General statement as to the effect of the Portal-to-Portal Act of 1947 on the Fair Labor Standards Act of 1938

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General statement as to the effect of the Portal-to-Portal Act of 1947 on the Fair Labor Standards Act of 1938
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Interpretive bulletin.
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November 1947.

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(INTERPRETATIVE BULLETIN)



General Statement as to the Effect of the

Portal-to-Portal Act of 1947

on the

Fair Labor Standards Act of 1938



Title 29, Chapter V, Code of Federal Regulations
Part 790



NOVEMBER 1947'


UNITED STATES DEPARTMENT OF LABOR
WAGE AND HOUR DIVISION
OFFICE OF %THE ADMINISTRATOR


1Published in the Federal Register November 18, 1947.


I-











UNITED STATES DEPARTMENT OF LABOR

WAGE AND HOUR DIVISION

WASHINGTON, D. C.

GENERAL STATEMENT AS TO THE EFFECT OF THE
PORTAL-TO-PORTAL ACT OF 1947 ON THE FAIR LABOR
STANDARDS ACT OF 1938*

TABLE OF CONTENTS
GENERAL: Page
Sec. 790.1. Introductory statement----------_-------------------
Sec. 790.2. Interrelationship of the two acts -------------------- 2
PROVISIONS RELATING TO CERTAIN ACTIVITIES ENGAGED IN BY EMPLOYEES
ON OR AFTER MAY 14, 1947:
Sec. 790.3 Provisions of the statute --------------------------.-- 4
Sec. 790.4. Liability of employer; effect of contract, custom, or
practice ---------------------------------------------__---- 4
Sec. 790.5. Effect of Portal Act on determination of hours worked._ 6
Sec. 790.6. Periods within the "workday" unaffected_ ------------ 7
Sec. 790.7. "Preliminary" and "postliminary" activities----_______ 9
Sec. 790.8 "Principal" activities-_-------------'--_------------ 11
Sec. 790.9. "Compensable by an express provision of a written or
nonwritten contract" ..---------. .----------------.------_ 13
Sec. 790.10. "Compensable by a custom or practice" 14
Sec. 790.11. Contract, custom, or practice in effect "at the time of
such activity"-------------------------- ------- ----- 16
Sec. 790.12. "Portion of the day" -------------------------------- 16
DEFENSE OF GOOD FAITH RELIANCE ON ADMINISTRATIVE REGULATIONS.
ETC.
Sec. 790.13. General nature of defense ------ ---------------_ 17
Sec. 790.14. "In conformity with" --------------------------------
Sec. 790.15. "Good faith" _--_-_- --- ------------------------- 19
Sec. 790.16. "In reliance on"-------- ------------------------ 21
Sec. 790.17. "Administrative regulation, order, rLilim-I, approval, or
interpretation" --- ---_------ ------ --- ------------- -- 21
Sec. 790.18. "Administrative practice or enforcement policy" ----_ 24
Sec. 790.19. "Agency of the Uniied States" --------------------- 26
RESTRICTIONS AND LIMITATIONS ON EMPLOYEE SUITS:
Sec. 790.20. Right of employees to sue; restrictions on representative
actions.--------------------------------------------__ 28
Sec. 790.21. Time.for bringing employee suits--------------------- 28
Sec. 790.22. Discretion of court as to assessment of liquidated
damages ---------------------------------------------------- 30
PROVISIONS RELATING TO CERTAIN ACTIVITIES EN ACIDD IN BY EMPLOYEES
BEFORE MAY 14, 1947:
Sec. 790.23. Liability of employer; effect of contract, custom, or
practice------------------------------------------------ 31
Sec. 790.24. Effect of Portal Act on determination of hours worked
prior to May 14, 1947 -------------------------------------- 32
Sec. 790.25. Jurisdiction of courts limited as to wage claims for periods
prior to May 14, 1947------------- ------------------------- 33
See. 790.26. Prohibition of assignments......-----.......--- ....... 34
See. 790.27. Compromise of claims existing prior to May 14, 1947_.. 34
Sec. 790.28. Waiver of right to liquidated damages. ---------_---- 36
Sec. 790.29. "Area of production" exemption prior to December 26,
1946 ----------------------------------------- 37

*Part 790 of Title 29. Chapter V, Subchapter B, Code of Federal Register. Published
in the Federal Register November 18, 1947.














GENERAL


SECTION 790.1. INTRODUCTORY STATEMENT

(a) The Portal-to-Portal Act of 1947 was approved May 14, 1947.'
It contains provisions which, in certain circumstances, affect the rights
and liabilities of employees and employers with regard to alleged un-
derpayments of minimum or overtime Wvages under the provisions of
the Fair Labor Standards Act of 1938,2 the Walsh-Healey Public Con-
tracts Act, and the Bacon-Davis Act. The Portal Act also establishes
time limitations for the bringing of certain actions under these three
acts, limits the jurisdiction of the courts with respect to certain claims,
and in other respects affects employee suits and proceedings under
these acts.
(b) It is the purpose of this bulletin to outline and explain the major
provisions of the Portal Act as they affect the application to employers
and employees of the provisions of the Fair Labor Standards Act.
The effect of the Portal Act in relation to the Walsh-Healey Act and
the Bacon-Davis Act is not within the scope of this bulletin, and is not
discussed herein. Many of the provisions of the Portal Act do not
apply to claims or liabilities arising out of activities engaged in after
the enactment of the act. These provisions are not discussed at length
herein,3 because the primary purpose of this bulletin is to indicate the
effect of the Portal Act upon the future administration and enforce-
ment of the Fair Labor Standards Act, with which the Administrator
of the Wage and Hour Division is charged under the law. The discus-
sion of the Portal Act in this bulletin is therefore directed principally
to those provisions that have to do with the application of the Fair
Labor Standards Act on or after May 14,1947.
(c) The correctness of an interpretation of the Portal Act, like the
correctness of an interpretation of the Fair Labor Standards Act, can
be determined finally and authoritatively only by the courts. It is
necessary, however, for the Administrator to reach informed conclu-
sions as to the meaning of the law in order to enable him to carry out
his statutory duties of administration and enforcement. It would
An act to relieve employers from certain liabilities and punishments under the Fair
Labor Standards Act of 1938, as amended, the Walsh-Healey Act, and the Bacon-Davis
Act. and for other purposes. Public Law No. 49, 80th Cong., ch. 52, 1st sess.
For the sake of brevity, this act is referred to in the following discussion as the Portal
Act.
S52 Stat. 1060: 29 U. S. C. 201 et seq. In the Fair Labor Standards Act, the Congress
exercised its power over interstate commerce to establish basic standards with respect to
minimum and overtime wages and to bar from interstate commerce goods In the production
of which these standards were not observed. For the nature of liabilities under this act,
see footnote 17.
Secs. 790.23 through 790.29 of this bulletin discuss briefly those provisions of the Portal
Act which affect the operation or enforcement of the Fair Labor Standards Act only with
respect to activities engaged in by employees before May 14. 1947. Since the so-called
"good-faith defense" against past claims Is considered incidentally in the discussion of the
similar provisions for the future, no separate discussion of this provision is included in
these sections.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


seem desirable also that he make these conclusions known to persons
affected by the law.4 Accordingly, as in the case of the interpretative
bulletins previously issued on various provisions of the Fair Labor
Standards Act, the interpretations set forth herein are intended to
indicate the construction of the law which the Administrator believes
to be correct5 and which will guide him in the performance of his
administrative duties under the Fair Labor Standards Act, unless and
until he is directed otherwise by authoritative rulings of the courts or
concludes, upon reexamination of an interpretation, that it is incor-
rect. As the Supreme Court has pointed out, such interpretations
provide a practical guide to employers and employees as to how the
office representing the public interest in enforcement of the law will
seek to apply it." As has been the case iii the past with respect to
other interpretative bulletins, the Administrator will receive and
consider statements suggesting change of any interpretation contained
herein.

SECTION 790.2. INTERRELATIONSHIP OF THE Two ACTS

(a) The effect on' the Fair Labor Standards Act of the various
provisions of the Portal Act must necessarily be determined by viewing
the two acts as interrelated parts of the entire statutory scheme for the
establishment of basic fair labor standards.7 The Portal Act contem-
plates that employers will be relieved, in certain circumstances, from
liabilities or punishments to which they might otherwise be subject
under the Fair Labor Standards Act.8 But the act makes no express
change in the national policy, declared by Congress in section 2 of
the Fair Labor Standards Act, of eliminating labor conditions "detri-
mental to the maintenance of the minimum standard of living neces-
sary for health, efficiency, and general well-being of workers." The
legislative history indicates that the Portal Act was not intended to
change this general policy.9 The Congressional declaration of policy

4 See S1kidmorfr v. Swift & Co., 323 U. S. 134; Kirschbaum Co. v. Walling, 316 U. S. 517;
Portal-to-Portal Act, sec. 10.
5 The interpretations expressed herein are based on studies of the intent, purpo,,e, and
interrelationship of the Fair Labor Standards Act and the Portal Act as evidenced by
their language and legislative history, as well as on decisions of the courts establishing
legal principles believed to be applicable in Interpreting the two acts. These interpreta-
tions have been adllipted by the Administrator after du. consideration of relevant knowledge
and experience gained in the administration of the Fair Labor Standards Act of 1938 and
after consu station with the Solicitor of Labor.
o.,ki'imorc v. Swift & Co., 323 U. S. 134. See also Roland Electrical Co. v. Walling. 326
U. S. 657; United States v. American Trucking Assn., 310 U. S. 534; Overnight Motor
Transp. Co. v. Mis.,'il. 316 U. S. 572.
7 As arpwars more fully in the following sections of this bulletin, the several provisions
of the Portal Act relate, in pertinent part, to actions, causes of action, lialbilities, or pun-
ishments based on the nonpayment by employers to their employees of minimum or over-
time wages unlde the provisions of the Fair Labor Standards Act. Sec. 13 of the Portal
Act prov-ides that the terms "employer." "eiupuloyee," and ''wage," when used in the Portal
Act. in relation to the Fair Labor Standards Act, have the same meaning as when used
in the latter act.
SPortal Act, sees. 1, 2, 4, 6, 9, 10, 11, 12.
Sponsors of the legislation asserted that the prnrvisions of the Portal Act do not deprive
any person of a contract right or other right which he may have under the common law
or under a State statute. See colloquy between Senators Donnell. Hatch, and Ferguson,
1947 Cong. Rec. 2168; colloquy between Senators Donnell and Ferguson. 1947 Cong. Rec.
2198; statement of Representative Gwynne. 1947 Cong. Rec. 1014.
9See references to this policy at p. 5 of the Senate Committee Report on the bill (S.
Rent. 48, 80th Cong., 1st sess.), and in statement of Senator Donnell, 1947 Cong. Rec.
2231 ; see also statement of Senator Morse, 1947 Cong. Rec. 2349; statement of Repre-
sentative Walter, 1947 Cong. ecc. 4514.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


in section 1 of the Portal Act is explicitly directed to the meeting of the
existing emergency and the correction, both retroactively and prospec-
tively, of existing evils referred to therein." Sponsors of the legisla-
tion in both Houses of Congress asserted that it "in no way repeals the
minimum wage requirements and the overtime compensation require-
ments of the Fair Labor Standards Act," that it "protects the
legitimate claims" under that act,12 and that one of the objectives of
the sponsors was to "preserve to the worker the rights he has gained
under the Fair Labor Standards Act."'3 It would therefore appear
that the Congress did not intend by the Portal Act to change the gen-
eral rule that the remedial provisions of the Fair Labor Standards Act
are to be given a liberal interpretation and exemptions therefrom are
to be narrowly construed and limited to those who can meet the burden
of showing that they come "plainly and unmistakably within [the]
terms and spirit" of such an exemption.15
(b) It is clear from the legislative history of the Portal Act that
the major provisions of the Fair Labor Standards Act remain in
full force and effect, although the application of some of them is
affected in certain respects by the 1947 act. The provisions of the
Portal Act do not directly affect the provisions of section 15 (a) (1)
of the Fair Labor Standards Act banning shipments in interstate
commerce of "hot" goods produced by employees not paid in accord-
ance with the act's requirements, or the provisions of .section 11 (c)
requiring employers to keep records in accordance with the regula-
tions prescribed by the Administrator. The Portal Act does not
affect in any way the provision in section 15 (a) (3) banning dis-
crimination against employees who assert their rights under the Fair
Labor Standards Act, or the provisions of section 12 (a) of the act
banning from interstate commerce goods produced in establishments
in or about which oppressive child labor is employed. The effect
of the Portal Act in relation to the minimum and overtime wage
requirements of the Fair Labor Standards Act is considered herein
in connection with the discussion of specific provisions of the 1947
act.
'~ Cf. H. Rept. No. 71 ; S. Rept. No. 48; H. (Conf.) Rept. No. 326, 80th Cong., 1st sess.
(referred to hereafter as House Report, Senate Report, and Conference Report) state-
ment of Representative Michener, 1947 Cong. Rec. 4516; statement of Senator W'iley, 1947
Cong. Rec. 4398; statement of Representative Gwvnne. 1947 Cong. Rec. 1629; statements
of Senator Donnell. 1947 Conu. Rec. 2204-2206, 2251-2252; statement of Representative
Robslon, 1947 Cong. Rec. 1553; Message of the President to Congress, May 14, 1947, on
approval of the act.
"' Statements of Senator Wiley. explaining the conference agreement to the Senate, 1947
Cong. Rec. 4398 and 4501. See also statement of Senator Cooper, 1947 Cong. Rec. 2373;
statement of Representative Robsion. 1947 Cong. Rec. 1553.
2 Statement of Representative Michener, explaining the conference agreement to the
House of Representatives, 1947 Cong. Ree. 4516. See also statement of Representative
Keating, 1947 Cong. Ree. 1566.
SStatement of Senator Cooper, 1947 Cong. Rec. 2378. See also statements of Senator
Donnell, 1947 Cong. Rec. 2439. 2440, 2442; statements of Representatives Walter and
Robsion, 1947 Cong. Rec. 1550. 1552.
Roland Electrical Co. v. Walling, 326 U. S. 657; United States v. Rosenwasser, 323
U. S. 360; Brooklyn Savings Bank v. O'Neil, 324 U. S. 697.
5 See A. H. Phillips Co. v. Walling, 324 U. S. 490; Walling v. General Industries Co.,
330 U. S. 545.








EFFECT OF PORTAL-TO-PORTAL ACT, 1947


PROVISIONS RELATING TO CERTAIN ACTIVITIES
ENGAGED IN BY EMPLOYEES ON OR AFTER MAY
14, 1947
SECTION 790.3. PROVISIONS OF THE STATUTE

Section 4 of the Portal Act, which relates to so-called "portal-to-
portal" activities engaged in by employees on or after May 14, 1947,
provides as follows:
(a) Except as provided in subsection (b), no employer shall be subject to
any liability or punishment under the Fair Labor Standards Act of 1938, as
amended, on account of the failure of such employer to pay an em-
ployee minimum wages, or to pay an employee overtime compensation, for or
on account of any of the following activities of such employee engaged in on
or after the date of the enactment of this act-
(1) walking, riding, or traveling to and from the actual place of per-
formance of the principal activity or activities which such employee is
employed to perform, and
(2) activities which are preliminary to or postliminary to said principal
activity or activities,
which occur either prior to the time on any particular workday at which such
employee commences, or subsequent to the time on any particular workday
at which he ceases, such principal activity or activities.
(b) Notwithstanding the provisions of subsection (a) which relieve an em-
ployer from liability and punishment with respect to an activity, the employer
shall not be so relieved if such activity is compensable by either-
(1) an express provision of a written or nonwritten contract in effect,
at the time of such activity, between such employee, his agent, or collective-
bargaining representative and his employer; or
(2) a custom or practice in effect, at the time of such activity, at the
establishment or other place where such employee is employed, covering
such activity, not inconsistent with a written or nonwritten contract, in
effect at the time of such activity, between such employee, his agent, or
collective-bargaining representative and his employer.
(c) For the purpose of subsection (b), an activity shall be considered as
compensable under such contract provision or such custom or practice only when
it is engaged in during the portion of the day with respect to which it is so made
cormpionsallile.
(d) In the application of the minimum-wage and overtime-compensation pro-
visions of the Fair Labor Standards Act of 1938, as amended, in
determining the time for which an employer emphys an employee with respect
to walking, riding, traveling, or other preliminary or postliminary activities
described in subsection (a) of this section, there shall be counted all that time,
but only that time, during which the employee engages in any such activity
which is compensable within the meaning of subsections (b) and (c) of this
section.

