Erie Railroad Company v. Williams
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Suit brought by plaintiff in error, the Erie Railroad Company (as it was plaintiff below, we shall so designate it), to restrain the defendant in error (herein called defendant) from instituting actions to recover penalties for noncompliance with the provisions of the labor law of the state of New York, which required plaintiff to pay its employees semimonthly and in cash.
The object of the suit is to test the constitutionality of the law.
The bill is very elaborate and alleges with much detail the following facts: Plaintiff is a New York corporation, and defendant is commissioner of labor of the state. Plaintiff maintains a railroad in New York which extends into other states, and operates car floats and other floating equipment, navigating the navigable waters of the United States. These and other equipment are used in the business of plaintiff as a common carrier of persons and property under and in compliance with tariffs duly promulgated and filed under the laws of the state and of the United States; and plaintiff is also a carrier of the United States mails. As a rule, the trains of plaintiff run over an operating division without change of employees. Some of the divisions are interstate and some wholly within the state of New York.
Plaintiff, in carrying out its functions, has in its service upon that portion of its road lying east of Meadville, Pennsylvania, upwards of 15,000 men, who are employed either wholly within or partially within the state of New York, and nearly all of them are employed in the movement of interstate commerce. The great majority of these employees render service in more than one state, and many of them who reside in Pennsylvania or New Jersey render a part of their service in New York, and many who reside in the latter state render service in the other two states. The contracts of employment of many of them were made, and in the future must be made, in states other than New York, in which states they must reside.
By the laws of New York plaintiff was vested with its powers as a railroad and to contract and be contracted with for the employment of persons to conduct its operations and enterprises at and for such wages and upon such terms of payment as should or might be mutually agreed on; and thereunder it has been its custom to pay its employees monthly, and thus pay them prior to or on the 20th day of each month the wages earned during the preceding month.
The great majority of plaintiff's employees were in its service prior to January 1, 1908, and all accepted such service with full knowledge of its general and uniform custom so to pay its employees monthly.
Prior to January 1, 1908, there existed and has since existed a contract between plaintiff and its employees that the latter should be paid monthly as stated, and so to pay them, as distinguished from payment twice a month, is not inconsistent with the public interest, or hurtful to the public order, or detrimental to the common good.
Section 4 of the labor law of the state makes it malfeasance in office for any officer, agent, or employee of the state to violate or evade his duty under the law, or knowingly permit the violation or evasion of the act, and he is subject to removal from office.
Section 9 provides that every railroad company and
'Section 9. Cash payment of wages.-Every manufacturing, mining, quarrying, mercantile, railroad, street railway, canal, steamboat, telegraph and telephone company, every express company, every corporation engaged in harvesting and storing ice, and every water company, not municipal, and every person, firm, or corporation engaged in or upon any public work for the state or any municipal corporation thereof, either as a contractor or a subcontractor therewith, shall pay to each employee engaged in his, their, or its business, the wages earned by such employee in cash. No such company, person, firm, or corporation shall hereafter pay such employees in script, commonly known as store money orders. [Laws 1897, chap. 415, as amended by Laws 1908, chap. 443.]
'Section 10. When wages are to be paid.-Every corporation or joint stock association, or person carrying on the business thereof by lease or otherwise, shall pay weekly to each employee the wages earned by him to a day not more than six days prior to the date of such payment. But every person or corporation operating a steam surface railroad shall, on or before the 1st day of each month, pay the employees thereof the wages earned by them during the first half of the preceding month, ending with the 15th day thereof, and on or before the 15th day of each month pay the employees thereof the wages earned by them during the last half of the preceeding calendar month. [Laws 1897, chap. 415, as amended by Laws 1908, chap. 442.]
'Section 11. Penalty for violation of preceding sections.-If a corporation or jointstock association, its lessee or other person carrying on the business thereof, shall fail to pay the wages of an employee, as provided in this article, it shall forfeit to the people of the state the sum of $50 for each such failure, to be recovered by the factory inspector in his name of office in a civil action; but an action shall not be maintained therefor unless the factory inspector shall have given to the employer at least ten days' written notice that such an action will be brought if the wages due are not sooner paid as provided in this article.
