mum. In accordance with the usual method, all new single-family dwellings were considered as built for owner-occupancy. In recent years of extreme housing shortages and rent control, an even greater proportion of such dwellings were built for owner-occupancy than in earlier years. Some two-family and multifamily dwellings were probably owner-occupied, though this was assumed to have been offset by those few new singlefamily dwellings which were rented. An estimate was also made of the percentage difference in rents for new units as compared with the rents for existing units of the same quality. Since rentals for new construction were controlled by Federal rent regulations until June 1947, those units which entered the market prior to 1946 were assumed to have had rents 20 percent higher than the average for comparable existing housing."

Since new rental units were decontrolled in 1947, rents for units authorized from January 1947 to mid-1948 were assumed to have been 100 percent above the rents for the same quality of existing housing. This assumption of a 100percent differential was purposely made onethird higher than estimates of the Office of Housing Expediter in order to maximize the estimated new unit bias. Since the rentals for public housing units are set at levels equal to, or possibly less than, prevailing rents for comparable existing housing, in the estimate of "new unit bias" no differential was allowed for new public housing units.8

Estimates were prepared separately for the housing market area in each of the 34 large cities, and in only 6 cities was the estimated "new unit bias" in the rent index from 1940 to mid-1948

• This is considered by housing officials as the maximum average difference in rent for new and old housing of the same type, during this period. Rent control officials stated that rent ceilings for new rental dwellings were set at what constitutes the median in the range of rents for housing of the same quantity and quality with allowance for increased construction costs. See Rent Regulation for Housing, sec. 4, par. (e) and (f); see also Report of the President's Committee on the Cost of Living, 1945 (p. 362). In this report, the Committee estimated the new and converted unit bias in the CPI large city rent index as 1 percent but went on to say that "it may well be an overgenerous allowance since in the light of the relative numbers of new and old dwelling units it implies an average rental of new units some 15 percent higher than that of old."

'See testimony of Tighe E. Woods, Housing Expediter, hearings before the Subcommittee on Banking and Currency, U. S. Senate, 80th Cong. 2d sess. Part 1 (p. 53). From reports by local rent control officials for 77 cities in 17 different States, "units newly constructed since February 1, 1947, which have uncontrolled rents, the average monthly rent was found to be 69 percent higher than the average for comparable units under rent control."

See Lanham Act as Amended, Public No. 849, 76th Congress, section 304; Manual of Policy and Procedure, section 3612 (2); Rent Regulation for Housing, sec. 4, par. (g); and Report of President's Committee on Cost of Living (p. 362).

more than 5 percent, while in more than half the cities it amounted to less than 2 percent. For the 34 large cities combined the maximum estimated bias from this source was 2 percent in the rent index and 0.3 percent in the all-items index of the CPI. If similar allowances are made to account for additions of rental units through conversion and shift from the sales market, the estimate of new unit bias would amount to 4 percent in the rent index and 0.5 percent in the total all-items index.

To adjust the rent index on the basis of such a general estimate might introduce an error considerably greater than the existing bias. The Bureau is currently investigating possible ways of defining qualities of housing which will permit an accurate measurement of the price differential between new and old housing of the same quality in order to provide a precise technique by which to adjust the index for new unit bias.

Other Measurement Problems

Inherent in the technique of measurement are other biases not necessarily all in the same direction. Procedures for compensating for depreciation through age in the quality of existing housing are limited to the requirement of periodic sample revisions, so that the rent samples represent all ages of dwellings and, therefore, all rates of depreciation. However, no attempt is made to reflect depreciation, or in some cases, appreciation, as a price change.

Also, the rent component does not take into account expenditures for repairs assumed by many tenants in a "landlord's" market. But this is also true during the down-swing of the market cycle, when repair costs tend to revert from the tenant to the landlord and competitive redecorations reappear. Thus, the bias is not always in the same direction; that is, during a "landlord's" market, the index tends to understate the increase in redecorative and repair costs to the tenant, whereas in a "tenant's" market, the index tends to understate the decrease in redecorative and repair costs to the tenant.

Since rental reports are obtained directly from tenants on a confidential basis, violations of the rent regulations and over-ceiling rentals are fre

In this connection it should be recognized that depreciation of rental property to tenants is not of the same nature or magnitude as the "value" depreciation of rental property to its owner.

Recent Decisions

of Interest to Labor'

Wages and Hours 2

Section 2

Portal Act-Compensable Activities. In an important decision, a circuit court of appeals considered the application of section 2 of the Portal-to-Portal Act to "nonportal" activities during scheduled working hours. provides that an employer shall be relieved of liability for failure to pay minimum wages and overtime compensation under the Fair Labor Standards Act to cover employee activities engaged in prior to May 14, 1947, which were not made compensable by the employment contract or by a custom or practice at the place of employment.

Night switchboard operators of local telephone exchanges were required to be on duty in their employer's building from 9 p. m. to 8 a. m. 6 nights a week. By their contracts of employment they were paid for only 9 of the 11 hours. The other 2 hours were termed "sleeping time." An operator was required to stay in the switchboard room during the whole 11 hours, but the employer furnished a cot on which she might sleep. After about midnight, when calls became less frequent, the operator would usually leave the board and sleep on the cot; when a call came through the exchange she was awakened by a mechanical device that caused a bell to ring.

