Constitutional Law–Commerce Clause–1966 Amendments to Fair Labor Standards Act Extending Coverage to Employees in State-Operated Schools, Hospitals, and Related Institutions Held Constitutional–Maryland v. Wirtz

In 1966, Congress amended the Fair Labor Standards Act (FLSA) and for the first time extended the coverage of the minimum wage and overtime provisions to employees in state-operated schools, hospitals, and related institutions. The State of Maryland, joined by twenty-seven other states, brought an action to enjoin enforcement of the amendments insofar as they applied to these state-operated facilities and sought a declaratory judgment ruling the amendments unconstitutional. The states asserted that the amendments were unconstitutional in two respects. First, they contended that the “enterprise” concept of FLSA coverage, which extended the Act to cover all employees of an “enterprise” if some of those employees were “engaged in commerce or in the production of goods for commerce,” was an invalid exercise of congressional power under the commerce clause. Second, the states made the two-pronged assertion that their activities in operating schools and hospitals are entirely outside the scope of the congressional power to regulate commerce, and, alternatively, that, even if their activities could be considered within the scope of that power, the application of federal wage and hour regulation interferes with the states’ performance of their sovereign functions and thus violates the basic federal scheme of the Constitution as declared by the tenth amendment. A three-judge federal district court denied the injunction, holding that Congress did not exceed its power by applying the minimum wage provisions of the FLSA to employees in state-operated schools and hospitals, and that the “enterprise” concept of coverage is not itself an unconstitutional extension of Congress’ power to regulate interstate commerce.