Maryland v. Wirtz

The state of Maryland, soon joined by 27 other states and a school district, challenged this latest expansion of the national labor legislation. It claimed that state-run organizations were beyond Congress' power under the Commerce Clause of the Constitution. They also claimed that the law ran counter to the Eleventh Amendment, which forbade the federal court system to rule on suits between the citizens of two different states. Finally, it argued that even if the Constitution did allow the expanded legislation, schools and hospitals were not engaged in interstate commerce and so should not be included in the act.

The Court ruled 6-2 in favor of Congress' right to pass the FLSA. It offered three major arguments:

(1) The Commerce Clause did indeed enable Congress to regulate the hours and wages of employees working for companies engaged in interstate business. First, it was clear that businesses with lower wages and no overtime enjoyed a competitive advantage over businesses with better wages and working conditions. Without federal legislation, interstate commerce would tend to flow in the direction of those states that paid the least. Therefore, if Congress evened out wages across the states, it was legitimately acting to regulate interstate commerce.

(2) Furthermore, said the Court, Congress had found that "labor peace"--an absence of strikes and other labor disputes--could be better achieved by mandating certain basic standards for workers, such as minimum wages and overtime pay. Labor peace meant that interstate commerce would flow freely, without interruptions caused by strikes or other disturbances. Therefore, Congress could pass minimum-wage legislation and overtime requirements as part of its efforts to regulate interstate commerce.

(3) Although federal and state interests might sometimes conflict, "the State may be forced to conform its activities to federal regulation" when engaging in "economic activities that are validly regulated by the Federal government."

The majority opinion in Maryland v. Wirtz caused great dismay among state governments, who claimed that they could not afford to pay the higher wages demanded by the new legislation. On the other hand, the decision was supported by the AFL-CIO and by the American Federation of State, County, and Municipal Employees (AFSCME), the public employees' union, both of whom had joined the federal government with "friend of the court" briefs.