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Subject Area: Law
Topic: The American Revolution and Constitution

§ 100.: Regulation of wages of workmen, continued—Time of payment—Medium of payment—Fines and deductions for imperfect work—Mechanics’ lien and exemption of wages.— - Christopher G. Tiedeman, A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, vol. 1 [1900]

Edition used:

A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint (St. Louis: The F.H. Thomas Law Book Co., 1900). Vol. 1.

Part of: A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, 2 vols.

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§ 100.

Regulation of wages of workmen, continued—Time of payment—Medium of payment—Fines and deductions for imperfect work—Mechanics’ lien and exemption of wages.—

Another very common regulation of wages is the statutory requirement, that the wages shall be paid to certain enumerated classes of workmen at stated periods, in some cases weekly, in others bimonthly. The object of such legislation is to protect the workman against the injustice of being compelled to wait an undue time for his wages. Some of these regulations are limited to corporation employers, while others apply to natural persons as well as to corporations, who are engaged in the businesses, which are intended to be brought within the operation of the act. In all of them, except the statute of Wisconsin, any agreement for some other period of payment is declared to be illegal. While these acts are professed to be for the protection of the workman; and, probably, in ordinary times of prosperity and activity of business, it is a beneficial regulation, however doubtful the necessity for the regulation may seem to most minds; it is likewise true they may in times of money stringency and slackness of business prove a source of the most serious injury and suffering to the workman. As it was explained by the court in a recent case:1 “An illustration of the manner in which it affects the employee, out of the many that might be given, may be found in the conditions arising from the late unsettled financial affairs of the country. It is a matter of common knowledge that a large number of manufactories were shut down because of the stringency in the money market. Employers of labor were unable to continue production for the reason that no sale could be found for the product. It was suggested in the interest of the employers, as well as in the public interest, that employees consent to accept only so much of their wages as was actually necessary to their sustenance, reserving payment of the balance until business should revive, and thus enable the factories or workshops to be open and operated with less present expenditures of money. Public economists and leaders in the interest of labor suggested and advised this course. In this State, and under this law, no such contract could be made. The employee who sought to work for one of the corporations enumerated in the act would find himself incapable of contracting as all other laborers might do. * * * The employee would, therefore, be restricted from making such a contract as would insure to him support during the unsettled condition of affairs, and the residue of his wages when the product of his labor could be sold. They would, by the act, be practically under guardianship; their acts voidable, as if they were minors; their right to freely contract for and to receive the benefit of their labor as others might do, denied them.”

The decisions of the courts as to the constitutionality of these regulations of the periods of payment of wages are more or less conflicting. In two cases they are declared to be constitutional, whether they applied to corporations or to natural persons.1 In other cases, the regulations were held to be constitutional, so far as they undertook to control the payment of wages to employees of corporations, but unconstitutional, so far as they applied to the employees of natural persons;2 while in a number of cases, the regulation is declared to be altogether unconstitutional, in that it was an unlawful interference with the individual liberty of contract.3

If the protection of the ignorant and unsuspecting against the fraud and oppression of another is ever a justification for the police regulation of the liberty of contract, it is surely justifiable, when it takes the form of legislation, which, following in the main the provisions of the English Anti-truck law, have prohibited certain classes of employers, especially manufacturers and persons and corporations who are engaged in mining, from paying their employees in orders or drafts, which are redeemable only in goods bought at the stores of the employers. This legislation is designed to prevent fraud and oppression in charging exorbitant prices for the goods, which under the order system the employee is obliged to buy of the employer. These acts generally prohibit the payment of wages in anything but lawful money; or if the orders are permitted at all, they are required to be redeemable in whole or in part in lawful money, at the option of the employee. In some States, the statutes prohibit the employers, who are included within the operation of the act, from keeping stores in conjunction with their main business for the supply of goods to the employees.

