1. When a judgment entered by a state court is modified by
another entered after a rehearing, the second supersedes the first,
and a writ of error to the second alone is proper for review in
this Court. P.
267 U. S.
561.
2. A decision of a state supreme court that provisions of a
statute of the state are separable is conclusive on this Court in
the case. P.
267 U. S.
562.
3. A judgment of reversal is not necessarily an adjudication by
the appellate court of any other than the questions in terms
discussed and decided.
Held that the former decision of this Court in this
case (262 U.S. 522) holding the Kansas Industrial Relations Act
unconstitutional insofar as it permitted the fixing of wages in
plaintiff in error's packing plant, and reversing the judgment of
the Kansas Supreme Court for that reason, was neither an
adjudication that the entire act was invalid nor an adjudication
that its provisions for fixing hours of labor were valid. P.
267 U. S.
562.
4. The Industrial Relations Act of Kansas, which seeks to
promote continuity of operation and production in the industries to
which it relates by compelling employer and employees to submit
their controversies to compulsory settlement by a state agency is,
as applied to a manufacturer of food products, unconstitutional not
only so far as it permits compulsory fixing of wages (as previously
decided,
262 U. S. 262 U.S.
522), but also, and for the same reasons, in the provision for
compulsory fixing of hours of labor, since the compulsion in both
these features alike is but part of a system by which the act seeks
to compel owner and employees to continue in business on terms not
of their own making, which infringes the rights of property and
liberty of contract guaranteed by the due process of law clause of
the Fourteenth Amendment. P.
267 U. S.
563.
5. Whether a power conferred on a state agency to fix hours of
labor would be valid if it were conferred independently, and made
either general or applicable to all business of a particular class,
is not considered. P.
267 U. S.
569.
114 Kans. 304, 487, reversed.
Page 267 U. S. 553
Error to a judgment of the Supreme Court of Kansas entered, upon
rehearing, after receipt of the mandate issued from this Court upon
a previous reversal,
262 U. S. 262 U.S.
522. The judgment awarded a mandamus to compel obedience to an
order of the Kansas administrative agency called the Court of
Industrial Relations insofar as it purported to fix the hours of
labor and pay for over time in the meat packing plant of the
plaintiff in error.
Page 267 U. S. 559
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
This was an original proceeding in mandamus in the Supreme Court
of Kansas to compel the Wolff Packing Company to put into effect an
order of a state agency, called the Court of Industrial Relations,
determining a dispute respecting wages, hours, labor, and working
conditions in a slaughtering and packing plant owned and operated
by the company. The order was made in a compulsory proceeding under
a Kansas statute, called the Industrial Relations Act, Laws Special
Session 1920, c. 29, and consisted of 19 distinct paragraphs --
some fixing wages, some fixing hours of labor and pay for overtime,
and others prescribing working conditions. After a hearing,
Page 267 U. S. 560
the supreme court eliminated the paragraphs relating to working
conditions, because made without the required notice, and awarded a
peremptory writ of mandamus commanding obedience to the other
paragraphs.
Court of Industrial Relations v. Charles Wolff
Packing Co., 109 Kan. 629, 111 Kan. 501. That judgment was
brought to this Court for review, and was reversed, with a
direction that the case be remanded for further proceedings not
inconsistent with the opinion rendered at the time.
262 U. S. 262 U.S.
522. After receiving the mandate, the state court vacated its
original judgment, eliminated the paragraphs relating to working
conditions and those fixing wages, also eliminated from the
paragraphs fixing hours of labor the clauses relating to pay for
overtime, and awarded a peremptory writ of mandamus commanding
obedience to what remained of the last paragraphs.
Court of
Industrial Relations v. Charles Wolff Packing Co., 114 Kan.
304. On a rehearing, the court modified that judgment by awarding a
peremptory writ of mandamus to compel obedience to the paragraphs
fixing hours of labor, including the clauses relating to pay for
overtime. 114 Kan. 487. The paragraphs to which obedience was thus
finally commanded are as follows:
"3. A basic working day of eight hours shall be observed in this
industry, but a nine-hour day may be observed not to exceed two
days in any one week without penalty:
Provided, however,
that, if the working hours of the week shall exceed 48 in number,
all over 48 shall be paid for at the rate of time and one-half;
furthermore, in case a day in excess of the eight-hour day shall be
observed more than two days in any one week, all over eight hours,
except for said two days in said week, shall be paid for at the
rate of time and one-half, even though the working hours of the
week may be forty-eight hours or fewer."
"14. Workers paid by the week or day, if employed within the
plant and not within the office or sales department, shall be
subject to hours of work and overtime
Page 267 U. S. 561
as other employees under the terms of finding No. 3 hereof."
