No employer shall be subject to any liability or punishment under
the Fair Labor Standards Act of 1938, as amended [29 U.S.C. 201 et
seq.], 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 an activity engaged in by such
employee prior to December 26, 1946, if such employer -
(1) was not so subject by reason of the definition of an "area
of production", by a regulation of the Administrator of the Wage
and Hour Division of the Department of Labor, which regulation
was applicable at the time of performance of the activity even
though at that time the regulation was invalid; or
(2) would not have been so subject if the regulation signed on
December 18, 1946 (Federal Register, Vol. 11, p. 14648) had been
in force on and after October 24, 1938.