Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949)

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Author: Justice Reed

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Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949)

MR. JUSTICE REED delivered the opinion of the Court.

This case presents the question whether the Eight Hour Law{1} applies to a contract between the United States and a private contractor for construction work in a foreign country.

This Act provides that

Every contract made to which the United States . . . is a party . . . shall contain a provision that no laborer or mechanic doing any part of the work contemplated by the contract, in the employ of the contractor or any subcontractor . . . shall be required or permitted to work more than eight hours in any one calendar day upon such work. . . .

37 Stat. 137, 40 U.S.C. § 324. Penalties are specified for violations. In 1940, the prohibition against workdays of longer than eight hours was modified as follows:

Notwithstanding any other provision of law, the wages of every laborer and mechanic employed by any contractor or subcontractor engaged in the performance of any contract of the character specified in sections 324 and 325 of this title, shall be computed on a basic day rate of eight hours per day and work in excess of eight hours per day shall be permitted upon compensation for all hours worked in excess of eight hours per day at not less than one and one-half times the basic rate of pay.

54 Stat. 884, 40 U.S.C. § 325a.

In 1941, petitioners contracted on a cost-plus basis to build certain public works on behalf of the United States in the East and Near East, particularly in Iraq and Iran. Petitioners agreed in the contract to "obey and abide by all applicable laws, regulations, ordinances, and other rules of the United States of America." The provisions of the Eight Hour Law were not specifically included in the contract. In 1942, petitioners hired respondent, an American citizen, to work on the construction projects as a cook at $60 a week. This contract of employment contained no provision concerning hours of work or overtime. Pursuant to the contract, respondent went to Iraq and Iran, where he frequently worked more than eight hours a day during the years 1942 and 1943.

Upon the refusal of his request for overtime pay for work in excess of eight hours per day, he brought suit against petitioners in the Supreme Court of New York, claiming that the Act entitled him to one and one-half times the basic rate of pay for such work. The court denied petitioners’ motions to dismiss the case and for a directed verdict, thereby overruling the contention that the Act did not apply to contracts which were to be performed in foreign countries. Judgment was entered on a jury verdict for respondent. The Appellate Division reversed on the ground that the Eight Hour Law, as amended, did not confer a right of action on an employee for overtime pay. 272 App.Div. 446, 71 N.Y.S.2d 592. Consequently, it did not consider the question now before us. The New York Court of Appeals reversed, holding that the Act applied to this contract. 297 N.Y. 217, 78 N.E.2d 480, 484. Referring to the language of the statute quoted above, it concluded, "Words of such inclusive reach cannot properly be read to exclude contracts for government jobs abroad." We granted certiorari to settle this important question concerning the scope of the Eight Hour Law. 35 U.S. 808.

Since the question is one of statutory interpretation, the Act, as it now exists, 40 U.S.C. §§ 321-326, is our starting point. In pertinent part, it provides for the limitation to eight hours per day of the working time of laborers and mechanics employed by the government or any contractor thereof on a public work of the United States. § 321. The same section makes it unlawful to require or permit work in excess of eight hours per day except in extraordinary emergencies. An intentional violation of this mandate is made a misdemeanor punishable by fine or imprisonment, or both. § 322. The insertion in "every contract" made by or on behalf of the United States of this restriction on hours of work is required by § 324. The contracts must stipulate a monetary penalty for violation, which penalty takes the form of a withholding by the government of moneys otherwise due the contractor under the terms of the contract. § 324. Finally, the restriction is lifted as to employees of private contractors by § 325a, supra, pp. 282-283, on condition that hours worked in excess of eight be paid for at the overtime rate.

The question before us is not the power of Congress to extend the Eight Hour Law to work performed in foreign countries. Petitioner concedes that such power exists. Cf. Blackmer v. United States, 284 U.S. 421; United States v. Bowman, 260 U.S. 94. The question is, rather, whether Congress intended to make the law applicable to such work. We conclude, for the reasons expressed below, that such was not the intention of the legislators.

First. The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States, Blackmer v. United States, supra, at 437, is a valid approach whereby unexpressed congressional intent may be ascertained. It is based on the assumption that Congress is primarily concerned with domestic conditions. We find nothing in the Act itself, as amended, nor in the legislative history, which would lead to the belief that Congress entertained any intention other than the normal one in this case. The situation here is different from that in Vermilya-Brown Co. v. Connell, 335 U.S. 377, where we held that, by specifically declaring that the Act covered "possessions" of the United States, Congress directed that the Fair Labor Standards Act applied beyond those areas over which the United States has sovereignty, and was in effect in all "possessions." This Court concluded that the leasehold there involved was a "possession" within the meaning of the Fair Labor Standards Act.

