Laboring for Laws

Theresa L. Berend

     During the perilous times of the 1930’s labor was suffering from the Great Depression.  With Franklin Delano Roosevelt in office, new legislation began to reshape the face of industry, labor and society in general.  The policies of Roosevelt’s New Deal restored the faith of industrial workers under such laws as the National Industrial Recovery Act, the Wagner Act, and the Fair Labor Standards Act (FLSA).  The specifications set by these laws, especially the latter two, affected labor positively in its ability to restore the legitimacy and faith in collective bargaining.  The country’s industry forum was forced to change its practices.  Within the state of Texas, examples of these changes and enforcements of regulations are numerous.  The activities of George Lambert in his efforts to organize and maintain unions and worker rights under the FLSA and specifically the Wage and Hour Law of 1938, were aggressive and illustrate the fundamental actions taken by other labor leaders of that time.

    In order to have a complete understanding of the Wage and Hour Law of 1938 under the FLSA, it is necessary to understand the origin and background pertaining to the legislation.  Under the leadership of F. Roosevelt, the U.S. government ventured to improve the conditions of workers and the economy.  With the development of the New Deal, several programs were proposed to benefit the workers.  One such program was the National Industrial Recovery Act (NIRA) signed by FDR on June 16, 1933.[1] This act was supposed to promote business and cut out unfair competition by providing workers a chance to join unions and collectively bargain.[2] This important part of the act fell under clause 7(a) of the NRA and gave hope to workers across the country.  Unfortunately, many companies under this act ignored the 7(a) clause and labor unions continued to struggle without power. Also, this law failed to specify what defined maximum hours, minimum wages, and other conditions of employment. [3] In 1935 the Supreme Court in Schechter Corporation v. United States declared the act unconstitutional.[4] The National Labor Relations Act of 1935, also referred to as the Wagner Act after its creator Senator Robert Wagner, was passed in order to reassert the 7(a) clause from the NRA.  In this, he hoped to “reassert the right of employees to self-organization and to bargain collectively through representatives of their own choosing.”  This act called for fair labor practices in the employers’ treatments of employees, but the work force was still unprotected from low wages and excessive work hours.  A possible solution to this problem came in the form of the Walsh-Healy Public Contracts Act passed in 1936.  This provided for a forty-hour workweek, time-and-a-half for overtime, a ban on child labor, and a minimum wage as determined by the Secretary of Labor.  Still, this act was limited to a small amount of the U.S. workforce making it very ineffective for the whole.[5] Legislation developed by Secretary of Labor, Frances Perkins, which would have been “comprehensive on labor guarantees,” was turned down as well as other drafts put together by attorney Stanley Reed and George Berry.  The Supreme Court declared these drafts unconstitutional because they were considered violations of freedom of contract under the due process clause of the Fifth Amendment.  Thomas G. Corcoran and Benjamin V. Cohen wrote the successful bill that passed through congress, the president, and the Supreme Court, and still governs labor today with some amendments.[6]

            Before this final proposal for a wage and hour regulation could be drafted and submitted, Roosevelt found himself approaching re-election.  So the bill was pushed back.[7] The need for the law also caused delay in that most people were so desperate for jobs that they would work at any pay rate.  The public was not pushing the act, so the lack of attention contributed to postponing the decision.  Another problem was the anti-labor congress that was reluctant to pass the bill through the system.[8] Again, the proposal was held in check as FDR pursued “packing the court in order to favor his labor legislation.  This was unsuccessful but Roosevelt was saved by the famous “switch in time that saved nine” in which Justice Owen Roberts voted with the liberal minority to keep the minimum wage in the case West Coast Hotel Company v. Parrish.  At this point the majority of the court was supporting fair labor standards.  This prompted the passage of the Fair Labor Standards Act of 1938 that had already faced so many challenges. Through all the revisions and controversy, the bill passed in May 1938 with a 314-97 majority after 72 proposed amendments and most of them being adopted.[9] And with overwhelming support from Perkins, President Roosevelt signed the act into law on Saturday, June 25, 1938, as part of his Second New Deal.[10]

