In the case of Chas. Wolff Packing Company v. The Court of Industrial Relations of the State of Kansas, 1924, the U.S Supreme Court ruled that a state law which allowed a court to determine and enforce wages in private industries was unconstitutional. This decision came after Charles Wolff Packing Co., a meatpacking company based in Kansas, challenged an order by the state's industrial relations court mandating minimum wage for its workers. The Supreme Court held that such regulation violated due process under both federal and state constitutions as it interfered with employers' rights to freely negotiate terms with their employees without government intervention unless there is clear public interest at stake (like health or safety). Thus, this ruling significantly limited states' power over labor conditions within their jurisdiction.

In the dissenting opinion for Chas. Wolff Packing Company v. The Court of Industrial Relations of the State of Kansas, Justice Oliver Wendell Holmes Jr., joined by Justice Louis Brandeis, argued that states should have broad powers to regulate businesses in order to protect public welfare. He disagreed with the majority's view that a state law requiring employers and employees to negotiate wages and working conditions violated due process rights under the Fourteenth Amendment. Holmes contended that such laws were necessary tools for preventing labor disputes from disrupting essential industries like meatpacking, which could harm consumers by causing food shortages or price spikes. He also rejected arguments that compulsory arbitration infringed on freedom of contract, asserting instead that contracts are subject to reasonable regulation in service of societal interests.