SECTION 790.4. LIABILITY OF EMiPLOEYER; EFFECT OF CONTRACT, CUSTOM,
OR PRACTICE

(a) Section 4 of the Portal Act, quoted above, applies to situations
where an employee, on or after May 14, 1947, has engaged in activities
of the kind described in this section and has not been paid for or on
account of these activities in accordance with the statutory standards
established by the Fair Labor Standards Act.16 Where, in these cir-
M The Fair Labor Standards Act requires payment of a minimum wage of not less than
40 cents an hour for all hours worked (except to certain learners, apprentices, handicapped
workers, and messengers, and in certain industries in Puerto Rico and the Virgin Islands).
and overtime compensation for all hours worked in excess of 40 in a workweek at a rate
not less than one and one-half times the employee's regular rate of pay.







'EFFECT OF PORTAL-TO-PORTAL ACT, 1947


cumstances, such activities are not compensable by contract, custom,
or practice as described in section 4, this section relieves the employer
from certain liabilities or punishments to which he might otherwise
be subject under -the provisions of the Fair Labor Standards Act.17
The primary congressional objectives in enacting section 4 of the
Portal Act, as disclosed by the statutory language and legislative
history, were (1) to minimize uncertainty as to the liabilities of em-
ployers'which it was felt might arise in the future if the compensability
under the Fair Labor Standards Act of such preliminary or post-
liminary activities should continue to be tested solely by existing
criteria18 for determining compensable worktime, independently ot
contract, custom, or practice; 19 and (2) to leave in effect, with respect
to the workday proper, the interpretations by the courts and the
Administrator of the requirements of the Fair Labor Standards Act
with regard to the compensability of activities and time to be included
in computing hours worked.20
(b) Under section 4 of the Portal Act, an employer who fails to pay
an employee minimum wages or overtime compensation for or on ac-
count of activities engaged in by such employee is relieved from liabil-
ity or punishment therefore if, and only if, such activities meet the fol-
lowing three tests:
(1) They constitute "walking, riding, or traveling" of the kind
described in the statute, or other activities "preliminary" or "post-
liminary" to the "principal activity or activities" which the em-
ployee is employed to perform; and
(2) They take place before or after the performance of all the
employee's "principal activities" in the workday; and
(3) They are not compensable, during the portion of the day
when they are engaged in, by virtue of any contract, custom, or
practice of the kind described in the statute.
(c) It will be observed that section 4 of the Portal Act relieves an
employer of liability or punishment only with respect to activities of
the kind described, which have not been made compensable by a con-
tract or by a custom or practice (not inconsistent with a contract) at
the place of employment, in effect at the time the activities are per-
11The failure of an employer to compensate employees subject to the Fair Labor Stand-
ards Act in accordance with its minimum wage and overtime requirements makes him
liable to them for the amount of their unpaid minimum wages and unpaid overtime com-
pensation, together with an additional equal amount subjectt to sec. 11 of the Portal-to-
Portal Act, discussed below in sec. 790.22) as liquidatpd damages (see. 16 (b) of the act);
and, if his act or omission is willful, subjects him to criminal penalties (sec. 16 (a) of the
act). Civil actions for injunction can be brought by the Administrator secss. 11 (a) and
17 of the act).
18 Employees subject to the minimum and overtime wage provisions of the Fair Labor
Standards Act have been held to be entitled to compensation in accordance with the
statutory standards, regardless of contrary custom or contract, for all time spent during
the workweek in "physical or mental exertion (whether burdensome or not), controlled
or required by the employer and pursued necessarily and primarily for the benefit of the
employer and his business" (Tennessee Coal, Iron & R. R. Co. v. Muscoda Local, 321 U. S.
590, 5981, as well as for all time spent in active or inactive duties which such employees
are engaged to perform (Armour & Co. V. Wantock, 323 U. S. 126, 132-134; Skidmore v.
Bwift & Co., 323 U. S. 134, 136-137).
Portal Act, sec. 1 ; Senate Report, pp. 41, 42, 46-49; Conference Report, pp. 12, 18;
statements of Senator Wiley. 1947 Cong. Rec. 4154. 4398; statements of Senator Donnell,
1947 Cong. Rec. 2159, 2192, 2193, 2255, 2256, 2440, 2441; statements of Senator Cooper,
1947 Cong. Rec. 2370-2377.
Senate Report, pp. 46-49: Conference Report, pp. 12, 13; statements of Senator
Donnell. 1947 Cong. Rec. 2255. 2256, 2440; statements of Senator Cooper, 1947 Cone.
Rec. 2371, 2374, 2375, 2376-2377, 2378; statement of Representative Gwynne, 1947
Cong. Rec. 4513; Statements of Senator Wiley, 1947 Cong. Rec. 2154, 4398.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


formed. The statute states that "the employer shall not be so relieved"
if such activities are so compensable; 21 it does not matter in such a
situation that they are so-called portal-to-portal activities.22 Accord-
ingly, an employer who fails to take such activities into account in
paying compensation to an employee who is subject to the Fair Labor
Standards Act is not protected from liability or punishment in either
of the following situations:
(1) Where, at the time such activities are performed there is a con-
tract, whether written or not, in effect between the"employer and the
employee (or the employee's agent or collect ive-bargaining represent-
ative), and by an express provision of this contract the activities are
to be paid for; 2 or
(2) Where, at the time such activities are performed, there is in
effect at the place of employment a custom or practice to pay for such
activities, and this custom or practice is not inconsistent with any ap-
plicable contract between such parties.24
In applying these principles, it should be kept in mind that under
the provisions of section 4 (c) of the Portal-to-Portal Act, "prelim-
inary" or "postliminary" activities which take place outside the work-
day "before the morning whistle" or "after the evening whistle" are,
for purposes of the statute, not to be considered compensable by a con-
tract, custom, or practice if such contract, custom, or practice makes
them compensable only during some other portion of the day.5

SECTION 790.5. EFFECT OF PORTAL-TO-PORTAL ACT ON DETERMINATION
OF HOURS WORKED

(a) In the application of the minimum-wage and overtime-com-
pensation provisions of the Fair Labor Standards Act to activities of
employees on or after May 14, 1947, the determination of hours worked
is affected by the Portal Act only to the extent stated in section 4 (d).
This section requires that--
in determining the time for which an employer employs an employee with respect
to walking, riding, traveling, or other preliminary or postliminary activities de-
scribed [in sec. 4 (a)] there shall be counted all that time, but only that time,
during which the employee engages in any such activity which is compensable
[under contract, custom, or practice within the meaning of sec. 4 (b), (c)]."
This provision is thus limited to the determination of whether time
spent in such "prclirminary"' or "po.tliin;iiary" activities, performed
before or after the employee's "principal aclilvitie." for the workday 27
must be included or excluded in computing time worked.28 If time
spent in such an activity would be time worked within the meaning of
the Fair Labor Standards Act if the Portal Act had not been enacted,29
21 Sec. 4 (b) of the act (quoted in sec. 790.3, above).
22 Cu(',t'rpnce.' RKort. pi'. 12, 13; colloquy between Senators Donnell and Hawkes, 1947
Cong. Rec. 2255-2256 colloquy between Senators Cooper and McGrath. 1947 Cong. Rec.
237(;. Cf. colloquy betmwien Senntors Donnell and HFnwkes. 1947 Cong. Rec. 2253.
a Statements of Senator Donnell, 1947 Cong. Rec. 2253, 2255, 2256; statements of
Senator Cooper. 1947 Cong. Rec. 2374, 2376.
Statements of Senator Dounnll, 1947 Cong. Rec. 2255, 2256.
2 Conference Report, pp. 12,13. See also see. 790.12, below.
2s The full text of sec. 4 of the act is set forth in sec. 790.3 of this bulletin.
See infra, sec. 790.6.
See. 4 (d) makes plain that subsecs. (b) and (c) of sec. 4 likewise apply only to such
activities.
28 COnference Report, p. 13.
2* See footnote 18.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


then the question whether it is to be included or excluded in computing
hours worked under the law as changed by this provision depends on
the compensability of the activity under the relevant contract, custom,
or practice applicable to the employment. Time occupied by such an
activity is to be excluded in computing time worked, if, when the
employee is so engaged, the activity is not compensalle by a contract,
custom, or practice within the meaning of section 4; otherwise it must
be included as worktime in calculating minimum or overtime wages
due.30 Employers are not relieved of liability for the payment of
minimum wages or overtime compensation for any time during which
an employee engages in such activities thus compensable by contract,
custom, or practice.83 But where, apart from the Portal Act, time
spent in such an activity would not be time worked within the meaning
of the Fair Labor Standards Act, although made compensable by con-
tract, custom, or practice such compensability will not make it time
worked under section 4 (d) of the Portal Act.
(b) The operation of section 4 (d) may be illustrated by the com-
mon situation of underground miners who spend time in traveling
between the portal of the mine and the working face at the beginning
and end of each workday. Before enactment of the Portal Act, time
thus spent constituted hours worked. Under the law as changed by the
Portal Act, if there is a contract between the employer and the miners
calling for payment for all or a part of this travel, or if there is a
custom or practice to the same effect, of the kind described in section 4,
the employer is still required to count as hours worked, for purposes
of the Fair Labor Standards Act, all of the time spent in the travel
which is so made compensable.32 But if there is no such contract,
custom, oi practice, such time will be excluded in computing work ime
for purposes of the Act. And under the provisions of section 4 (c)
of the Portal Act,33 if a contract, custom, or practice of the kind de-
scribed makes such travel compensable only during the portion of the
day before the miners arrive at the working face and not during the
portion of the day when they return from the working face to the
portal of the mine, the only time spent in such travel which the em-
ployer is required to count as hours worked will be the time spent in
traveling from the portal to the working face at the beginning of the
workday.
SECTION 790.6. PERIODS WITHIN THE "WORKDAY" UNAFFECTED
(a) Section 4 of the Portal Act does not affect the compu.ta.tio.n of
hours worked within the "workday" proper-roughly described as the
period "from whistle to whistle"-and its provisions have nothing to
do with the compensability under the Fair Labor Standards Act of
any activities engaged in by an employee during that period.34 Under
so See Conference Report. pp. 10, 13.
Conference Report, p. 10.
3 Cf. colloquies between Senators Donnell and Hawkes, 1947 Cong. Rec. 2253, 2255, 2256;
colloquy between Senators Ellender and Cooper, 1947 Cong. Rec. 2374; colloquy between
Senators McGrath and Cooper, 1947 Cong. Rec. 2376. See also S. Rept., p. 48.
33 See sees. 790.3 and 790.12 of this bulletin; Conference Report, pp. 12, 13. See also
Senate Report, p. 48.
4 The report of the Senate Judiciary Committee states (p. 47), "Activities of an employee
which take place during the workday are not affected by this section (sec. 4 of
the Portal-to-Portal Act, as finally enacted) and such activities will continue to be com-
pensable or.not without regard to the provisions of this section."
767134"-47-- 2







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


the provisions of section 4, one of the conditions that must be present
before "preliminary" or "postliminary" activities are excluded from
hours worked is that they "occur either prior to the time on any par-
ticular workday at which the employee commences, or subsequent to
the time on any particular workday at which he ceases" the principal
activity or activities which he is employed to perform. Accordingly,
to the extent that activities engaged in by an employee occur after the
employee commences to perform the first principal activity on a par-
ticular workday and before he ceases the performance of the last prin-
cipal activity on a particular workday, the provisions of that section
have no application. Periods of time between the commencement of
the employee's first principal activity and the completion of his last
principal activity on any workday must be included in the computation
of hours worked to the same extent as would be required if the Portal
Act had not been enacted.35 The principles for determining hours
worked within the "workday" proper will continue to be those estab-
lished under the Fair Labor Standards Act without reference to the
Portal Act,3 which is concerned with this question only as it relates
to time spent outside the "workday" in activities of the kind described
in section 4.37
(b) "Workday" as used in the Portal Act means, in general, the
period between the commencement and completion on the same work-
day of an employee's principal activity or activities. It includes all
time within that period whether or not the employee engages in work
throughout all of that period. For example, a rest period or a lunch
period is part of the "workday," and section 4 of the Portal Act there-
fore plays no part in determining whether such a period, under the
particular circumstances presented, is or is not compensable, or whether
it should be included in the computation of hours worked.38 If an
employee is required to report at the actual place of performance of
his principal activity at a certain specific time, his "workday" com-
mences at the time he reports there for work in accordance with the
employer's requirement, even though through a cause beyond the
employee's control, he is not able to commence performance of his
productive activities until a later time. In such a situation, the time
spent waiting for work would be part of the workday,39 and section 4
of the Portal Act would not affect its inclusion in hours worked for
purposes of the Fair Labor Standards Act.
3 See Senate Report, pp. 47, 48; Conference Report. p. 12; statement of Senator Wiley,
explnining the conference agreement to the S.nnate. 31147 Cong. Rec. 4395 (also 2154. 2155) ;
Statemnint of cRpresentative Gwynne, explaining the conference agreement to the House
of Representatives, 1947 Cong. Rec. 4513; statements of Senator Cooper. 1947 Cong. Ree.
2371, 2374-2377; statimrints of Senator Donnell, 1947 Cong. Rec. 2255. 225i. 24-40.
36 See, in this connection, statements of Senator Cooper. 1947 Conc. Ree. 2373-2374,
237;-2377; statements of Senator Donnell, 1947 Cong. Rec. 2255-225i'. 2440: statement
of Senator Wiley, explaining the conference agreement to the Senate, 19-17 Cong. Rec. 4398.
See also footnote 18, suprn.
The deterrminntion of hours worked under the Fair Labor Standards Act is the subject of
a separate interpretative bulletin, No. 13, which will be republished in revised form as
Part 785 of Title 29, Chapter V, Code of Federal Ripulntions.
87 See statement of Senator Wiley, explaining the conference agreement to the Senate,
1947 Cong. Rec. 4398. See also the discussion below in sees. 790.7 and 790.8 of this
bulletin.
v Senate Report. pp. 47, 48. Cf. statement of Senator Wiley explaining the conference
agreement to the Senate, 1947 Cong. Rec. 4398: statements of Senator Donnell, 1947 Cong.
Rec. 2440; statements of Senator Cooper, 1947 Cong. Rec. 2375-76.
9 Colloquy between Senators Cooper and McGrath, 1947 Cong. Rec. 2375, 2376.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947 9