Prepared in the Office of the Solicitor, U. S. Department of Labor. The eases covered in this article represent a selection of the significant decisions believed to be of special interest. No attempt has been made to reflect all recent judical and administrative developments in the field of labor law or to indicate the effect of particular decisions in Jurisdictions in which contrary results may be reached, based upon local statutory provisions, the exist ence of local precedents, or a different approach by the courts to the issue presented.

*This section is intended merely as a digest of some recent decisions involving the Fair Labor Standards Act and the Portal-to-Portal Act. It is not to be construed and may not be relied upon as interpretation of these acts by the Administrator of the Wage and Hour Division or any agency of the Department of Labor.

Central Missouri Telephone Co. v. Conwell (U. 8. C. C. A. (8th), November 16, 1948.).

817250-49

other calls also required tending of the switchboard. An operator might get several hours of uninterrupted sleep on many nights but be frequently awakened on certain other nights.

In a suit by the operators for overtime compensation for the 2 hours "sleeping time," the employer claimed relief from liability under section 2 of the Portal Act, since the contract of employment made such time not compensable. The court held that such time was compensable within the meaning of the act; that Congress, in passing the act, had merely intended to relieve employers from unexpected liability for portal-toportal activities before and after scheduled working hours and to nullify the effect of certain court decisions that had created such a liability. The court held that the Fair Labor Standards Act was not so modified as to make it necessary in an action to recover compensation for time actually devoted to the normal work for which the employee was employed, to plead an express written contract or a practice or custom.

4

Exemption of Railroad Employees. The Fourth Circuit Court of Appeals held that employees of a weighing and inspection bureau maintained by a group of railroads were exempt from the provisions of the Fair Labor Standards Act, under section 13 (b) (2), which exempts employees of railroads.

The bureau was one of six maintained by the railroads to perform services which could be rendered more efficiently by united than by individual effort. It promoted, through inspection and supervision, the uniform packing, marking, weighing, and classification of freight. It was neither a corporation nor a partnership, but by its articles of association, was under the control of an executive committee composed of officials of member railroads. Its 170 employees were paid from funds of the railroads handled by an accounting and treasury department provided for the six bureaus.

In holding that the employees were exempt, the court pointed out that the Interstate Commerce Commission recognized their status as railroad employees for the purpose of granting them free travel passes on the railroads. Their wages were comparable to those of other railroad employees. Employees of a similar association had been held

A McComb v. Southern Bureau (U. S. C. C. A. (4th), November 5, 1948).

69

subject to the Railway Labor Act. The history of the exemption granted by section 13 (b) (2) was held to indicate that Congress intended the Interstate Commerce Commission to have exclusive power to regulate the hours of all railroad employees, so that there would be no division of responsibility in supervision of railroad operations. The court pointed out that railway workers had always been exempt from labor legislation of general application.

Labor Relations

Restraint or Coercion. A recent ruling of the National Labor Relations Board further considered the application of section 8 (b) (1) (A) of the National Labor Relations Act as amended by the Labor Management Relations Act, 1947. This section makes it an unfair labor practice for a labor organization to restrain or coerce employees in the exercise of their right to engage in or refrain from certain collective-bargaining activities listed in section 7.

Discharge of a worker in a shoe factory precipitated a strike. The stoppage was apparently unauthorized by the local of the American Federation of Labor, which had been recognized by the employer in an agreement containing a nostrike clause, but had never been certified as bargaining agent by the NLRB. Shortly after the stoppage began, a committee composed of 21 workers was formed, which quickly assumed leadership of the strike.

It was alleged that the strike was an attempt to dissolve the recognized local union and abrogate an existing bargaining contract and was therefore in itself coercive. The Board refused to hold to such an interpretation of section 8 (b) (1) (A), on the ground that Congress had not thereby intended to outlaw any strike itself, but had only intended to forbid coercive methods of carrying on a strike.

The threat of a member of the committee to run the representative of the local out of town, and a threat of a discharged striker to "get" anybody replacing her were held to be too indefinite and not sufficiently immediate to be considered coercive. Assemblage of a crowd of about 200 persons near the plant during the strike was held not to be coercive, althouth accompanied by

In re Perry Norvell Co. (80 NLRB No. 9-CB-3, November 10, 1948).

vigorous denunciation of strikebreakers, since there was no interference or attempt to interfere with ingress or egress. The fact that on another occasion nonstriker felt that she was forced to walk around a block of eight strikers to get into the plant was held not to show coercion. However, certain threats of bodily harm and actual assaults upon nonstrikers were held unlawful.

The strike committee was responsible, the board held, for acts of violence of its members, but not for acts of nonmember strikers. It had been formed "to look out for the welfare of shoe workers on strike." Each committee member, the Board held, was authorized to act on behalf of the committee and acts of coercion were held to come within the scope of their authority to carry out the strike. It was held by the Board to be a "representative committee" and thus a "labor organization" within the meaning of section 2 (5) and therefore capable of committing unfair labor practices. However, the Board held that rank and file strikers possessed no such presumption of authority to act on committee's behalf. The fact that they were adherents to its cause did not make them its agents.