"19. In departments operating twenty-four hours a day and seven
days a week, each employee therein shall be entitled to one day off
each week. In other departments, work performed on Sunday and legal
holidays shall be paid for at the rate of time and one-half."
The order, according to its terms, was to remain in force until
changed by the Court of Industrial Relations or by agreement of the
parties with the approval of that agency.
The company has brought the case here again, this time on two
writs of error. One covers the judgment first entered after receipt
of the mandate of this Court, and the other covers the judgment
entered on the rehearing. The first of these writs can serve no
purpose, and must be dismissed. The rehearing was seasonably
requested, and the judgment entered thereon became the final
judgment, the other being superseded by it.
Throughout the mandamus proceedings, the company insisted that
the Industrial Relations Act, on which the order was based, was in
conflict with the provision of the Fourteenth Amendment that no
state shall deprive any person of liberty or property without due
process of law. This insistence was wholly rejected when the
original judgment, heretofore reversed, was rendered, and was
largely rejected when the judgment on the rehearing was given.
When the case was first before this Court, the discussion at the
bar and in the briefs chiefly related to the validity of the parts
of the act permitting the fixing of wages, and the opinion then
delivered particularly dealt with that question, the ultimate
conclusion, as expressed therein, being:
"We think the Industrial Court Act, insofar as it permits the
fixing of wages in plaintiff in error's packing
Page 267 U. S. 562
house, is in conflict with the Fourteenth Amendment, and
deprives it of its property and liberty of contract without due
process of law."
That conclusion, without more, required a reversal of the
judgment of the state court. The parts of the act permitting the
fixing of hours of labor were not specially dealt with, and were
not affected by the decision, save as the reasons on which it
proceeded might be applicable to them. The reversal was with a
direction that the case be remanded for further proceedings not
inconsistent with this Court's decision, and therefore the mandate
operated particularly to require that the parts of the act
permitting the fixing of wages be regarded as invalid.
In the proceedings which followed the receipt of the mandate,
the state court held that the other parts of the Act were separable
from those permitting the fixing of wages, and also pronounced them
constitutional. As the question of separability was a state
question, the decision of that court thereon is conclusive here.
Dorchy v. Kansas, 264 U. S. 286;
Hallanan v. Eureka Pipe Line Co., 261 U.
S. 393,
261 U. S. 397.
The decision on the constitutional question is all that we can
review.
Both parties rely on our decision when the case was first here.
One insists that, by reversing the original judgment of the state
court, and not merely a part of it, we adjudged the invalidity of
the entire Act, and the other that, by particularly declaring the
provisions permitting the fixing of wages invalid and saying
nothing about the provisions permitting the fixing of hours of
labor, we impliedly held the latter valid. Both contentions are
wrong. "A judgment of reversal is not necessarily an adjudication
by the appellate court of any other than the questions in terms
discussed and decided."
Mutual Life Insurance Co. v. Hill,
193 U. S. 551,
193 U. S.
553.
The company next contends that the decision, even though not in
terms determining the question of the validity
Page 267 U. S. 563
of the provisions permitting the fixing of hours of labor,
recognized and gave effect to principles which are applicable to
that question and if applied will solve it. A survey of the Act and
of the decision will show that this contention is well taken.
The declared and adjudged purpose of the Act is to insure
continuity of operation and production in certain businesses which
it calls "essential industries." To that end, it provides for the
compulsory settlement by a state agency of all labor controversies
in such businesses which endanger the intended continuity. It
proceeds on the assumption that the public has a paramount interest
in the subject which justifies the compulsion. The businesses named
include, among others, that of manufacturing or preparing food
products for sale and human consumption. The controversies to be
settled include, among others, those arising between employer and
employees over either wages or hours of labor. The state agency
charged with the duty of making the settlement is the Court of
Industrial Relations. Although called a court, it is an
administrative board. It is to summon the disputants before it, to
give them a hearing, to settle the matter in controversy, as by
fixing wages or hours of labor, where they are what is in dispute,
to embody its findings and determination in an order, and, if need
be, to institute mandamus proceedings in the supreme court of the
state to compel compliance with its order. The order is to continue
in effect for such reasonable time as the agency may fix, or until
changed by agreement of the parties with its approval. The employer
may discontinue the business (a) where it can be conducted
conformably to the order only at a loss; or (b) where for good
cause shown the agency approves, and individual employees may quit
the service in the exercise of a personal privilege, but may not
induce others to quit or combine with them to do so. With these
qualifications, both employer
Page 267 U. S. 564
and employees are required to continue the business on the terms
fixed in the order; violations and evasions being penalized. The
authority given to the agency to fix wages or hours of labor is not
general, nor is it to be exerted independently of the system of
compulsory settlement. On the contrary, it is but a feature of that
system, and correspondingly limited in purpose and field of
application. No distinction is made between wages and hours of
labor; both are put on the same plane. In the fixing of wages,
regard is to be had for what is fair between employer and
employees, and, in the fixing of hours of labor, regard is to be
had for what are healthful periods; but neither is to be fixed save
in the compulsory adjustment of an endangering controversy to the
end that the business shall go on.