SECTION 790.7. "PRELIMIINARY" AND "POSTLIMINARY" ACTIVIES
(a) Since section 4 of the Portal Act applies only to situations where
employees engaged in "preliminary" or postliminary" activities out-
side the workday proper, it is necessary to consider what activities fall
within this description. The fact that an employee devotes some of
his time to an activity of this type is, however, not a sufficient reason
for disregarding the time devoted to such activity in computing hours
worked. If such time would otherwise be counted as time worked
under the Fair Labor Standards Act, section 4 may not change the
situation. Whether such time must be counted or may be disregarded,
and whether the relief from liability or punishment afforded by section
4 of the Portal Act is available to the employer in such a situation, will
depend on the compensability of the activity under contract, custom, or
practice within the meaning of that section.40 On the other hand,
the criteria described in the Portal Act have no bearing on the com-
pensability or the status as worktime under the Fair Labor Standards
Act of activities that are not "preliminary" or "postliminary" activi-
ties outside the workday proper.41 And even where there is a contract,
custom, or practice to pay for time spent in such a "preliminary" activ-
ity, section 4 (d) of the Portal Act does not make such time hours
worked under the Fair Labor Standards Act if it would not be so
counted under the latter act alone.42
(b) The words "preliminary activity" mean an activity engaged in
by an employee before the commencement of his "principal" activity
or activities, and the words "postliminary activity" mean an activity
engaged in by an employee after the completion of his "principal"
activity or activities. No categorical list of "preliminary" and "post-
liminary" activities except those named in the Act can be made, since
activities which under one set of circumstances may be "preliminary"
or "postliminary" activities, may under other conditions be "principal"
activities. The following "preliminary" or "postliminary" activities
are expressly mentioned in the act:
Walking, riding, or traveling to or from the actual place of performance of the
principal activity or activities which [the] employee is employed to perform.3
(c) The statutory language and the legislative history indicate that
the "walking, riding, or traveling" to which section 4 (a) refers is
that which occurs, whether on or off the employer's premises, in the
course of an employee's ordinary daily trips between his home or
lodging and the actual place where he does what he is employed to
do. It does not, however, include travel from the place of perform-
ance of one principal activity to the place of performance of another,
nor does it include travel during the employee's regular working
40 See Conference Report, pp. 10, 12, 13; statements of Senator Donnell, 19-17 Cong. Roc.
2253, 2255, 2256; statements of Senator Cooper, 1947 Cong. Ree. 2374, 2376. See also
sees. 790.4 and 790.5 above.
41 See Conference Report, p. 12; Senate Report, pp. 47, 48; statement of Senator Wiley,
explaining the conference agreement to the Senate, 1947 Cong. Rec. 4398; statement of
Representative Gwynne. explaining the conference agreement to the House of Representa-
tives. 1947 Cong. Rec. 4513. See also see. 790.6 above.
42 See sec. 790.5 (a) of this bulletin.
43 Portal Act, subsecs. 4 (a), 4 (d). See also Conference Report, p. 18; statement of
Senator Donnell, 1947 Cong. Rec. 2255, 2440.







10 -EFFECT OF PORTAL-TO-PORTAL ACT, 1947

hours.4 For example, travel by a repair man from one place where
he performs repair work to another such place, or travel by a mes-
senger delivering messages, is not the kind of "walking, riding, or
traveling" described in section 4 (a). Also, where an employee travels
outside his regular working hours at the direction and on the business
of his employer, the travel would not ordinarily be "walking, riding,
or traveling" of the type referred to in section 4 (a). One example
would be a traveling employee whose duties require him to travel
from town to town outside his regular working hours; another would
be an employee who has gone home after completing his day's work
but is subsequently called out at night to travel a substantial distance
and perform an emergency job for one of his employer's customers.45
In situations such as these, where an employee's travel is not of the
kind to which section 4 (a) of the Portal Act refers, the question
whether the travel time is to be counted as worktime under the Fair
Labor Standards Act will continue to be determined by principles
established under this act, without reference to the Portal Act.41
(d) An employee who walks, rides, or otherwise travels while per-
forming active duties is not engaged in the activities described in sec-
tion 4 (a). An illustration of such travel would be the carrying by a
logger of a portable power saw or other heavy equipment (as distin-
guished from ordinary hand tools) on his trip into the woods to the
cutting area. In such a situation, the walking, riding, or traveling
is not segregable from the simultaneous performance of his assigned
work (the carrying of the equipment, etc.) and it does not constitute
travel "to and from the actual place of performance" of the principal
activities he is employed to perform.47
(e) The report of the Senate Committee on the Judiciary (p. 47)
describes the travel affected by the statute as "Walking, riding, or
traveling to ancTfrom the actual place of performance of the principal
activity or activities within the employer's plant, mine, buildhig, or
ot7ier place of employment, irrespective of whether such walking, rid-
ing, or traveling occur on or off the premises of the employer or before
or after the employee has checked in or out." [Italics added.] The
phrase, "actual place of performance," as used in section 4 (a), thus
emphasizes that the ordinary travel at the beginning and end of the
workday to which this section relates includes the employee's travel on
the employer's premises until he reaches his workbench or other place
where he commences the performance of his principal activity or activi-
44 These conclusions are supported by the limitation, "to and from the actual place of
performance of thr principal activity or activities which [the] employee is employed to
perform," which follows thp term "walking, riding. or travelinrj" in see. 4 (a). ninl by the
adlitionnll limitation applicable to all "preliminary" and "po.-tliminary" activities to the
effect that the act may affect them only if they occur "prior to" or subsequentt tb" the
wirkdna. See, in this connection, the statements of Sniiiator ronnerll. 1947 Cong. Rec.
2192, 2255, 2256, 2441; statement of Senator Cooper, 1947 Cong. Rec. 2374. See also
Senate Report. pp. 47, 48.
4The Report of the Senate Judiciary Committee (p. 4A, emphasized that this section of
the act "ilos not attempt to cover by specific Ianguiige the many thousands of situations
that do, not readily fnll within the pattern of the ordinary workday"
4These principle's will be discussed in Part 78. of Title 29. Chapter V, of the Code of
Federal Reaglntions. which will replace Interpretative bulletin No. 13.
4 Senate Cooper, after explaining that the "principal" activities referred to include
activities which are an integral part of a principall" activity (Senate Report, pp. 47, 48),
that is. those which "are indispensable to the performance of the productive work," sum-
marized this provision as it appeared in the Senate bill by stating: "We have clearly
eliminated from compensation walking traveling, riding. and other activities which are not
an integral part of the employment for which the worker is employed." [Italics supplied.]
1947 Cong. Rec. 2377.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


ties, and the return travel from that place at the end of the workday.
However, where an employee performs his principal activity at various
places (common examples would be a telephone lineman, a "trouble-
shooter" in a manufacturing plant, a meter reader, or an exterminator)
the travel between those places is not travel of the nature described in
this section, and the Portal Act has no significance in determining
whether the travel time should be counted as time worked.
(f) Examples of walking, riding, or traveling which may be per-
formed outside the workday and would normally be considered "pre-
liminary" or "postliminary" activities are (1) walking or riding by an
employee between the plant gate and the employee's lathe, workbench,
or other actual place of performance of his principal activity or activi-
tis; (2) riding on buses between a town and an outlying mine or fac-
tory where the employee is employed; and (3) riding on buses or trains
from a logging camp to a particular site at which the logging opera-
tions are actually being conducted.48
(g) Other types of activities which may be performed outside the
workday and, when performed under the conditions normally present,
would be considered "preliminary" or "postliminary" activities, in-
clude checking in and out and waiting in line to do so, changing clothes,
washing up or showering, and waiting in line to receive pay checks.49
(h) As indicated above, an activity which is a "preliminary" or
"postliminary" activity under one set of circumstances may be a prin-
cipal activity under other conditions.50 This may be illustrated by
the following example: Waiting before the time established for the
commencement of work would be regarded as a preliminary activity
when the employee voluntarily arrives at his place of employment
earlier than he is either required or expected to arrive. Where, how-
ever, an employee is required by his employer to report at a particular
hour at his workbench or other place where he performs his principal
activity, if the employee is there at that hour ready and willing to work
but for some reason beyond his control there is no work for him to per-
form until some time has elapsed, waiting for work would be an inte-
gral part of the employee's principal activities.51 The difference in the
two situations is that in the second the employee was engaged to wait
while in the first the employee waited to be engaged.52

SECTION 790.8. "PRINCIPAL" ACTn'ITIES
(a) An employer's liabilities and obligations under the Fair Labor
Standards Act with respect to the "principal" activities his employees
are employed to perform are not changed in any way by section 4 of the
Portal Act, and time devoted to such activities must be taken into
48 See Senate Report, p. 47; statements of Senator Donnell, 1947 Cong. Rec. 2192, 2255,
2441.
19 See Senate Report, p. 47. Washing up after work, like the changing of clothes, may
in certain situations be so directly related to the specific work the employee is employed
to perform that it would be regarded as an integral part of the employee's "principal
activity." See colloquy between Senators Cooper and McGrath, 1947 Cong. Rec. 2375.
See also par. (h) of this section and sec. 790.8 (c). This does not necessarily mean, how-
ever, that travel between the washroom or clothes-changing place and the actual place of
performance of the specific work the employee is employed to perform, would be excluded
from the type of travel to which sec. 4 (a) refers.
Bo See par. (b) of this section. See also footn -te 49. above.
6 Colloauy between Senators Cooper and McGrath. 1947 Cong. Ree. 2375-6.
5" See Skidmore v. Swift d Co., 323 U. S. 134, 7 WHR 1165.







EFFECT OF PORTAL-TO-PORTAL ACT, -1947-


account in computing hours worked to the same extent as it would if
the Portal Act had not been enacted.53 But before it can be deter-
mined whether an activity is "preliminary or postliminary to [the]
principal activity or activities" which the employee is employed to
perform, it is generally necessary to determine what. are such "prin-
cipal"activities. 5 The use by Congress of the plural form "activities"
in the statute makes it clear that in order for an activity to be a "prin-
cipal" activity, it need not be predominant in some way over all other
activities engaged in by the employee in performing his job;55 rather,
an employee may, for purposes of the Portal-to-Portal Act, be engaged
in several "principal' activities during the workday. The "princi-
pal" activities referred to in the statute are activities which the em-
ployee is "employed to perform";56 they do not include noncompen-
sable "walking, riding, or traveling" of the type referred to in section
4 of the act.17 Several guides to determine what constitute "principal
activities" was suggested in the legislative debates. One of the mem-
bers of the conference committee stated to the House of Representa-
tives that "the realities of industrial life," rather than arbitrary
standards, "are intended to be applied in defining the term 'principal
activity or activities'," and that these words should "be interpreted
with due regard to generally established compensation practices in
the particular industry and trade." 5 The legislative history further
indicates that Congress intended the words "principal activities" to be
construed liberally in the light of the foregoing principles to include
any work of consequence performed for an employer, no matter when
the work is performed.59 A majority member of the committee which
introduced this language into the bill explained to the Senate that it
was considered "sufficiently broad to embrace within its terms such
activities as are indispensable to the performance of productive
work." 60
(b) The term "principal activities" includes all activities which are
an integral part of a principal activity.61 Two examples of what is
meant by an integral part of a principal activity are found in the Re-
port of the Judiciary Committee of the Senate on the Portal-to-Portal
bill.62 They are the following:

3 See sees. 790.4 through 790.6 of this bulletin; also, part 785 of title 29, ch. V, of the
Code of Federal Regulations, which will replace Interpretative Bulletin No. 13 as a state-
ment of the Tirinc'iljlps for eIptertninin*- hours wnrke'l under the Fnir Labor Standards Act.
54Althli-:bh certain "pr.limiinarv" and "p..-tlinminary." activities are Pxrressly mentioned
in the statute (see sec. 790.7 (b) of this bulletin), they are described with reference to the
place where principal activities are pi-eformdin Even as to these activities, therefore.
identification of certain other activities as "principal" activities is necessary.
c' Cf. Edlcardf P. Allison Co., Inc. v. Commissioinr of Internal Revenue, 63 F. (2d) 553
(C. C. A. 8, 1933).
SCf. Armour & Co. v. Wantook, 323 U. S. 126, 132-134; Skidmore v. Swift & Co., 323
U. S. 134, 13r-137.
1 See statement of Senator Cooper. 1947 Cnng. Rec. 2374.
SRemarks of Representative Walter. 1947 Cong. Rec. 4515. See also statements of
Senator Conppr. 1947 Cong. 2375. 2377.
*See statements of Senator Cooper, 1947 Cong. Ree. 2374-2377. See also Senate
Report. p. 48, and the President's message to Congress on approval of the Portal Act, May
14, 1947.
0 See statement of Senator Cooper, 1947 Cong. Rec. 2377.
11 Senate Report, p. 48; statements of Senator Cooper, 1947 Cong. Rec. 2375-2377.
a As stated in the Conference Report (p. 12), by Representative Gwynne in the House of
Representatives (1947 Cong. Rec. 4513) and by Senator Wiley in the Senate (1947 Cnng.
Rec. 4501), the language of the provision here involved follows that of the Senate bill.








EFFECT OF PORTAL-TO-PORTAL ACT, 1947 13

(1) In connection with the operation of a lathe an employee will frequently, at
the commencement of his workday, oil, grease, or clean his machine, or install a
new cutting tool. Such activities are an integral part of the principal activity,
and are included within such term.
(2) In the case of a garment worker in a textile mill, who is required to report
30 minutes before other employees report to commence their principal activities,
and who during such 30 minutes distributes clothing or parts of clothing at the
workbenches of other employees and gets machines in readiness for operation by
other employees, such activities are among the principal activities of such em-
ployee.
Such preparatory activities, which the Administrator has always re-
garded as work and as compensable under the Fair Labor Standards
Act, remain so under the Portal Act, regardless of contrary custom or
contract.63
(c) Among the activities included as an integral part of a principal
activity are those closely related activities which are indispensable to
its performance." If an employee in a chemical plant, for example,
cannot perform his principal activities without putting on certain
clothes,65 changing clothes on the employer's premises at the beginning
and end of the workday would be an integral part of the employee's
principal activity.66 On the other hand, if changing clothes is merely a
convenience to the employee and not directly related to his principal
activities, it would be considered as a "preliminary" or "postliminary"
activity rather than a principal part of the activity.66 However, ac-
tivities such as checking in and out and waiting in line to do so would
not ordinarily be regarded as integral parts of the principal activity
or activities.67

SECTION 790.9. "COMPENSABLE BY AN EXPRESS PROVISION OF A WRIT-
TEN -OR NONWRITTEN CONTRACT."