A distinction is very properly made between an act, which prohibits an employer from keeping a truck store for the use and convenience of his employees, and one which prohibits an employer from compelling an employee to buy from the stores of the employer, by paying his wages in orders, which are redeemable only in goods bought at the store. If the wages of the employee are paid in lawful money, and he has not obligated himself to purchase any of his supplies from the employer’s truck store, his personal liberty is in nowise endangered by the maintenance of a truck store, adjacent to the factory or works; and the store may prove a positive benefit to him, in making it unnecessary for him to go a long distance to purchase what he and his family may need. In testing the constitutionality of these statutes, and distinguishing between them, by a consideration of their relative degrees of reasonableness or unreasonableness, as a regulation for the prevention of the practice of fraud and oppression upon the ignorant and helpless; it is justifiable to pronounce the law unconstitutional, which prohibits an employer from keeping a truck store for the service of the employees;1 while the law is declared to be constitutional which prohibits an employer from compelling his employees to deal at his store, by paying their wages in anything but lawful money. Unless the position of the text of preceding sections is adhered to, that, under the doctrine of political equality of all men, and the inviolability of the individual liberty of contract, the possibility that the man of superior intelligence and skill will take undue advantage of the weaker vessel, with whom he is contracting, is no justification for the police regulation of the liberty of contract; then there can be no ground, upon which these statutes can consistently be declared unconstitutional, except that they may be class legislation (as to which, see later); and that objection only can obtain, when the legislation is made to include only particular classes of persons and corporations. If the legislation is universal in its application to all employees, the legislation ought undoubtedly to be declared a constitutional exercise of police power. And such has been the conclusion of a number of the cases.1

It is to be observed that in almost all of the cases, in which these so-called anti-truck laws have been held to be unconstitutional, the position of the courts has been made to rest upon the principle, that they were violations of the constitutional prohibition of class legislation, in that they applied to only a class of persons; making that unlawful, when done by that class of persons, which is perfectly lawful when done by others. In these cases, the statute generally applied to persons who were engaged in manufacturing and mining, and did not include those persons and corporations who were engaged in other trades and businesses, in which they might be paying their employees in orders on their truck-stores.2

In Pennsylvania, although the act applied only to persons and corporations, who were engaged in mining of any kind or manufacturing, the Supreme Court pronounced the act to be unconstitutional, on the general ground that it was an unlawful restriction of the individual liberty of contract, pronouncing the legislation to be “an attempt by the legislature to do what, in this country, cannot be done; that is, prevent persons who are sui juris from making their own contracts.”1

One of the most unreasonable and most unjust attempts, to enhance the interests of the average workman at the expense of the employer, is to be found in legislation in a few of the States, which prohibits an employer from imposing fines on the employee, and making deductions from his wages, on account of imperfect or careless work done, or of injury to machinery. In the absence of a statute, it has been held to be a clear right for an employer to impose such fines, and to make such deductions, where provision is made for them in the contract of hiring.1 Where the act, prohibiting such fines and deductions, relates only to one or more kinds of employment, and is not applicable to others, it would seem to be unconstitutional as class legislation. And so, on the other hand, as in the Ohio statute, where the prohibition only applies to the case, where there has been no express provision for such fines and deductions in the contract of hiring, there can be no constitutional objection to the statute. But if the law should be made to apply to all kinds of trades and businesses, and should deny the validity of any express stipulation in the contract of hiring of the right of the employer to impose such fines and deduct the same from the employee’s wages; the conclusion, in the light of the general trend of judicial opinion, would seem to be undoubted, that the legislation was unconstitutional as an unlawful restriction of the individual liberty of contract. The leading cases on this subject are from Massachusetts, in which State the regulation was made to apply to all employers of weavers, and prohibited fines and deductions from wages for imperfections arising during the process of weaving. The court held the act or acts containing these regulations to be an unconstitutional restriction of the liberty of contract; but adding that “if the act went no further than to forbid the imposition of a fine by an employer for imperfect work, it might be sustained as within the legislative power conferred by the constitution of this commonwealth.”2 In Arkansas a statute required all corporations and persons engaged in operating and constructing railroads and railroad bridges, and contractors and sub-contractors who are engaged in the construction of any railroad or railroad bridge, to pay the employees on the day of their discharge the unpaid wages still due at contract rate, without abatement or deduction. It was held that the statute was constitutional so far as its provisions apply to corporations, and unconstitutional so far as they apply to natural persons, such as contractors and sub-contractors.1