            The act incorporated a wide variety of standards among industry.  A Wage-Hour Council and a Labor Management Council were established under the FLSA to determine what would be considered the “articles of labor standards.”  These would be signed by the president and carry the weight of law.  Among these articles were set wage and hour standards, a ban on child labor, collective bargaining agreements, workman’s compensation and safety agreements, and regulations covering the aged, crippled, and handicapped.[11] Special provisions were also adopted for learners, apprentices, and messengers.[12] Specifically, the FLSA set minimum wage at $0.25 an hour for the first year, $0.30 the following six years and then $0.40 per hour beginning October of 1945.  It also established a forty-four-hour workweek for the first year, a forty-two hour work week the second year, and settled at forty hours a week in October of 1940.  A stipulation to this law was that employers could allow overtime but only if the employees were paid time-and-a-half.[13] Among these laws set for wages and hours, Cohen and Corcoran banned child labor under the age of 16.[14] Another important aspect of the FLSA was its call for equal minimum payment for men and women.  Overall, the mandates of this law form a breakthrough in history for employee coverage and protection in all aspects of the labor environment.[15]

            Standards set into law had to be enforced to achieve effectiveness.  The FLSA not only established fair labor standards, but also machinery to keep a watchful eye over these new laws.[16] With advice from the Senate, the president would appoint a qualified person to direct the Wage and Hour Division under the Department of Labor.[17] This Division then had the job of monitoring industries by investigating and uncovering any violations of the Act.  The Division was able to devote its full time to enforcing the regulations set forth by the FLSA.[18] The only exception to this was the child labor provisions, which were enforced by the chief of the Children’s Bureau.[19] Finally, the Federal Trade Commission, the Justice Department, and ultimately the courts would enforce the standards.[20] The government was determined to make this act “stick.”

            The FLSA was a national law that spanned the country; however, it only applied to certain industries, i.e. those involved in interstate commerce.  This included approximately one-fifth or eleven million of the workers.  Exemptions cut the Act’s overall effectiveness even further, as farm workers, railroads, air carriers, seamen, and interstate retailing enterprises were free from most applications of the law. [21]

            The law, though only covering one-fifth of the workforce, still had expansive results – both positive and negative.  In the first year of FLSA application, 300,000 workers received pay raises and 1,380,000 experienced decreased work hours.[22]   “It is important to emphasize that the original act established only the principle of wage and hour protection,” because it did not cure all ills in the labor forum.[23] One of the negatives was an estimation, taken by the Labor Department, indicating that the FLSA caused 30,000 to 50,000 workers to lose their jobs.  Of those workers, approximately ninety percent were in a few southern industries such as pecan shelling and tobacco stemming.[24]

            Opinions about the effects of the FLSA were strong as well.  Workers were afraid that the minimum wage would become the maximum wage and skilled workers would thus lose out when compared to unskilled workers.  Further, labor feared that contracts that had called for a forty-four-hour week would be voided and those workers previously paid under that plan would no longer be covered.  The man behind the newly formed Congress of Industrial Organizations (CIO), John L. Lewis feared that the FLSA would make collective bargaining nearly impossible, trapping workers into fixed wages and benefits.[25] Despite objections, the FLSA endured where other wage and hour laws had not, by defining “unfair trading practices” and maintaining the constitutionality of the legislation.  “Unfair trading practices” came to be understood as practices that were detrimental to workers, hindered the flow of commerce and fair marketing of goods, and included practices that produced goods under “oppressive conditions.”[26]  The constitutionality was tested in Darby Lumber Company and upheld.  The new act had the stamp of approval from the Supreme Court giving it strength and security.[27] Though strength and security was guaranteed in the Supreme Court, the new laws needed local support and guidance to maintain its effectiveness.  In this aspect, local labor leaders played important roles.  Though the law applied to the entire nation, the southern states were the least willing to comply.[28] Thus, labor leaders such as George Lambert of Texas kept busy in their efforts to maintain the stipulations of the FLSA and specifically the Wage and Hour Law of 1938.

            George Lambert, born in Bluefield, West Virginia, made Texas his home in the 1930’s and organizing labor unions was his business.  Before applying to the Amalgamated Clothing Workers of America (ACWA) in August of 1938, he had prior experience with union organizations.  He had been connected with the UCAPAWA in San Antonio, organized pecan workers in Houston, and assisted in the organization of steel workers.  Before coming to Texas he had experience with the Textile Workers Organizing Committee (TWOC) in Nashville, organizing a textile company called Washington Manufacturing Company.  In Lambert’s efforts to be hired by the ACWA, he listed references and connections with other labor leaders:  Franz Daniel, Executive Assistant of the Southeastern Region of the TWOC; H.A. Rasmussen, Sub-Regional Director of the SWOC; P.F. Kennedy, Secretary of Texas Council of Industrial Unions; Samuel S. White, organizer within the ILGWU; and E.L. Oliver, Executive Vice President of LNPL.  Such connections qualified him as an able labor leader in Texas.  Lambert was selected to be a representative and organizer for the men’s clothing workers in Dallas in August of 1938.  His work led him to other opportunities in cities across the state such as San Antonio, Waco, and Fort Worth.[29]

