(The information referred to is as follows:) UNITED STATES DEPARTMENT OF THE INTERIOR, OFFICE OF TERRITORIES, February 23, 1956. Hon. CARL ELLIOTT, House of Representatives, Washington 25, D. C. MY DEAR MR. ELLIOTT: At the February 17 hearings of the Subcommittee of the Committee on Education and Labor on modification of the application of the Fair Labor Standards Act to American Samoa, Congressman James Roosevelt inquired as to what recourse a Samoan employee of the cannery operating in American Samoa would have if he wished to seek legal enforcement of the minimum wage provisions of the Fair Labor Standards Act. Since I was unable to supply an answer to this question at the hearing, the information set forth below is provided for the record. Sections 16 (b) and (c) of the Fair Labor Standards Act confer upon "any court of competent jurisdiction" authority with respect to employees' actions for unpaid minimum wages and unpaid overtime compensation and with respect to actions of the Administrator of the Wage and Hour Division (29 U. S. C., secs. 216 (b) and (c)). It seems probable that the High Court of American Samoa would constitute a "court of competent jurisdiction" for the purposes of such sections. Additionally, injunction proceedings under section 17 of the act would be available to a Samoan if he were in a position to bring action in any of the courts outside of Samoa referred to in section 17. Sincerely yours, WILLIAM A. ARNOLD, Assistant Director for Insular Affairs. I would like to say, however, that I do not believe that the Department of the Interior should be considered as being in a position of responsibility for any violations that may have occurred out there. The government of American Samoa has leased some physical properties to these people. But I do not believe that there could be any legal determination that in doing so we assumed any responsibility for what wages they were going to pay to their employes, Mr. Roosevelt. Mr. ROOSEVELT. What you are saying makes it even worse for the company because you are refusing to take any responsibility for it, and therefore it is all the company's responsibility unless the Congress does something to relieve them of it. Mr. ARNOLD. Perhaps so. I do think if there is any responsibility from the Federal Government it would be in the Department of Labor rather than in the Department of the Interior, however. Mr. ROOSEVELT. Why? Because of the enforcement of the wageand-hour law? Mr. ARNOLD. Yes, sir. Mr. ROOSEVELT. In other words, if there was any responsibility they should have notified you that you had a responsibility that any lessee must pay the wage required by law. Mr. ARNOLD. I presume so, yes, sir. Mr. ROOSEVELT. What is the position of the Government as to paying wages under the wage-and-hour law? For instance, do you have a legal right, in your opinion, to pay less than the wage-and-hour law demands in areas that are not exempted by it? Mr. ARNOLD. Certainly. The Government of American Samoa would not be subject to the Fair Labor Standards Act, would it, Mr. Roosevelt? Mr. ROOSEVELT. I don't know. I am asking you. Mr. ARNOLD. No, it would not. Mr. ROOSEVELT. It would not. Mr. GRAHAM. May I interject. Prior to amendment to the Fair Labor Standards Act in 1949 the Secretary of Labor had the right to institute suit. The amendment has made it incumbent upon the individual. So I am not too sure that it would be the responsibility of the Department of Labor except for enforcement. Mr. ROOSEVELT. But you would feel that the company had a potential liability here? Mr. GRAHAM. I do not think there is any question about that. Mr. ELLIOTT. Are there any further questions? Mr. WARD. I believe that Mr. Moore stated the other day that they were operating under a calculated risk, or some words to that effect, when he started his statement in regard to this. He made some statement that they realized there was some question. Mr. ROOSEVELT. I think we should clear it up because if there is such a risk, in other words if an American national could sue, there is always a possibility that some bright lawyer would go down there and sign up enough of these people and file a suit, let's say in Hawaii, for them for their back wages. And if the company continues to operate with that kind of a liability over their heads they would, I think, be conducting a rather foolish operation. Mr. ELLIOTT. Thank you very much, gentlemen. If there is nothing further at this time the committee will stand adjourned until ten o'clock Tuesday morning. The representatives of the Department of Labor and of the Department of the Navy will be heard Tuesday morning. (Whereupon, at 12 o'clock noon, the subcommittee was recessed, to be reconvened at 10 a. m., Tuesday, February 21, 1956.) MINIMUM WAGES IN CERTAIN TERRITORIES, POSSESSIONS, AND OVERSEA AREAS OF THE UNITED STATES TUESDAY, FEBRUARY 21, 1956 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE OF THE COMMITTEE ON EDUCATION AND LABOR, Washington, D. C. The subcommittee met at 10:00 a. m., pursuant to recess, in room 429 of the Old House Office Building, Honorable Carl Elliott (chairman of the subcommittee) presiding. Present: Representatives Elliott, Landrum, Roosevelt, Holt, Coon, and Fjare. Present also: Fred