(a) Where an employee engages in a "preliminary" or "postlimin-
ary" activity of the kind described in section 4 (a) of the Portal Act
and this activity is "compensable by an express provision of a written
or nonwritten contract" applicable to the employment, section 4 does
not operate to relieve the employer of liability or punishment under
the Fair Labor Standards Act with respect to such activity,8" and does
not relieve the employer of any obligation he would otherwise have

63 Statement of Senator Cooper, 1947 Cong. Rec. 2375; colloquy between Senators Barkley
and Cooper, 1947 Cong. Rec. 2428. The fact that a period of 30 minutes was mentioned
in the second example given by the committee does not mean that a different rule would
apply where such preparatory activities take less time to perform. In a colloquy between
Senators McGrath and Cooper, 1947 Cong. Rec. 2375, Senator Cooper stated that "There
was no definite purpose in using the words '30 minutes' instead of 15 or 10 minutes or 5
minutes or any other number of minutes." In reply to questions, he indicated that any
amount of time spent in preparatory activities of the types referred to in the examples
would be regarded as a part of the employee's principal activity and within the compensable
workday. Cf. Anderson v. Mt. Clemens Pottery Co., 328 U. S. 680. 693.
U See statements of Senator Cooper, 1947 Cong. Rec. 2375, 2377; colloquy between Sen-
ators Barkley and Cooper, 1947 Cong. Rec. 2428.
m Such a situation may exist where the changing of clothes on the employer's premises
is required by law, by rules of the employer, or by the nature of the work. See footnote 49.
w See colloquy between Senators Cooper and McGrath, 1947 Cong. Rec. 2375.
67 See Senate Report, p. 47; statements of Senator Donnell, 1947 Cong. Rec. 2383, 2440:
statements of Senator Cooper. 1947 Cong. Rec. 2374, 2375.
6a See see. 790.4 of this bulletin.







14 EFFECTOF PORTAL-TO-PORTAL ACT, 1947

under that Act to include time spent in such activity in computing
hours worked.69
(b) The word "compensable" is used in subsections (b), (c), and
(d) of section 4 without qualification.0 It is apparent from these
provisions that compensablele" as used in the statute, means compen-
sable in any amount.7
(c) The phrase "compensable by an express provision of a written
or nonwritten contract" in section 4 (b) of the Portal Act offers no
difficulty where a written contract states that compensation shall be
paid for the specific activities in question, naming them in explicit
terms or identifying them through any appropriate language. Such a
provision clearly falls within the statutory description.72 The exist-
ence or nonexistence of an express provision making an activity com-
pensable is more difficult to determine in the case of a nonwritten con-
tract since there may well be conflicting recollections as to the exact
terms of the agreement. The words "compensable by an express pro-
vision" indicate that both the intent of the parties to contract with
respect to the activity in question and their intent to provide compen-
sation for the employee's performance of the activity must satisfactor-
ily appear from the express terms of the agreement.
(d) An activity of an employee is not "compensable by *
a written or nonwritten contract" within the meaning of section 4 (b)
of the Portal Act unless the contract making the activity compensable
is one "between such employee,73 his agent, or collective-bargaining
representative and his employer." 3 Thus, a provision in a contract
between a government agency and the employer, relating to compen-
sation of the contractor's employees, would not in itself establish the
compensability by "contract" of an activity, for purposes of sect ion 4.

SECTION 790.10. "COMPENSABLE BY A CUSTOM OR PRACTICE"
(a) A "preliminary" or "postliminary" activity of the type de-
scribed in section 4 (a) of the Portal Act may be "compensable,"
within the meaning of section 4 (b), by a custom or practice as well
as by a contract. If it is so compensable, the relief afforded by sec-
tion 4 is not available to the employer with respect to such activity,4
and section 4 (d) does not operate to exclude the time spent in such
activity from hours worked under the Fair Labor Standards Act.7"
Accordingly, in the event that no "express provision of a written or
nonwritten contract" makes compensable the activity in question, it is
necessary to determine whether the activity is made compensable by a
*6 See sec. 790.5 and 790.7 of this bulletin.
o The word is also so used throughout sec. 2 of the act, which relates to past claims.
See sees. 790.23-790.25 of this bulletin.
7 Cf. Conference Report, pp. 9, 10, 12, 13; message of the President to the Congress on
approval of the Portal-to-Portal Act, May 14, 1047.
2 Sep colloquy between Senators Donnell and Lodge. 1947 Cong. Rec. 2252; colloquies
between Senators Dinnell and Hawkes. 1947 Cong. Roc. 2253, 2256.
73 The terms "einriloy.e" andl employerr" have the same meaning as when used in the
Fair Labor Sinndn:rds Act Pnrtal-to-IPortal Act, sec. 13 (a).
'~ See sec. 790.4 of this bulletin.
"5 See sees. 790.5 and 790.7 of this bulletin.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


custom or practice, not inconsistent with such a contract, in effect at
the establishment or other place where the employee was employed.",
(b) The meaning of the word "compensable" is the same, for pur-
poses of the statute, whether a contract or a custom or practice is
involved."
(c) The phrase, "custom or practice," is one which in common mean-
ing, is rather broad in scope. The meaning of these words as used
in the Portal Act is not stated in the statute; it must. be ascertained
from their context and from other available evidence of the congres-
sional intent, with such aid as may be had from the many judicial
decisions interpreting the words "custom" and "practice" as used
in other connections. Although the legislative history casts little
light on the precise limits of these terms, it is believed that the con-
gressional reference to contract, custom or practice was a deliberate use
of nontechnical words which are commonly understood and broad
enough to cover every normal situation under which an employee works
for an employer for compensation." Accordingly, "custom" and
"practice," as used in section 4 (b) of the Portal Act, may be said to
be descriptive generally of those situations where an employer, with-
out being compelled to do so by an express provision of a contract, has
paid employees for certain activities performed. One of the sponsors
of the legislation in the House of Representatives indicated that the
intention was not only "to protect every collective bargaining agree-
ment about these activities" but "to protect the agreement between one
workman and his employer" and "every practice or custom which we
assume must have entered into the minds of the people when they made
the contract." '
(d) The words, "custom or practice," as used in the Portal Act, do
not refer to industry custom or the habits of the community which are
familiar to the people; these words are qualified by the phrase "in
effect at the establishment or other place where such em-
ployee was employed." The compensability of an activity under cus-
tom or practice, for purposes of this act, is tested by the custom or the
practice at the "particular place of business," "plant," '"mine," "fac-
tory," "forest," etc."0
(e) "The custom or practice" by which compensability of an activity
is tested under the statute is one "covering such activity." Thus, a
custom or practice to pay for washing up in the plant after the end
of the workday, for example, would not necessarily establish the com-
pensability of walking time thereafter from the washroom in the plant
'7 See Senate Report, p. 49.
The same is true with respect to the activities r,?ferred to in see. 2 of the Portal Act in
an action or proceeding relating to activities performed before May 14, 1947. See Senate
Report, p. 45. See also sec. 790.23 of this bulletin.
See see. 790.9 (b) of this bulletin.
See colloquy between Senators Donnell and Tydings, 1947 Cong. Rec. 2196, 2197:
colloquy between Senators Donnell. Lodge, and Hawkes, 1947 Cone. Rec. 2252, 2253;
colloquy between Senators Donnell and Hawkes, 1947 Cong. Rec. 2255, 2256. Statements
of Senator Cooper, 1947 Cong. Ree. 2371.
7o Statements of Representative Gwynne, 1947 Cong. Rec. 1623.
"" Senate Report, p. 45; colloquy between Senators Donnell and Hawkee, 1947 Cong. Ree.
2253.


767134-47--8







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


to the plant gate. It is enough, however, if there is a custom or prac-
tice covering "such activity"-there is no provision, as there is with
regard to contracts, that the custom or practice be one "between such
employee, his agent, or collective-bargaining representative, and his
employer." 8
(f) Another qualification of the "custom or practice" referred to in
the statute is that it be "not inconsistent, with a written or nonwritten
contract" of the kind mentioned therein. If the contract is silent on
the question of compensability of the activity, a custom or practice to
pay for it would not be inconsistent with the contract.S2 However, the
intent of the provision is that a custom or practice which is incon-
sistent with the terms of any such contract shall not be taken into
account in determining whether such an activity is compensable."3

SECTION 790.11. CONTRACT, CUSTOM, OF PRACTICE IN EFFECT "AT THE
TIME OF SUCH ACTIVITY'
The "contract," "custom," or "practice" on which the compensabil-
ity of the activities referred to in section 4 of the Portal Act may be
based, is a contract, custom or practice in effect "at the time of such ac-
tivity." Thus, the conlpensability of such an activity, and its inclusion
in computation of hours worked, is not determinable by a custom or
practice which had been terminated before the activity was engaged in
or was adopted some time after the activity was performed. This
phrase would also seem to permit recognition of changes in customs,
practices and agreements which reflect changes in labor-management
relations or policies.

SECTION 790.12. "PORTION OF THE DAY"
A "preliminary" or "postliminary" activity of the kind referred to
in section 4 of the Portal Act is compensable under a contract, custom,
or practice within the meaning of that sect ion "only when it is engaged
in during the portion of the day with respect to which it is so made
compenlsble." 84 This provision in no way affects the crmlpe:sability
of activities performed within the workday proper or the computation
of hours worked within such workday for purposes of the Fair Labor
Standards Act; *5 the provision is applicable only to walking, riding.
traveling or other preliminaryr" or "po-tlimin.ary" activities of the
kind described in section 4 (a) of the Portal Act,86 which are engaged
in out..,sid the workday, during the portions of the day before per-
formance of the first principal activity and after performance of the
last principal activity of the employee.8'
8 See see. 7,0."i (d) of this bulletin.
8 Senate Report, pp. 45, 49; colloquy between Senators Donnell and Hawkes. 1947 Cong.
Rec. 2253.
a3 Senate Report, pp. 45. 49.
84 Sec. 4 (c) of the Portal Act (set out in full in see. 790.3 of this bulletin).
86 See sees. 790.4-790.6 of this bulletin.
Conference Report, pp. 12, 13.
8 See C(infre-niiev Report, p. 13; sees. 790.4 (c) and 790.;- (b) of this bulletin.
The scupe of ~,e 4 i is narrower in this respect than that of see. 2 (b), which is
couched in idlutic:il language. Cf. Conference Repmrt, pp. 9, 10; pp. 12, 13. See also
sec. 790.23 of this bulletin.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


DEFENSE OF GOOD FAITH RELIANCE ON ADMINISTRA-
TIVE REGULATIONS, ETC.
SECTION 790.13. GENERAL NATURE OF DEFENSE
(a) Under the provisions of sections 9 and 10 of the Portal Act, an
employer has a defense against liability or punishment in :iny action
or proceeding brought against him for failure to comply with the
minimum wage and overtime provisions of the Fair Labor St ul;ards
Act, where the empllqyer pleads and proves that "the act or omission
complained of was in good faith in conformity with and in reliance
on any administrative regulation, order, ruling, approval, or interpre-
tation" or "any administrative practice or enforcement policy *
with respect to the class of employers to which he belonged." In
order to provide a defense with respect to acts or omissions occurring
on or after May 14, 1947 (the effective date of the Portal Act), the
regulation, order, ruling, approval, interpretation, administrative
practice or enforcement policy relied upon and conformed with munst
be. that of the "Administrator of the Wage and Hour Division of the
Department of Labor," and a regulation, order, ruling, approval, or
interpretation of the Administrator may be relied on only if it is in
writing.6" But where the acts or omissions complained of occurred
before MIay 14, 1947, the employer may show that they were in good
faith in conformity with and in reliance on "any" (written or non-
?wUrittct) administrative regulation, order, ruling, or interpretation of
"any agency of the United States," or any administrative practice or
enforcement policy of "any such agency" with respect to the class of
employers to which he belonged.89 In all cases, however, the act or
omission complained of must be both "in conformity with" 0 and "in
reliance on" 91 the administrative regulation, order, ruling, approval,
interpretation, practice, or enforcement policy, as the case may be, and
such conformance and reliance and such act or omission must be "in
good faith." 92 The relief from liability or punishment provided by
sections 9 and 10 of the Portal Act is limited by the statute to employers
who both plead and prove all the requirements of the defense.93
(b) The distinctions mentioned in paragraph (a), above, depending
on whether the acts or omissions complained of occurred before or
after May 14, 1947, may be illustrated as follows: Assume that an
ss Portal Act, see. 10; Conference Report. p. 16; statements of Senator Wiley, explain-
ing the conference agreemn,-nt to the Senate, 1947 Cong. !eec. 4398; statements of Repre-
sentatives Gwynne and Walter. explaining the conference agreement to the House of
Representatives, 1947 Cong. Rec. 4514, 4515. See also sees. 790.17 and 790.19 of this
bulletin.
IPortal Act, sec. 10; Conference Report, p. 16; statement of Senator Wiley. explaining
the conference agreement to the Senate, 1947 Cong. Rec. 4398 ; statements of Repre.-enra-
Stives Gwynne and Walter, 1947 Cong. Rec. 4514, 4515. See also sec. 790.19 of this bulletin.
.See see. 790.14, below.
I See sec. 790.16, below.
a See sec. 790.15. below.
Conference Report, pp. 15, 16; statements of Representatives Gwynne and Walter,
explaining the conference agreement to the House of Representatives, 1947 Cong. Rec.
4514, 4515; statements of Senators Cooper and Donnpll, 1947 Cong. Rec. 4312, 4577
4578. See also the President's message of May 14, 1947, to the Congress on approval ol
the Act.
The requirements of the statute as to pleading and proof emphasize the continuing
recognition by Congreqs of the remedial nature of the Fair Labor Standards Act and of
the need for safeguarding the protection which Coneress intended it to afford employepp.
See see. 790.2 of this bulletin: ef. statements of Senator Wile-y, 1947 Cong. Ire. 4."2,;
SR"ntor Donnell. 1047 Cong. Rec. 4578, and Representative Walter, 1947 Cong. Rec. 4514,
4515.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


employer, on commencing performance of a contract with X Federal
agency extending from Jantary 1, 1,47, to January 1, 1948, received
an opinion from the agency that employees working under the con-
tract were not covered hy the Fair Labor Standards Act. Assume
further that the employer may be said to have relied in good faith
upon this opinion, and therefore did not compensate such employees
during the period of the contract in accordance with the provisions of
the act. After completion of the contract on January 1, 1948, the
employees, who have learned that they are probably covered by the
act, bring suit against their employer for unpaid overtime compensa-
tion which they claim is due them. If the court finds that the em-
ployees were performing work subject to the act, they can recover for
the period commencing May 14, 1947, even though the employer pleads
and proves that his failure to pay overtime was in good faith in con-
formity with and in reliance on the opinion of X agency, because for
that period the defense would, under section 10 of the Portal Act, have
to be based upon a written administrative regulation, order, ruling,
approval, or'interpretation, or an administrative practice or enforce-
ment policy of the Administrator of the Wage and Hour Division.
The defense would, however, be good for the period from January 1,
1947, to May 14, 1947, and the employer would be freed from liability
for that period under the provisions of section 9 of the statute.

SECTION 790.14. "IN CONFORMITY WITH"
(a) The "good faith" defense is not available to an employer unless
the acts or omissions complained of were "in conformity with" the
regulation, order, ruling, approval, interpretation, administrative
practice, or enforcement policy upon which he relied.94 This is true
even though the employer erroneously believes he conformed with it
and in good faith relied upon it; actual con formity is necessary.
(b) An example of an employer not acting "in conformity with" an
administrative regulation, order, ruling, approval, practice, or enforce-
ment. policy is a situation where an employer receives a letter from
the Administrator of the Wage and Hour Division, stating that if
certain specified circu nmtances and facts regarding the work performed
by the employer's employees exist, the employees are, in his opinion
exempt from pro% isions of the Fair Labor Standards Act. One of
these hypothetical circumstances upon which the opinion was based
does not exist regarding these employees, but the employer, errone-
ou3ly assumingr that this circumstance is irrelevant, relies upon the
Administrators ruling and fails to compensate the employees in ac-
corda.lnc with the act. Since he did not act "in conformity" with that
opinion, he has no defense under section 9 or 10 of the Portal Act.
(c)' As a further example of the requirement of conformity, refer-
ence is made to the illustration given in section 790.13 (b) above,
where an employer, who had a contract with the X Federal agency
covering the period from January 1, 1947, to January 1, 1948, received
an opinion from the agency that employees working on the contract
were not covered by the Fair Labor Standards Act. Assume (1) that
94 Statement of Senator Cooper, 1947 Cong. Ree. 4577; message of the President to
Con'Iress on approval of the act, May 14, 1947.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


the X agency's opinion was confined solely and exclusively to activi-
ties performed under the particular contract held by the employer with
the agency and made no general statement regarding the status under
the act of the employer's employees while performing other work; and
(2) that the employer, erroneously believing the reasoning used in
the agency's opinion also applied to other and different work per-
formed by his employees, did not compensate them for such different
work, relying upon that opinion. As previously pointed out, the
opinion from the X agency, if relied on and conformed with in good
faith by the employer, would form the basis of a "good faith" defense
for the period prior to May 14, 1947, insofar as the work performed
by the employees on this particular contract with that agency was con-
cerned. The opinion would not, however, furnish the employer a
defense regarding any other activities of a different nature performed
by his employees, because it was not an opinion concerning such
activities, and insofar as those activities are concerned, the employer
could not act "in conformity" with it.

