Ribnik v. McBride , 48 S. Ct. 545 ( 1928 )

Mr. Justice Sutherland

delivered the opinion of the Court.

Chapter 227, Laws of New Jersey, 1918, p. 822, 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 tjie Commissioner of Labor and, among other requirements, the applicant must “ file with the Commissioner of Labor, for his approval, a schedule of, fee's .proposed tó 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 fijfed with the state Commissioner of Labor a written application for' á 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 cburt 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 at as constitutional under the due process of law clause of the Fourteenth Amendment. 4 N. J. Mis. R. 623. .Upon appeal to the state court, of errors.and appeals, the judgment, w^ affirmed.., 103 N. J. L. 708.

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, 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 & Brother v. Banton, 273 U. S. 418, 430, 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, 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 (p. 430) 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 (p. 434) “ 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 (p. 438) 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, p. 537, 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, 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 (p. 546) that while there was no such thing as absolute freedom of contract,', nevertheless, freedom of contract was the general rule and restraint the exception; and that “the exercise of legislative authority to abridge if 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 substantial character from the business of a real estate broker, ship broker, merchandise broker or ticket broker. In the Tyson case, supra, we declared unconstitutional án act of the New York legislature which sought to fix the price at'which theatre 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 deéply 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, p. 536. 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, pp. 431, 437, 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, cited by defendant in error lends no support to the judgment below. That case involved the validity of á 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. § 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 (p. 344):

. “ Provisions of § 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 & Brother v. Banton, supra, p. 431; and see pp. 440-441.

To urge that extortion, fraud, imposition, discrimination •and the like have been practiced to some, or to a great, extent in connection with the business here under consideration, or that the business is one lending itself peculiarly to such evils, is simply to restate grounds already fully considered by this Court. These are grounds for regulation but not for price fixing, as we have already definitely decided. Tyson & Brother v. Banton, supra, 442-445.

There are a number of states which have statutes like that now under consideration, and we are asked to give weight to that circumstance. It is to be observed, however, that with the exception of the decision now under review none of these, statutes has been judicially considered, except in the State of California, where the legislation was declared unconstitutional. Ex parte Dickey, 144 Cal. 234; In re Smith, 193 Cal. 337. And it was said in oral argument, and not disputed, that, while legislation of this character existed in several states, generally it was not enforced, in some instances because the state’s attorney-general had advised that the legislation was unconstitutional. In any event, under all the circumstances, and in the face of our prior decisions, we do not regard the mere existence in other states of statutory provisions like the one now under review as entitled to persuasive force.

Judgment reversed.