which was "merely expository of the Committee's obvious, although implicit, finding." 18

Both the form and timing of the presentation of evidence were involved in League of Voluntary Hospitals and Homes v. Local 1199, Hospital Workers, 19 a suit challenging the retention of controls on the health industry in Phase IV. There TECA found that a White House background paper and a Presidential message to Congress and accompanying background paper, which generally identified the health industry as highly inflationary, coupled with an affidavit by the Director of CLC, John T. Dunlop, which detailed reasons why the determination to retain controls on the health industry was made, were sufficient to support the controls.20

However, an affidavit supporting regulations may not be sufficient if it contains only bald conclusory statements, or if it does not address all of the relevant factors which formed the basis for the agency decision and show the reason for the agency's determination on each factor. In Chrysler Corp. v. Dunlop, the Court suggested that an affidavit from Dr. Dunlop could have been sufficient by itself to justify the challenged actions, but that the affidavits which were presented did not contain enough factual evidence to support the conclusion of an economic impact inconsistent with the Economic Stabiliation Program sufficient to justify action taken to defer a proposed price increase.21 In addition, the affidavit did not address the question of whether Chrysler's escrowrepayment program would mitigate the inflationary pressure. Under these circumstances, the affidavit did not provide sufficient evidence to form a reasonable basis for the agency action.

On the other hand, the affidavit may apparently contain something less than complete information. TECA held in Pacific Coast Meat Jobbers Association v. CLC that an affidavit was sufficient where it, "... reveals that the problem was studied thoroughly and a decision reached on the basis of extrapolations from the best data available to CLC." 22

Reasonable Basis Test-Notes

1. 462 F.2d 1161 (T.E.C.A. 1972).

2. Citing Bowles v. Seminole Rock and Sand Co., 325 U.S. 410 (1945). 3. 472 F.2d 1065 (T.E.C.A. 1972), cert. denied, 410 U.S. 928 (1973).

4. Id. at 1068.

5. Id. at 1069.

6. Id.

7. Id.

8. 372 F. Supp. 517 (D.D.C. 1974), rev'd 497 F.2d 909 (T.E.C.A. 1974). 9. Id. at 913.

10. Id.

11. 481 F.2d 1388 (T.E.C.A. 1973).

12. Id. at 1391.

13. Note 8, supra.

14. Id. at 914. The District Court had found the actions of the CLC arbitrary and capricious. The court said it agreed with the "great deference" test, but that this was not to be taken as a carte blanche. 372 F. Supp. at 525.

Challenges to Wage and Salary Stabilization

In addition to the constitutional challenge to the delegation of powers contained in the original Act, and suits based on alleged violation of due process, "taking" and equal protection guarantees, the wage, price, and rent segments of the program faced a wide variety of more narrowly based assaults. In this section we will explain briefly some of the major challenges to the "wage" control program of the ESP, how they arose, and the resolution of the conflicts arrived at by the courts.

In United States v. Atlantic and Pacific Tea Co.,1 the government brought suit against an employer and a union to enjoin the payment of a wage increase in violation of the Phase II regulations.

A&P and Local 117 of the Amalgamated Meat Cutters and Butcher Workmen of North America, which represented approximately 77 employees of A&P, were parties to a collective bargaining agreement which expired September 4, 1971. Negotiations for a new contract took place from September to mid-November 1971. After A&P stated that it would not agree to a wage increase greater than the recently promulgated Pay Board standard of 5.5%, the union struck on November 13, 1971. The strike ended on November 21, 1971 when A&P entered into a 16-month contract calling for wage increases substantially in excess of 5.5%. The new contract was implemented on the following day, but no request for Pay Board approval was made until January 12, 1972. On March 28, 1972, the Pay Board granted an exception, but with an overall limitation of 7%, which was less than the increase called for under the contract. A&P continued to pay the wage increases provided for in the contract at least through April 6, 1972.