A variety of provisions is to be found in the statute books of the different States, having for their object, on the one hand, the protection of the laborer against his own indiscretion in making debts beyond his capacity to pay, by exempting his wages and tools, as well as other enumerated property from attachment and execution for his debts; and, on the other hand, to secure to him the payment of his wages through all the financial vicissitudes of his employer, sometimes by giving him a claim for his wages of priority over all other creditors of the employer, and sometimes by giving him a lien on the property on which his labor has been expended. These regulations, varied as they are, contain no new principle of police regulation, and should not be considered as involving any serious constitutional question, beyond what might be raised in any other case of exemption or priority of lien over other creditors. The priority laws have been the subject of litigation in two cases; but in both they have been sustained as constitutional, so far, at least, as they affect the rights of creditors which have been acquired subsequent to the enactment of the laws, giving the priority to laborers.2

But in Pennsylvania, an act of the legislature was declared unconstitutional, because violative of the indefeasible right of acquiring, possessing and protecting property, which provided that the contractor for the erection of a building shall be deemed to be the owner’s agent, and that no contract between them that no lien shall be filed on the property, shall prevent the claim of the subcontractor to a mechanic’s lien on the building, unless the latter agrees in writing to be bound by the provisions and stipulations of the contract between the owner and the contractor.1 On the other hand, in Ohio, laws have been declared to be unconstitutional, which give to sub-contractors, laborers and material men, a lien on the property of the owner for wages and claims, which are owing to them by the contractor.2 The position of the Ohio court is not without soundness in that all such liens are imposed upon one man’s property, in order to secure the performance of another man’s contracts. Still, the fact that the owner is the ultimate beneficiary of the labor and materials which have been expended upon his property, the mechanics’ lien law only throws upon the owner of the property the burden of seeing that the contractor pays his bills, and makes the owner of the property a trustee for the subcontractors, laborers and material men. But is it justifiable for the State to impose such a burden upon him?

[1]Braceville Coal Co. v. People, 147 Ill. 66, decided in 1893.

[1]Opinions of Justices, 163 Mass. 589; Hancock v. Yaden, 121 Ind. 366.

[2]Leep v. St. Louis, I. M. Ry. Co., 58 Ark. 407; State v. Brown & Sharpe Mfg. Co., 18 R. I. 16.

[3]Commonwealth v. Isenberg, 8 Kulp. 116; 4 Pa. Dist. 579; San Antonio & A. P. Ry. Co. v. Wilson (Tex. App.), 19 S. W. 910; Braceville Coal Co. v. People, 147 Ill. 66. In the Texas and Illinois cases cited, the regulations were declared to be unconstitutional, not only because they infringed the constitutional liberty of contract, but likewise because they offended the constitutional prohibition of special legislation. In the Illinois case, the court says: “There can be no liberty protected by government that is not regulated by such laws as will preserve the right of each citizen to procure his own advancement in his own way, subject only to the restraints necessary to secure the same rights to all others. The fundamental principle upon which liberty is based is equality under the law. It has accordingly been held that liberty, as that term is used in the constitution, means not only freedom of the citizen from servitude and restraint, but is deemed to enhance the right of every man to be free in the use of his powers and faculties and to adopt and pursue such avocation or calling as he may choose, subject only to the restraints necessary to secure the common welfare. * * * Labor is the primary foundation of all wealth. The property which each one has in his own labor is the common heritage. And, as an incident to the right to acquire other property, the liberty to enter into contracts by which labor may be employed in such way as the laborer shall deem most beneficial, and of others to employ such labor, is necessarily included in the constitutional guaranty. * * * It is undoubtedly true that the people in their representative capacity may, by general law, render that unlawful in many cases, which had hitherto been lawful. But laws depriving particular persons, or classes of persons, of rights enjoyed by the community at large, to be valid, must be based upon some existing distinction or reason, not applicable to others, not included within its provisions.”

[1]In Frorer v. People, 141 Ill. 171, and State v. Coal and Coke Co., 33 W. Va. 188, an act was declared to be unconstitutional, which prohibited miners and manufacturers from selling merchandise and supplies to employees at a greater per cent profit than at which they sell to others. It was, however, held by the court to be class legislation. In Frorer v. People, the court say: “The privilege or liberty to engage in or control the business of keeping and selling clothing, provisions, groceries, etc., to employees is one of profit, and thus, by the effect of these sections (of the prohibitive law), what the employer in other industries may do for their pecuniary gain with impunity and have the law to protect and enforce, the miner and manufacturer, under precisely the same circumstances and conditions, are prohibited from doing for their pecuniary gain. The same act, in substance and in principle, if done by the one, is lawful; but if done by the other, is not only unlawful, but a misdemeanor.”

[1]In re House Bill No. 147, 23 Colo. 504; Hancock v. Yaden, 121 Ind. 366; State v. Peel Spirit Coal Co., 36 W. Va. 802; Haun v. State (Kans. App.), 54 P. 130. In an earlier case in West Virginia, State v. Goodwill Slate & Fire Creek Coal Co., 33 W. Va. 179, an act was declared to be unconstitutional, which prohibited persons engaged in mining or manufacturing from paying the wages of employees in orders on their truck stores, on the ground that it was class legislation. In the case in 36 W. Va. 802, the act, under inquiry, applied to all persons or corporations, who are engaged in any trade or business.

[2]The West Virginia cases are cited in the preceding note. The Illinois case, Frorer v. People, 141 Ill. 171 (see preceding note), pronounced the law unconstitutional which prohibited the keeping of truck-stores by manufacturers and miners. The court say in part: “The privilege of contracting is both a liberty and a property right, and if A. is denied the right to contract and acquire property in a manner which he has hitherto enjoyed under the law, and which B. and C. are thus allowed by the law to enjoy, it is clear that he is deprived of both liberty and property to the extent that he is thus denied the right to contract.” This conclusion is affirmed upon rehearing in Frorer v. People, 142 Ill. 387. In Missouri, where the statute was confined in its application to persons, corporations and firms, who are engaged in manufacturing and mining; in the first hearing of a case coming up under the provisions of the statute, the Supreme Court of the State denied that the statute was class legislation, or was an unlawful infringement of the constitutional liberty of contract in general. State v. Loomis (Mo.), 20 S. W. Rep. 332. But, upon a rehearing, the statute was declared to be unconstitutional, on the ground that it was class legislation, in that its provisions did not apply to all kinds of trades and businesses, but only to two or more enumerated kinds of employment. State v. Loomis, 115 Mo. 307.

[1]“The act is an infringement alike of the right of the employer and the employee; more than this, it is an insulting attempt to put the laborer under a legislative tutelage, which is not only degrading to his manhood, but subversive of his rights as a citizen of the United States. He may sell his labor for what he thinks best, whether money or goods, just as his employer may sell his iron or coal, and any and every law that proposes to prevent him from so doing, is an infringement of his constitutional privileges, and consequently vicious and void.” Godcharles v. Wigeman, 113 Pa. St. 431.

[1]Birdsall v. Twenty-third St. Ry. Co., 8 Daly, 419; Bowes v. Press, 70 L. T. R. 116.

[2]Commonwealth v. Perry, 155 Mass. 117; Commonwealth v. Potomska Mills, 155 Mass. 122.

[1]Leep v. St. Louis, I. M. & S. Ry. Co., 58 Ark. 407; Paul v. St. Louis, I. M. & S. Ry. Co., 64 Ark. 83; s. c. 173 U. S. 404. In affirming the decision of the Supreme Court of Arkansas, the Supreme Court of the United States held the statute to be constitutional, as an amendment to the charter of the railroad company, the power to amend or repeal such charter having been reserved by the State.

[2]Warren v. Solen, 112 Ind. 213; Ripley v. Evans, 87 Mich. 217. In the latter case, the laborer’s lien for wages was given priority over the mortgage of the coal mines, which had been given after the enactment of the law.

[1]Waters v. Wolf, 162 Pa. St. 153; McMaster v. West Chester State Normal School, 162 Pa. St. 260; Lea v. Lewis, 7 Kulp, 164; 13 Pa. Co. Ch. Rep. 567.

[2]Palmer v. Tingle, 55 Ohio St. 423; Young v. Lion Hardware Co., 55 Ohio St. 423.