There is no language in the Eight Hour Law, here in question, that gives any indication of a congressional purpose to extend its coverage beyond places over which the United States has sovereignty or has some measure of legislative control. There is nothing brought to our attention indicating that the United States had been granted by the respective sovereignties any authority, legislative or otherwise, over the labor laws or customs of Iran or Iraq. We were on their territory by their leave, but without the transfer of any property rights to us.

The scheme of the Act itself buttresses our conclusion. No distinction is drawn therein between laborers who are aliens and those who are citizens of the United States. Unless we were to read such a distinction into the statute, we should be forced to conclude, under respondent’s reasoning, that Congress intended to regulate the working hours of a citizen of Iran who chanced to be employed on a public work of the United States in that foreign land. Such a conclusion would be logically inescapable although labor conditions in Iran were known to be wholly dissimilar to those in the United States and wholly beyond the control of this nation. An intention so to regulate labor conditions which are the primary concern of a foreign country should not be attributed to Congress in the absence of a clearly expressed purpose. See Attorney General Stone’s conclusion to this effect in 34 Op.Atty.Gen. 257, where he stated that the law did not apply to alien laborers engaged in altering the American Embassy in London. The absence of any distinction between citizen and alien labor indicates to us that the statute was intended to apply only to those places where the labor conditions of both citizen and alien employees are a probable concern of Congress. Such places do not include foreign countries such as Iraq and Iran.{2}

Second. The legislative history of the Eight Hour Law reveals that concern with domestic labor conditions led Congress to limit hours of work. The genesis of the present statute was the Act of June 25, 1868, 15 Stat. 77, which was apparently aimed at unemployment resulting from decreased construction in government navy yards. Congressional Globe, 40th Cong., 2d Sess., Part I, p. 335. In 1892, when the coverage of this Act was extended to employees of government contractors and when criminal penalties were added, 27 Stat. 340, the considerations before Congress were domestic unemployment, the influx of cheap foreign labor, and the need for improved labor conditions in this country. H.R.Rep. 1267, 52d Cong., 1st Sess. The purpose of the new legislation was to remedy the defects in the Act of 1868. 23 Cong.Rec. 5723.

The Act was amended in 1912, 37 Stat. 137, to include "every contract." (Italics supplied.) The insertion of the word "every" was designed to remedy a misinterpretation according to which the Act did not apply to work performed on private property by government contractors. 48 Cong.Rec. 381, 385, 394-95. Nothing in the legislative history supports the conclusion of respondent and the court below that "every contract" must, of necessity, by virtue of the broadness of the language, include contracts for work to be performed in foreign countries.{3} A contrary inference must be drawn, we think, from a 1913 amendment which extended the law to cover persons employed

to perform services similar to those of laborers and mechanics in connection with dredging or rock excavation in any river or harbor of the United States or of the District of Columbia.

37 Stat. 726, 40 U.S.C. § 321. This Court had held that such dredgers were not covered by the phrase "laborers and mechanics" in the previously existing law. Ellis v. United States, 206 U.S. 246. In its attempt to secure equality of treatment for dredgers, on the one hand, and laborers and mechanics, on the other, Congress would hardly have intended for coverage over the latter class to extend to the far corners of the globe, while coverage over the former was limited to work performed in rivers or harbors "of the United States or of the District of Columbia."

The 1940 amendment which permitted work in excess of eight hours per day upon payment of overtime, 54 Stat. 884, passed without any discussion indicative of geographical scope. 86 Cong.Rec. 11216-11217.

Third. The administrative interpretations of the Eight Hour Law in its various phases of development afford no touchstone by which its geographic scope can be determined. Executive Order No. 8623 of December 31, 1940, 3 CFR Cum.Supp. 850, issued pursuant to § 326 of the Act, suspended the law as to laborers and mechanics employed directly by the government at Atlantic bases leased from Great Britain. Such a suspension indicated, to be sure, a conclusion on the part of the President that the statute applied, or might apply, to these bases. Such action, however, may well have been predicated on the premise that the leases with the provisions discussed in our Vermilya-Brown decision were sufficiently subject to our control so that the Eight Hour Law would apply to them. Though numerous Executive Orders have been issued which suspend the operation of the Act in the United States, Alaska, Hawaii, Midway Island, Wake Island, etc., we have not been able to find, nor has our attention been directed to, any orders purporting to suspend its operation in countries not subject to our legislative control.{4} The order deserves no weight as an administrative determination of the Act’s applicability to localities unquestionably and completely beyond the direct legislative competence of the United States.

