97. Darby, Congress, and Modern Labor Law

Four years after the Court ushered in the end of the "Lochner era," a 1941 ruling reinforced what that shift *meant* with regard to Congress's power to shape the policies of most workplaces

Welcome back to “One First,” a weekly newsletter that aims to make the U.S. Supreme Court more accessible to all of us. 

Every Monday (including holidays like today), I’ll be offering an update on goings-on at the Court (“On the Docket”); a longer introduction to some feature of the Court’s history, current work, or key players (“The One First ‘Long Read’”); and some Court-related trivia. If you’re enjoying the newsletter, I hope you’ll consider sharing it (and subscribing if you don’t already): 

It’s been a little while since I used the Monday issue for a more historical look at the Court. But I thought I’d use the occasion of today’s Labor Day holiday to take a look back at one of the Court’s most important labor law rulings—the (unanimous) February 1941 decision in United States v. Darby, in which the justices upheld the constitutionality of the maximum-hour and minimum-wage rules Congress imposed in the Fair Labor Standards Act of 1938. What is striking about Darby is not just that the Court so emphatically overruled its earlier decision in Hammer v. Dagenhart, but why it did so. Darby reflected not only a view of Congress’s power, but of the courts’ role in reviewing that power, that was instrumental in the rise of modern labor law (and lots of other things, too).

But first, the news.

---

On the Docket

The Court resolved three pending emergency applications last week—granting none of them. In the student loan cases (previewed here), the Court denied both the federal government’s application to vacate the Eighth Circuit’s (procedurally problematic) universal injunction pending appeal and three red states’ application to vacate the Tenth Circuit’s stay of a district court injunction. Both rulings included cryptic notes at their ends—that the Court expects the Eighth Circuit to move quickly in the federal government’s case; and that the Eighth Circuit’s ruling moots the need for emergency relief in the Tenth Circuit case. What’s clear for now is that (1) the Court will almost certainly have to take this issue up later this term unless the election moots it; and (2) in the interim, the Biden administration’s amendments to the SAVE program will remain blocked.

The Court also refused to block Florida’s execution of Loran Cole. Like the student loan orders (and so many of the Court’s emergency orders in capital cases these days), there were no public dissents.

There’s nothing formally on tap this week, but the Court still has 23 emergency applications to resolve—including the eight applications in the power plant emissions cases, which have been fully briefed for almost two weeks now. Perhaps recognizing (1) how busy the Court already is; and (2) how little of an “emergency” they present, Chief Justice Roberts finally ordered the Biden administration to respond to the seven pending applications seeking to block the EPA’s new Mercury and Air Toxics Standards, as well—but didn’t make that response due until Friday, September 13, at 4 p.m. ET.

---

The One First “Long Read”: The Fair Labor Standards Act and the Commerce Clause

In honor of Labor Day, I thought it might be fun/useful to write about the Court’s role in the growth of a distinctly federal body of labor law—a microcosm of how the Court’s approach to all federal economic legislation went through a fundamental (and, in my view, positive) shift just before the beginning of World War II.

The story begins in the so-called “Lochner era”—the name usually given to describe the Supreme Court between 1905 and 1937, and especially the hostility that justices of that era tended to show toward a broad range of both state and federal economic regulation. Lochner itself had struck down New York’s maximum-hour rules for bakers—holding that the law violated the bakers’ “liberty of contract” under the Due Process Clause of the Fourteenth Amendment. More fundamentally, it reflected the justices’ deeply laissez-faire view that readjusting economic inequality was not an appropriate task for policymakers.

With regard to federal regulation, specifically, one of the hallmarks of the Lochner era was the justices’ willingness to second-guess why Congress was regulating economic activity. Perhaps the most visible illustration came in 1918, when a 5-4 Court in Hammer v. Dagenhart struck down the Keating-Owen Child Labor Act of 1916, which had barred the shipment through interstate commerce of goods produced by children under the age of 14, or by 14-16-year-olds who worked more than eight hours per day or 60 hours per week. No one disputed that the act purported to regulate interstate commerce. But Justice Day’s majority opinion stressed that interstate commerce was only the means by which Congress was seeking to achieve an otherwise impermissible end, i.e., the regulation of child labor in the states. In other words, because the justices disagreed with Congress as to which was the means and which was the ends, the statute was not a permissible regulation of interstate commerce.

And although I’m not one of those who thinks that the Lochner-style approach to judicial review caused the Great Depression, it certainly made it at least somewhat more difficult for policymakers to respond—as reinforced by (and reflected in) the Supreme Court’s hostility in the mid-1930s to some of the central planks of FDR’s “New Deal.”

I’ve written before about the “switch in time”—Justice Owen Roberts’ famous vote in West Coast Hotel v. Parrish, the March 1937 decision that heralded the end of the Lochner era. Just two weeks after West Coast Hotel, the Court also upheld the central provisions of the Wagner Act (the National Labor Relations Act of 1935), on the ground that, even if the justices didn’t approve of Congress’s motives in trying to regulate labor-management relations in the workplace, the question before them was only whether Congress was in fact regulating interstate commerce—which it indisputably was.

