Maryland v. Wirtz

The Fair Labor Standards Act, as enacted in 1938, required every employer to pay each of his employees "engaged in commerce or in the production of goods for commerce" certain minimum wages and overtime pay. The definition of employer excluded States and their political subdivisions. In 1961 the Act's coverage was extended beyond employees individually connected to interstate commerce to include all employees of certain "enterprises" engaged in commerce or production for commerce. In 1966 the Act was amended to cover certain hospitals, institutions, and schools, and to modify the definition of employer to remove the exemption of the States and their subdivisions with respect to employees of hospitals, institutions, and schools. Appellants, 28 States and a school district, sought to enjoin enforcement of the Act as it applies to schools and hospitals operated by the States or their subdivisions. They argued that the "enterprise concept" of coverage and the inclusion of state-operated hospitals and schools were beyond Congress' power under the Commerce Clause, that the remedial provisions of the Act, if applied to the States, would conflict with the Eleventh Amendment, and that school and hospital enterprises do not have the statutorily required relationship to interstate commerce. A three-judge district court declined to issue a declaratory judgment or an injunction, and concluded that the adoption of the "enterprise concept" and the extension of coverage to state institutions do not, on the face of the Act, exceed Congress' commerce power. That court declined to consider the Eleventh Amendment and statutory relationship contentions.

Held:


 * 1. The "enterprise concept" of coverage is clearly within the power of Congress under the Commerce Clause. Pp. 188-193.


 * (a) A rational basis for Congress' finding the scheme necessary to the protection of commerce was the logical inference that the pay and hours of employees of an interstate business who are not production workers, as well as those who are, affect an employer's competition with companies elsewhere. United States v. Darby, 312 U.S. 100, followed. Pp. 188-191.


 * (b) Another rational basis is the promotion of labor peace by the regulation of wages and hours, subjects of frequent labor disputes. Pp. 191-192.


 * (c) The class of employers subject to the Act, approved in Darby, supra, was not enlarged by the addition of the "enterprise concept." P. 193.


 * 2. The commerce power provides a constitutional basis for extension of the Act to state-operated schools and hospitals. Pp. 193-199.


 * (a) Congress has "interfered with" state functions only to the extent that it subjects a State to the same minimum wage and overtime pay limitations as other employers whose activities affect commerce. Pp. 193-194.


 * (b) Labor conditions in schools and hospitals can affect commerce and are within the reach of the commerce power. Pp. 194-195.


 * (c) Where a State is engaging in economic activities that are validly regulated by the Federal Government when engaged in by private persons, the State may be forced to conform its activities to federal regulation. United States v. California, 297 U.S> 175. Pp. 195-199.


 * 3. Questions concerning the States' sovereign immunity from suit and whether particular state-operated institutions have employees handling goods in commerce are reserved for appropriate concrete cases. Pp. 199-201.

269 F. Supp. 826, affirmed.

Alan M. Wilner, Assistant Attorney General of Maryland, and Charles Alan Wright argued the cause for appellants. With Mr. Wilner on the brief for appellant the State of Maryland et al. were the Attorneys General for their respective States as follows: Francis B. Burch of Maryland, Crawford C. Martin of Texas, MacDonald Gallion of Alabama, Darrell F. Smith of Arizona, Joe Purcell of Arkansas, Duke W. Dunbar of Colorado, David Buckson of Delaware, Earl Faircloth of Florida, Bert T. Kobayashi of Hawaii, William G. Clark of Illinois, Richard C. Turner of Iowa, Robert C. Londerholm of Kansas, James S. Erwin of Maine, Elliot L. Richardson of Massachusetts, Joe T. Patterson of Mississippi, Norman H. Anderson of Missouri, Clarence A. H. Meyer of Nebraska, Arthur J. Sills of New Jersey, Boston E. Witt of New Mexico, T. Wade Bruton of North Carolina, Helgi Johanneson of North Dakota, William B. Saxbe of Ohio, G. T. Blankenship of Oklahoma, Daniel R. McLeod of South Carolina, Frank L. Farrar of South Dakota, James L. Oakes of Vermontj Robert Y. Button of Virginia, and James E. Barrett of Wyoming; and A. J. Carubbi, Jr., Executive Assistant Attorney General of Texas, Hawthorne Phillips, Assistant Attorney General of Texas, and James V. Noble, Assistant Attorney General of New Mexico. With Mr. Wright on the brief for appellant the State of Texas were Messrs. Martin, Carubbi, and Phillips, and Nola White, First Assistant Attorney General. Cecil A. Morgan filed a brief for appellant Fort Worth Independent School District.

Solicitor General Griswold argued the cause for appellees. With this on the brief were Assistant Attorney General Weisl, Louis F. Claiborne, John S. Martin, Jr., and Morton Hollander.

Briefs of amici curiae, urging affirmance, were filed by J. Albert Woll, Laurence Gold, and Thomas E. Harris for the American Federation of Labor and Congress of Industrial Organizations, and by Henry Kaiser and Ronald Rosenberg for the American Federation of State, County, and Municipal Employees, AFL-CIO.