The following excerpt from the opinion of the supreme court of
the state in
State ex rel. v. Howat, 109 Kan. 376, 417,
explains the pervading theory of the Act:
"Heretofore, the industrial relationship has been tacitly
regarded as existing between two members -- industrial manager and
industrial worker. They have joined wholeheartedly in excluding
others. The legislature proceeded on the theory there is a third
member of those industrial relationships which have to do with
production, preparation, and distribution of the necessaries of
life -- the public. The legislature also proceeded on the theory
the public is not a silent partner. Whenever the dissensions of the
other two become flagrant, the third member may see to it the
business does not stop."
On three occasions when the Act was before us, we referred to it
as undertaking to establish a system of "compulsory arbitration."
Howat v. Kansas, 258 U. S. 181,
258 U. S. 184;
Wolff Packing Co. v. Court of Industrial Relations,
262 U. S. 522,
262 U. S. 542;
Dorchy v. Kansas, 264 U. S. 286,
264 U. S. 288.
The supreme court of the state, in a recent opinion, criticizes
this use of the term "arbitration."
Page 267 U. S. 565
State v. Howat, 116 Kan. 412, 415. We recognize that,
in its usual acceptation, the term indicates a proceeding based
entirely on the consent of the parties. And we recognize also that
this Act dispenses with their consent. Under it, they have no voice
in selecting the determining agency, or in defining what that
agency is to investigate and determine. And yet the determination
is to bind them, even to the point of preventing them from agreeing
on any change in the terms fixed therein unless the agency
approves. To speak of a proceeding with such attributes merely as
an arbitration might be subject to criticism, but we think its
nature is fairly reflected when it is spoken of as a compulsory
arbitration. Of course, our present concern is with the essence of
the system, rather than its name. In this connection, it is well to
observe that, in the opinion last mentioned, the state court
recognizes that the system, while intended to be just between
employer and employees, proceeds on the theory that the public
interest is paramount, as was explained in
State ex rel. v.
Howat, supra.
The survey just made of the Act, as construed and applied in the
decisions of the supreme court of the state, shows very plainly
that its purpose is not to regulate wages or hours of labor either
generally or in particular classes of business, but to authorize
the state agency to fix them where, and insofar as, they are the
subjects of a controversy the settlement of which is directed in
the interest of the public. In short, the authority to fix them is
intended to be merely a part of the system of compulsory
arbitration, and to be exerted in attaining its object, which is
continuity of operation and production.
When the case was first here, the question chiefly agitated, and
therefore discussed and decided, was whether the authority to fix
wages as an incident of the compulsory arbitration could be applied
to a business like that of the Wolff Company consistently with the
protection
Page 267 U. S. 566
which the due process of law clause of the Fourteenth Amendment
affords to the liberty of contract and rights of property. The
question was answered in the negative, and the Act was held invalid
insofar as it gives that authority. The subject was much
considered, and the principles which were recognized and applied
were distinctly stated.
At the outset, the court pointed out that the Act assumes as a
"necessary postulate" that the state, in the interest of the
public,
"may compel those engaged in the manufacture of food, and
clothing, and the production of fuel, whether owners or workers, to
continue in their business and employment on terms fixed by an
agency of the state if they cannot agree."
Then, after referring to the limited privilege of withdrawing
from the business or employment which the Act accords to owners and
employees who may be dissatisfied with the determination, the Court
said:
"These qualifications do not change the essence of the Act. It
curtails the right of the employer on the one hand, and of the
employee on the other, to contract about his affairs. This is part
of the liberty of the individual protected by the guaranty of the
due process clause of the Fourteenth Amendment.
Meyer v.
Nebraska, ante, 262 U. S. 390. While there is no
such thing as absolute freedom of contract, and it is subject to a
variety of restraints, they must not be arbitrary or unreasonable.
Freedom is the general rule, and restraint the exception. The
legislative authority to abridge can be justified only by
exceptional circumstances.
Adkins v. Children's Hospital,
261 U. S.
525."
Various matters which were relied on as justifying the attempted
restraint or abridgment were considered and pronounced inadequate.