G. Hussey, chief clerk; John O. Graham, minority clerk; Kennedy W. Ward, assistant general counsel; and Russell C. Derrickson, chief investigator. Mr. ELLIOTT. The subcommitee will be in order. We will proceed with the hearings on the bills which have for their purpose the amendment of the Fair Labor Standards Act of 1938. Before we start our counsel, Mr. Kennedy W. Ward, has called to my attention a memorandum furnished the Committee on Education and Labor of the House of Representatives by the Library of Congress which deals with the subject of canceling liability under the Fair Labor Standards Act. If there is no objection, this statement will be made a part of the record. (The memorandum referred to follows:) To: Committee on Education and Labor Attention: Mr. Ward From: American Law Division THE LIBRARY OF CONGRESS, LEGISLATIVE REFERENCE SERVICE, Washington 25, D. C., February 20, 1956, Subject: Canceling liability under the Fair Labor Standards Act This is in response to your request of February 16, 1956, concerning the constitutionality of canceling liability of employers abroad under the Fair Labor Standards Act, as contemplated in the several "Overseas Fair Labor Standards Amendments" bills now before Congress-S. 2404, H. R. 209, H. R. 9129, and H. R. 9144. Each of the bills proposes in section 4 to amend the Fair Labor Standards Act to cancel liability, under that act and the Portal-to-Portal Act of 1947, of any employer located in a foreign country or in certain United States territories. The purpose of this provision is so similar to that of section 2 of the Portalto-Portal Act (29 U. S. C. 252) that the decisions regarding the constitutionality of the latter, in our opinion, would apply. Section 2 of the Portal-to-Portal Act limited the liability of employers under existing and future claims for wages, with damages, due to certain employee activities, which prior to enactment were considered compensable. This section has been held constitutional in several dozen reported cases, which the Supreme Court has consistently declined to re view. (See Note 1, 29 U. S. C. A. 252.) The rationale of these decisions, which would apply to the instant provision, is concisely stated in Rogers Cartage Co. v. Reynolds (1948, CCA 6) 166 F. 2d 317, 320: "*** Congress, in the exercise of its power to regulate interstate commerce, may interfere with valuable property rights. North American Co. v. Securities and Exchange Commission, 327 U. S. 686, 708, 66 S. Ct. 785, 90 L. Ed. 945; American Power and Light Co. v. Securities and Exchange Commission, 329 U. S. 90, 67 S. Ct. 133. While the rights given to employees under the Fair Labor Standards Act are substantial, they did not exist at common law, nor were they established by the United States Constitution. Since they are purely the creature of statute, they may be altered or abolished by the Congress which established them at any time before they have ripened into final judgment. Cf. Western Union Telegraph Co. v. Louisville and Nashville Rd. Co., 258 U. S. 13, 42 S. Ct. 258, 66 L. Ed. 437; Kline v. Burke Const. Co. 260 U. S. 226, 234, 43 S. Ct. 79, 67 L. Ed. 226, 24 A. L. R. 1077." FEBRUARY 20, 1956 JAMES W. KELLEY, American Law Division. Mr. ELLIOTT. Our first witness for today is Mr. Clarence T. Lundquist. Mr. ROOSEVELT. Before we go to that, would it be possible for each member of the committee to be given a copy of that? That deals with the retroactive liability which we were talking about the other day, and I think every member of the committee would be interested in studying it. Mr. ELLIOTT. Certainly. Mr. Clarence T. Lundquist, Deputy Administrator for the Wage and Hour and Public Contracts Divisions of the Department of Labor, is our first witness. He has a prepared statement, a copy of which I believe has been furnished each member of the committee. You may proceed, Mr. Lundquist, in any way that you desire. STATEMENT OF CLARENCE T. LUNDQUIST, DEPUTY ADMINISTRATOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, UNITED STATES DEPARTMENT OF LABOR; ACCOMPANIED BY JOHN J. BABE, ASSISTANT SOLICITOR, OFFICE OF THE SOLICITOR; AND HARRY KANTOR, ASSISTANT ADMINISTRATOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, UNITED STATES DEPARTMENT OF LABOR Mr. LUNDQUIST. Mr. Chairman, if you please, I will read the statement that has been prepared. I am happy to respond to your request to discuss proposals for revising the application of the Fair Labor Standards Act of 1938, as amended, in certain outlying geographical areas. These proposals are contained in H. R. 4478, H. R. 209, H. R. 9129 and H. R. 9144. Geographically, the act now applies not only in the 48 States and the District of Columbia but also in any Territory or possession of the United States. It applies, for example, in Alaska, Hawaii, Puerto Rico, the Canal Zone, Guam, Guano Islands, American Samoa, the Virgin Islands and Wake Island. It also applies in leased bases such as Bermuda bases leased from Great Britain, and similar geographical areas with respect to which the United States has no sovereignty but which, under judicial authority, are possessions. The views expressed in this statement represent those contained in a report dated February 17, 1956, by the Secretary of Labor to |