Vermilya-Brown Co. v. Connell

Background

A group of workers employed by contractors on a U.S.-leased military base in Bermuda sued for unpaid overtime under the Fair Labor Standards Act (FLSA). The District Court dismissed their complaint, concluding the leased area was not part of U.S. territory and that the question involved political branches. The Court of Appeals reversed, and the Supreme Court granted review because many similar leased bases exist.

Reasoning

The Court addressed whether the FLSA reaches employer-employee relations on a foreign leasehold that remains under British sovereignty. The majority said Congress may regulate labor where the United States has exclusive control for base operations, even if formal sovereignty remains with the lessor. The Court relied on constitutional power to make rules for U.S. property and read the word "possession" in the statute to include foreign areas where the U.S. has authority to set wages and hours. On that basis the Court affirmed the appeals court and allowed the overtime claims to proceed.

Real world impact

The decision means contractor employees working on U.S.-controlled foreign bases may be covered by federal wage-and-hour protections and can press overtime claims. The case was not a final trial on whether each plaintiff met the Act’s tests (for example, whether the particular work involved commerce), so further proceedings were left to the lower court. The opinion noted administrative and executive concerns, reflecting possible effects on many leased bases and on foreign relations.

Dissents or concurrances

Justice Jackson dissented, arguing leased bases are not U.S. possessions, stressing the lease limits and warning about diplomatic consequences; three Justices joined his view.