SCOTUS Opens the Door to Blue States Fighting Child Labor in Red States

Blue states could potentially push up minimum wage & enviro standards across the country using new Court decision

In the last two years, ten states have enacted or introduced laws to weaken child labor laws.

This is not some theoretical problem.  The US Labor Department recently announced it had found two 10-year-olds working at a McDonald’s in Louisville, Kentucky, sometimes until 2 am. While the federal government restricts child labor under the Fair Labor Standards Act (FLSA), enforcement is often weak unless states tighten enforcement locally.  A common example is requiring work permits, ensuring that parents have given permission and proof of age has been provided in any workplace.    Arkansas repealed its requirement for child labor work permits this year.

States could demand that no products be sold where signed parental permission has not been verified by local governments- or submitted to the blue state as an alternative.  Not only is this good policy to protect kids, but it would create a clear political line between blue-state Dem policies and Red state pro-corporate GOP policies.  Instead of a national media debate on trans policies, child labor could be the culture war issue defining 2024. 

And a decision last Thursday by the Supreme Court reinforces the ability of blue states to do this.  If the Supreme Court extended this decision to allow the exclusion of goods made with weak protections for child labor, potentially, blue states could build on that to exclude goods made at a minimum wage below $20/hr or that use environmentally destructive practices. Blue states could leverage their collective economic heft to stop companies from trying to locate in red states so they could take advantage of weak regulatory standards, then ship those goods to consumers in states with tougher standards. 

The National Pork Producers Council vs. Ross Decision

Back in 2018, California voters approved a ballot initiative banning the sale of pork products where breeding pigs are confined in stalls too small to allow them to lie down or turn around.  The National Pork Producers Council sued the state after its passage, arguing the law was illegal in extending California’s regulatory authority outside California in regulating the production by out-of-state pork producers.

Since there are no federal standards protecting the right of pork producers to breed pigs as they wish – a law pork producers in fact tried to pass in Congress – the argument of the pork producers was that what is known as the “dormant commerce clause” inherently prevents such out-of-state regulation, even for goods sold within a particular state.

As argued in the core decision of the court, authored surprisingly by conservative Justice Neil Gorsuch, the dormant commerce clause has largely been invoked by the Supreme Court in the past to prevent states from favoring in-state companies against competition from companies based in other states:

this antidiscrimination principle lies at the “very core” of our dormant Commerce Clause jurisprudence…In its “modern” cases, this Court has said that the Commerce Clause prohibits the enforcement of state laws “driven by . . . ‘economic protectionism—that is, regulatory measures designed to benefit in-state eco[1]nomic interests by burdening out-of-state competitors.’”

As Gorsuch notes, though, in the case of California’s pork production law, the same production rules would apply to in-state producers as to out-of-state producers.  Gorsuch pointed out in his opinion that horse meat can’t be sold in most states across the nation and asks why the pork standards in California are any different. 

He also pointed to a past court decision, Exxon Corp. v. Governor of Maryland, which prohibited petroleum producers from also operating retail gas stations.  Despite there being no petroleum producers in Maryland, the Court said there was no unconstitutional discrimination, since there were out-of-state retail gas station chains that were free to operate in Maryland, so there was no protectionism involved.  Similarly, pork producers using humane procedures outside California were free to sell pork in that state under the disputed ballot law.

Are Big States Barred from Regulating Production Standards Because Their Market are Too Big?

However, the pork producers wanted the Court to go beyond the anti-discrimination principle and argued that, given California’s economic importance, any law that might have the practical impact of changing economic procedures throughout an industry should be unconstitutional under the dormant commerce clause.

