Ribnik v. Bride, 569

• Decision Date: 28 May 1928
• Docket Number: No. 569,569
• Parties: RIBNIK v. McBRIDE, Commissioner of Labor of New Jersey
• Court: U.S. Supreme Court

277 U.S. 350

48 S.Ct. 545

72 L.Ed. 913

RIBNIK

v McBRIDE, Commissioner of Labor of New Jersey.

No. 569.

Argued April 26, 27, 1928.

Decided May 28, 1928.

Messrs. John W. Simpson, 2d, and Walter Gordon Merritt, both of New York City, for plaintiff in error.

[Argument of Counsel from page 351 intentionally omitted] Mr. Harry R. Coulomb, of Atlantic City, N. J., for defendant in error.

[Argument of Counsel from pages 352-353 intentionally omitted] Mr. Justice SUTHERLAND delivered the opinion of the Court.

Chapter 227, p. 822, Laws of New Jersey 1918, being an act to regulate the keeping of employment agencies, requires that every person operating an employment agency as defined by the statute must procure a license from the commissioner of labor. A penalty is imposed for failure to do so. The application for such license must be made in writing to the commissioner of labor, and, among other requirements, the applicant must 'file with the commissioner of labor, for his approval, a schedule of fees proposed to be charged for any services rendered to employers seeking employees, and persons seeking employment, and all charges must conform thereto. The schedule of fees may be changed only with the approval of the commissioner of labor.' The commissioner of labor may refuse to issue or may revoke any license for any good cause shown within the meaning and purpose of the act.

Plaintiff in error filed with the state commissioner of labor a written application for a license to conduct an employment agency. All conditions of the statute were complied with; but the commissioner rejected the application upon the sole ground that, in his opinion, the fees proposed to be charged in respect of certain permanent positions were excessive and unreasonable. This action of the commissioner was brought up for review to the Supreme Court of the state, and that court construing the statute as empowering the commissioner to fix and limit the charges to be made by the applicant, nevertheless sustained it as constitutional under the due process of law clause of the Fourteenth Amendment. (N. J. Sup.) 133 A. 870. Upon appeal to the state court of errors and appeals, the judgment was affirmed. 137 A. 437.

That the state has power to require a license and regulate the business of an employment agent does not admit of doubt. But the question here presented is whether the due process of law clause is contravened by the legislation attempting to confer upon the commissioner of labor power to fix the prices which the employment agent shall charge for his services. The question calls for an answer under the last of the three categories set forth by this court in Wolff Co. v. Industrial Court, 262 U. S. 522, 535, 43 S. Ct. 630, 67 L. Ed. 1103, 27 A. L. R. 1280; that is to say, Has the business in question been devoted to the public use and an interest in effect granted to the public in that use? Or, in other words, is the business one 'affected with a public interest,' within the meaning of that phrase as heretofore defined by this court? As was recently pointed out in Tyson & Borther v. Banton, 273 U. S. 418, 430, 47 S. Ct. 426, 71 L. Ed. 718, the phrase is not capable of exact definition; but, nevertheless, under all the decisions of this court from Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77, it is the standard by which the validity of price-fixing legislation, in respect of a business like that here under consideration, must be tested.

In the Tyson Case it was said (page 430 (47 S. Ct. 428)) that the interest meant was not 'such as arises from the mere fact that the public derives benefit, accommodation, ease, or enjoyment from the existence or operation of the business; and while the word has not always been limited narrowly as strictly denoting 'a right,' that synonym more nearly than any other expresses the sense in which it is to be understood.' The business must be such (page 434 (47 S. Ct. 429)) 'as to justify the conclusion that it has been devoted to a public use and its use thereby, in effect, granted to the public.' And again (page 438 (47 S. Ct. 431)), after reviewing former decisions, it was said that:

'Each of the decisions of this court upholding governmental price regulation, aside from cases involving legislation to tide over temporary emergencies, has turned upon the existence of conditions, peculiar to the business under consideration, which bore such a substantial and definite relation to the public interest as to justify an indulgence of the legal fiction of a grant by the owner to the public of an interest in the use.'

