99 Ct. Cl. 608 | Ct. Cl. | 1943
delivered the opinion of the court:
Cases Nos. 44004 and 44067 are both suits for the recovery of increased costs alleged to have been incurred as the result
In No. 44004 the plaintiff contracted with John B. Kelly, Inc., to furnish it the necessary brick, hollow tile, and salt-glazed tile for the construction of a Post Office at Philadelphia, Pennsylvania, and in No. 44067 plaintiff contracted with the said John B. Kelly, Inc., to furnish it the necessary brick, hollow tile, and salt-glazed tile for the construction of a Naval hospital and other buildings connected therewith at Philadelphia, Pennsylvania. The materials furnished for the Post Office building at Philadelphia were furnished by plaintiff’s East Canton, Ohio plant, and the materials used in the construction of the Naval hospital were furnished by plaintiff’s Perth Amboy, New Jersey, and its Lorrilard plant.
Prior to the enactment of the National Industrial Recovery Act of June 16, 1933 there was a condition of severe financial depression in the structural clay products industry. Plaintiff was in an acute financial condition verging on bankruptcy, finally culminating in a reorganization under 77B of the Bankruptcy Act. Wages were at a very low level, varying from a high of 22yz cents an hour in the North, to a low of 10 cents an hour in some parts of the South. Laborers, quite naturally, were dissatisfied with the wages received, but the proof indicates that business conditions were so bad that nothing could be done about it.
One of the declared purposes of the National Industrial Recovery Act was “to improve standards of labor,” and to effectuate this purpose, among others, the President Avas authorized to issue licenses when he should find that any trade or industry was engaging in destructive wage practices, price cutting, or other activities contrary to the policy of the Act. Under section 7 employers were required to assure the right of collective bargaining to their employees, and were prohibited from requiring an employee to join a
After the passage of this Act plaintiff’s employees gave voice to their dissatisfaction with their rates of pay. Then on July 28, 1933 the President called upon industrialists to sign the President’s Reemployment Agreement, which prescribed 40 cents an hour as the minimum wage and 40 hours a week as the maximum workweek, and agitation among plaintiff’s employees for increased wages increased.
On account of the difference in the wages prevailing in plaintiff’s northern and southern plants plaintiff did not desire to sign the President’s Reemployment Agreement, but was diligent in its efforts to agree with other members of its industry on a code of fair competition. In an effort to induce its employees to defer their demand for increased wages until after the adoption of a Code for the industry plaintiff addressed a communication to the superintendents of its various plants, the first paragraph of which reads:
You are no doubt being asked by your employees what the company is doing in relation to government codes.
The letter then sets out the efforts that were being made to agree upon a Code, and stated that plaintiff was not signing the President’s Reemployment Agreement because it hoped to agree on a Code which would more nearly meet conditions in this industry than the PRA. The letter concluded:
You are authorized to tell your employees that regardless of whether we are working under an approved code by September first or not, action will be taken on our part to increase wages and reduce working hours. It is hoped that between the fifteenth of August and the first of September that this matter will have been satisfactorily settled and we will be working according to government ruling.
In case No. 44004 (the East Canton plant) the defendant admits that plaintiff is entitled to recover its increased costs incident to the increase in wages from 25 cents an hour, the August 22, 1933 minimum, to 40 cents an hour until December 7, 1933, and thereafter the increase from 25 cents an hour to 37% cents an hour, the minimum prescribed by the Code. This total amount is $6,739.58.
A majority of the court is of the opinion that the plaintiff is entitled to recover the increase from 25 cents an hour to 40 cents an hour even after the adoption of the Code, although the Code prescribed a minimum rate of 37% cents an hour. Plaintiff was paying 40 cents an hour at the time of its adoption, and as a practical proposition it could not reduce its wages to the minimum prescribed by the
Defendant also says that plaintiff is not entitled to recover the 5-cent increase granted on August 22,1933. It says that this increase was not the result of the enactment of the National Industrial Eecovery Act, but was the result of long-standing labor agitation. But there is no proof in the record that there was any labor agitation prior to the passage of the National Industrial Eecovery Act. The inference is to the contrary.
It is true that plaintiff did not sign the PEA until after the increase was granted, but it was granted as the direct result of the agitation resulting from the passage of the National Industrial Eecovery Act and from plaintiff’s failure to sign the President’s Eeemployment Agreement promulgated thereunder. The increase was granted as the immediate result of the demand of its employees that it sign the President’s Eeemployment Agreement. It was granted in an effort to induce them to postpone this demand. It is plain, therefore, that the increase was directly attributable to the passage of the National Industrial Eecovery Act.
This increase in wages increased plaintiff’s costs at the East Canton plant (case No. 44004) by the amount of $2,592.05. This added to the increased cost of $1,176.14, as a result of the "increase from 25 cents an hour to 40 cents an hour, makes a total increased cost of $10,368.19. We are of opinion that the plaintiff is entitled to recover this amount. Judgment therefor will be entered in case No. 44004. It is so ordered.
Employees of National Fireproofing Co. left service on account of company rejecting blanket code July 31. Please advise what action employees should take. Men refuse to return to work until it is adopted.
This telegram was referred to the National Labor Board, and on August 17, 1933 the Secretary of this Board wrote plaintiff quoting the telegram and asking to be advised of the present status of the matter ánd what the company was going to do about it. Prior to receipt of this letter, however, plaintiff had met with its striking workmen and had agreed to increase their wages from 22% cents an hour to 40 cents an hour, the minimum prescribed by the President’s Reemployment Agreement, and it also agreed, as it had done at the East Canton plant, that it would sign the PRA on September 1, 1933, if in the meantime a Code of Fair Competition had not been adopted.
As in the case of the East Canton plant, plaintiff continued to pay this minimum of 40 cents an hour, even after the adoption of the Code of December 7, 1933, and a majority of the court is of the opinion that it is entitled to the increase from 22% cents an hour to the 40 cents minimum, even after the adoption of the Code.
Defendant says in its brief in this case also that this increase of 17% cents an hour was the result of “longstanding agitation by plaintiff’s employees for higher wages,” and that the National Industrial Recovery Act did nothing more than aggravate an “already serious situation.” The record, however, does not sustain this statement. There
Each of these cases must be decided on its own facts, but see McCloskey v. United States, No. 44003, 98 C. Cls. 90. We do not think that Dravo v. United States, 93 C. Cls. 745, is in conflict herewith.
The increased cost incident to an increase of wages to 40 cents an hour from August 4, 1933, amounts to $2,929.25. This amount plaintiff is entitled to recover in case No. 44067. Judgment therefor will be entered. It is so ordered.