A&P and the union raised a number of defenses, both constitutional and nonconstitutional. By way of constitutional defenses the defendant union asserted that the regulations, as applied, would deprive its members of due process and equal protection of the laws, arguing that the regulations arbitrarily placed them in an inequitable position as compared to those who had entered into contracts before November 14, 1971. However, the court ruled that it was necessary for the program to choose some point certain in time to impose new controls, and without prior notice, so as to restrict the opportunity to escape the controls' impact. The court also rejected the challenge that the 5.5% standard lacked a rational basis.2

With respect to the non-constitutional defenses, the court ruled that the Pay Board had been properly delegated responsibility to promulgate wage regulations, and that the 5.5% standard applied to "category III" adjustments, i.e., those adjustments affecting fewer than 1,000 employees, as well as to adjustments affecting larger units. The pur

pose of the categories was not, as defendant claimed, to apply different wage standards to each category, but rather to tailor the prenotification and reporting requirements for each category to the probable impact of their wage adjustments. Finally, the court held, on the basis of interpretation of Pay Board regulations, that the base from which the 5.5% standard was to be measured was wages of the actual employees involved, not the area or regional prevailing wage. Further § 201.11 of the regulations, allowing exceptions for certain "tandem relationships" and "catch up" increases was subject to an overall 7% limit,3 far below the 15.5% increase implemented by defendants.

In addition to rolling back the wage increases, the government sought to impose a civil penalty on defendants because of the violation, as provided for by the Economic Stabilization Act Amendments of 1971, $208, P.L. 92-210. The union and other defendants claimed that to subject them to such a penalty would violate constitutional prohibitions against ex post facto laws, as contained in Article 1, Section 9, Clause 3 of the Constitution. (The cited amendments became law December 22, 1971, while the violation of Pay Board regulations began a month earlier.) The court had two answers to this contention. First, Congress had clearly intended that the penalty be civil in nature to which ex post facto limitation does not apply. Second, the violation in question had continued for over 3 months after the penalty provision was enacted.*

5

In Local 117, Meat Cutters v. United States TECA affirmed the district court decision. The ex post facto request to the Pay Board for approval of the increase did not make the payment of the increase legal. Further, the power to impose civil penalties in the case was affirmed.

INTERPRETATION OF $203 (c) OF THE ECONOMIC STABILIZATION ACT-WAGE INCREASES PROVIDED FOR PRIOR TO AUGUST 15, 1971

Largely in response to the lobbying efforts of teachers, who saw the August 15, 1971 date of the beginning of the application of the ESA as depriving them of contract increases scheduled to become effective only a few weeks later, Congress added § 203 (c) to the Economic Stabiliation Act Amendments of December 1971. Subsections 203 (c) (1) and (2) provided for payment of wage increases agreed upon in contracts entered into prior to August 15, 1971, and payable, respectively, either during the freeze or afterward, unless "the President determines that the increase provided in such a contract is unreasonably inconsistent with the standards for wage and salary increases published under subsection (b)." In addition, subsection 203 (c) (3)

provided that the President must take action to require the payment of wage increases withheld under the authority of the Stabilization Act if the President determined that

(A) such increases were provided for by law or contract prior to August 15, 1971; and

(B) prices have been advanced, productivity increased, taxes have been raised, appropriations have been made, or funds have otherwise been raised or provided for in order to cover such increases.

Because of its importance to wage earners, subsection 203 (c) was among the most heavily litigated portions of the ESA.

One of the early cases dealing with § 203 (c) involved a conflict between the Pay Board and certain unions representing aerospace workers. The unions had appealed Board denial of a 51 cents per hour wage increase package, negotiated in December 1971. In UAW v. Boldt, the district court agreed with the union and remanded, for Pay Board reconsideration, first-year master contracts calling for 34 cents in a cost of living adjustment (COLA) and 17 cents of general wage increase. The court held that the COLA amounts were due from contracts executed prior to August 15, 1971, and thus should be allowed to operate according to their terms.

In Boldt v. UAW, the decision was affirmed. Before examining the courts' reasoning, some discussion of the factual background of the suit is in order. The UAW had negotiated in 1968 three-year contracts with various aerospace firms, providing for periodic COLA's based on increases in the cost of living, as measured by the CPI. Each COLA clause contained a "cap” limiting the COLA in the last 2 years of the contract, irrespective of CPI changes. However, shortly after the 1968 contracts were executed, the UAW made agreements with each company that the "overage"-the amount of COLA that would have been granted had no "cap" been imposed-would be retained for "catch up" purposes at the end of the term of the bargaining agreement. The agreement provided that the "catch up" increase "be available" as of September-October 1971 for wages and benefits to be agreed upon by the company and union during the bargaining for the contract to succeed the on-going one. Subsequently calculated, this overage was 34 cents per man/hour. In December 1971, the UAW and the respective aerospace companies entered into a new collective bargaining agreement which provided for a wage increase of approximately 51 cents per man per hour of which 34 cents was attributable to the COLA overage adjustment and 17 cents to a general wage increase.

In January 1972, the Pay Board disapproved the 51 cents package described above as "unreasonably inconsistent" with the general wage