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497

Opinion of the Court.

approval of estimates and the making of appropriations prior to undertaking construction of certain buildings (§ 1 (a)), restrictions on leasing (§ 1 (b)), restrictions on the assignment of personnel (§ 2 (b)), limitations on the number of serviceable aircraft (§ 3), and restrictions as to civil service employees (§ 4 (a)). No suggestion was made of a suspension of part or all of the Fair Labor Standards Act, nor was anything authorized that would violate that Act.

The single reference made in the 1940 Act to the WalshHealey Act was to insure the applicability of the latter Act to negotiated contracts. This appears from the following revealing statement made on the floor of the Senate by Senator Wagner, the author of the amendment containing the reference:

"A question has arisen-and the amendment is simply to remove the ambiguity-as to whether the Walsh-Healey Act, which is now definitely applicable to a contract for the purchase of supplies as a result of advertising, will also apply to a negotiated contract. . . .

Unless this amendment is adopted we would have this anomalous situation: Under a contract entered into with the Government as the result of public bidding one set of minimum wages, that is, the prevailing wages [under the Walsh-Healey Act], would be applied, whereas under another contract entered into as a result of negotiations, a much lower minimum wage would be paid, that is, the flat minimum under the Wage and Hour Act [the Fair Labor Standards Act]. This situation would present an opportunity for exploitation, since a contractor under a negotiated contract might be paying wages in some instances 25 percent to 75 percent below those required under the Healey-Walsh Act. I am sure that we would not want to invite any such exploitation." (Emphasis supplied.) 86 Cong. Rec. 7924 (1940).

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These cases do not present at another one of those

situations in the long series in which the Court has been

Tent of Labor Poley was emphasized by counsel for the respondent in the Aaron case. Much of it is published in Regulations Army: Ordnance Procurement Instructions, 2 CCH War Law *rv $39,101 1, 9,1043, 9,104.4, 9,1052 and 9,105.3.

497

FRANKFURTER, J., dissenting.

called upon to give a sympathetic construction to the Fair Labor Standards Act. We do not here have a controversy involving relations between a capitalist employer and his employees. The real controversy is between the Department of the Army which conceived, formulated, and administered a scheme for the production of war matériel by means of Government-owned plants and the Wage and Hour Division of the Department of Labor which administers the Fair Labor Standards Act. We do not have here, in short, the resistance of private employers to the demands of their employees. Here a vast claim on the Treasury of the United States is in issue. The issue should be decided in light of the fact that Congress has manifested in the most emphatic way that the Fair Labor Standards Act is not to be stretched to the extent that sophistical argumentation can stretch its scope but is to be applied in a commonsensical way.' Fine distinctions in the application of the statute can hardly be avoided. That makes it all the more necessary to hew close to the line marked out by the specific facts of the cases before us. The caution that general propositions do not decide concrete cases is particularly to be heeded in dealing with an enactment framed in terms of legal categories having diverse and conflicting contents. It begs the real question to purport to solve a particular problem merely by invoking such a category.

1 Congress found that the construction which this Court placed upon the Fair Labor Standards Act in Jewell Ridge Coal Corp. v. Local No. 6167, 325 U. S. 161, Anderson v. Mt. Clemens Pottery Co., 328 U. S. 680, Bay Ridge Operating Co. v. Aaron, 334 U. S. 446, Brooklyn Savings Bank v. O'Neil, 324 U. S. 697, and Farmers Reservoir and Irrigation Co. v. McComb, 337 U. S. 755, misconceived the purposes of Congress. See Portal-to-Portal Act of 1947, 61 Stat. 84, 29 U. S. C. (Supp. III) § 251 et seq.; Act of July 20, 1949, 63 Stat. 446, 29 U. S. C. (Supp. III) § 207 (e) (1), (2), (f); Fair Labor Standards Amendments of 1949, §§ 11, 14, 63 Stat. 910, 917, 919, 29 U. S. C. (Supp. III) §§ 213, 216.

FRANKFURTER, J., dissenting.

339 U.S.

Not only is it important to be heedful of what these cases are really about; it is no less important to be mindful of what they are not about. The problem before us is not the applicability of the Fair Labor Standards Act to work done under all Government contracts, or even to work under all varieties of war production contracts, cost-plus-fixed-fee or otherwise. What is involved is the particular kind of cost-plus-fixed-fee contracts for the operation of ordnance plants under the Act of July 2, 1940, which authorized the Secretary of War to provide for the operation of such plants "through the agency of selected qualified commercial manufacturers." 2 54 Stat. 713, 50 U. S. C. App. § 1171 (b).

An analysis of the nature of the interrelationship of Government, contractor and employees is necessary to put the issues in their proper perspective. The facts are substantially the same in all three cases, but since the findings in No. 79, Aaron v. Ford, Bacon & Davis, Inc., are particularly detailed, further discussion will center on that

case.

The United States contracted with respondent Ford, Bacon & Davis, Inc. in July, 1941, for the operation of the Government-owned Arkansas Ordnance Plant and production there of munitions for war-detonators, percussion elements, artillery primers, fuses, boosters and powder train fuses. The plant was a military reservation under the immediate control of an ordnance officer designated by the Chief of Ordnance. Munition quotas and specifications were set by the Government, and inspection by Government officials at each stage of production checked compliance with rules promulgated by the Government not merely as to safety but as to production

The Secretary of the Navy was authorized to enter into contracts for private operation of Navy installations on a cost-plus-fixed-fee basis by §§ 2 (a) and 8 (b) of the Act of June 28, 1940. 54 Stat. 677, 680, 50 U. S. C. App. §§ 1152 (a) (1), 1158 (b).

497

FRANKFURTER, J., dissenting.

as well. The contract was terminable at will by the Government and under it the "normal factors which go to make up commercial profit are lacking." War and Navy Departments' Statement of Labor Policy Governing Government-Owned, Privately Operated Plants (1942), digested in 2 CCH War Law Serv. 124,862 et seq. The United States owned all materials and equipment used in connection with the operation of the plant. Ninety-five per cent were furnished by the Government directly; the remainder was obtained by the contractor after approval by the Government. The United States obtained title to the latter purchases at the point of origin, and shipment to the plant was on Government bills of lading at a reduced rate and without payment of transportation tax. Title to all materials, equipment, and work in process in the plant was at all times in the United States. Finished products were shipped out of Arkansas to military facilities on Government bills of lading.

Under the contract the Government paid all expenses of operating the plant, including labor costs. The contractor was even allowed costs of production of munitions that did not meet specifications and could not be used. The Government contracted for electric power, telephone, teletype and telegraph services itself and paid the bills. directly, and provided employees traveling on business with tax-free transportation tickets. At no time did the contractor have to advance its own money-expenses were paid out of available Government funds. For its services in operating the plant, the contractor was paid a fixed fee.

The War and Navy Departments' Statement of Labor Policy forbade agreements between the contractor and personnel "which, in the opinion of either the Secretary of War or the Secretary of the Navy, will have the effect of restricting or hampering maximum output." Although the contract provided that the contractor was to hire all employees and that they were to be "subject to

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