            Lambert began his work for the ACWA just prior to the Wage and Hour Law of 1938 becoming effective in October.  As most laws are, the Act was extensive and often misunderstood by those people it affected.  In response to this, Alex Cohen, Manager of the Shirt Department of the ACWA, sent out an informative letter to all shirt manufacturers and contractors under the ACWA.  There was a great misunderstanding about the issue of pay for handicapped workers.  In this letter Cohen wrote, “Some confusion existed as to the interpretation of the Wage and Hour Law, largely due to ill-considered advice.  The only responsible interpretations of the law have come from the Wage and Hour Division in Washington.”  Violations of this law were often due to confusion on the part of the workers who would sign a statement for a “Special Handicapped Workers Certificate” unknowingly when their bosses (or “ill-considered advice”) put it in front of them. This scheme would benefit the employer because handicapped workers could be employed at a lower rate (seventy-five percent of the $0.25 per hour minimum) than non-handicapped workers.[30] Lambert, himself, ran across this very problem in his dealings with the Finesilver Pants and Overall Manufacturing Company (Finesilver) in San Antonio, Texas.  This company was involved in many violations of labor laws, beginning with regulation 524.90 – the handicapped provision of the Wage and Hour Law.  Merle D. Vincent of the U.S. Department of Labor – Wage and Hour Division, brought to Lambert’s attention the increased number of employees at Finesilver who were applying for handicapped wages.  He suggested coercion.  After investigating the situation, Lambert replied to Vincent that twenty workers who were slow, but not handicapped, were asked to sign applications and were being paid less than minimum wage.  The employer was able to get away with this because most of these employees were Mexican, didn’t know what they were signing, and were threatened with their jobs if they didn’t sign.[31] This example is only one of many of the violations of underpayment in some form.

            Many pamphlets were sent out soon after the law became effective.  Jacob S. Potofsky, Assistant General President of ACWA, sent out specific pamphlets to Texas industries promoting and explicitly explaining the Wage and Hour Law.  These handouts enumerated each aspect of the law and were meant to inform workers of their rights, especially the $0.25 minimum wage and the forty-four hour workweek.[32] Unfortunately, these efforts did not stop the industries and individual companies from violating the law.

            One of the most involved cases for Lambert dealing with the Wage and Hour Law of 1938 surrounded the Finesilver Pants and Overall Manufacturing Company.  As stated before, the company was infamous in Texas for its illegal standards and practices.  The cases provide excellent examples of how the Wage and Hour Law was broken and enforced.

            The first incident of violating the law was noticed in the dealings with the handicapped workers as described above.  Truly, the goal of the company was to maintain business practices as close to those in place before the Wage and Hour Law came into effect.  As a result, many of the workers were underpaid and management strove to avoid unionization. The first step taken by George Lambert, in order to fight the unfair practices, was to organize the workers of the company.  He contacted 150 workers of Finesilver and thirty-five signed application cards immediately.  Leaflets were passed out at the factory gates describing the union, in order to spark interest.  Instead, fears arose among workers that the ILGWU’s contracts calling for minimum wage of $8.00 a week would bring their pay down to that level.[33] Though this thought may have seemed foolhardy to leaders of the unions, this actually happened in other industries and the workers’ fears were justified.  For example, in the seamless hosiery industry, one third of the workers in 1940 earned no more than $0.02.5 over the $0.32.5 minimum and in the lumber industry, nearly ninety-five percent of the workers earned exactly the $0.30 minimum.[34] Within a month of the October effective date, Finesilver was violating the law by paying cutters only $18.00 a week (this was below the area average) and overworking the employees more than before the new laws came into place.[35]

Not only was Finesilver violating the Wage and Hour Law, but also with the company’s anti-union actions they were violating Section 8 of the National Labor Relations Act or The Wagner Act.  Much of this consisted of threatening workers and labor organizers, including George Lambert.  This violation eventually went to court with testimony from Rosie Jung and Homer Galloway, and Finesilver was found guilty and charged.[36] The company was forced to post intentions to allow labor organization and collective bargaining.       

