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“As a matter of fact, it all depends on how you interpret the policy we have, and it is strictly for our use, and if we follow it, fine; if not, we have a lot of variance."

That was what his deposition was. It was contrary to what Silberman told this committee.

Mr. THOMPSON. In a very real sense, the space center and the job descriptions are, as someone said yesterday, "exotic," and there are within that facility a great many highly trained, highly sophisticated workers; it would almost follow that they should use the enclave theory, wouldn't it?

Mr. SALAMONE. Certainly.

Mr. THOMPSON. They wouldn't have any other basis of comparability, except their general statement that the cape is now living with inflated wages as a carryover from the heyday. I doubt if there was 7.1-percent unemployment in the heyday.

Mr. SALAMONE. Mr. Silberman, as I am sure you know, his testimony agrees with you. He said that was the whole purpose of the enclave, where there was a metropolitan area that had a lower rate and a Government installation that had a higher rate, that they would then issue a wage determination based on an enclave or facility rate.


Mr. SALAMONE. As we were told, not only in the deposition but in conferences we had, in our requests for a determination at the cape, we thought this met the criteria, the rates were there, the geographical location was there.

Really the only thing at this point in Brevard County is the space center. There may be some tourist trade and some other, but the real bulk of the work force in Brevard County is employed at the Kennedy Space Center.

Mr. THOMPSON. We understand that, and we are going to do everything we can to cure this situation.

Mr. SALAMONE. One other point I would like to make, Mr. Chairman, which I think was significant to us: Under the rules and regulations of the Department of Labor for filing the intent of soliciting, they require 30 days in advance.

In the Pacífic Missile Range matter, the notice was filed, mind you, on August 5, 1970, received by the Department of Labor on August 13, 1970, with the statement on the face of the form saying the solicitation of the contract would be August 20 of 1970.

It was almost impossible, even if they had all the wage data available, which we think they did have, for them to make a wage determination.

As the matter progressed, they were asked, “Why wasn't a wage' determination made later on?They said, “We didn't have time, because of the time of award of the contract."

The contract did not award until 9 months later, May 21, 1971. Their excuse was in the meantime, “We didn't have time," from September until May 21 of 1971.

It just shows how ridiculous this really is. Over the years, we have thought the act as administered would protect the prevailing labor standards.

We think if it were legally administered, that it really wouldn't need any amendments, if it were administered as the committee in

led it to be, or as Congress intended.

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You pointed out the weakness or the flaw in it all, and that is where the Secretary of Labor has this right to make this exception, if you will.

Mr. THOMPSON. But that is a very narrow right in section 4(b), and concerns itself with a major public interest or an emergency, a serious impairment

Mr. SALAMONE. Yes. But I think what has been happening, they have been using that, either the necessary and proper public interest, or to avoid serious impairment of the Government business, but they have never, not to my knowledge, and certainly not in this case, given any valid reason for coming to that decision.

Mr. THOMPSON. I don't think their actions are in the strictest sense as a lawyer, or as a legislator, illegal, but I think that they have taken and stretched the definition of the public interest to à point where it is very likely to break momentarily.

Mr. SALAMONE. Mr. Chairman, we say they are very capricious and very arbitrary as far as we are concerned.

That is especially true when we deal with the special facility and enclave situation.

In his deposition, the Secretary said all the decisions were negative.
Mr. THOMPson. That is quite clear.
I thank you very, very much, sir.
Mr. Dunn. I would like to ask this, Mr. Chairman. ...,

You said you don't think their actions are illegal. Don't you think that when an officer of the United States commits an act of misfeasance or non feasance that that is illegal ? Because that is our case in the U.S. district court.

When they fail to do what they are supposed to do, this is not a ministerial act. They didn't take into consideration the prevailing rates in the area. They didn't do anything about it.

Mr. THOMPSON. Well, in that sense, of course, probably mandamus would lie. I don't know. I don't want to discuss pending litigation, because I don't want to prejudice it.

Mr. Dunn. I know, but I was concerned about your statement. I am not talking about malfeasance. Mr. THOMPSON. I understand. Mr. Murphy? Mr. MURPHY. Mr. Chairman, many of the points I have in my statement were brought out in your questioning, and Mr. Frey covered some of them, so I will very briefly go into the statement as I have it.

I received the same letter that I believe Congressman Frey introduced from the Secretary of Labor, the reasons for not making the wage determination.

The first one, of course, was that it may be prejudicial to the public interest, but that makes no sense to me whatever, and I don't think it is worthy of comment.

I hope when the Department of Labor appears tomorrow, you would ask them what they mean by that, because I don't understand


The second point in the letter was that workers at the Cape have wages equal to or greater than wages paid elsewhere in the community.

I have figures in here that are contrary to that statement.
But he is in violation of section 303 (b)2, which calls for protection

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of rates on a military installation if they have been arrived at through collective bargaining and they are higher than the surrounding area.