The significance of the decision in NLRB v. Jones & Laughlin Steel Corp. was not lost on Congress. In June 1938, it enacted the Fair Labor Standards Act, which went significantly further than the NLRA. Whereas the NLRA was focused on labor-management disputes “affecting [interstate] commerce,” the FLSA aimed to impose nationwide maximum-hour and minimum-wage rules, even in relatively small workplaces (today, it’s most businesses with annual sales of $500K or more), on the ground that the overall effects on interstate commerce justified federal legislative intervention. In other words, the Wagner Act was focused on problems affecting interstate commerce; the FLSA was focused on wages and other features of employment that generally produced such effects.

And although the FLSA was controversial in many corners, reflecting the different times for constitutional litigation, the Court did not consider a constitutional challenge to the act until its October 1940 Term—in a case captioned United States v. Darby, involving the prosecution of a Georgia lumber company and its owner for selling through interstate commerce goods that were produced in violation of the FLSA’s wage-and-hour minimums. In April 1940, the district court sided with Darby—holding that the Tenth Amendment barred Congress from regulating truly “local” commerce, and quashing the indictment.

Writing for a unanimous Court¹ in February 1941, Justice Harlan Fiske Stone reversed—upholding the statute and expressly overruling Hammer:

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. The motive and purpose of a regulation of interstate commerce are matters for the legislative judgment upon the exercise of which the Constitution places no restriction and over which the courts are given no control. . . . Whatever their motive and purpose, regulations of commerce which do not infringe some constitutional prohibition are within the plenary power conferred on Congress by the Commerce Clause. Subject only to that limitation, . . . we conclude that the prohibition of the shipment interstate of goods produced under the forbidden substandard labor conditions is within the constitutional authority of Congress.

In other words, Congress could decide for itself which was the means and which was the ends; as long as Congress was regulating matters that affected interstate commerce, the “why” didn’t matter.

It wasn’t until the following year, in Wickard v. Filburn, that the Court would fully endorse a view of the Interstate Commerce Clause that allowed Congress to regulate any activity that, in the aggregate, produced a “substantial effect” on interstate commerce. But Darby was significant in its own right in at least three respects. First, in expressly overruling Hammer, it went a step further than the Court’s previous post-West Coast Hotel rulings—recognizing not only that the Court would defer to Congress when it came to economic regulation, but that it would not follow its own prior precedents that hadn’t. Second, whereas Jones & Laughlin had opened the door to labor law in large-scale disputes, Darby cleared the way for Congress to also regulate relatively smaller enterprises—on the ground, which the Court would repeatedly reaffirm, that the behaviors of even small businesses very much could (and did) affect interstate commerce. And third, whereas Jones & Laughlin had been 5-4, the eight participating justices in Darby were unanimous—reflecting the dramatic shift in the Court’s composition between 1937 and 1941 (and its doctrinal ramifications). Indeed, Darby was the first major decision the Court handed down without any of the “four horsemen of the apocalypse”; Justice McReynolds had retired just two days before the ruling came down.

Of course, starting with its 1995 decision in Lopez v. United States, the Supreme Court has, over the past 30 years, scaled back at least some of the Commerce Clause jurisprudence that decisions like Jones & Laughlin and Darby helped to precipitate. But Darby itself very much remains good law today—and, with it, Congress’s broad power to create a substantive body of federal law to govern American workplaces. The fact that Congress hasn’t raised the minimum wage since July 24, 2009 (when it was raised to $7.25/hour) is, in my view, an embarrassing policy failure. But no one seriously disputes that Congress has the constitutional power to do so—and Darby remains today the best authority for why.

---

SCOTUS Trivia: The Respondents in Darby

Generations of law students, most of whom read the case in their first-year Constitutional Law classes, have been taught that the case described above is called United States v. Darby—because that is how it’s captioned in the U.S. Reports (the official publication of the Supreme Court’s ruling). In fact, the respondents in Darby were the F.W. Darby Lumber Company and Mr. Fred W. Darby. In the lower court, the case is officially reported as “United States v. F.W. Darby Lumber Co.” And the Supreme Court’s official Journal reflects the same view—referring to the case as “United States v. F.W. Darby Lumber Company and Fred W. Darby” in its entries on both the day it was argued and the day on which it was decided.

It couldn’t matter less, but it’s a useful reminder that the caption the Court chooses to put on a case is not necessarily the official caption that the underlying litigation reflected in the lower courts, or an accurate identifier of the parties. Fred Darby was one of the parties in Darby, but the small company he owned was the lead defendant—and lead respondent. Live and learn.

---

I hope that you’ve enjoyed this installment of “One First.” If you have feedback about today’s issue, or thoughts about future topics, please feel free to e-mail me. And if you liked it, please help spread the word!:

If you’re not already a paid subscriber and are interested in receiving regular bonus content (or, at the very least, in supporting the work that goes into this newsletter), please consider becoming one! This week’s bonus issue for paid subscribers will drop on Thursday. And we’ll be back with our regular content for everyone next Monday!

Happy Monday, everyone. I hope that you have a great week!!

1. The Court was down to eight justices, with Justice James McReynolds’ retirement having taken effect on February 1, 1941.