SECTION 790.15. "GooD FAITH"
(a) One of the most important requirements of sections 9 and 10
is proof by the employer that the act or omission complained of and
his conformance with and reliance upon an administrative regulation,
order, ruling, approval, interpretation, practice or enforcement policy,
were in good faith. The legislative history of the Portal Act makes
it clear that the employer's "good faith" is not to be determined merely
from the actual state of his mind. Statements made in the House and
Senate indicate that "good faith" also depends upon an objective test-
whether the employer, in acting or omitting to act as he did, and in
relying upon the regulation, order, ruling, approval, interpretation,
administrative practice or enforcement policy, acted as a reasonably
prudent man would have acted under the same or similar circum-
stances." "Good faith" requires that the employer have honesty of
intnttion and no knowledge of circumstances which ought to put him
upon inquiry.9
(b) Some situations illustrating the application of the principles
stated in paragraph (a) may be mentioned. Assume that a ruling
from the Administrator, stating positively that the Fair Labor Stand-
ards Act does not apply to certain employees, is received by an
employer in response to a request which fully described the duties
of the employees and the circumstances surrounding their employ-
ment. It is clear that the employer's employment of such employees
in such duties and under such circumstances in reliance on the Ad-
ministrator's ruling, without compensating them in accordance with
the act, would be in good faith so long as the ruling remained un-
revoked and the employer had no notice of any facts or circumstances
which would lead a reasonably prudent man to make further inquiry
as to whether the employees came within the act's provisions. As-
sume, however, that the Administrator's ruling was expressly based
9 Colloquy between Representatives Reeves and Devitt, 1947 Cong. Rec. 1620; colloquy
between Senators Ferguson and Donnell, 1947 Cong. Rpc. 4578.
9 See statement of Senator McGrath, 1947 Cong. Rec. 23.0 : statement of Representative
Keating. 1947 Cong. Rec. 4517; statement of Representative Walter, 1947 Cong. Ree. 4515.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


on certain court decisions holding that employees so engaged were
not engaged in commerce or in the production of goods for com-
merce, and that the employer subsequently learned from his attorney
that a higher court had reversed tlese decisions or had cast doubt
on their correctness by holding employees similarly situated to be
engaged in an occupation necessary to the production of goods for
interstate commerce. -Assume further that the employer, after learn-
ing of this, made no further inquiry but continued to pay the em-
ployees without regard to the requirements of the act in reliance on
the Administrator's earlier ruling. In such a situation, if the em-
ployees later brought an action against the employer, the court might
determine that they were entitled to the benefits of the act and might
decide that the employer, after learning of the decision of the higher
court, knew facts which would put a reasonably prudent man upon
inquiry and therefore had not proved his good faith in relying upon
the Administrator's ruling after receiving this advice.
(c) In order to illustrate further this test of "good faith," sup-
pose that the X Federal agency published a general bulletin re-
garding manufacturing, which contained the erroneous statement that
all foremen are exempt under the Fair Labor Standards Act as em-
ployed in a "bona fide executive capacity." Suppose also
that an employer, knowing that the Administrator of the Wage and
Hour Division is charged with the duties of administering the Fair
Labor Standards Act and of defining the phrase "bona ide execu-
tive capacity" in that act, nevertheless relied upon the
above bulletin without inquiring further and, in conformity with
this advice, failed to compensate his nonexempt, foremen in accord-
ance with the overtime provisions of the Fair Labor Standards Act
for work subject to that act, performed before May 14, 1947. If the
employer had inquired of the Administrator or had consulted the
Code of Federal Regulations, he would have found that his foremen
were not exempt. In a subsequent action brought, by employees
under section 16 (b) of the Fair Labor Standards Act, the court
may decide that the employer knew facts which ought to have put
him as a reasonable man upon further inquiry, and, consequently,
that he did not rely "in good faith" within the meaning of section 9,
upon the bulletin published by the X agency."7
(d) Insofar as the period prior to May 14, 1947, is concerned, the
employer may have received an interpretation from an agency which
conflicted with an interpretation of the Administrator of the Wage
and Hour Division of which he was also aware. If the employer chose
to rely upon the interpretation of the other agency, which interpreta-
tion worked to his advantage, considerable weight may well be given
to the fact that the employer ignored the interpretation of the agency
charged with the administration of the Fair Labor Standards Act
and chose instead to rely upon the interpretation of an outside agency.98
"See statement of RepresentatlivP wynne. 1047 Cong. Rec. 1620, and colloquy between
Senators Connall-y and Dnnnell. 1017 Cong. Ree. 4579.
This view was exprpsspd several timrns lirlurit the debates. See statements of Repre-
sentative Keating. 1147 Cong. Rec. 15ifi and 4517; colloquy between Representatives
Kenting and D)rvitt. 1947 Conr. Ree. 15'. : statement of Re rrsentative Walter. 1947 C-ng.
RPe. 4514-15: statmen-nt of lReiresentaiive MacKinnon, 1947 Cong. Rec. 4510; statement
of Ropresentatlre GwvTrn. 1047 Cong. RHr 16"' : staitrnenl *-f Senator Cnoner. 1947 CM ,'..
Ree. 4577 and 4578; colloquy between Senators Connally and Donnell, 1947 Cong. Rec. 4579.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


Under these circumstances bthe question could pIrolerly be considered
as to whether it was a good-faith reliance or whether the employer was
simply choosing a course which was most favorable to him." "'' This
problem will not arise in regard to any acts or ominiiolns by the em-
ployer occurring on or after May 14, 1947, because section 10 provides
that the employer, insofar as the Fair Labor Standards Act is con-
cerned, may rely only upon regulations, orders, rulings, approvals
interpretations, administrative practices and enforcement policies of
the Administrator of the Wage and Hour Division.'

SECTION 790.16. "IN RELIANCE ON"

(a) In addition to acting (or omitting to act.) in good faith and in
conformity with an administrative regulation, order, ruling, approval,
interpretation, enforcement policy, or practice, the employer must
also prove that he actually relied upon it.2
(b) Assume, for example, that an employer failed to pay his em-
ployees in accordance with the overtime provisions of the Fair Labor
Standards Act. After an employee suit has been brought against
him, another employer calls his attention to a letter that had. been
written by the Administrator of the Wage and Hour Division, in
which the opinion was expressed that employees of the type employed
by the defendant were exempt from the overtime provisions of the Fair
Labor Standards Act. The defendant had no previous knowledge of
this letter. In the pending employee suit, the court may decide that
the opinion of the Administrator was erroneous and that the plaintiffs
should have been paid in accordance with the overtime provisions of
the Fair Labor Standards Act. Since the employer had no knowledge
of the Administrator's interpretation at the time of his violations, his
failure to comply with the overtime provisions could not have been
"in reliance on" that interpretation; consequently, he has no defense
under section 9 or section 10 of the Portal Act.

SECTION 790.17. "ADMINISTRATIVE REGULATION, ORDER, RULING,
APPROVAL, OR INTERPRETATION"

(a) Administrative regulations, orders, rulings, approvals, and
interpretations are all grouped together in sections 9 and 10, with no
9 Statement of Senator Cooper. 1947 Cong. Rec. 4577. Representative Walter, a member
of the Conference Committee, made the following explanatory statement to the House of
Representatives (1947 Cong. Rec. 45151 : "The di-ft- ise of iood faith is intended to apply
only where an employer innocently and to his detriment, followed the law as it nas laid
down to hiu by government ngeu-cie's, without notice that such interpretations were,
claimed to be erroneous or invalid. It is nor intended that this defense shall apply where
an employer had knowledge of conflicting rules and chose to act in accordance with the one
most favorable to him." Representarive Gwynne made a similar statement (1947 Coug.
Rec. 16201.
SStapement of Senator Wiley explaining conference agreement to the Senate. 1947 Cong.
Rec. 4398; statement of Representative Walter, 1947 Cone. Ree. 4515.
2 In a colloquy between Senators Thyp and Cooper (1947 Cong. Rec. 4577), Senator
Cooper pointed out that the purpose of see. 9 was to provide a defense for an employer
who pleads and proves, among other things, that his failure to bring himself under the
Act "grew out of reliance upon" the ruling of an agency. [Italics supplied.] See also
statement of Representative Keating, 1947 Conr. Rec. 1563: colloquy between Representa-
tives Seating and Devitt, 1947 Cong. Rec. 1569; cf. colloquy between Senators Donnell
and Ball, 1947 Cong. Rec. 4502.







22 EFFECT OF PORTAL-TO-PORTAL ACT, 1947

distinction being made in regard to their function under the "good
faith" defense. Accordingly, no useful purpose would be served by an
attempt. to precisely define and distinguish each term from the others,
especially since some of these terms are often employed interchange-
ably as having the same meaning.
(b) The terms "regulation" and "order" are variously used to con-
note the great variety of authoritative rules issued pursuant to statute
by an administrative agency, which have the binding effect of law,
unless set aside upon judicial review as arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.3
(c) The term "interpretation" has been used to describe a statement
"ordinarily of an advisory character, indicating merely the agency's
present belief concerning the meaning of applicable statutory lan-
guage." 4 This would include bulletins, releases, and other statements
issued by an agency which indicate its interpretation of the provisions
of a statute.
(d) The term "ruling" commonly, refers to an interpretation made
by an agency "as a consequence of individual requests for rulings upon
particular questions." Opinion letters of an agency expressing
opinions as to the application of the law to particular facts presented
by specific inquiries fall within this description.
(e) The term "approval" includes the granting of licenses, permits,
certificates or other forms of permission by an agency, pursuant to
statutory authority.6
(f) The terms "administrative regulation, order, ruling, approval,
or interpretation" connote affirmative action on the part of an agency.7
A failure to act or a failure to reply to an inquiry on the part of an ad-
ministrative agency is not a "regulation, order, ruling, approval, or
interpretation" within the meaning of sections 9 and 10.8 Thus, sup-
pose that an employer writes a letter to the Administrator of the
Wage and Hour Division, setting forth the facts concerning his busi-
ness. He goes.on to state in his letter that he believes his employees
are not covered by the Fair Labor Standards Act, and that unless he
hears to the contrary from the Administrator, he will not pay them in
accordance with its provisions. When the employer does not receive
a reply to his letter within what he regards as a reasonable time, he
assumes that the Administrator agrees with his (the employer's) in-
terpretation of the act and he acts accordingly. The employer's
reliance under such circumstances is not a reliance upon an admin-

a See Final Report of Attorney General's Committee on Administrative Procedure, S. Doc.
No. 8, 77th Cong., 1st sess. (1941) p. 27; 1 Vom Baur, Federal Administrative Law (1942)
p. 486: sees. 2 (c), 2 (d), and 10 (e) of the Administrative Procedure Act, 5 U. S. C. A.,
sec. 1001.
4 Final Report of the Attorney General's Committee on Administrative Procedure, S. Doc.
No. 8, 77th ('ng., 1st sess. (1941) p. 27.
5 Final Report rf the Attorney General's Committee, p. 27. To the same effect is 1 Vom
Baur, Federal Administrative Law 11942), p. 492.
6 See see. 2 (e) of the Administrative Procedure Act. 5 U. S. C. A.. see. 1001.
I See Final Report of Attorney General's Committee, p. 27: 1 Vom Baur, Federal Admin-
istrative Law. pp. 46. 492 : Conference Report, p. 16 : statements of Representative Walter,
1947 Cong. Rec. 4315; statements of Representative Gwynne-. 1947 Cong. Rec. 1545: state-
ments of Senator Donnell. 1947 Cong. Rec. 2259; President's message of May 14, 1947, on
approval of the Portal-to-Portal Act.
s That this is true on and after the effective date of the Act is clear from the require-
ment in spetion 10 that the regulation, order. ruling, approval, or Interpretation relied on
must be that of the Administrator in writing. As to sec. 9, the terms appear to have no
different meaning.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


istrative regulation, order, ruling, approval, or interpretation, within
the meaning of sections 9 and 10.
(g) The affirmative action taken by the agency must be one which
actually results in a "regulation, order, ruling, approval, or interpre-
tation." If, for example, the agency declines to express an opinion
as to the application of the law in a particular fact situation, the
agency is refraining from interpreting the law rather than giving
an interpretation.9
(h) An employer does not have a defense under these two sections
unless the regulation, order, ruling, approval, or interpretation, upon
which he relies, is in effect and operation at the time of his reliance.
To the extent that it has been rescinded, modified, or determined by
judicial authority to be invalid, it is no longer a "regulation, order,
ruling, approval, or interpretation," and, consequently, an employer's
subsequent reliance upon it offers him no defense under sections 9 and
10.'0 On the other hand, the last sentence in section 9 and in section
10 expressly provides that where the employer's good faith reliance
on a regulation, order, ruling, approval, or interpretation occurs be-
fore it is rescinded, modified, or determined by judicial authority to
be invalid, his claim of a "good faith" defense for such earlier period
is not defeated by the subsequent rescission or modification or by the
subsequent determination of invalidity. *
(i) To illustrate these principles, assume that the Administrator
of the Wage and Hour Division, in reply to an inquiry received from
a particular employer, sends him a letter, in which the opinion is
expressed that employees performing a particular type of work are
not covered by the Fair Labor Standards Act. The employer relied
upon the Administrator's letter and did not pay his employees, who
were engaged in such work, in accordance with the provisions of
the Fair Labor Standards Act. Several months later the Adminis-
trator issues a general statement, published in the Federal Register
and given general distribution, that recent court decisions have per-
suaded him that the class of employees referred to above are within
the coverage of the Fair Labor Standards Act. Accordingly, the
statement continues, the Administrator hereby rescinds all his pre-
vious interpretations and rulings to the contrary. The employer who
had received the Administrator's letter, not learning of the Admin-
istrator's subsequent published statement rescinding his contrary
interpretations, continued to rely upon the Administrator's letter after
the effective (late of the published statement. Under these circum-
stances, the employer would, from the date he received the Adminis-
trator's letter to the effective date of the published statement rescind-
ing the position expressed in the letter, have a defense under section
9 or 10, assuming he relied upon and conformed with that letter in
good faith. However, in 'spite of the fact that this employer did
9 See Final Report of Attorney General's Committee on Administrative Procedure, p. 33.
o1 See House Report, p. 7, and statements of Representative Gwynne, 1947 Cong. Rec.
1545, 1546. 1620. It will be noted that the provisions of sec. 12 of the act, affording relief
to employers who acted in conformity with the invalidated "area of production" regula-
tions, would have been unnecessary if reliance could be placed on a regulation no longer in
effect. See statement of Representative Gwynne, 1947 Cong. Rec. 4514, and cf. remarks
of Senator McCarran, discussing the bill before sec. 12 was added by the conference com-
mittee, 1947 Cong. Rec. 2322, 2323.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


not receive actual notice of the subsequent published statement, he
has no defense for his reliance upon the letter during the period after
the effective date of the public statement, because the letter, having
then been rescinded, was no longer an "administrative *
ruling or interpretation" within the meaning of sections
9 and 10.11

SECTION 790.18. "ADMINISTRATIVE PRACTICE OR ENFORCEMENT POLICY"

(a) The terms "administrative practice or enforcement policy" refer
to courses of conduct or policies which an agency has determined to
follow 12 in the administration and enforcement of a statute, either
generally, or with respect to specific classes of situations.3 Adminis-
trative practices and enforcement policies may be set forth in state-
ments addressed by the agency to the public.14 Although they may be,
and frequently are, based upon decisions or views which the agency
has set forth in its regulations, orders, rulings, approvals, or inter-
pretations, nevertheless administrative practices and enforcement
policies differ from these forms of agency action in that such practices
or policies are not limited to matters concerned with the meaning or
legal effect of the statutes administered by the agency and may be based
wholly or in part on other considerations.
(b) To illustrate this distinction, suppose the Administrator of the
Wage and Hour Division issues a general statement indicating that in
his opinion a certain class of employees come within a specified exemp-
tion from provisions of the Fair Labor Standards Act in any workweek
when they do not engage in a substantial amount of nonexempt work.
Such a statement is an "interpretation" within the meaning of sect ions
9 and 10 of the Portal Act. Assume that at the same time, the Admin-
istrator states that for purposes of enforcement, until further notice,
such an employee will be considered as engaged in a substantial amount
of nonexempt work in any workweek when he spends in excess of a
specified percentage of his time in such nonexempt work. This latter
type of statement announces an "administrative practice or enforce-
ment policy" within the meaning of sections 9 and 10 of the Portal Act.
(c) An administrative practice or enforcement policy may, under
certain circumstances, be at variance with the agency's current inter-

n See statement of Representative Gwynne, 1947 Cong. Rec. 1620; colloquy between
Representative Gwynne and Lee Pressman, Hearings before House Subcommitee on the
Judiciary, pp. 156-157.
The fact that an employer has no defense under sec. 9 or 10 of the Portal Act in the
situation stated in the text would not, of course, preclude a court from finding that he acted
in good faith having reasonable grounds to believe he was not in violation of the law. In
such event, sec. 11 of the act would permit the court to reduce or eliminate the employer's
liability for liquidated damages in an employee suit. See sec. 790.22 of this bulletin.
12 The agency may have determined to follow the course of conduct or policy for a lim-
ited time only (see pars. (c) and (f), this section) or for an indefinite time (see par. this section), or for a period terminable by the happenirng of some contingency, such as a
final decision in pending litigation.
s See United States v. Minnesota, 270 U. S. 181 (1926) ; United States v. Boston d
Maine R. R. Co., 279 U. S. 732 (1929) ; Lucas v. American Code Co., 280 U. S. 445 (1930) ;
Estate of Sanford v. Commissioners of Internal Revenue, 308 U. S. 39 (1939). See also
Final Report of Attorney General's Committee on Administrative Procedure In Govern-
ment Agencies, pp. 26-29; 1 Vom Baur, Federal Administrative Law (1942), p. 474.
As to requirement that practice or policy be one with respect to a "class of employers."
see par. (g) of this section.
UPursunnt to sec. 3 of the Administrative Procedure Act, statements of general policy
formulated and adopted by the agency for the guidance of the public are published in the
Federal Register. An example is the statement of the Secretary of Labor and the Admin-
istrator of the Wage and Hour Division, dated June 16, 1947, published in 12 F. R. 3915.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


pretation of the law. For example, suppose the Administrator an-
nounces that as a result of court decisions he has changed his view as
to coverage of a certain class of employees under the Fair Labor
Standards Act. However, he may at the same time announce that in
order to give affected employers an opportunity to make the adjust-
ments necessary for compliance with the changed interpretation, the
Wage and Hour Division will not commence to enforce the act on the
basis of the new interpretation until the expiration of a specified period.
(d) In the statement of the managers on the part of the House,
accompanying the report of the conference committee on the Portal-
to-Portal Act, it is indicated (p. 16) that under sections 9 and 10 "an
employer will be relieved from liability, in an action by an employee,
because of reliance in good faith on an administrative practice or
enforcement policy only (1) where such practice or policy was based
on the ground Mthat an act or omission was not a violation of the
[Fair Labor Standards] Act, or (2) where a practice or policy of not
enforcing the act with respect to acts or omissions led the employer
to believe in good faith that such acts or onmiss.ions were not violations
of the act." [Italics supplied.]
(e) The statement explaining the conference committee report goes
on to say: "Ho-wever, the employer will be relieved from criminal
proceedings or injunctions brought by the United States not only in
the cases described in the preceding paragraph but also where the
practice or policy was .such as to lead him in good faith to believe that
he would not be proceeded against by the United States." [Italics
supplied.]
(f) The statement explaining the conference committee report gives
the following illustration of the above rules:
An employer will not be relieved from liability under the Fair Labor Standards
Act of 193S to his employees (in an action by them for the period December 26,
1946, to March 1, 1947, if he is not exempt under the "Area of Production"
regulations published in the Federal Register of December 25. 1946, notwith-
standing the press release issued by the Administrator of the Wage and Hour
Division of the Department of Labor, in which he stated that lie would not enforce
the Fair Labor Standards Act of 1938 on account of acts or omissions occurring
prior to March 1. 1947. On the other hand. he will, by reason of the enforcement
policy set forth in such press release, have a good defense to a criminal proceeding
or injunction brought by the United States based on an act or omission prior to
March 1, 1947.
(g) It is to be noted that, under the language of sections 9 and 10,
an employer has a defense for good faith reliance on an administrative
practice or an enforcement policy only when such practice or policy is
"with respect to the efass of employers to which he belonged." '1 Thus
where an enforcement policy has been announced pertaining to laun-
dries and linen-supply companies serving industrial or commercial
establishments, the operator of an establishment furnishing window-
washing service to industrial and commercial concerns, who relied
upon that policy in regard to his employees, has no defense under sec-
5 This provision, which appeared for the first time in the conference bill, to which the
term "practice" was restored after elimination by the Senate, was apparently designed to
meet some of the objections which led to elimination of the word "practice" from the
bill reported by the Senate Judiciary Committee. Cf. remarks of Senator Murray. 1947
Cong. Rec. 2313; remarks of Senator Johnston. 1947 Cong. Rec. 2451; colloquy between
Senators Lucas and Donnell, 1947 Cong. Rec. 2259; remarks of Senator McGrath, 1947
Cong. Ree. 2330.







26 EFFECT OF PORTAL-TO-PORTAL ACT, 1947

tions 9 and 10. The enforcement policy upon which he claimed
reliance did not pertain to "the class of employers to which he
belonged."
(h) Administrative practices and enforcement policies, similar to
administrative regulations, orders, rulings, approvals, and interpre-
tations, require affirmative action by an administrative agency.16 This
should not be construed as meaning that an agency may not have ad-
ministrative practices or policies to refrain from taking certain action,
as well as practices or policies contemplating positive acts of some
kind.17 But before it can be determined that an agency actually has a
practice or policy to refrain from acting, there must be evidence of its
adoption by the agency through some affirmative action establishing
it as the practice or policy of the agency."8 Suppose, for example, that
shoe factories in a particular area were not investigated by Wage and
Hour Division inspectors operating in the area. This fact would not
establish the existence of a practice or policy of the Administrator to
treat the employees of such establishments, for enforcement purposes,
as not subject to the provisions of the Fair Labor Standards Act, in
the absence of proof of some affirmative action by the Administrator
adopting such a practice or policy. A failure to inspect might be due
to any one of a number of different reasons. It might, for instance, be
due entirely to the fact that the inspectors' time was fully occupied in
inspections of other industries in the area.
(i) It was pointed out above that sections 9 and 10 do not offer a
defense to the employer who relies upon a regulation, order, ruling,
approval or interpretation which at the time of his reliance has been
rescinded, modified, or determined by judicial authority to be invalid.
The same is true regarding administrative practices and enforcement
policies.19 However, a plea of a "good faith" defense is not defeated by
the fact that after the employer's reliance, the practice or policy is re-
scinded, modified, or declared invalid.

SECTION 790.19. "AGENCY OF THE UNITED STATES"

(a) In order to provide a defense under section 9 or section 10 of
the Portal Act, the regulation, order, ruling, approval, interpretation,
administrative practice, or enforcement policy relied upon and con-
formed with must be that of an "agency of the United States." Inso-
far as acts or omissions occurring on or after May 14, 1947, are con-
cerned, it must be that of the "agency of the United States specified
in" section 10 (b), which, in the case of the Fair Labor Standards Act,
is "the Administrator of the Wage and Hour Division of the Depart-
1e See Union Stockyards d Transit Co. v. United States, 308 U. S. 213. 223 (1939) : and
United States v. American Union Transport, Inc.. 327 U. S. 437, 454 (1946). C. Federal
Trade Commission v. Bunte Brothers, Inc.. 312 U. S. 349, 351 (1941). See also President's
message of May 14, 1947.
See, for example, Mintz v. Baldwin, 289 U. S. 346 (1933); where the Department of
Agriculture announced "its policy for the present is to leave the control [of Bang's
disease] with the various States." See also in this connection the statement of June 23,
1947, by the Senate Committee on the Judiciary regarding the President's message of May
14, 1947, on he Portal-to-Portal Act, 1947 Cong. Rec. 7694.
18 Union Stockyards & Transit Co. v. United States, supra. It may be noted in this con-
nection that examples given by the sponsors of the legislation, In discussing the terms
"administrative practice or enforcement pnlicy," involved situations in which affirmative
action had been taken by the agency. Conference Report, p. 16; 1947 Cong. Rec. 2259,
2272, 4515-16.
'B See sec. 790.17, pars. (h) and (i), and footnotes 12 and 13 above.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


ment of Labor." However, with respect to acts or omissions occurring
prior to May 14, 1947, section 9 of the act permits the employer to
show that he relied upon and conformed with a regulation, order, rul-
ing, approval, interpretation, administrative practice, or enforcement
policy of "any agency of the United States." 20
(b) The Portal Act contains no comprehensive definition of "agency"
as used in sections 9 and 10, but an indication of the meaning intended
by Congress may be found in section 10. In that section, where the
"agency" whose regulation, order, ruling, approval, interpretation,
administrative practice, or enforcement policy may be relied on is con-
fined to "the agency of the United States" specified in the section, the
Act expressly limits the meaning of the term to the official or officials
actually vested with final authority under the statutes involved.21
Similarly, the definitions of "agency" in other Federal statutes 22 indi-
cate that the term has customarily been restricted in its usage by
Congress to the persons vested under the statutes with the real power
to act for the Government-those who actually have the power to act as
(rather than merely for) the highest administrative authority of the
Government establishment.23 Furthermore, it appears from the state-
ment of the managers on the part of the House, accompanying the
Conference Committee Report, that the term "agency" as appearing
in the Portal Act was employed in this sense. As there stated (p. 16),
the regulations, orders, rulings, approvals, interpretations, adminis-
trative practices and enforcement policies relied upon and conformed
with "'mu.st be those of an "agency' and not of an individual officer or
employee of the agency. Thus, if inspector A tells the employer that
the agency interpretation is that the employer is not subject to. the
[Fair Labor Standards] Act, the employer is not relieved from lia-
bility, despite his reliance in good faith on such interpretation, unless
it is in fact the interpretation of the agency." 24 Similarly, the chair-
man of the Senate Judiciary Committee, in explaining the conference
agreement to the Senate, made tle following statement concerning the
"good faith" defense: "It will be noted that the relief from liability
must be based on a ruling of a Federal agency, and not a minor official
thereof. I, therefore, feel that the legitimate interest of labor will be
adequately protected under such a provision, since the agency will
exercise due care in the issuance of any such ruling." 25
(c) Accordingly, the defense provided by sections 9 and 10 of the
Portal Act is restricted to those situations where the employer can
show that the regulation, order, ruling, approval, interpretation,
20 The differences in the provisions of the two sections are explained and illustrated in
see. 790.13 of this bulletin.
:t In regard to the Walsh-Healey Act, "agency" is defined in sec. 10 of the Portal-to-
Portal Act as including. in addition to the Secretary of Labor, "any Federal officer uti-
lized by him in the administration of such act." The legislative history of the Portal-to-
Portal Act (1947 Cong. Rec. 2314-2315) reveals that this clause was added because of
the language in the Walsh-Healey Act authorizing the Secretary of Labor to administer
the act "and to utilize such Federal officers and employees as he may find
necessary in the administration."
Federal Register Act, 44 U. S. C., sec. 304 : Federal Reports Act, 5 U. S. C., sec. 139;
Administrative Procedure Act, 5 U. S. C.. sec. 1001.
2 See Cudahy Packing Co. v. Holland, 315 U. S. 357 (1942) ; United States v. Watashe,
102 F. (2d 428 (C. C. A. 10, 1939): 39 Opinions Attorney General 15 (1925). Of.
Keyser v. Hitz, 133 U. S. 138 (18901 39 Opinions Attorney General 541 (1933); 13
George Washington Law Review 144 (1945).
2 See also statement by Representative Gwynne, 1947 Cong. Rec. 1620; and statement
by Senator Wiley explaining the conference agreement to the Senate, 1947 Cong. Reo. 4398.
5 Statement of Senator Wiley, 1947 Cong. Rec. 4398.







28 EFFECT OF PORTAL-TO-PORTAL ACT, 1947

administrative practice, or enforcement policy with which he con-
formed and on which he relied in good faith was actually that of the
authority vested with power to issue or adopt regulations, orders,
rulings, approvals, interpretations, administrative practices, or en-
forcement policies of a final nature as the official act or policy of the
agency.26 Statements made by other officials or employees are not
regulations, orders, rulings, approvals, interpretations, administrative
practices, or enforcement policies of the agency within the meaning
bf sections 9 and 10.