His own manual calls for him to protect those rates. He has failed to do so. The fact of the matter is that he is not right. We have been, by admittance of the Air Force, very reasonable in our demands and over the years have only averaged out 3.01 percent per year.

I go on to compare some rates. I don't think that we need to go over them. You have them and can compare them. · The only ones that we can find to compare them to, we have a few people in these classifications, not very many, because the majority of our people are very highly trained electronics technicians who work on highly complex state of the art, tracking systems and telemetry systems, and you don't find that off the bases.

We have a few telephone people, and I compare the rates both with Southern Bell Telephone and with civil service, and you will find we are considerably behind both. We are so far behind civil service that I am almost ashamed to present these in evidence.

Mr. THOMPSON. Yours are the RCA rates ?

Mr. MURPHY. Yes. We represent the RCA people. At the completion of our 1966 negotiations, that was a 3-year agreement which took us through 1969, in which the Air Force itself commends us on behalf of the commanding general for our reasonableness and maturity in these negotiations.

Of course, he goes on to commend us for something that we are proud of. That is that none of our members has ever lost a day because of labor disturbance. The present Secretary's actions may destroy that record. I hope not.

Thank you.
Mr. THOMPSON. Thank you very much.

Once again, I express my regret that the day has been such that you have been delayed so long.



Mr. THOMPSON. Our next witness is Mr. James F. Horst, the international executive vice president of the Transport Workers Union.

Mr. O'CONNELL. Mr. Chairman, Mr. Horst hoped to be here, but he couldn't make it, Mr. Chairman.

On my left is Mr. William Redford. He is an international vice president, and he is in charge of our Florida division, and on my right is Ed Dishong who is president of our Local 525 at Cocoa Beach, Cape Kennedy, Fla.

We have a statement, Mr. Chairman, with a number of attached appendices, and in summary of our statement, may I say that

Mr. THOMPSON. May I interrupt to say that without objection your tatement and the appendices will be made a part of the record at his point.

(The statement and appendices follow :)



Mr. Chairman and members of the committee, my name is James F. Horst. I am International Executive Vice President of the Transport Workers Union of America, AFL-010 and Director of the Union's Air Transport Division with offices at 1980 Broadway, New York, New York.

I appreciate this opportunity to speak on behalf of the 150,000 members of the Transport Workers Union of America, at these most important Oversight Hea rings on the Administration of the Service Contract Act of 1965, and the U.S. Department of Labor's blatant refusal to make a wage determination at the Cape Kennedy Eastern Test Range in compliance with that Act.

The Air Transport Division of TWU represents approximately 50,000 workers in the air transport industry-office and clerical, communication, meteorologists, flight dispatchers, flight navigators, flight attendants, aircraft mechanics, mechanics and ground service employees

It is to the problem of wage determination discrimination faced by our members employed by Pan American World Airways at Cape Kennedy that we address ourself today. .

Let me gay first, however, that the interest of the Transport Workers Union goes far beyond this particular problem faced by our members today. Today it is our ox that is being gored, tomorrow it might well be the entire labor force employed under Government contracts, organized or unorganized, and we are here seeking the assistance of this Committee and of the entire U.S. Congress, if need be, to help us right this cruel and grievous wrong the U.S. Department of Labor and especially the Secretary, Mr. Hodgson, has handed our members.

Our specific problem-which could be remedied instantaneously if the Secretary of Labor so desired-is that the U.S. Air Force by decree of the Defense Department and the Administration has circulated a Request for Proposals for performing the maintenance and service contract at the Cape Kennedy AFETR installation commencing July 1, 1972. This is the work for which Pan American World Airways has been the prime contractor since the very beginning of the Guided Missile Range, now Cape Kennedy in 1953. For the record, TWU has been the exclusive collective bargaining representative of the Pan American mechanical and ground service employees at the Cape since November 21, 1956, and there is presently in effect a collective bargaining agreement covering its GMRD members employed by Pan American World Airways, Inc. dated May 21, 1971.

This contract dated May 21, 1971 covers approximately 8,800 Pan American employees of whom 1,187 are employed at Cape Kennedy. The remaining 7,613 are employed by Pan American in its commercial airline operation in such cities as Miami, New York, San Francisco, Los Angeles, Teterboro, Detroit and Portland, Oregon; Honolulu and Houston, Wake and New Orleans, Boston, Philadelphia, Chicago, Baltimore, San Juan, Fairbanks, Seattle and Washington, D.C. This is a system-wide contract entered into between the Transport Workers Union and Pan American under the auspices of the National Mediation Board in compliance with the Railway Labor Act. Up until this latest contract was negotiated and ratified by the membership, all of the conditions such as rates of pay, hours of work, vacations and holidays, hospitalization and medical insurance, pensions and severance pay and all the other provisions in a labor agreement were negotiated on a system-wide basis. However, because of the experience and the ensuing hardships and loss of jobs and pay when NASA put out its contract with TWA for proposals, our membership at Cape Kennedy decided on their own to forego any wage increase or other money fringe benefit items in order to give themselves and Pan American a chance, though slim, at the Air Force Request for Proposals which at that time was only a rumor. So as to pay rates, shift differentials, tool insurance, dental and optical insurance, a new longevity pay program and severance plan, among other benefits, the members whom we are here representing today have voluntarily frozen their pay and fringe benefits as of April 29, 1969.

In the April 29, 1969 agreement the top rate of pay for a mechanic, be he an aircraft mechanic in Miami or a heavy equipment and ground power mechanic at Cape Kennedy was established at $5.23 per hour. In the same agreement the top rate of pay for a plant maintenance electrician at New York was established at $5.23, the same rate of pay as for a low voltage electrician at Cape Kennedy. A fleet serviceman whether he be fueling aircraft at Honolulu or fueling ground power equipment at Cape Kennedy received $4.24 per hour. A janitor anywhere in the airline operation received $3.76 per hour the same as the janitor at Cape Kennedy.

With the hand writing on the wall following the NASA-Pape of the TWA employees with a reduction of wages from 20 to 50%, and a loss of jobs, our members at Cape Kennedy passed up a 25% wage increase negotiated last May 21, for their fellow workers in the airline operation and so have already suffered a 25% wage cut. Under the May 21, 1971 agreement negotiated with Pan American, the aircraft mechanic at Miami will, on December, 1972, providing President Nixon doesn't freeze any more increments, be earning $6.63 per hour or $1.40 per hour more than the heavy equipment mechanic at Cape Kennedy.

You can readily see and understand from these figures and examples what has happened to the morale, the spirit and job performance of the Cape Kennedy members since May 1971 and it doesn't take much imagination to-visualize what occured after receipt of Secretary Hodgson's denial of our request for a wage determination September 10, 1971.

We have not made any detailed in-depth survey of wage rates at Cape Kennedy, for we thought, quite frankly, that with all of the inquiries from the members of Congress Secretary Hodgson would decide in favor of a wage survey-a wage survey by the way we would be forced to live with. However, the rates of pay paid by Pan American, and TWA at NASA at that time and the U.S. Government to its Civil Service employees at Patrick Air Force Base were not out of line with one another. (TWU Appendix pages 1, 2 & 3). For that matter even today the rates of pay at Pan American and at Patrick for Civil Service employees are comparable, with pennies per hour of one another. (TWU Appendix pages 4,5 & 6) But not for long. Come next July 1, the differential, based on the TWA employees experience at NASA will be in the neighborhood of $1.75 to $2.00 and more per hour less for the employees of the successful bidder, that is unless this Committee is able to effectuate a change in Mr. Hodgson's mind on this matter.

I would like to point out that the wage increases and other cost items negotiated in the November 1956 and every succeeding contract between Pan American and TWU'covering the Cape Kennedy members were always subjeet to the approval of the Air Force. And so! while we negotiated with Pan American it was always with the advice and consent of the Air Force. (TWU Appendix page 7)

There is another tremendously important issue here I should also like to dwell on for a moment and that is the matter of maintaning effective and stable labor management relations at the Cape. TWU recognizing its responsibilities to President Kennedy, the Congress, the Air Force and the American Public in their dedication to the "Man In Space” effort, in early October 1962 entered into with Pan American a letter of agreement providing for a No-Strike pledge for Cape Kennedy even though the employees withheld their services in the airline operation because of unresolved labor disputes. These employees believed in the Space Program and have, to this day, abided in that decision not to withhold their services, though there have been times, I admit, when they thought otherwise about the agreement. And the Air Force thought so highly of this pledge and the employees' endeavors to maintain a strike free operation that glowing letters of accolades from the Commanding General, Missile Test Center, were from time to time received acknowledging their dedication.

I should like to quote from two of them which are included in TWU Appendix, pages 8 and 9.

And so what is their reward for this long history of labor-management harmonious relationship. Out the gate or if circumstances force them into it, doing the same job in the same location at from 20% to 50% less on top of the already 25% cut without any fringe benefits including the most important factor of all, their seniority. This then is their thanks from the Air Force, the Department of Labor and the Administration. i .

We would not be here today if this work at the Cape was new construction or if we were under Davis-Bacon, Congress would have solved our problem many years ago, but we are not Davis-Bacon and its prevailing wage; we are under the Service Contract Act of 1965. And frankly, when the Service Contract Act was passed, we thought we had at least some measure of security in our wage rates being somewhat in line with a prevailing wage determination the Secretary of Labor would make and we have never considered he wouldn't make a determination. We don't read Section 4 B as giving the Secretary the discretion to pick and chose to make a wage determination. And we don't believe

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