Portal-to-Portal for All

WAGES & SALARIES

From the august chambers of the U.S. Supreme Court last June came a tiny cloud to hover in the economic skies. Few but smart union lawyers noticed it. This week the cloud hung dark and squally over much of U.S. industry, as C.I.O.'s United Steelworkers marched into Pittsburgh's Federal Court, demanded from Carnegie-Illinois Steel Corp. & the National Tube Co. a whopping $120 million. Last week in Cleveland, the same union sued Republic Steel for $56 million, American Steel & Wire Co. for $38 million. The United Automobile Workers demanded $12 million from Ohio Crankshaft Co.

The $226 million was the largest bill to date that organized labor has tendered industry for retroactive "portal-to-portal" pay. And new suits are being filed almost daily. Plainly, unions intended to sue every industrialist and his dog for all they think they have coming over the past years.

Opening the Door. The trouble started when employes, encouraged by John L. Lewis' portal-to-portal agreement with coal operators, sued Michigan's small Mt. Clemens Pottery Co. for portal-to-portal pay under the 1938 Wages & Hours Act.

The employes argued that company workers should be paid from the moment they entered the company's property, not from the actual time they started work. The Supreme Court upheld the principle. But because of varying local conditions, the court left it to the lower courts to determine what payments were due in each individual case for portal-to-portal work. What ran up the liability of companies was the fact that 1) portal-to-portal time was added to the eight-hour working day, and so called for time-and-a-half pay and 2) employes could sue for double wages under the Wages & Hours Act. In short, companies found themselves faced with paying triple damages.

In the face of this, some companies are already settling out of court. Dow Chemical last-month paid out $4,656,000 for portal pay back to 1940. This is relatively small compared with some estimated potential liabilities. Examples: P:Overall liability of U.S. Steel for back portal-to-portal pay and damages might run as high as $500 million. P: Republic Steel: $100 million. P: Bethlehem Steel: $100 million. P:Aluminum Co. of America (which has had suits filed against some plants): $80 million.

Dazed by such astronomical sums, businessmen feel that they are being unfairly penalized, that the Wages & Hours Act was not intended to cover such cases. As the suits piled up, they fervently hoped that one of the first things Congress does is to find a way to keep them from losing their shirts.

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