In the 1922 case Ex Parte in the Matter of Davis, Director General of Railroads, Etc., Petitioner, the U.S. Supreme Court dealt with a dispute over railroad workers' wages during World War I. The federal government had taken control of railroads for wartime use and established an eight-hour workday with overtime pay for additional hours worked. However, some employees were not paid according to this standard due to their employers’ interpretation that only those who physically labored (i.e., manual laborers) qualified for these benefits while clerical staff did not qualify as they did not perform physical labor. The court ruled against this interpretation stating that all employees should be compensated equally regardless of whether their job involved physical or mental exertion under the Federal Control Act's provision on "labor". This decision was significant because it broadened wage protections to include non-manual workers within its scope.

In the dissenting opinion for Ex Parte in the Matter of Davis, Director General of Railroads, Etc., Petitioner (1922), Justice Holmes argued that Congress did not intend to give federal courts jurisdiction over state court decisions when it passed legislation related to railroad labor disputes during World War I. He believed that this interpretation was consistent with the traditional respect for state sovereignty and judicial independence. Furthermore, he contended that if Congress had intended such a significant change in jurisdictional rules, it would have done so explicitly rather than implicitly. Therefore, he disagreed with the majority's decision to intervene in a case originally decided by a state court.