In the case of the Wage and Hour violation, George Lambert submitted a complaint on behalf of the workers of Finesilver to the Wage-Hour Administration after gathering evidence.  Some of the key pieces of evidence collected were letters from Mr. Vincent and Mr. Fletcher (no letters in reference to look at) explaining that they had not been paid their time-and-a-half for overtime after forty-four hours.[37] One specific complaint of violations of the Wage and Hour Law, issued by the ACWA, concerned Katie Herring, a front pocket operator in the pants department of Finesilver.  Finesilver failed to pay her the minimum wage but she was afraid to testify out of fear of losing her job.  The only evidence that would be available then would have been in company records.[38] This type of situation occurred most often and made convictions of large companies more difficult.

The Wage-Hour Bureau went ahead with an investigation of Finesilver but because of intimidation akin to that of Katie Herring, the investigator was unable to uncover enough evidence.[39] With Lambert’s enormous involvement in the Finesilver Labor Relations case, he was able to provide supporting evidence in the treatment of Sol Handler and Margie Tudyk.  The complaint was submitted and a hearing was set for March 30, 1939 in San Antonio Texas. [40]

Before the hearing, the workers discovered they were being underpaid and started to slow down work.  Negotiations with Crump and Calvert, the management who had cut wages on front pocket girls who had “failed to keep up production,” were semi-successful.  With the threat of the girls staging a sit-down strike, Crump granted them the back pay which was paid over a considerable amount of time.[41]

After this chaos, complications arose during the hearing when Hyman Reiff, an organizer, wrote Lambert, “Our cutters at Finesilver have gone back on us.  They are going to testify for the company.  Evidently the company gave them a light raise and warned them about testifying against the company again.”[42] Wrinkles in the case were smoothed out only with Lambert’s help in finding others to testify. The hearing in San Antonio ruled in favor of the workers.[43] The San Antonio Wage-Hour Office asked for over three hundred dollars in back wages for individual workers.[44] This entire case is a testament to the strength and endurance of the Wage and Hour Law under the Fair Labor Standards Act of 1938.

Other companies in the south were held in violation of the Wage and Hour Law and investigations and cases documented the regulations.  Lambert was also involved in investigating the Sledge Manufacturing Company of Tyler, Texas, in 1940.  There were cases where the company exempted 125 “learners” from the minimum wage.[45] Another case occurred at the Vanette Hosiery Mill.  Lambert wrote to William B. Smith, General Secretary of Treasury, in 1940 explaining that workers at the mill were working overtime without being paid appropriately.[46] This was an important case and being one of the largest industries in the south, the seamless hosiery industry faced having to lay off employees to increase the others’ wages.  This hit the workers the hardest.[47] Lambert also faced more violations of overtime provisions by Texas Textile Mills in Waco, Texas.  They doubled up workers on machines in the dyeing department.  Finally, Lambert also filed a complaint on behalf of the workers in the J.W. Wood Manufacturing Company of Waco, Texas.  He charged non-payment of the minimum wage and falsification of records and he provided the evidence.[48]

Another important industry to consider along with the hosiery industry is that of lumber and saw milling.  Being the second largest manufacturing employer in the south, the impacts of its actions were great.  It is important to note that violations of the FLSA were more frequent in the lumber industry than any other industry in the south. Emphasizing the greatness of this, it should be considered that the majority of firms avoided paying the minimum wage by not engaging in interstate commerce and enjoyed the exemptions or paid less than the minimum rate illegally.  Either way, the negative results were more far spread than can be determined. These are only a few of the companies and industries that ignored the law in hopes of keeping up their increasing bank accounts.  It is obvious from these documented cases, the law was very much needed to protect workers from unfair treatment.

Industries of the thirties needed regulation during the recovery of the Great Depression.  With the passage of the Fair Labor Standards Act of 1938, the country moved toward a healthy economy. Power was restored to the industrial laborers through a minimum wage and the right to organize unions and collectively bargain.  Standards set by the Wage and Hour Law secured workers better rights and standards.  Through the work of labor leaders and organizers such as George Lambert, workers began to understand the rights the government guaranteed them.  Regulations of the law, as well as specific guidelines set forth for industries to follow, allowed it to be successful.  The law, though it had some drawbacks and faults in its coverage, was essentially beneficial to the labor movement and laborers of that time.  The most important accomplishment of this law was to take the first step in regulating labor and industries.  It set the foundation for further improvements in the work environment.  Franklin D. Roosevelt once said, “Except for the Social Security Act, it [FLSA] is the most far-reaching, farsighted program ever adopted here or in any other country.”[49] The Fair Labor Standards Act has stretched into the 1990’s from a time of depression to a time of prosperity and will continue in the new millenium as a program worthy of respect and enhanced by its increasing endurance.  

Endnotes

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