'On the trial of such action, such corporation or association shall not be allowed to set up any defense, other than a valid assignment of such wages, a valid set-off against the same, or the absence of such employee from his regular place of labor at the time of payment, or an actual tender to such employee at the time of the payment of the wages so earned by him, or a breach of contract by such employee, or a denial of the employment.' [Laws 1897, chap. 415.] certain other companies shall pay their employees in cash, and no such company shall pay its employees in script, commonly known as store money orders.
Section 10 requires the payment of employees' wages semimonthly.
Section 11 imposes a penalty of $50 for each failure to so pay, to be recovered by the factory inspector in his name of office in a civil action, and limits the defenses to the action to a valid assignment of such wages, a valid set-off against the same, or the absence of such employee from his regular place of labor at the time of the payment, or an actual tender at the time of the payment, or a breach of contract by such employee, or a denial of the employment.
The commissioner of labor is required to enforce the provisions of the law, and notified plaintiff of his intention to do so, and to sue for the penalties imposed by the act. He expressed his opinion of the act to be that each failure to pay the wages of each employee constituted a separate offense, and that the aggregate of the penalties would be $250,000. Plaintiff believes, unless that officer is restrained, that he will exercise his authority under the act.
The employees of plaintiff are distributed over more than 1,819 miles, and the making of the payment of their wages in money semimonthly instead of monthly will impose upon and subject plaintiff to an increased cost and expense of several thousand dollars each month.
The difficulty of semimonthly payments is described, and it is alleged that the drastic and enormous penalties are, by reason of their necessarily aggregate character and effect, so excessive as to evidence legislative intention to unduly limit or prevent judicial inquiry, and practically constrain plaintiff to submit to the statute rather than, by contesting its validity, to take the chances of the penalties it imposes.
That the statute by its terms prevents plaintiff from setting up in defense the contracts existing between it and its employees for the payment of their wages once a month, and that the statute violates, when applied to plaintiff, various provisions of the Constitution of the state and of the United States, and thereby is repugnant to article 3 of the Constitution of the United States and article 6 of the Constitution of the state of New York, in that it is an invasion by the legislative of the judicial power; and it is also repugnant to § 1 of article 14 of the Constitution of the United States, and § 6, article 1, of the Constitution of the state of New York, in that it deprives plaintiff of property without due process of law; and violates § 10, article 1, of the Constitution of the United States, in that it impairs the obligation of contracts. The act in its other provisions deprives plaintiff of property without due process of law, and of the equal protection of the laws. It also interferes with and impairs plaintiff's performance and discharge of its duties as a common carrier in interstate commerce, is not a valid exercise of the police power, and is illegal and unenforceable and void under articles of the Constitution of the state and of the United States, which are enumerated.
By the enforcement of the act plaintiff will be subjected to enormous penalties, a multiplicity of suits, and to great and irreparable damage, and plaintiff has no adequate remedy at law.
The answer of the defendant admitted the allegations of the complaint as to the statute, and alleged that he intended to give such notice to plaintiff as to enforcing such penalties as he was required by the law to give and enforce. He denied that he had any knowledge or information sufficient to form a belief regarding the truth of the other allegations of the complaint.
A stipulation of facts was entered into by the parties upon which the court entered judgment dismissing the complaint. The judgment was successively affirmed by the appellate division of the supreme court and by the court of appeals.
The facts stipulated practically sustain the allegations of the answer, and detail the manner of the payment by plaintiff of its employees. The plaintiff also introduced in evidence an exhibit which classified its employees and showed the number of days' work, total compensation and average compensation per day as per pay rolls for the year ending June 30, 1908. Its materiality was contested.
Mr. Justice McKenna, after stating the case as above, delivered the opinion of the court: