Thank you for your cooperation in this matter to date, and I know you will continue to speak out against this injustice. Respectfully, LEONARD GREEN, Member IBEW Local 2088. EAU GALLIE, FLA., September 15, 1971. DEAR SIR: The Air Force has announced that it will recompete the AFETR Support Contract. As of this time the Dept. of Labor has announced that it will not preform a wage survey of this area. As a result the companies who bid on this Contract will not have to consider existing wages that are now being paid by my employer of 12 years, RCA. I hope that you will use the influence of your office to persuade the Dept. of Labor to insure that the Service Contract Act of 1965 is followed and we are not asked to take pay cuts as in the case of TWA employes at the Kennedy Space Center. Thank you, B. A. TAYLOR, Jr. Congressman FRANK THOMPSON, Jr. SATELLITE BEACH, October 7, 1971. DEAR SIR: Attached is a copy of a letter addressed to the Secretary of Labor the Honorable James D. Hodgson and signed by the following members of our work group. Yours truly, ROY D. BRAND. Owen K. Wright, Cocoa Beach, Fla.; Roy D. Brand, Satellite Beach, Fla.; Donald L. Crawford, Cocoa, Fla.; Alfred N. Modrall, Merritt Island, Fla.; Harold L. Olsen, Indian River City, Fla.; and Willard G. Duke, Titusville, Fla. Hon. JAMES D. HODGSON, Secretary of Labor. DEAR SIR: We have been informed that on September 9, 1971, the Department of Labor refused to make a wage determination at Cape Kennedy as required under the Service Contract Act of 1965. Two reasons were given: (1) Our wages were much higher than they should be and, (2) That to make a determination "might be prejudicial to the public interest in the success of the President's economic program to combat inflation." (1) Speaking for the Communications Technicians of RCA, I would be interested to know your source of information as to our wages being much higher than they should be. Our wages compare favorably to Southern Bell as of this time; job for job. Keep in mind that this is not considered a permanent job as the Range Contract is now up for bid. Also please consider we are working on a military base and a wage increase in the sum total of $2,000,000,000.00 has already been approved and is to go into effect as soon as the Wage/Price Freeze is lifted, around 5 November 1971.1 (2) To make a wage determination or to checkout thoroughly the above statements, is not prejudicial to the public interest of this area. We are the public and whether or not our vote is in favor of the present administration may depend entirely on your reconsideration of this matter. You can count on it that we are the public and it is to our public interest in this area for a avorable solution. TITUSVILLE, FLA., October 7, 1971. SIR: Your decision refusing to make a wage determination for employees at Cape K Air Force Station is unfair and arbitrary and if it stands success se described above is for military and government employees and not mployees. fully in a very short time we all employees at Kennedy Space Center will be working for new contractors at greatly reduced wages and benefits. Your negative attitude is a slap in the face to we all dedicated workers of the space program and it will affect the willing of the thousands of people in this area to support this Administration in the incoming months. How the Labor Department is fighting unemployment creating new labor dropouts? Because that is what is going to happen when hundreds of K.S.C. workers find that they are out of their jobs if your punitive decision is not reversed. Mr. Secretary, there is no other choice but to respond favorably to the interest of the Public and in that sense is why I am writing this letter. Respectfully yours, R. BERMUDEZ. LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, Representative FRANK THOMPSON, Jr., In no uncertain terms, I explained that contractors bidding and obtaining work subject to the Service Contract Act of 1965, were being encouraged to take unfair and unlawful actions against the workers by the detrimental attitudes of the Department of Labor, the Air Force and the Comptroller General against the sound and equitable enforcement and administration of the Act. One contractor so being encouraged is Emerald Maint., Inc. of Sandpoint, Idaho. Since April 1, 1970, Emerald had refused to recognize and bargain with the certified representative of the employees. Unfair labor practice charges were filed with the NLRB; the trial examiner found Emerald's refusal unlawful and consequently the Board reaffirmed the trial examiner's findings and ordered Emerald to bargain. Emerald appealed to the 5th Circuit Court and the Board cross-petitioned for enforcement. The case in this court awaits a decision. In the meantime and after Emerald's continued refusal to bargain, a strike ensued in Oct. 1970. Subsequently, an unconditional offer to return was made, but Emerald discriminatorily refused reinstatement to a good number of strikers. It was not until April 12, about a month after the Board's order to bargain, that Emerald agreed to meet with us, supposedly to bargain. Good faith bargaining was not included in Emerald's plans. They resorted to delaying tactics and to semantical games and continued to refuse reinstatement to some of the Oct. Strikers. After several fruitless meetings, it became apparent that Emerald wanted bargaining to be based on the strength of the contending forces. That being the case, we demanded that Emerald correct its longstanding unfair labor practices and cease their bad faith bargaining. Emerald refused and we were forced to stage a seven hour strike on May 24th. Our strength adequately demonstrated we returned to work as an act of good faith. With this action we have shown that our desires are to bargain on good faith grounds, and to substitute reason and fair actions on both sides for the crude contest of force. The Union requested federal mediation in an effort to avoid further conflict and disruption of the mission of Laredo Air Force Base. Talks are scheduled for June 10th. Knowing well that collective bargaining matters are not subject to the field of consideration of the Sub-Committee, I nevertheless, submit this information which I feel illustrates well the side effects of the mal-administration of the Service Contract Act. This laxity has been the cause of two strikes at Laredo AFB in the last six months and there appears to be uncertainty for the future. Thank you for your efforts to correct this unfair situation. Sincerely yours, DAVID L. JACOBS, Congressman FRANK THOMPSON, Jr., MELBOURNE, FLA., October 10, 1971. DEAR SIR: I am writing this to protest the decision refusing to make a wage determination in the Cape Kennedy area as required by the Service Contract Act. I respectfully submit that such a wage determination should be made before new contracts are let by the U.S. Air Force so that employees will not suffer loss of wages, benefits and jobs. It seems to me that such a wage determination is the only way to insure competitive bidding on these contracts. Thank you for your consideration of this matter. Sincerely yours, HARRY W. MONEY. DEAR CONGRESSMAN THOMPSON: In reference to the recent decision refusing to make a wage determination required by the Service Contract Act I feel it necessary to at least express my opinion. I am an employee at the Kennedy Space Center working in communications. It has been a very unpleasant situation communicating with so many employees who have been victims of this wage busting ordeal with the TWA-Boeing Support Contract. It has caused a lot of tension and low morale. I strongly feel a survey is needed in this area of Kennedy Space Center and Cape Kennedy which will prove a definite suffering of wages, benefits and working conditions. Thus, being unfair competition between contractors. This also extends the burdens to our communities and businesses. Very truly yours, ALEXANDRIA WILES. TO AMEND THE SERVICE CONTRACT ACT OF 1965 THURSDAY, OCTOBER 14, 1971 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON LABOR, OF THE COMMITTEE ON EDUCATION AND LABOR, Washington, D.C. The subcommittee met at 10 a.m., pursuant to recess, in room 2261, Rayburn House Office Building, Hon. Frank Thompson (chairman of the subcommittee) presiding. Present: Representatives Thompson, O'Hara and Dellenback. Staff members present: Hugh G. Duffy, counsel; Jeunesse M. Beaumont, subcommittee clerk; and Michael J. Bernstein, minority counsel for labor. Mr. THOMPSON. The subcommittee will be in order. Today we resume oversight hearings on the Service Contract Act of 1965. We are anxious to hear our first witness, Mr. Silberman and have a number of questions for him. Before we begin, I would like to clarify what I meant yesterday when I said that a particular action of the Secretary of Labor may not have been illegal. I meant that he may not have acted with evil intent, but, nevertheless, may have violated the Service Contract Act through misfeasance or nonfeasance. I want the record to show I used the term loosely and not in the strict sense. There has been some apprehension about what I said. Our first witness this morning is the Honorable Laurence H. Silberman, the Under Secretary of Labor. Good morning, Mr. Silberman. STATEMENT OF HON. LAURENCE S. SILBERMAN, UNDER SECRETARY OF LABOR, DEPARTMENT OF LABOR, ACCOMPANIED BY HORACE E. MENASCO, ADMINISTRATOR OF WAGE AND HOUR DIVISION; AND ALFRED J. ALBERT, DEPUTY SOLICITOR Mr. SILBERMAN. Good morning, Mr. Chairman and Congressman O'Hara. I appreciate this opportunity to represent the Department again before the subcommittee. We are well aware of your continued interest in the administration of the McNamara-O'Hara Service Contract Act and we know there are some areas in which the subcommittee would take a different approach than the Department. I intend to discuss these matters frankly with you this morning and to answer your questions as fully as I can. I have brought with me this morning Mr. Horace E. Menasco, Administrator of the Wage and Hour Division, and also Adminis trator of the Employment Standards Administration; and the Deputy Solicitor, now Acting Solicitor, Mr. Al Albert. Both of these gentlemen are available to answer directly or help me answer questions which you pose. First, with respect to Cape Kennedy, NASA and the Eastern Air Force Test Range questions, the position of the Department on the advisability of issuing wage determinations for service contract workers in the Cape Kennedy (Brevard County, Fla.) area was established in 1967. That position is set out in some detail in the enclosure to the letter from Secretary Hodgson to Congressman O'Hara, dated September 28, 1970. I will not read it now, but request that it and the letter be made a part of the record of this hearing. Mr. THOMPSON. Without objection, that will be done. (The information referred to follows:) Hon. JAMES G. O'HARA, SEPTEMBER 28, 1970. DEAR CONGRESSMAN O'HARA: Thank you for your letter of August 26, 1970. I asked the Wage and Hour Division to give me a full report on the two specific points regarding administration of the wage determination provisions of the McNamara-O'Hara Service Contract Act. A copy of that report is enclosed. Incidentally, the General Accounting Office is making a management survey of the Service Contract Act wage determination program. In view of your interest in the Act's administration, there is also enclosed a copy of General Accounting Office's letter of August 31, 1970 setting forth some initial comments (however, their review has not been completed). Please let me know if I can provide you with additional information. I am aware of your interest in the Act and in turn I am certainly interested in receiving all comments on its administration. Sincerely, JAMES D. HODGSON, Enclosure. REPORT ON QUESTIONS RAISED BY CONGRESSMAN JAMES G. O'HARA REGARDING ADMINISTRATION OF THE MCNAMARA-O'HARA SERVICE CONTRACT ACT IN HIS LETTER OF AUGUST 26, 1970, TO THE SECRETARY OF LABOR 1. EXTENT OF APPLICATION OF WAGE DETERMINATIONS TO SERVICE CONTRACTS The Department of Labor's approach is to use its limited resources for administration of the Act in making wage determinations to apply to those service contracts involving more than a few service employees in their performance. For contracts involving only a few employees, either in remote areas or in other than ordinary job classifications, where there are no wage data readily available, the cost of obtaining wage data and making a wage determination would be quite high in comparison to results. Generally for such small contracts no wage determination is made and the Fair Labor Standards Act minimum wage is applied to the contract. On the other hand, wage data is obtained and determinations are applied to contracts involving any appreciable number of service employees. The Cape Kennedy locality is somewhat of an exception to this general approch. During the first year of administration of the Act, considerable attention was given to its application at Cape Kennedy and Patrick Air Force Base. Following full discussions with the major contracting agencies in the locality (National Aeronautics and Space Agency, Air Force, and Corps of Engineers), and with organized labor and contractor representatives, the Wage and Hour Division requested the Bureau of Labor Statistics to conduct a wage survey in Brevard County, Florida. After considering the results of the March 1967 survey |