In the 1924 case Davis v. Manry, the Supreme Court of the United States ruled on a dispute involving railroad workers' compensation under federal control during World War I. The plaintiff, Manry, was an employee of a railway company that had been taken over by the U.S government during wartime and was seeking additional pay for working overtime hours. He argued that he should be compensated at his regular rate plus half for any time worked beyond eight hours in one day or forty-eight hours in one week as per Section 206 of Transportation Act (1920). However, Davis, acting as Director General of Railroads and agent under Section 206 disputed this claim arguing that these provisions did not apply to employees like Manry who were paid monthly salaries rather than hourly wages. The court sided with Davis ruling that salaried employees were not entitled to extra pay for overtime work according to Section 206 since it specifically referred only to those "whose actual daily or weekly service is such as ordinarily does not exceed eight hours per day or six days per week". Therefore, they concluded that Congress intended this provision solely for wage earners whose employment terms are typically defined by specific hourly rates and schedules.

In the dissenting opinion for Davis v. Manry, Justice McReynolds disagreed with the majority's decision to allow a railroad worker to sue his employer under state law for injuries sustained on the job. He argued that federal law should preempt state laws in this case because Congress had enacted comprehensive legislation regulating railroads and their employees' rights and remedies. The Transportation Act of 1920, he noted, provided specific procedures for injured workers to seek compensation from their employers through an administrative process rather than litigation in court. Allowing lawsuits under conflicting state laws would undermine this federal scheme and create uncertainty for both railroads and their employees about what rules apply. Furthermore, it could potentially expose railroads to greater liability than intended by Congress or unfairly limit workers' rights if states chose less generous standards of compensation.