hearing record, we enclose herewith a copy of Mr. Moore's statement for the ready reference of the subcommittee and its staff. We would, however, appreciate it if this letter could be incorporated in the record of the current hearings. One point that the association did not refer to in the prior hearings relates to those bills which would amend section 13 (a) (1) of the Fair Labor Standards Act so as to delete the present exemption afforded any employee employed "in the capacity of outside salesman." The very nature of the activities of an outside salesman are such that they do not reasonably come within the limitations on wages and hours as provided for in the wage-hour law. In most instances an outside salesman is a free agent in planning his activities and itinerary. His employer has only limited control over the hours worked by an outside salesman and no effective supervision over such employees essential to feasible compliance with the recordkeeping requirements of the statute and administrative regulations. It was estimated by the Department of Labor last year that the deletion of the outside salesman exemption would affect approximately 1,351,000 workers so employed. We submit that to repeal this exemption would be self-defeating for companies involved would, in many cases, no doubt be forced to materially revise their systems of sales and distribution. Further, this subcommittee was presented with substantial testimony to the effect that it would be highly impractical and unrealistic to attempt to apply legislation of this type to outside salesmen-the employer can't comply with the statute and the employees, in most cases, by choice prefer to work without the restrictions on their time and activities that application of the act would of necessity require. We also wish to briefly reaffirm our concern with the continued application of the Walsh-Healey Public Contracts Act of 1936. This act is a constant source of confusion and overlapping with the Fair Labor Standards Act and adds excessively to administrative recordkeeping expense. While these present hearings relate to proposed amendments to the wage-hour law, we deem it appropriate to again bring the matter of reappraising the necessity for maintaining two Federal statutes on wages and hours to the attention of this subcommittee. Recent court cases have served to demonstrate and buttress the contention that the Walsh-Healey Act has given rise to many legal inequities and raises costs to the Government and business generally. There is no basis or justification for perpetuating a regulatory statute that long ago outlived the limited purpose for which it was enacted and which now serves only to foment litigation and added costs. Respectfully submitted. LAMBERT H. MILLER, STATEMENT OF THE AMERICAN MEAT INSTITUTE This statement is made on behalf of the American Meat Institute, the national trade association of the meat industry. We are opposed to certain bills now pending before Congress to broaden the coverage of the Fair Labor Standards Act and particularly the proposed provisions to restrict or remove the present hours of work exemptions which were a salient feature of the original act and have always been supported vigorously since that time. These amendments that seek to broaden or remove certain exemptions will directly and indirectly affect agricultural producers' costs. The 14 tolerance weeks, the area of production, and the initial processing exemptions provisions under the present act are necessary to many producers, processors, and manufacturers of agricultural products and should be retained. The proposed amendments to alter or change the present customary method of paying outside salesmen or buyers will work a hardship on the salesmen, the customer, the final purchaser of the finished product, and the employer. Changes such as are proposed to the present Fair Labor Standards Act with re spect to salesmen's hours for overtime pay whether daily or weekly could only result in added costs. We will appreciate your committee giving careful consideration to the serious effects which the proposed amendment could have on the economy. The proposed amendment to the Fair Labor Standards Act which would alter or change the long-established pattern of sales work and salaries paid will not increase income or other benefits presently enjoyed by employees in this classification. To the contrary, it would prove to be a handicap and a hardship upon the salesmen themselves, their employers, their customers, and the ultimate consumer. It is clear that such extensions in hourly paid coverage as are proposed in some of the bills would ultimately affect the entire economy. This is evident because of the influence that such economic pressure would have upon the price of meat and meat products. Salesmen of this industry, like those of many others, differ considerably from other types of employees by virtue of the very nature of their work and the standards upon which their earnings are established. Compensation ranges from what might be comparable to a beginning office worker up to what might be called an upper income bracket. Few fields of endeavor offer more individual apportunity to reap the rewards of one's own personal effort than sellingwhether it be meat or any one of the thousands of other products that move through industry to the consuming public. However, these rewards cannot be realized if measurement of performance is attempted on an hourly basis. The incentive would be destroyed for it can only be related to the salesman's individual contribution in effort, initiative, and ingenuity. We would urge that in such consideration as is given the bills now before this committee, particular attention be devoted to the nature of sales work in general and the difficulty, if not the actual impossibility, of legislating and controlling hours, work habits, and routine of these salesmen. The committee should also be conscious of the undesirable effects which might result from attempts to devise unworkable regulations to carry out exemptions of the act which are of doubtful merit. It would be impossible to administer for many reasons, among them, the fact that a salesman's actual working time is not sharply defined, the dependence on the salesman for accuracy and honesty and the necessity of having to rely on these employees to maintain and submit their own time records and reports. For these same reasons, it could not be policed. In short, to attempt any correlation of a salesman's earnings with a 40-hour week or an 8-hour day would force unreasonable limits on his working time with a corresponding reduction in his actual as well as potential earnings. Salesmanship is in reality a creative profession, and we wish to impress upon the committee that any time-clock techniques would indeed discourage incentive and initiative to the detriment of the entire economy. In this connection, it is a fact that wage and salary standards in the meatpacking industry are well above the minimum prescribed by law. We would also like to impress upon the committee the importance of the seasonable aspect of production in the meatpacking industry. We have no control over the number of head of livestock marketed each day and each week. Livestock as well as the resulting meat are highly perishable products. They cannot be stored and held for later processing. They must be processed promptly after arriving at the Nation's stockyards and packing plants and made available for consumption at the earliest possible hour. Regardless of the volume that may be coming to market, the perishable nature of the meat demands that salesmen dispose of output promptly since livestock receipts (our raw material) change from day to day, week to week, month to month. It is evident a hardship would result by the extension of the act to restrict the hours of work and the scope of activity of meat and meat products salesmen. The special nature of salesmen's duties, routine, and methods of compensation was carefully considered, and it was this reason which lead to the exemption from the original Fair Labor Standards Act and from subsequent amendments. The methods of operation and the manner of compensating salesmen is essentially the same today as it was in 1938 when the law was enacted. In summary, we are opposed to the bills now pending for the reasons stated: 1. The existing law has proved to be satisfactory over the entire life of the Fair Labor Standards Act and has been accepted by the salesman, the employer and indirectly by the buying public. 2. The unique features of the occupations involved in these exemptions make impossible adequate or equitable substitute legislation. |