STONE, C. J., dissenting.

328 U.S.

harbor workers any of the special rights or privileges conferred on seamen by the maritime law. In fact Congress, by the Longshoremen's Act, cut off from longshoremen and harbor workers the right extended to them by judicial construction of the Jones Act, 46 U. S. C. § 688, International Stevedoring Co. v. Haverty, 272 U. S. 50; Uravic v. Jarka Co., 282 U. S. 234, to enjoy the same right of recovery from the vessel or owner as seamen for negligent injuries sustained while working on navigable waters. Swanson v. Marra Brothers, ante, p. 1. While the Act gave to longshoremen and stevedores a right to compensation against their employer, it neither conferred upon nor withheld from them any rights of recovery for such injuries against third persons. It can hardly be said that the failure of Congress thus to enlarge the rights of longshoremen, so as to make them comparable to those of seamen, is a recognition of existing rights against third persons arising from the warranty of seaworthiness which no court has ever recognized* and which grows out of a status which longshoremen have never occupied.

There are no considerations of policy or practical need which should lead us, by judicial fiat, to do that which Congress, after a full study of the subject, has failed to do. Wherever the injury occurs on navigable waters, Congress has given to longshoremen and harbor workers substantial rights to compensation against their employer for in

*The two cases relied upon by the Circuit Court of Appeals do not lend support to its decision. In Cassil v. United States Emergency Fleet Corp., 289 F. 774, recovery was sought on the ground that the vessel was negligent, and the court merely said that there could be no claim against the vessel unless it was unseaworthy. The court seems to have assumed that a recovery for unseaworthiness could be had only if negligence was shown. See cases cited in Mahnich v. Southern S. S. Co., 321 U. S. 96, 100. In W. J. McCahan Co. v. Stoffel, 41 F.2d 651, a longshoreman was allowed recovery on the ground of negligence of one of the ship's employees.

85

STONE, C. J., dissenting.

juries inflicted without his fault. South Chicago Co. v. Bassett, 309 U. S. 251. It has left them free to pursue their remedy for injuries resulting from negligence of third parties, including in this case the vessel and the furnishers of the defective shackle. Where the injury occurs on land they are free to pursue the remedy afforded by local law. State Industrial Commission v. Nordenholt Corp., 259 U. S. 263; Smith & Son v. Taylor, 276 U. S. 179; Swanson v. Marra Brothers, ante, p. 1. There would seem to be no occasion for us to be more generous than Congress has been by presenting to them paid-up accident insurance policies at the expense of a vessel by which they have not been employed, and which has not failed in any duty of due care toward them. Apparently under the decision now rendered the maritime worker employed by a vessel on navigable waters, but not a member of the crew, would enjoy rights of recovery not accorded to members of the crew. For he would be entitled to indemnity upon the warranty of seaworthiness as are members of the crew and also to the benefits of the Longshoremen's and Harbor Workers' Act from which members of the crew are excluded. See South Chicago Co. v. Bassett, supra, 255–6.

Nor is the rule now announced to be justified as a modern and preferred mode of distributing losses inflicted without fault. Congress, in adopting the Longshoremen's Act, has chosen the mode of distribution in the case of longshoremen and harbor workers. By 33 U. S. C. § 901 et seq. it has given to them compensation for their injuries, irrespective of fault. Section 933 provides that if a stevedore entitled to compensation elects to recover damages against a third person, the employer must pay as compensation a sum equal to the excess of the amount which the commission determines is payable on account of the injury over the amount recovered against the third person.

The whole philosophy of liability without fault is that losses which are incidental to socially desirable conduct should be placed on those best able to bear them. Congress has made a determination that the employer is best able to bear the loss which, in this instance, could not be avoided by the exercise of due care. This is an implied determination which should preclude us from saying that the ship owner is in a more favorable position to absorb the loss or to pass it on to society at large, than the employer.

D. A. SCHULTE, INC. v. GANGI ET AL.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.

No. 517. Argued March 1, 1946.-Decided April 29, 1946.

1. An employer can not be relieved from liability for liquidated damages under § 16 (b) of the Fair Labor Standards Act by a compromise or settlement of a bona fide dispute as to the coverage of the Act. P. 114.

2. The purpose of the Fair Labor Standards Act-to secure a subsistence wage for low-income workers-requires that neither wages nor the damages for withholding them be reducible by compromise of controversies over coverage. Pp. 116-118, 121. 3. Maintenance employees of a building the occupants of which receive, work on and return in intrastate commerce goods belonging to non-occupants who subsequently in the regular course of their business ship substantial proportions of the occupants' products to other States, held covered by the Fair Labor Standards Act. P. 120.

4. The burden of proof that rests upon employees to establish that they are engaged in the production of goods for commerce, within the coverage of the Fair Labor Standards Act, must be met by evidence in the record. P. 120.

5. In determining whether employees are engaged in the "production of goods for commerce," within the meaning of the Fair Labor Standards Act, it is sufficient that, from the circumstances of production,

a trier of fact may reasonably infer that the employer has reasonable grounds to anticipate that his products will move in interstate commerce. Walling v. Jacksonville Paper Co., 317 U. S. 564, distinguished. Pp. 119, 121.

6. Mere separation of the economic processes of production for commerce between different industrial units, even without any degree of common ownership, does not destroy the continuity of production for commerce. P. 121.

150 F.2d 694, affirmed.

Respondent, suing on behalf of himself and other employees similarly situated, brought suit against his employer to recover liquidated damages under § 16 (b) of the Fair Labor Standards Act. The District Court held that the liability of the employer had been validly released. 53 F. Supp. 844. The Circuit Court of Appeals reversed. 150 F. 2d 694. This Court granted certiorari. 326 U. S. 712. Affirmed, p. 121.

Edwin A. Falk argued the cause for petitioner. With him on the brief was Abraham Friedman.

Isidore Entes argued the cause and filed a brief for respondent.

Solicitor General McGrath, William S. Tyson, Bessie Margolin and Joseph M. Stone filed a brief for the Administrator of the Wage and Hour Division, United States Department of Labor, as amicus curiae, urging affirmance.

MR. JUSTICE REED delivered the opinion of the Court.

The issues brought to this Court by this proceeding arise from a controversy concerning overtime pay and liquidated damages under the Fair Labor Standards Act of 1938. Under § 7 (a), the employer is required to pay for

Opinion of the Court.

328 U.S.

excess hours of work not less than one and one-half times the regular rate.' An employer who violates this subsection is liable to his injured employees in the amount due and unpaid and in an additional equal amount as liquidated damages.2

The primary issue presented by the petition for certiorari is whether the Fair Labor Standards Act precludes a bona fide settlement of a bona fide dispute over the coverage of the Act on a claim for overtime compensation and liquidated damages where the employees receive the overtime compensation in full. As the conclusion of the Circuit Court of Appeals on this issue in this case conflicts with that of the Fourth Circuit in Guess v.

1 52 Stat. 1063:

"SEC. 7. (a) No employer shall . . . employ any of his employees who is engaged in commerce or in the production of goods for commerce-[longer than the maximum workweek]

unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed."

2 52 Stat. 1069:

3

"SEC. 16. (b) Any employer who violates the provisions of section 6 or section 7 of this Act shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for and in behalf of all employees similarly situated. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action."

3 Gangi v. D. A. Schulte, 150 F. 2d 694. See also Fleming v. Warshawsky & Co., 123 F. 2d 622, 626.