It is true that, in 1905, Attorney General Moody, in a letter to the Secretary of War, expressed the opinion that the Eight Hour Law applied to public works to be constructed in the Canal Zone. 25 Op.Atty.Gen. 441. For the purpose of his opinion, he treated the Canal Zone as foreign territory. 25 Op.Atty.Gen. at 444. No distinction was drawn between citizen and alien laborers. If we accept the Attorney General’s assumption as to the status of the Canal Zone,{5} his opinion is in line with respondent’s contention that the law is applicable to work performed in foreign countries. The opinion, however, proves too much. Although Attorney General denied that incongruous results would flow from his interpretation, it would be anomalous, as we have said, for an act of Congress to regulate the hours of a citizen of Iran at work on a government project there. Attorney General Stone so indicated in 1924, when he advised the State Department that the Eight Hour Law did not apply to English workers engaged in altering the American Embassy in London. 34 Op.Atty.Gen. 257. Since the statute contains no distinction between laborers based on citizenship, Attorney General Stone’s reasoning that aliens are not covered points to the conclusion that the statute does not apply to contracts which are to be performed in foreign countries. The Comptroller General has expressed agreement with this conclusion by stating that

the Eight Hour Law of June 19, 1912, was not intended to and does not apply to contracts necessarily entered into on behalf of the United States in foreign countries which may require or involve the employment of foreign laborers or mechanics in their performance.

19 Comp.Gen. 516, 518.{6}

Although the statute expressly requires the inclusion in every government public works contract of the eight-hour provision, the Secretary of the Treasury has approved a standard form for construction contracts which contains eight-hour provisions but which provides that the use of the form will not be required in foreign countries. U.S. Standard Form No. 23, 41 U.S.C. App. § 12.23, pp. 4520, 4522. The inclusion of such provisions is also required by War Department Procurement Regulation No. 3, par. 346, in "all contracts subject to the provisions of the Eight Hour Law." Yet neither the instant contract nor others covering off-continent operations contain the Eight Hour Law clause.{7} Similarly the Department of State "does not consider it legally necessary to include provisions of the Eight Hour Law in contracts to be performed in foreign countries." Letter of November 8, 1948, signed by the Acting Legal Adviser "For the Acting Secretary of State," to the Attorney General.

We conclude that administrative interpretations of the Act, although not specifically directed at the precise problem before us, tend to support petitioners’ contention as to its restricted geographical scope.

Since we decide that the Eight Hour Law is inapplicable to a contract for the construction of public works in a foreign country over which the United States has no direct legislative control, it is unnecessary to decide whether the law, either directly or via the third party beneficiary contract route, gives an employee who is covered by it a cause of action against his employer for overtime wages.

Reversed.

1. 27 Stat. 340, as amended, 40 U.S.C. §§ 321-326.

2. Since it is unnecessary for this decision, we do not reach a conclusion as to the precise geographic coverage of the Eight Hour Law.

3.

. . . Words having universal scope, such as "every contract in restraint of trade," "every person who shall monopolize," etc., will be taken, as a matter of course, to mean only every one subject to such legislation, not all that the legislator subsequently may be able to catch.

American Banana Co. v. United Fruit Co., 213 U.S. 347, 357.

4. See, however, Executive Orders 9251, 3 C.F.R.Cum.Supp. 1216, and 9898, 3 C.F.R.1947 Supp. 172, in which the geographic coverage of the suspensions is not specified.

5. See, however, the Isthmian Canal Convention, proclaimed on February 26, 1904, 33 Stat. 2234, whereby the United States had been granted all the rights, power, and authority of a sovereign in the Zone.

6. See also 29 Op.Atty.Gen. 488, 492 et seq.

7. Illustrative contracts from which the clause is omitted are: W 1098 eng-1525, June 8, 1942 (Laborador and Baffin Island); W 1098 eng-1375, June 3, 1942 (Cuba); W 1098 eng-135 , April 24, 1942 (Bahamas); W 1098 eng-108, November 10, 1941 (North Africa and Palestine); W 1098 eng-2, August 2, 1941 (Greenland); W 258 eng-54, February 8, 1941 (Newfoundland); W 958 eng-50, February 4, 1941 (Bermuda).

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Chicago: Reed, "Reed, J., Lead Opinion," Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949) in 336 U.S. 281 336 U.S. 283–336 U.S. 291. Original Sources, accessed January 16, 2019, http://www.originalsources.com/Document.aspx?DocID=Q7ZB6M2JWXUN5AN.

MLA: Reed. "Reed, J., Lead Opinion." Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949), in 336 U.S. 281, pp. 336 U.S. 283–336 U.S. 291. Original Sources. 16 Jan. 2019. www.originalsources.com/Document.aspx?DocID=Q7ZB6M2JWXUN5AN.

Harvard: Reed, 'Reed, J., Lead Opinion' in Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949). cited in 1949, 336 U.S. 281, pp.336 U.S. 283–336 U.S. 291. Original Sources, retrieved 16 January 2019, from http://www.originalsources.com/Document.aspx?DocID=Q7ZB6M2JWXUN5AN.