And a minority of the Court largely endorsed that approach under an opinion by Chief Justice John Roberts, the opinion joined by Brett Kavanaugh, Samuel Alito and (distressingly) recently appointed Justice Katanji Brown Jackson. In that dissent, Roberts argued:

[where there are] broader, market-wide consequences of compliance—economic harms that our precedents have recognized can amount to a burden on interstate commerce… I would therefore find that petitioners have stated a substantial burden against interstate commerce…

Gorsuch in the majority decision notes such a position would potentially strike down a wide swathe of existing laws and have the perverse effect of making local legislation by larger states like California more likely to be unconstitutional than legislation by smaller states:

California’s market is so lucrative that almost any in-state measure will influence how out-of-state profit-maximizing firms choose to operate…But if that makes all the difference, it means voters in States with smaller markets are constitutionally entitled to greater authority to regulate in-state sales than voters in States with larger markets. So much for the Constitution’s “fundamental principle of equal sovereignty among the States.”

The last quote is from John Roberts himself from the Shelby County v. Holder decision, so passes for a major slam in Supreme Court terms.

This is the hinge of the dispute in the case, whether states through their buying power will be allowed to redirect the overall decisions of major corporations.  While it’s possible companies will maintain two forms of production, one meeting those to service states with higher standards and another line of production for other states, California and other states potentially banding together may lead companies to decide it’s easier to have all production designed to meet the higher standards required.

Brett Kavanaugh makes clear in his dissent that he fears just such a result leading to companies across the country being de facto forced to raise the minimum wage if blue states make that a condition of selling in their states:

What if a state law prohibits the sale of goods produced by workers paid less than $20 per hour?... California’s law thus may foreshadow a new era where States shutter their markets to goods produced in a way that offends their moral or policy preferences—and in doing so, effectively force other States to regulate in accordance with those idiosyncratic state demands.

Navigating a Narrow Supreme Court Majority

Before rushing to require a higher minimum wage as a condition of selling in their states, blue states may want to test the waters constitutionally, since it was a thin and unstable majority endorsing upholding the California law.  To give a sense of the fractured majority, concurring and dissenting opinions, here it the official breakdown of the decision:

Only Clarence Thomas – who whatever else may be said is reasonably consistent in upholding states’ regulatory powers – endorsed almost all of Gorsuch’s opinion. While Justices Sotomayor, Kagan and Barrett upheld the California humane pork production law, they all held out in concurring opinions that the Court could find unreasonable burdens on interstate commerce under the dormant commerce clause in other cases.

This is one reason taking on weakened regulation of child labor is a good place for blue states to start.  Gorsuch himself cited child labor as an example of “unethical and immoral” practices that have long been subject to state regulation. Ideally, any follow-up case would lead Justice Jackson to clarify why they endorsed the dissent in this case and ideally move towards upholding stronger state control of local standards- and help build confidence that states could move forward on more aggressive regulation.

Given the filibuster and malapportionment in the Senate, using local regulation and the buying power in blue states may be the best bet for stopping child labor and raising wage and environmental standards nationally. The Supreme Court opened a wedge for doing so and blue states should (carefully) use that tool to begin raising standards.

Gorsuch’s Ode to Judicial Restraint

On a final note, while it’s a surprise that it’s coming from Neil Gorsuch, his decision really has one of the best passages defending democratic-decisionmaking on the economy against second-guessing by unelected judges.  His mocking attack on judicial activism – which Gorsuch himself has of course participated in during recent years – can be read as a cautionary broadside against his fellow conservatives exercising their power too readily:

if pig husbandry really does “‘imperatively demand’” a single uniform nationwide rule…[pork producers]  are free to petition Congress to intervene. Under the (wakeful) Commerce Clause, that body enjoys the power to adopt federal legislation that may preempt conflicting state laws. That body is better equipped than this Court to identify and assess all the pertinent economic and political interests at play across the country. And that body is certainly better positioned to claim democratic support for any policy choice it may make. But so far, Congress has declined the producers’ sustained entreaties for new legislation.. And with that history in mind, it is hard not to wonder whether petitioners have ventured here only because winning a majority of a handful of judges may seem easier than marshaling a majority of elected representatives across the street.

Hard to believe this comes from Gorsuch, but a great statement.

Maybe to the horror of the Federalist Society, he is “evolving.”