A national union to which the committee became affiliated was held not to be responsible for the coercive practices. Its agents had given the committee advice as to publicity and other matters and had addressed groups of employees. But the direction and control of the strike was always in the hands of the committee and there was no evidence that the national union either knew of or participated in the acts of coercion.

Union Security. The NLRB ruled that a union shop contract in effect but not authorized by an election pursuant to section 9 (e) of the amended National Labor Relations Act cannot act as a bar to proceedings brought by another union seeking to be certified as bargaining representative. The contract in this case provided for a union shop on a 15-day basis and for maintenance of membership and check-off of union dues, apparently without written authorization. Since the union having the contract had not complied with the filing and non-Communist affidavit provisions of the act, it could not have secured a union shop election under section 9 (e). The Board stated. that the contract was illegal, even if no action was

In re C. Hager & Sons Hinge Mfg Co. (80 NLRB No. 36, November 5, 1948).

7

taken under it, since it did not satisfy the conditions laid down for a union shop in section 8 (a) (3) and the mere existence of such an agreement acted as a restraint upon those desiring to refrain from union activities. The mere execution of the compulsory check-off provision was also held illegal. Section 14 (b) of the amended National Labor Relations Act provides that its union shop provisions shall not apply to States in which unionsecurity agreements are prohibited. Previously, the NLRB held that a union shop unit could not include employees working in such a State. More recently it ruled that section 14 (b) does not apply where a State regulates, but does not prohibit, union-security agreements. Therefore, although the State law placed more drastic restrictions on such agreements than did Federal laws, the Federal law was held to control. The Board pointed out that the ordinary meaning of the word "prohibit" used in section 14 (b) did not include regulation.

The case involved employees of an interstate bus company engaged in continuous travel between States which, respectively, permit without restriction, regulate, or prohibit union-shop agreements. The Board held that in deciding whether an employee was or was not in a State prohibiting union-shop agreements depended upon their work headquarters. The provisions of any agreement between employer and employees, it was pointed out, will be effectuated in the States where they have their headquarters.

Secondary Boycotts. A number of recent cases deal with so-called secondary boycotts.

9

A circuit court of appeals affirmed a lower court decree 10 which enjoined various unions from circulating a "we do not patronize" list and engaging in picketing with the purpose of preventing a builder from dealing with a prefabricated-house manufacturer, whose employees were on strike. The unions contended that their peaceful picketing and circulation of a blacklist was protected by the first amendment, which guarantees freedom of speech, press, and assembly, and by section 8 (c) of the act, which provides that expressions of views without threat of reprisal or force or promise of benefit do not constitute an unfair labor practice.

In re Giant Food Shopping Center (77 NLRB No. 133).

In re Northland Greyhound Lines (80 NLRB No. 60, November 12, 1948). • United Carpenters v. Sperry (U. 8. C. C. A. (10th), November 2, 1948). See Monthly Labor Review, March 1948 (p. 308).

The court stated that a blacklist confined to the name of the employer primarily engaged in the controversy or labor dispute, and the premises of such employer, came in the category of protected free speech. But the free speech guaranty, the court held, does not protect peaceful picketing that is used as a means of waging a secondary boycott which has the effect of substantially burdening commerce. While the builder's activities were essentially local-he obtained all his materials inside the State-they were held to be of such character, bearing such relation to interstate commerce, that a blacklist compelling him to cease doing business with the prefabricator was an unfair labor practice within the meaning of the act. If the secondary boycotts directed at the prefabricator were extended sufficiently, the court held, they would necessarily affect the flow of commerce. A district court held 11 that a local farm labor union could be enjoined from participating in a secondary boycott or strike, although the union was composed of agricultural workers who were not employees within the meaning of [section 2 (3) of] the amended National Labor Relations Act and could therefore not bring unfair labor practice charges against their employer. The court held that, while the farm-labor union might not be a labor organization within the meaning of [section 2 (5) of] the act, since it was composed of exempt employees, it was an agent of a labor organization, and was, therefore, capable of committing unfair labor practices. It was held to be the agent of its international affiliate, part of the membership of which were not exempt from provisions of the act. The local union, the court stated, was governed by the constitution and bylaws of the international, and its affairs were conducted by an officer of the international.

Prohibition of Strike Where Another Union is Certified. The Second Circuit Court of Appeals upheld 12 the constitutionality of an injunction enforcing section 8 (b) (4) (C) of the amended Natoral Labor Relations Act. This section makes it an unfair labor practice for a union to engage in a strike or boycott to compel an employer to recognize or bargain with it, if another union has been certified as bargaining representative of his

11 Le Baron v. Kern County Farm Labor Union (U. S. D. C., S. D. Calif., July 3, 1948).

13 Douds v. Retail Wholesale Department Store Union (U. S. C. C. A. (2d), November 8, 1948).