RESTRICTIONS AND LIMITATIONS ON EMPLOYEE SUITS
SECTION 790.20. RIGHT OF EMPLOYEES To SITE; RESTRICTIONS ON
REPRESENTATIVE ACTIONS

Section 16 (b) of the Fair Labor Standards Act, as amended by
section 5 of the Portal Act, no longer permits an employee or employees
to designate an agent or representative (other than a member of the
affected group) to maintain an action for and in behalf of all employees
similarly situated. Collective actions brought by an employee or
employees (a real party in interest) for and in behalf of himself or
themselves and other employees similarly situated may still be brought
in accordance with the provisions of section 16 (b). With respect to
these actions, the amendment provides that no employee shall be a
party plaintiff to any such action unless he gives his consent in writing
to become such a party and such consent is filed in the court in which
such action is brought. The amendment is expressly limited to actions
which are commenced on or after the date of enactment of the Portal
Act. Representative actions which were pending on May 14, 1947,
are not affected by this amendment.27 However, under sections 6
and 8 of the Portal Act, a collective or representative action com-
menced prior to such date will be barred as to an individual claimant
who was not specifically named as a party plaintiff to the action on or
before September 11, 1947, if his written consent to become such a
party is not filed with the court within a prescribed period.28

SECTION 790.21. TIME FOR BRINGING EMPLOYEE SUITS
(a) The Portal Act 29 provides a statute of limitations fixing the
time limits within which actions by employees under section 16 (b)
of the Fair Labor Standards Act30 may be commenced, as follows:
26 Statement by Representative Gwynne, 1947 Cong. Rec. 1620; statements by Repre-
sentative Walter, 1947 Cong. Rec. 1550, 4514-4515; statement by Representative Robsion,
1947 Cong. Rec. 1553-1554; statement by Senator Thye, 1947 Cong. Rec. 4578.
Z Conference Report, p. 13.
28 Conference Report, pp. 14, 15. The claimant must file this consent within the shorter
of the following two periods: (1) 2 years, or (2) the period prescribed by the applicable
State statute of limitations. See Conference Report, p. 15.
29 See sees. 6-8, inclusive.
80 Sponsors of the legislation stated that the time limitations prescribed therein apply
only to the statutory actions, brought under the special authority contained in sec. 16 (b)
in which liquidated damages may be recovered. and do not purport to affect the usual
application of State statutes of limitation to other actions brought by employees to recover
wages due them under contract, at common law, or under State statutes. Statements of
Representative Gwynne 1947 Cong. Rec. 1545, 1614; colloquy between Representatives
Robsion and Celler, 1941 Cong. Rec. 1549.








EFFECT OF PORTAL-TO-PORTAL ACT, 1947


(1) Actions to enforce causes of action accruing on or after May
14, 1947: 2 years.
(2) Actions to enforce causes of action accruing before May 14
1947 *. 2 years, or period prescribed by applicable State statute oi
limitations, whichever i.s shorter.
These are maximum periods for bringing such actions, measured
from the time the employee's cause of action acrcues to the time his
action is conmmence'd.-
(b) The courts have held that a cause of action under the Fair Labor
Standards Act for unpaid minimum wages or unpaid overtime com-
pensation and for liquidated damages "accrues" when the employer
fails to pay the required compensation for any workweek at the regu-
lar pay day for the period in which the workweek ends.3 The Portal
Act provides that an action to enforce such a cause of action shall
be considered to be commenceded:
(1) In individual actions, on the date the complaint is filed;
(2) In collective or class actions, as to an individual claimant,
(i) On the date the complaint is filed, if he is specifically
named therein as a party plaintiff and his written consent to
become such is filed with the court on that date, or
(ii) On the subsequent date when his written consent to be-
come a party plaintiff is filed in the court, if it was not so filed
when the complaint was filed or if he was not then named therein
as a party plaintiff.35
(c) The statute of limitations in the Portal Act is silent as to
whether or not the running of the 2-year period of limitations may
be suspended for any cause." In this connection attention is directed
to section 205 of the Soldiers' and Sailors' Civil Relief Act of 1940,37
as amended, which provides that the period of military service shall

a This refers to actions commenced after September 11, 1947. Such actions commenced
on or between May 14, 1947, and September 11, 1947, were left subject to State statutes
of limitations. As to collective and reprsEntiati-e actions commenced before May 14,
1947. sec. 8 of the Portal Act makes the period of limitations stated in the text applicable
to the filing, by certain individual claimants, of written consents to become parties plain-
tiff. See Conference Report, p. 15; sec. 790.20 of this bulletin.
= Conference Report, pp. 13-15.
33 Reid v. Solar Corp., 6 W. H. Cases 508; Mid-Continent Petroleum Corp. v. Keen, 157
F. (2d) 310, 316 (C. C. A. 8). See also Brooklyn Savings Bank v. O'Neil, 324 U. S. 697;
Rigopoulo.r v. Kervan, 140 F. (2d) 506 (C. C. A. 2).
In some instances an employee may receive, as a part of his compensation, extra pay-
ments under incentive or bonus plans, based on factors which do not permit computation
and payment of the sums due for a particular workweek or pay period until some time
afrer the pay day for that period. In such cases it would seem that an employee's cause of
action, insofar as it may be based on such payment, would not accrue until the time
when such payment should be made. Cf. Walling v. Hanisclifegcr Corp., 325 U. S. 427.
84 Sec. 7. See also Conference Report, p. 14.
85 This is also the rule under sec. 8 of the Portal Act as to individual claimants, in collec-
tive or representative actions commenced before May 14, 1947, who were not specifically
named ns parties plaintiff on or before September 11, 1947.
36 A limited suspension provision was contained in sec.,2 (d) of the House bill, but was
eliminated by the Senate. Neither the Senate debates, the Senate committee report, nor
the c.,nferenroe committee report indicate the reason for this. While the courts have held
that in a proper case a statute of limitations may be suspended by causes not mentioned in
the statute itself (Braun \. aS'aernicci. 10 Wall. 218, 223. R e also Richards v. Maryland
Ins. Co., S Cranch S4, 92; Bausermanu v. Blunt, 147 U. S. 647), they have also held that
when the statute has once commenced to run, its operation is not suspended by a subse-
quent disability to ue. and that the bar of the statute cannot be postponed by the failure
of the creditor (employee) to avail himself of any means within his power to prosecute or
to preserve his claim. Bauscrman v. Blunt, 147 U. S. 647, 657; Smith v. Continental Oil
Co.. 59 F. Supp. 91, 94.
1' Act of October 17. 1940. ch. 888, 54 Stat. 1178, as amended by the act of October 6,
1942, ch. 581, 56 Stat. 769 (50 U. S. C. A. App. see. 525).







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


not be included in the period limited by law for the bringing of an
action or proceeding, whether the cause of action shall have accrued
prior to or during the period of such service.

SECTION 790.22. DISCRETION OF COURT AS TO ASSESSMENT OF
LIQUIDATED DAMAGES
(a) Section 11 of the Portal Act provides that in any action brought
under the Fair Labor Standards Act to recover unpaid minimum
wages, unpaid overtime compensation, or liquidated damages, the
court may, subject to prescribed conditions, in its sound discretion
award no liquidated damages or award any amount of such damages
not to exceed the amount specified in section 16 (b) of the Fair Labor
Standards Act.38
(b) The conditions prescribed as prerequisites to such an exercise
of discretion by the court are two: (1) The employer must show to
the satisfaction of the court that the act or omission giving rise to
such action was in good faith; and (2) he must show also, to the satis-
faction of the court, that he had reasonable grounds for believing that
his act or omission was not a violation of the Fair Labor Standards
Act. If these conditions are met by the employer against whom the
suit is brought, the court is permitted, but not required, in its sound
discretion to reduce or eliminate the liquidated damages which would
otherwise be required in any judgment against the employer. This
may be done in any action brought under section 16 (b) of the Fair
Labor Standards Act, regardless of whether the action was instituted
prior to or on or after May 14, 1947, and regardless of when the em-
ployee activities on which it is based were engaged in. If, however,
the employer does not show to the satisfaction of the court that he
has met the two conditions mentioned above,-the court is given no dis-
cretion by the statute, and it continues to be the duty of the court to
award liquidated damages.39
(c) What constitutes good faith on the part of an employer, and
whether he had reasonable grounds for believing that his act or omis-
sion was not a violation of the Fair Labor Standards Act are mixed
questions of fact and law, which should be determined by objective
tests.40 Where an employer makes the required showing, it is for the
court to determine in its sound discretion what would be just accord-
ing to the law on the facts shown.
(d) Section 11 of the Portal Act does not change the provisions
of section 16 (b) of the Fair Labor Standards Act under which attor-
88 Sec. 16 (b) of the Fair Labor Standards Act provides that an employer who violates
the minimum-wage or overtime provisions of the act shall be liable to the affected employees
not only for the amount of the unpaid minimum wages or unpaid overtime compensation,
as the case may be, but also for an additional equal amount as liquidated damages. The
courts have held that this provision is "not penal In its nature" but rather that such
damages "constitute compensation for the retention of a workmen's pay" where the
required wages are not paid "on time." Under this provision of the law, the courts have
held that the liability of an employer for liquidated damages in an amount equal to his
underpayments of required wages becomes fixed at the time he fails to pay such wages when
due and the courts were given no discretion, prior to the enactment of the Portal-to-Portal
Act, to relieve him of any portion of this liability. See Brooklyn Savings Bank v. O'Neil,
324 U. S. 697 ; Overnight Motor Transp. Co. v. Missel, 816 U. S. 572.
See Conference Report, p. 17; remarks of Representative Walter, 1947 Cong. Rec.
1550; President's message of May 14, 1947, to the Congress on approval of the Portal Act.
4 Cf. sees. 790.13-790.16 of this bulletin.




F


EFFECT OF PORTAL-TO-PORTAL ACT, 1947 31

ney's fees and court costs are recoverable when judgment is awarded
to the plaintiff.

PROVISIONS RELATING TO CERTAIN ACTIVITIES
ENGAGED IN BY EMPLOYEES BEFORE MAY 14, 1947

1 SECTION 790.23. LIABILITY OF EMPLOYER; EFFECT OF CONTRACT,
CUSTOM, OR PRACTICE

(a) Section 2 of the Portal Act, which relates to activities engaged
in by employees prior to the effective date of the act, was designed
to meet the problem which Congress found had arisen as a result of
existing "portal-to-portal" claims.41 Subsections (a) and (b) of this
section provide as follows:
(a) No employer shall be subject to any liability or punishment under the
Fair Labor Standards Act of 1938, as amended, (in any action or
proceeding commenced prior to or on or after the date of the enactment of this
Act), on account of the failure of such employer to pay an employee minimum
wages, or to pay an employee overtime compensation, for or on account of any
activity of an employee engaged in prior to the date of the enactment of this
Act, except an activity which was compensable by either-
(1) an express provision of a written or nonwritten contract in effect,
at the time of such activity, between such employee, his agent, or collective-
bargaining representative and his employer; or
: (2) a custom or practice in effect, at the time of such activity, at the
Establishment or other place where such employee was employed, covering
such activity, not inconsistent with a written or nonwritten contract, in
effect at the time of such activity, between such employee, his agent, or
collective-bargaining representat ie and his employer.
(b) For the purpose of subsection (a), an activity shall be considered as
compensable under such contract provision or such custom or practice only
when it was engaged in during the portion of the day with respect to which it
was so made compensable.
It will be noted that the above language contains certain words and
Phrases which are similarly used in section 4 of the act, relating to
future claims. Reference is made to the discussion of that section
Ai: for comments as to the meaning and effect of such terms42 The dis-
cussion of these provisions which follows is confined to certain general
comments.
(b) Like section 4 of the act, previously discussed, section 2 affords
relief to employers from liability or punishment to which they might
otherwise be subject because they did not pay their employees in ac-
cordance with the Fair Labor Standards Act for or on account. of
certain activities which were, at the time of performance, not com-
pensable either by contract or by a custom or practice as described in
the statute. A major difference is that section 2 refers only to activi-
ties performed before May 14, 1947 (the effective date of the act)
while section 4 is concerned only with activities performed on or after
that date. Although the same criteria of contract, custom, and prac-

M.:" 4 See Portal Act, sec. 1; Conference Report, pp. 9, 10; House Report. pp. 1-6; Senate
Report, pp. 1-45; statement of Representative Gwynne. 1947 Cong. Rec. 4513; statements
of Senator Wiley, 1947 Cong. Rec. 2151-2156, 4397; statements of Senator Donnell, 11(47
Cone. Rec. 2196. 2197.
42 See sees. 790.4, 790.9-790.12 of this bulletin.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


tice are used to determine compensability," the provisions of section
2 (a), (b) of thePortal Act differ from the corresponding provisions
of section 4, relating to future chlims, in that their scope is not con-
fined to activities engaged in outside the workday proper, but extends
to such activities engaged in at any time during the 24 hours of the
day.44 However, it is apparent from the statutory language and the
legislative history that the quoted provisions were intended to carry
out the policy expressed in section 1 of the act and were not intended to
relieve an employer from liability or punishment for failing to pay
compensation as required by the Fair Labor Standards Act for or on
account of any activities of his employees which were compensable
in any amount under a contract, custom, or practice of the kind de-
scribed in subsection (a) ,5 even though such activities were so-called
"portal-to-portal" activities.46
(c) It will be noted that the relief afforded employers by the provi-
sions quoted in paragraph (a) above is relief from liability or punish-
ment "in any action or proceeding." 47 Whether the relief thus pro-
vided is available to a particular employer in a given fact situation
would, therefore, seem to be a matter for determination in such an
action or proceeding on the basis of the proof made therein. The
language "any action or proceeding" indicates that, with respect to
activities performed before May 14, 1947, these provisions apply in
accordance with their terms in any action or proceeding to enforce lia-
bility or impose punishment on the employer, whether commenced
before or on or after such date."

SECTION 790.24. EFFECT OF PORTAL ACT ON DETERMINATION OF HOURS
WORKED PRIOR TO MAY 14, 1947

(a) Section 2 (c) of the Portal Act provides as follows:
(c) In the application of the minimum wage and overtime compensation pro-
visions of the Fair Labor Standards Act of 1938, as amended, in
determining the time for which an employer employed an employee there shall
be counted all that time, but only that time, during which the employee engaged
in activities which were compensable within the meaning of subsections (a) and
(b) of this section. [Italics supplied.] 4a
This provision relates to the determination of hours worked prior to
May 14, 1947. The effect of the Portal Act on the determination of
hours worked under the Fair Labor Standards Act after that date is
discussed at another point in this bulletin.50 Under the terms of the
quoted provision, time spent by employees prior to the enactment of
the latter act in activities which were not compensable by contract,
custom, or practice within the meaning of the Portal Act is to be ex-
4 See sees. 790.5 (b), 790.10-790.14 above.
44 See statements of Senator Donnall, 1947 Cong. Rec. 2196, 2255, 2440.
See Conference Report, pp. 9, 10; 1947 Cong. Rec. 1621. 1623, 1629, 2194, 2196 2197,
2200, 2203, 2252, 2253. 2370, 2371, 2373, 2378, 2383, 2384. See also the President's
message on approval of the Portal-to-Portal Act, May 14. 1947.
*6 See colloquy between Senators Tydings and Donnell. 1947 Cong. Rec. 2196; colloquy
between Senators Lodge, Donnell, and Hawkes. 1947 Cong. Rec. 2252. 2253.
01 The quoted language does not appear in the corresponding provisions of see. 4, relating
to future claims. See sec. 790.4 of this bulletin.
0 See Conference Report, p. 9.
40 Subsecs. (a) and (b) are discussed in see. 790.23 of this bulletin.
50 See sees. 790.5-790.8 of this bulletin.








