Fry v. United States, 421 U.S. 542 (1975)

CERTIORARI TO THE TEMPORARY EMERGENCY

COURT OF APPEALS OF THE UNITED STATES

Syllabus

The Economic Stabilization Act of 1970 authorized the President to stabilize wages and salaries at certain levels, and the Pay Board was created to oversee the controls. The Government filed this action to enjoin Ohio and its officials from paying state statutory wage and salary increases to state employees above the amount authorized by the Pay Board. The Temporary Emergency Court of Appeals, on certification from the District Court, construed the Act as applying to state employees, upheld its constitutionality, and enjoined payment of the increases.

Held:

1. The Act’s language contemplating general stabilization of "prices, rents, wages, salaries, dividends, and interest" and providing that the controls should "call for generally comparable sacrifices by business and labor as well as other segments of the economy," and its legislative history showing that Congress had rejected an amendment exempting state employees, make it clear that the Act was intended to apply to employees generally, including state employees. That the Act did not expressly refer to the States warrants no inference that controls could not extend to their employees. Pp. 545-546.

2. The Act was constitutional as applied to state employees. Pp. 547-548.

(a) General raises to state employees, even though purely intrastate in character, could significantly affect interstate commerce, and thus could be validly regulated by Congress under the Commerce Clause. P. 547.

(b) States are not immune from all federal regulation under the Commerce Clause merely because of their sovereign status. Maryland v. Wirtz, 392 U.S. 183. Here, where the Act did not appreciably intrude on state sovereignty, but was an emergency measure to counter severe inflation, the effectiveness of federal action would have been drastically impaired if wage increases to state and local governmental employees (who, at the time the wage freeze was activated, composed 14% of the Nation’s workforce) were left outside the Act’s reach. Pp. 547-548.

(c) Since the Ohio wage legislation conflicted with the Pay Board’s ruling, the State must yield under the Supremacy Clause to the federal mandate. P. 548.

487 F.2d 936, affirmed.

MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, STEWART, WHITE, BLACKMUN, and POWELL, JJ., joined. DOUGLAS, J., filed a separate statement, post, p. 549. REHNQUIST, J., filed a dissenting opinion, post, p. 549.