Among them was the assumption in the Act that a business like that
in question -- preparing food for sale and human consumption -- is
so far
Page 267 U. S. 567
affected with a public interest that the state may compel its
continuance, and, if the owner and employees cannot agree, may fix
the terms through a public agency to the end that there shall be
continuity of operation and production. This assumption was held to
be without any sound basis, and its indulgence by the state
legislature was declared not controlling. The court recognized
that, in a sense, all business is of some concern to the public,
and subject to some measure of regulation, but made it plain that
the extent to which regulation reasonably may go varies greatly
with different classes of business, and is not a matter of
legislative discretion solely, but is a judicial question to be
determined with due regard to the rights of the owner and
employees. Care was taken to point out that operating a railroad,
keeping an inn, conducting an elevator, and following a common
calling are not all in the same class, and particularly to point
out the distinctions between a
quasi-public business
conducted under a public grant imposing a correlative duty to
operate, a business originally private which comes to be affected
with a public interest through a change
in pais, and a
business which not only was private in the beginning but has
remained such. The conclusion was that power to compel the
continuance of a business because affected with a public interest
is altogether exceptional. On this subject, the Court said:
"An ordinary producer, manufacturer, or shopkeeper may sell or
not sell as he likes (
United States v. Trans-Missouri Freight
Association, 166 U. S. 290,
166 U. S.
320;
Terminal Taxicab Co. v. District of
Columbia, 241 U. S. 252,
241 U. S.
256), and while this feature does not necessarily
exclude businesses from the class clothed with a public interest
(
German Alliance Insurance Co. v. Lewis, 233 U. S.
389), it usually distinguishes private from
quasi-public occupations. . . ."
"It involves a more drastic exercise of control to impose
limitations of continuity growing out of the public
Page 267 U. S. 568
character of the business upon the employee than the employer,
and, without saying that such limitations upon both may not be
sometimes justified, it must be where the obligation to the public
of continuous service is direct, clear, and mandatory, and arises
as a contractual condition express or implied of entering the
business either as owner or worker. It can only arise when
investment by the owner and entering the employment by the worker
create a conventional relation to the public somewhat equivalent to
the appointment of officers and the enlistment of soldiers and
sailors in military service. . . ."
"The penalties of the Act are directed against effort of either
side to interfere with the settlement by arbitration. Without this
joint compulsion, the whole theory and purpose of the Act would
fail. The state cannot be heard to say, therefore, that, upon
complaint of the employer, the effect upon the employee should not
be a factor in our judgment. . . ."
"The power of a legislature to compel continuity in a business
can only arise where the obligation of continued service by the
owner and its employee is direct, and is assumed when the business
is entered upon. A common carrier which accepts a railroad
franchise is not free to withdraw the use of that which it has
granted to the public. It is true that, if operation is impossible
without continuous loss (
Brooks-Scanlon Co. v. Railroad
Commission, 251 U. S. 396;
Bullock v.
Railroad Commission, 254 U. S. 513), it may give up
its franchise and enterprise, but, short of this, it must continue.
Not so the owner [in another field] when, by mere changed
conditions, his business becomes clothed with a public interest. He
may stop at will, whether the business be losing or
profitable."
Applying these principles, the Court was of opinion that the
business in question is one which the state is without power to
compel the owner and employees to continue.
Page 267 U. S. 569
On further reflection, we regard the principles so stated and
applied as entirely sound. They are as applicable now as they were
then. The business is the same, and the parties are the same. So we
reach the same conclusion now that we reached then.
The system of compulsory arbitration which the Act establishes
is intended to compel, and if sustained will compel, the owner and
employees to continue the business on terms which are not of their
making. It will constrain them not merely to respect the terms if
they continue the business, but will constrain them to continue the
business on those terms. True, the terms have some qualifications,
but, as shown in the prior decision, the qualifications are rather
illusory, and do not subtract much from the duty imposed. Such a
system infringes the liberty of contract and rights of property
guaranteed by the due process of law clause of the Fourteenth
Amendment.
"The established doctrine is that this liberty may not be
interfered with, under the guise of protecting the public interest,
by legislative action which is arbitrary or without reasonable
relation to some purpose within the competency of the state to
effect."
Meyer v. Nebraska, 262 U. S. 390,
262 U. S.
399.
The authority which the Act gives respecting the fixing of hours
of labor is merely a feature of the system of compulsory
arbitration, and has no separate purpose. It was exerted by the
state agency as a part of that system, and the state court
sustained its exertion as such. As a part of the system, it shares
the invalidity of the whole. Whether it would be valid had it been
conferred independently of the system and made either general or
applicable to all businesses of a particular class we need not
consider, for that was not done.
It follows that the state court should have declined to give
effect to any part of the order of the state agency.
No. 207. Writ of error dismissed.
No. 299. Judgment reversed.