In Wolff Co. v. Industrial Court, supra, page 537 (43 S. Ct. 633), it was said:

'It has never been supposed, since the adoption of the Constitution, that the business of the butcher, or the baker, the tailor, the wood chopper, the mining operator or the miner was clothed with such a public interest that the price of his product or his wages could be fixed by state regulation. * * * One does not devote one's property or business to the public use or clothe it with a public interest merely because one makes commodities for, and sells to, the public in the common callings of which those above mentioned are instances.'

In Adkins v. Children's Hospital, 261 U. S. 525, 43 S. Ct. 394, 67 L. Ed. 785, 24 A. L. R. 1238, this court had under consideration an act of Congress fixing minimum wages for women and children in the District of Columbia. The legislation, so far as it affected women, was held invalid as contravening the due process of law clause of the Fifth Amendment, because it was an arbitrary interference with the right to contract in respect of terms of private employment. It was said (page 546 (43 S. Ct. 397)) that, while there was no such thing as absolute freedom of contract, nevertheless, such freedom of contract was the general rule and restraint the exception, and that 'the exercise of legislative authority to abridge it can be justified only by the existence of exceptional circumstances.'

The business of securing employment for those seeking work and employees for those seeking workers is essentially that of a broker; that is, of an intermediary. While we do not undertake to say that there may not be a deeper concern on the part of the public in the business of an employment agency, that business does not differ in sub- stantial character from the business of a real estate broker, ship broker, merchandise broker or ticket broker. In the Tyson Case, supra, we declared unconstitutional an act of the New York Legislature which sought to fix the price at which theater tickets should be sold by a ticket broker, and it is not easy to see how, without disregarding that decision, price-fixing legislation in respect of other brokers of like character can be upheld.

An employment agency is essentially a private business. True, it deals with the public, but so do the druggist, the butcher, the baker, the grocer, and the apartment or tenement house owner, and the broker who acts as intermediary between such owner and his tenants. Of course, anything which substantially interferes with employment is a matter of public concern, but in the same sense that interference with the procurement of food and housing and fuel are of public concern. The public is deeply interested in all these things. The welfare of its constituent members depends upon them. The interest of the public in the matter of employment is not different in quality or character from its interest in the other things enumerated; but in none of them is the interest that 'public interest' which the law contemplates as the basis for legislative price control. Wolff Co. v. Industrial Court, supra, page 536 (43 S. Ct. 630). Under the decisions of this court it is no longer fairly open to question that, at least in the absence of a grave emergency (Tyson & Brother v. Banton, supra, pages 431, 437 (47 S. Ct. 426)), the fixing of prices for food or clothing, of house rental or of wages to be paid, whether minimum or maximum, is beyond the legislative power. And we perceive no reason for applying a different rule in the case of legislation controlling prices to be paid for services rendered in securing a place for an employee or an employee for a place.

Brazee v. Michigan, 241 U. S. 340, 36 S. Ct. 561, 60 L. Ed. 1034, cited by defendant in error lends no support to the judgment below. That case involved the validity of a Michigan statute in respect of employment agencies. Section 5 of the act attempted to limit the fees which should be charged. The state Supreme Court held that the business was one properly subject to police regulation and control, but did not rule concerning the validity of section 5. This court held that it was within the power of the state to require licenses for employment agencies and prescribe reasonable regulations to be enforced by the commissioner of labor. But it was said (page 344 (36 S. Ct. 562)):

'Provisions of section 5 in respect of fees to be demanded or retained are severable from other portions of the act and, we think, might be eliminated without destroying it. Their validity was not passed upon by the Supreme Court of the state and has not been considered by us.'

And we since have held definitely that the power to require a license for and to regulate the conduct of a business is distinct from the power to fix prices. 'The latter power is not only a more definite and serious invasion of the rights of property and the freedom of contract, but its exercise cannot always be justified by circumstances which have been held to justify legislative regulation of the manner in which a business shall be carried on.' Tyson & Borther v. Banton, supra, page 431 (47 S. Ct. 428). And see pages 440, 441 (47 S. Ct. 426).

To urge that extortion, fraud, imposition, discrimination, and the like have been practiced to some, or to great, extent in connection with the business here under consideration, or that the...