Fair Labor Standards Act.

In 1938, Congress enacted the Fair Labor Standards Act. The measure prohibited not only the shipment in interstate commerce of goods manufactured by employees whose wages are less than the prescribed maximum but also the employment of workmen in the production of goods for such commerce at other than the prescribed wages and hours. Interstate commerce was defined by the act to mean “trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof.”

It was further provided that “for the purposes of this act an employee shall be deemed to have been engaged in the production of goods [that is, for interstate commerce] if such employee was employed . . . in any process or occupation directly essential to the production thereof in any State.”833 Sustaining an indictment under the act, a unanimous Court, speaking through Chief Justice Stone, said: “The motive and purpose of the present regulation are plainly to make effective the congressional conception of public policy that interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions, which competition is injurious to the commerce and to the States from and to which the commerce flows.”834 In support of the decision, the Court invoked Chief Justice Marshall’s reading of the Necessary and Proper Clause in McCulloch v. Maryland and his reading of the Commerce Clause in Gibbons v. Ogden.835 Objections purporting to be based on the Tenth Amendment were met from the same point of view: “Our conclusion is unaffected by the Tenth Amendment which provides: ‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.’ The amendment states but a truism that all is retained which has not been surrendered. There is nothing in the history of its adoption to suggest that it was more than declaratory of the relationship between the national and State governments as it had been established by the Constitution before the amendment or that its purpose was other than to allay fears that the new National Government might seek to exercise powers not granted, and that the States might not be able to exercise fully their reserved powers.”836

Subsequent decisions of the Court took a very broad view of which employees should be covered by the Act,837 and in 1949 Congress to some degree narrowed the permissible range of coverage and disapproved some of the Court’s decisions.838 But, in 1961,839 with extensions in 1966,840 Congress itself expanded by several million persons the coverage of the Act, introducing the “enterprise” concept by which all employees in a business producing anything in commerce or affecting commerce were brought within the protection of the minimum wage-maximum hours standards.841 The “enterprise concept” was sustained by the Court in Maryland v. Wirtz.842 Justice Harlan for a unanimous Court on this issue found the extension entirely proper on the basis of two theories: one, a business’ competitive position in commerce is determined in part by all its significant labor costs, and not just those costs attributable to its employees engaged in production in interstate commerce, and, two, labor peace and thus smooth functioning of interstate commerce was facilitated by the termination of substandard labor conditions affecting all employees and not just those actually engaged in interstate commerce.843

Footnotes

833
52 Stat. 1060, as amended, 63 Stat. 910 (1949). The 1949 amendment substituted the phrase “in any process or occupation directly essential to the production thereof in any State” for the original phrase “in any process or occupation necessary to the production thereof in any State.” In Mitchell v. H.B. Zachry Co., 362 U.S. 310, 317 (1960), the Court noted that the change “manifests the view of Congress that on occasion courts . . . had found activities to be covered, which . . . [Congress now] deemed too remote from commerce or too incidental to it.” The 1961 amendments to the Act, 75 Stat. 65, departed from previous practices of extending coverage to employees individually connected to interstate commerce to cover all employees of any “enterprise” engaged in commerce or production of commerce; thus, there was an expansion of employees covered but not, of course, of employers, 29 U.S.C. §§ 201et seq. See 29 U.S.C. §§ 203(r), 203(s), 206(a), 207(a). [Back to text]
834
United States v. Darby, 312 U.S. 100, 115 (1941). [Back to text]
835
312 U.S. at 113, 114, 118. [Back to text]
836
312 U.S. at 123–24. [Back to text]
837
E.g., Kirschbaum v. Walling, 316 U.S. 517 (1942) (operating and maintenance employees of building, part of which was rented to business producing goods for interstate commerce); Walton v. Southern Package Corp., 320 U.S. 540 (1944) (night watchman in a plant the substantial portion of the production of which was shipped in interstate commerce); Armour & Co. v. Wantock, 323 U.S. 126 (1944) (employees on stand-by auxiliary fire-fighting service of an employer engaged in interstate commerce); Borden Co. v. Borella, 325 U.S. 679 (1945) (maintenance employees in building housing company’s central offices where management was located though the production of interstate commerce was elsewhere); Martino v. Michigan Window Cleaning Co., 327 U.S. 173 (1946) (employees of a window-cleaning company the principal business of which was performed on windows of industrial plants producing goods for interstate commerce); Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207 (1959) (nonprofessional employees of architectural firm working on plans for construction of air bases, bus terminals, and radio facilities). [Back to text]
838
Cf. Mitchell v. H.B. Zachry Co., 362 U.S. 310, 316–318 (1960). [Back to text]
839
75 Stat. 65. [Back to text]
840
80 Stat. 830. [Back to text]
841
29 U.S.C. §§ 203(r), 203(s). [Back to text]
842
392 U.S. 183 (1968). [Back to text]
843
Another aspect of this case was overruled in National League of Cities v. Usery, 426 U.S. 833 (1976), which itself was overruled in Garcia v. San Antonio Metropolitan Transit Auth., 469 U.S. 528 (1985). [Back to text]