EFFECT OF PORTAL-TO-PORTAL ACT, 1947 33

eluded in computing worktime for purposes of determining whether
the minimum wage and overtime requirements of the Fair Labor
Standards Act were met.51 On the other hand, time that constituted
hours worked, which was devoted to activities which were so com-
pensable, is not removed by these provisions from the category of time
worked, for purposes of the Fair Labor Standards Act; the statute
expressly provides that all such time shall be counted in computing
hours worked.5
(b) In determining time worked prior to May 14, 1947, in accord-
ance with the provision quoted in paragraph (a) above, regard must be
had to the "portion of the day" provisions of section 2 (b) of the
Portal-to-Portal Act as well as the more general provisions of section
2 (a).53

SECTION 790.25. JURISDICTION OF COURTS LIMITED AS TO WAGE CLAIMS
FOR PERIODS PRIOR TO MAY 14, 1947

(a) Section 2 (d) of the Portal Act provides that:
No court of the United States, of any State, Territory, or possession of the
United States, or of the District of Columbia, shall have jurisdiction of any action
or proceeding, whether instituted prior to or on or after the date of the enactment
of this Act, to enforce liability or impose punishment for or on account of the
failure of the employer to pay minimum wages or overtime compensation under
the Fair Labor Standards Act of 193S, as amended, to the extent that
such action or proceeding seeks to enforce any liability or impose any punishment
with respect to an activity which was not compensable under subsections (a)
and (b) of this section."
(b) It will be noted that this provision of the act limits the juris-
diction of both Federal and State courts in all such actions or pro-
ceedings whether commenced before or after the enactment, of the act.
It is important to bear in mind that this provision 'does not affect the
jurisdiction of any court in any action or proceeding insofar as it is
based on failure to pay minimum wages or overtime compensation
for any activities engaged in by employees on or after May 14, 1947.
This limitation of jurisdiction affects only those actions or proceedings
in which it, is sought to enforce liability or impose punishment on an
employer for, or on account of, his failure to pay, the required mini-
mum wages or overtime compensation for activities engaged in by em-
ployees during periods prior to May 14, 1947, and then only to the ex-
tent that such activities were not compensable by contract, custom, or
practice as provided in subsections 2 (a) and 2 (b) of the Portal Act.56

51 This aspect of the quoted provision is, as explained in the Conference Rep'rt, intended
to make clear, as was done in see. 2 of the Senate amendment to the bill (H. R. 21571 as
passed by the House of Representatives (not contained in the bill as finally enacted), that
no judicial or administrative interpretation will have the effect of including as w,'o kimee
other time which was not made compensable by contract, custom, or practice. Conference
Report. p. 10.
52The purpose of this portion of the quoted provision, as explained by the Conference
Committee, is to emphasize that employers are not relieved from liability for the payment
of minimum wages and overtime compensation for any time during which the employee
engaged in activities compensable under contract, custom, or practice as provided in the
statute. Sec. 3 of the Senate amendment, which so provided, was omitted under the con-
ference agreement as surplusage, and as fully covered by sec. 2 (c) of the bill as agreed to
in conference. Conference Report. p. 10.
3 These provisions are quoted in sec. 790.23 above. See also Conference Report, p. 10,
and cf. sec. 790.L2 of this bulletin.
54 The text of subsecs. (a) and (b) "appears above in see. 790.23 (a) of this bulletin.
65 See in this connection, sees. 790.23 and 790.24 of this bulletin.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


The denial of jurisdiction is "not applicable to actions or proceedings
in which judgment has become final prior to the date of the enact-
ment" of the act.56
(c) It appears from the language quoted above that the jurisdiction
of the courts with respect to an action or proceeding remains unaffected
by this provision to the extent that such an action or proceeding seeks
to impose liability or punishment either (1) for failure to pay wages
in accordance with the Fair Labor Standards Act for or on account
of activities which were compensable by contract, custom, or practice
as provided in sections 2 (a), (b) of the Portal Act, or (2) for
child labor or other violations of the Fair Labor Standards Act where
no liability or punishment is sought to be imposed "for or on account
of the failure of the employer to pay minimum wages or overtime
compensation."
SECTION 790.26. PROHIBITION OF ASSIGNMENTS
Assignees of employees' causes of action for unpaid minimum wages,
unpaid overtime compensation, or liquidated damages under the Fair
Labor Standards Act have, in the past, been allowed to recover in some
cases where such assignments are permitted by local law, on the theory
that the act does not expressly or by implication forbid such assign-
ments and that they do not contravene public policy.7 Certain such
assignments are now prohibited by section 2 (e) of the Portal Act.8
This section expressly refers only to causes of action which accrued 59
prior to May 14, 1947, and applies only "to the extent that" such a
cause of action "is based on an activity which was not compensable"
under contract, custom, or practice within the meaning of the pro-
visions of section 2 (a) and 2 (b) of this act.60 To the extent that such
a cause of action is based on such an activity, section 2 (e) provides
that neither it nor "any interest in" it "shall hereafter be assignable,
in whole or in part." As explained in the Conference Report,61 this
provision will render it impossible for anyone (even though permitted
to do so under State law) to buy up existing claims which were not
compensable under contract, custom, or practice, with the hope of
compromising such claims at a profit under the provisions of section 3
of the act.62

SECTION 790.27. COMPRO MISE OF CLAIMS EXISTING PRIOR TO MAY 14, 1947
(a) Section 3 of the Portal Act authorizes compromises of certain
claims on causes of action under the Fair Labor Standards Act which
accrued before enactment of the Portal Act, as follows:
(a) Any cause of action under the Fair Labor Standards Act of 1938, as
amended, which accrued prior to the date of the enactment of this
Act, or any action (whether instituted prior to on or after the date of the enact-
ment of this Act) to enforce such a cause of action, may hereafter be compro-
w Conference Report, p. 11.
T Steiner v. Plcasantville Constructors, Inc., 9 Labor Cas. (C. C. H.), par. 66,902. Cf.
Titus v. Wallick. 306 U. S. 282.
SCf. sec. 5 of the act. discussed in sec. 790.20 of this bulletin.
0 As to meaning of "accrued," see the discussion in sec. 790.21 (b) of this bulletin.
O These prdvislons are discussed in sec. 790.23 of this bulletin.
a Conference Report, p. 11.
2 See the discussion of sec. 8 in sec. 790.27 of this bulletin.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947 35

mised in whole or in part, if there exists a bona fide dispute as to the amount
payable by the employer to his employee; except that no such action or cause of
action may be so compromised to the extent that such compromise is based on an
hourly wage rate less than the minimum required under such Act, or on a pay-
ment for overtime at a rate less than one and one-half times such minimum
hourly wage rate.
*
(c) Any such compromise *, in the absence of fraud or duress, shall,
according to the terms thereof, be a complete satisfaction of such cause of action
and a complete bar to any action based on such cause of action.
(d) The provisions of this section shall also be applicable to any compro-
mise heretofore so made or given.
(e) As used in this section, the term "compromise" includes "adjustment",
"settlement", and "release".
The foregoing provisions authorize compromise only of those causes
of action accruing prior to May 14, 1947, and of actions thereon; the
statute does not change existing law as to compromise of such claims,63
with respect to any cause of action accruing 64 after the date of enact-
ment of the act.6 Subject to the conditions discussed below in para-
graph (b), this statutory authorization of compromises extends to the
following:
(1) All or any part of any cause of action accruing prior to May
14, 1947.
(2) All or any part of any action to enforce cause of action in-
cluded in (1), above, whether such action was instituted before, on,
or after May 14, 1947.
(3) Any compromise made prior to May 14, 1947, which comes
within the terms of section 3 of the Portal-to-Portal Act.
(b) The compromise of existing claims just described is permitted,
if, and only if, all of the following conditions are fulfilled in each
case:
(1) Existence of a bona fide dispute as to the amount. payable by
an employer to employee.
(2) Absence of fraud and duress.
(3) The compromise sum for straight-time hours worked must
be based on an hourly wage rate not less than the minimum rate
per hour prescribed by the Fair Labor Standards Act or by a wage
order issued thereunder, which is at present 40 cents (except in
certain industries in Puerto Rico and the Virgin Islands).
(4) The compromise sum for overtime hours worked must be
based on a rate not less than one and one-half times the minimum
hourly wage rate prescribed by the Fair Labor Standards Act or
by a wage order issued thereunder, which at the present means at
least. l11/ by 40, or 60 cents for each overtime hour (except in cer-
tain industries in Puerto Rico and the Virgin Islands).
(c) As pointed out in paragraph (b) (4) of this section, the sums
paid in compromise of overtime claims may be based, as a minimum,

6 Prior to the Portal Act. it was settled that claims of employees for minimum and
overtime wages under the Fair Labor Standards Act could not be compromised because
of disputes as to coverage of the act. Schulte Co. v. Gangi, 328 U. S. 108.
64 For the meaning of "accruing" see sec. 790.21 (b) of this bulletin. The legislative
history indicates that the omission of a provision for compromises or settlement of claims
arising after enactment of the statute constitutes a recognition by the Congress of the
danger, emphasized by the- Supreme Court, that such a provision would lead to a break-
down of the labor standards established in the Fair Labor Standards Act. See Senator
Donnell's statement, 1947 Cong. Rec. 2192.
65 Conference Report, p. 12.







36 EFFECT OF PORTAL-TO-PORTAL ACT, 1947

one one and one-half times the 40-cent minimum hourly wage. Thus,
an employee whose regular hourly rate is 50 cents and who, accord-
ingly, has a right to overtime at 75 cents per hour may compromise
an existing claim, as authorized by section 3, for 60 cents an overtime
hour, but not for less.66 Permitting compromises of certain existing
claims as specified does not, of course, alter the general requirement
of section 7 of the Fair Labor Standards Act that overtime compen-
sation under the act must be paid at a rate not less than one and one-
half times the regular rate at which the employee is actually employed.
(d) A "bona fide dispute" which must exist before any compromise
can be made, would seem to mean an honest disagreement between
employer and employee. It follows that no compromise would be
permitted where there is no actual dispute as to the facts or the
applicable law, or where the exact amount of an employer's liability
under the law is clear. The Portal Act does not permit an employee
to merely release his undisputed right to straight-time or overtime
wage payments."6

SECTION 790.28. WAIVER OF RIGHT TO LIQUIDATED DAMAGES
(a) The general rule that an employee whose employer has failed
to pay him the minimum or overtime wages required by the Fair Labor
Standards Act is not permitted to waive his right under section 16 (b)
of the Act to liquidated damages for withholding the compensation
due,68 is modified by section 3 (b), (c), (d) of the Portal Act. Under
these provisions, an employee may waive, in whole or in part, his
right to liquidated damages with respect to activities performed
before May 14, 1947. This permission is extended retrospectively to
waivers of liquidated damages made by employees prior to May 14,
1947. Such waivers are made valid unless their invalidity was deter-
mined prior to that date by a final court judgment. It is provided
that, in the absence of fraud or duress and according to the terms of
the waiver, any waiver authorized by section 3 shall be a complete
satisfaction of the employee's cause of action for the liquidated dam-
ages so waived and a complete bar to any action based on such cause
of action.
(b) The general rule stated in paragraph (a) remains in effect in all
situations where the liquidated damages are based on underpayments
for activities performed on or after May 14, 1947. The Portal Act
does not authorize the waiver by an employee of his right to such
liquidated damages.6
(c) It should be noted that an employee is not permitted to waive
his right to the statutory miinimum wages or to overtime payments at
E See Conference Report, p. 11; statement of Senator Wiley explaining the conference
agreement to the Senate, 1947 Cong. Rec. 4397; statement of Representative Gwynne,
1947 Cone. Rec. 4513.
*6 Representative Walter, explaining the conference agreement to the House of Repre-
sentatives, 1947 Cong. RPo. 4515, indicated that the phrase. "dispute as to the amount
payable," would Include disagreements as tn matters of law such as whether employee's
work is covered by the Fair Labor Standards Act or whether the employer Is exempt, as
well as disagreements as to matters of fact such as the number of hours worked or the
wage rates paid.
wSee O'N.ei v. Brooklyn Savings Bank, 324 U. S. 697.
See conference Report, p. 12. As to discretion of courts in awarding liquidated dam-
ages in such a case, see sec. 790.22 of this bulletin.







EFFECT OF PORTAL-TO-PORTAL ACT, 1947


Sone and one-half times his regular hourly rate."0 For example, an
employee covered by the Fair Labor Standards Act who had been paid
only 30 cents per hour for work performed in 1947 to May 14, and
who did not work more than 40 hours in any workweek, has a valid
claim for 10 cents for each hour worked plus liquidated damages in an
equal amount.71 He is permitted to wacie only his right to liquidated
damages. Similarly, an employee who worked 48 hours a week prior
to May 14, 1947 and was paid only 80 cents an hour has a valid claim
for an additional 40 cents for each hour worked after 40 in the work-
week, which he is not permitted to waive, although he may waive all
or part of the equal amount to which he may be entitled as liquidated
damages.
(d) No waiver by an employee of his right to recover attorney's
fees and court costs in an action under section 16 (b) of the Fair Labor
Standards Act is authorized by section 3.

SECTION 790.29. "AREA OF PRODUCTION" EXEMPTION PRIOR TO
DECEMBER 26, 1946

(a) As explained in the conference report on the bill, section 12 of
the Portal Act relieves employers from liability and punishment for
failure to pay employees minimum wages or overtime compensation as
prescribed in the Fair Labor Standards Act for or on account of any
activity (within the scope of one of the "area of production" exemp-
tions) 72 engaged in by their employees prior to December 26, 1946,73 if
such employer can show that he-
(1) was relieved from such liability or punishment by reason of a valid defini-
tion of "area of production" by the Administrator applicable at the time of the
performance of the activity, or (2) would have been so relieved by reason of an
invalid definition applicable at the time of the performance if such definition had
been valid, or (3) would lmve been so relieved if the definition finally made by
Sthe Administrator on December 18, 1946, and published in the Federal Register on
December 25, 1946, had been in force on and after the effective date of the sec-
tions of such act of 1938 providing for minimum wages and overtime compen-
sation.74
The conference report points out also that the protection to the em-
ployer under the foregoing provisions for acts or omissions up to De-
cember 26, 1946, will exist even though hereafter the regulation of
December 1946 is held invalid.
(b) It should be noted, however, that the provisions of section 12
do not relieve employers from liability or punishment under the Fair
Labor Standards Act for acts or omissions with respect to any of the
following activities engaged in by their employees:
(1) Activities engaged in on and after December 26,1946.75
'0 As to compromise of such claims arising out of activities performed before May 14,
1947. see sec. 790.27 of this bulletin.
The recovery of this amount as liquidated damages is made subject to the sound dis-
cretion of the courts under certain conditions. See the discussion of sec. 11 of the Portal
Act in sec. 790.22 of this bulletin.
These exemptions are contained in sees. 7 (c) and 13 (a) (10) of the Fair Labor
Standards Act.
'a See Addiso i v. Holly Hill Fruit Products, Inc., 322 U. 8. 607.
Conference Report. p. 17.
7 As to activities performed on or after December 26, 1946, and prior to March 1, 1947,
see sec. 790.18(f) of this bulletin.







38 EFFECT OF PORTAL-TO-PORTAL ACT, 1947

(2) Activities engaged in during the period from October 24,
1938, through December 25, 1946, by employees who were not em-
ployed-within the "area of production" as defined in either (i) .any
regulation of the Administrator (valid or invalid) which was
applicable at the time they were performed, or (ii) the currently
effective regulation issued December 25, 1946.76
(3) Activities other than those for which section 13 (a) (10) or
the relevant portion of section 7 (c) provides an exemption, even
though performed by employees employed within the "area of
production" as defined in such a regulation."
All these latter activities remain subject to the applicable provisions
of the Fair Labor Standards Act of 1938, as amended, and to current
and subsequent regulations of the Administrator, to the same extent
as they would have been had section 12 of the Portal-to-Portal Act not
been enacted. Other sections of the Portal-to-Portal Act may, of
course, be applicable in appropriate situations.
7 Pt. 536 of Title 29, Ch. V, of the Code of Federal Regulations.
7 See the Interpretative Bulletin (No. 14) on exemptions applicable to agriculture and
operations on products of agriculture ,which will be issued in revised form as pt. 780,
subpt. A, of Title 29, Ch. V, of the Code of Federal Regulations.

UNIVERSITY OF FLORIDA

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