GLASSBORO SERVICE ASSOCIATION, INC., PETITIONER V. ANN DORE
MCLAUGHLIN, SECRETARY OF LABOR

   No. 87-1934

   In the Supreme Court of the United States

   October Term, 1988

   On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Third Circuit

   Memorandum for the Respondent in Opposition

   Petitioner contends that it should not have been held in contempt
for violating a district court order by requiring migrant farmworkers
to pay the cost of traveling from Puerto Rico to their places of work
in New Jersey.  When those transportation costs are subtracted from
the workers' earnings, they receive less than the federal minimum wage
set forth in the Fair Labor Standards Act of 1938, 29 U.S.C. (& Supp.
IV) 201 et seq. (FLSA).

   1. Petitioner is an association of New Jersey farmers that recruits
Puerto Rican migrant farmworkers for its members (Pet. App. 1a).
Petitioner recruits the laborers under an agreement with the
Commonwealth of Puerto Rico (id. at 1a-2a).  Petitioner arranges for
the workers' transportation from the point of recruitment in Puerto
Rico to the point of hire in New Jersey (id. at 41a, 48a), but
petitioner requires the workers to pay the cost of transportation
(ibid.).  When those costs are deducted from the compensation paid to
the workers, the result is often a rate of compensation below the
minimum wage required under the FLSA (29 U.S.C. 206;  Pet. App. 48a).

   In 1978, the Secretary of Labor brought an action against
petitioner for violating the minimum wage provisions of the FLSA (29
U.S.C. 206, 215(a)(2);  Pet. App. 1a).  The Secretary asserted that
petitioner's practice of deducting transportation costs from the
workers' wages /1/ constituted a violation of the Act to the extent
that it reduced their pay below the statutory minimum (Pet. App. 3a).
The district court agreed with the Secretary (id. at 7a-9a) that
transportation costs which are incident to petitioner's recruitment
program cannot be charged to employees if such costs result in net pay
less than the minimum wage.  See 29 U.S.C. 203(m);  29 C.F.R.
531.32(c).  Accordingly, on December 5, 1979, the district court
permanently enjoined petitioner from deducting its transportation
costs from the workers' wages if such a deduction results in net pay
below the minimum wage.  /2/ The court of appeals affirmed that
injunction (639 F.2d 774 (1980)), and this Court denied a petition for
a writ of certiorari (450 U.S. 1040 (1981)).

   In August 1981, the Secretary filed in the district court a
petition seeking to hold petitioner in civil contempt of the court's
1979 injunction (Pet. App. 43a).  The Secretary had learned that
petitioner was advancing transportation costs to workers and then
requesting "voluntary paybacks" of those advances (ibid.).  On
November 5, 1981, with the consent of the parties, the court entered a
new injunction (1981 Injunction) that incorporated the original
injunction and added provisions specifically prohibiting petitioner
from seeking "voluntary paybacks" of transportation costs (id. at
16a-21a, 43a-44a).

   The district court entered a money judgment in this case on August
25, 1983.  The court ordered petitioner to pay more than $294,000 in
back wages.  Pet. App. 36a-38a.  In an opinion supporting that
judgment, the court rejected petitioner's claim that it could require
employees to pay bus fare before they were assigned to a particular
farm (id. at 25a-29a).  Petitioner argued that this practice did not
violate the 1981 Injunction because a worker's payment of
transportation costs before he began work was not a "deduction" from
wages.  The court ruled that "to the extent that a worker's payment of
his ground transportation reduced the amount of money he ultimately
earned below the minimum wage, that payment violated the (1981
Injunction)" (id. at 29a).  Petitioner did not appeal from the money
judgment.

   2. On February 11, 1987, the Secretary commenced this contempt
action.  The Secretary alleged that petitioner had continued to
require farm laborers to pay their transportation costs in defiance of
the 1981 Injunction (Pet. App. 47a).  Petitioner admitted that it
required workers to pay airfare from Puerto Rico and to pay the cost
of ground transportation from the airport to their housing (id. at
47a-48a).  But petitioner denied that this practice of requiring
workers to pay their own airfare violated the 1981 Injunction, even
though workers' net wages often dropped below the statutory minimum
(id. at 48a).

   The court found petitioner to be in civil contempt.  The court
squarely rejected, as it had in August 1983, petitioner's assertion
that the 1981 Injunction only prohibited "deductions" from wages to
pay transportation costs and did not forbid the workers' outright
payment of those expenses (id. at 61a).  The court observed that
petitioner's argument "substitutes artificial distinctions for a
practical view of the economic realities" (ibid.).  The court
reiterated its finding of 1979 that petitioner must bear
transportation expenses as part of its recruitment costs because those
expenses primarily benefit petitioner, not the farmworkers (id. at
60a).

   On July 23, 1987, the court entered an order holding petitioner in
civil contempt and requiring petitioner to remedy its violation (Pet.
App. 70a-73a).  The court of appeals affirmed that order without an
opinion on February 8, 1988.  /3/

   3. The court of appeals' decision is clearly correct and does not
conflict with any decision of this Court or any other court of
appeals.  Thus, no further review is warranted.

   Petitioner argues (Pet. 21-24) that the district court's 1981
Injunction is wrong because it forbids petitioner's practice of
charging farmworkers with its transportation costs if such charges
reduce the workers' wages below the statutory minimum.  Thus,
petitioner is challenging the contempt order solely on the ground that
the underlying injunction is based on a legal error.  Accordingly,
petitioner's current challenge is foreclosed by "'the longstanding
rule that a contempt proceeding does not open to reconsideration the
legal or factual basis of the order alleged to have been disobeyed.'"
United States v. Rylander, 460 U.S. 752, 756 (1983) (quoting Maggio v.
Zeitz, 333 U.S. 56, 69 (1948)).

   As petitioner concedes (Pet. 22), the correctness of the underlying
order was fully litigated.  And petitioner is in no position to argue
that the district court in the present contempt action has given the
1981 Injunction a new construction of which it had no prior notice.
The 1981 Injunction provides that petitioner "shall not include (in)
the computations of its employees' minimum wages, as the cost of
furnishing facilities to its employees, the cost of transporting
workers from the point of recruitment to the point of hire" (Pet. App.
18a-19a).  The district court stated in its August 25, 1983 Letter
Opinion that "(r)egardless of when the worker pays for his fare, the
court thinks that the * * * consent order places the burden of that
cost upon the employer.  The decree forbids the employer from
including transportation costs from the point of recruitment -- here
Puerto Rico -- to the point of hire -- the farm -- ask a part of the
employer's minimum wage payment to the worker" (id. at 28a-29a).
Thus, it has been clear since 1983 that petitioner's practice of
requiring workers to pay their transportation costs violates the
court's 1981 Injunction, and an order of contempt for a clear
violation of that injunction was wholly proper.

   It is therefore respectfully submitted that the petition for a writ
of certiorari should be denied.

   CHARLES FRIED

      Solicitor General

   GEORGE R. SALEM

      Solicitor of Labor

   JULY 1988

   /1/ At that time, it was petitioner's practice to refund the
deducted transportation costs and further pay the cost of a trip back
to Puerto Rico for those employees who complete their term of hire
(Pet. App. 2a).

   /2/ A copy of the December 1979 order is included as Appendix A to
this memorandum.  That order was not a final judgment because it did
not resolve the issue of money damages.

   /3/ Petitioner omitted the court of appeals' order from its
appendix.  A copy of that order is included as Appendix B to this
memorandum.

   APPENDIX