McCloskey & Co. v. United States

98 Ct. Cl. 90, 1942 U.S. Ct. Cl. LEXIS 32, 1942 WL 4461
United States Court of Claims·Decided October 5, 1942·No. No. 44003·Published·Cited by 5 cases

Opinions

LitteetoN, Judge,

delivered the opinion of the court:

Plaintiff sues under the act of June 25, 1938, 52 Stat. 1197, to recover $29,238.05 for increased costs alleged to have been incurred and paid as a result of the enactment of the National Industrial Recovery Act, approved June 16, 1933, in the performance of a contract with the defendant entered into November 26,1932. This amount is made up of three items: First, a wage increase for common labor on October 18,1933, from twenty-five to thirty-five cents an hour, which increase, from October 18 to completion of the contract, amounted to $13,615.30; second, a further increase on January 19, 1934, [106]*106in the rate of wage for common labor from thirty-five to forty cents an hour, which increase, to date of completion of the contract, amounted to $3,122.75; and, third, a claim for $12,500, or, in the alternative, $9,368.28, which it is alleged arose under the N. I. R. A. in connection with subcontracts with the Herzog Iron Works and the Flour City Ornamental Works.

The third item of the claim must be denied because the pi’oof is not sufficient to establish that either the amount of $12,500 or $9,368.28, or any determinable portion thereof was the direct result of the enactment of the National Industrial Recovery Act. See findings 14 to 17, inclusive.

The other two items, representing increased wages paid between October 18,1933, and November 3,1934, require some discussion in connection with the interpretation of the act of June 25, 1938, 52 Stat. 1197, under which the suit was brought and on which the court must base its decision as to whether the plaintiff is entitled to a judgment for all or a part of the $16,738.05, increased wages paid. The facts with reference to these two wage increases of ten cents an hour on October 18, 1933, and five cents an hour on January 19, 1934, showing how the increases came about and why they were made, are set forth in findings 1 to 13, inclusive. In substance the facts established show that plaintiff and the defendant entered into a contract on November 26, 1932, for the construction of the U. S. Customs House and Appraisers’ Stores at Philadelphia for a fixed price. This contract contained no provision for a specific wage rate other than that provided by the act of March 3, 1931, 46 Stat. 1494, which required that every contract with the Government in excess of five thousand dollars in amount which required or involved the employment of laborers or mechanics in the construction, alteration, and/or repairs of any public buildings of the United States or the District of Columbia, should contain a provision to the effect that the rate of wage for all laborers and mechanics employed by the contractor, or any subcontractor, on the public buildings, should be not less than the prevailing rate of wages for work of a similar nature in the city, town, or other civil division of a State in which the public build[107]*107ings were located, and a further provision that in case any dispute should arise as to the prevailing rates of wages for work of a similar nature applicable to- the contract which could not be adjusted by the contracting officer the matter should be referred to the Secretary of Labor for determination and his decision thereon should be conclusive on ail the parties to the contract.

Plaintiff’s subcontractor for the demolition work commenced late in 1932 to pay his common laborers fifteen cents an hour, which he contended was the prevailing rate. Plaintiff thought that the rate should be higher and requested the Department of Labor to send a representative to fix the prevailing rate of wage to be paid under the contract. The Department of Labor did so and plaintiff and-this representative, after making an investigation and ascertaining that contractors in Philadelphia were paying from fifteen to twenty-five cents an hour, determined that twenty-five cents was the prevailing rate and posted that wage rate at the site of the work. Plaintiff and all its subcontractors paid this rate of wage until October 18, 1933. On June 16, 1933, the National Industrial Recovery Act, 48 Stat. 195, was approved. Until that time, and for sometime thereafter, nothing occurred which required that plaintiff give consideration to the matter of any increase in the rate of wages so determined to be the prevailing rate in that locality. After the enactment of the National Industrial Recovery Act the plain - tiff, as well as the other contractors, was asked by the Government to increase the wage rate for common labor to forty cents an hour. Plaintiff did not then agree to do this, its position being that its contract called for payment at the prevailing rate which had been established, and which it was paying, and that if the Government wished to so increase the cost of performance of the contract it should, bear the “inoreased cost”. The President’s Reemployment Agreement was issued July 27,1933, and sent to all employers and contractors and they were asked to sign it. This Reemployment Agreement provided in part as follows:

During the period of the President’s emergency reemployment drive, that is to say, from August 1 to December 31, 1933, or to any earlier- date of approval of [108]*108a Code of Fair Competition to which he is subject, the undersigned hereby agrees with the President as follows: * * * * *
(3) Not to employ any factory or mechanical worker or artisan more than a maximum week of 35 hours until December 31, 1933, but with the right to work a maximum week of 40 hours for any 6 weeks within this period; and not to employ any worker more than 8 hours in any 1 day. * * * t- *
(6) Not to pay any employee of the classes mentioned in paragraph (3) less than 40 cents per hour unless the hourly rate for the same class of work on July 15,1929, was less than 40 cents per hour, in which latter case not to pay less than the hourly rate on July 15, 1929, and in no event less than 30 cents per hour.

The Government did not agree to reimburse plaintiff for any wage increase that it had been asked to make and plaintiff did not sign the President’s Reemployment Agreement until January 19, 1934, which was shortly before the National Recovery Code for the Construction Industry was approved by the President on January 31, 1934, to become effective March 2, 1934. However, plaintiff, oil October 18, 1933, did increase the rate of wage being paid for common labor from the prevailing rate of twenty-five to thirty-five cents by reason of the conditions and circumstances existing and brought about by reason of the enactment and administration of the National Industrial Recovery Act, as set forth in more detail in the findings. When the plaintiff signed the Reemployment Agreement on January 19, plaintiff made a further increase in the rate of wage being paid for common labor from thirty-five to forty cents an hour, and that rate was thereafter paid until the contract was completed. Under the facts and circumstances disclosed in the findings, we are of opinion that these two wage increases represented, increased costs incurred as a result of the enactment of the National Industrial Recovery Act within the meaning of the act of June 25,1938, supra. All the facts of record combine to show that these wage increases were brought about and were caused by the enactment of the National Industrial Recovery Act and its administration in the locality where [109]*109the plaintiff was performing its contract for the defendant.

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McCloskey & Co. v. United States, 98 Ct. Cl. 90, 1942 U.S. Ct. Cl. LEXIS 32, 1942 WL 4461 (cc 1942).

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