In Falk et al. v. Brennan, Secretary of Labor in 1973, the U.S Supreme Court ruled that a group of related businesses could be considered as one enterprise under the Fair Labor Standards Act (FLSA). The case involved two corporations operating nursing homes and hospitals which were managed by another corporation owned by the same family members who controlled both corporations. The Department of Labor sued for back wages on behalf of employees working more than forty hours per week without receiving overtime pay as required by FLSA. Lower courts held that each business was separate and thus did not meet FLSA's $1 million annual gross sales requirement to mandate overtime pay. However, the Supreme Court reversed this decision stating that when related activities are performed through complex corporate structures for a common business purpose, they constitute an enterprise subject to FLSA regulations.

In the dissenting opinion for Falk et al. v. Brennan, Justice Douglas argued that the majority's interpretation of "enterprise" under the Fair Labor Standards Act was too broad and inconsistent with Congressional intent. He contended that Congress intended to cover larger businesses engaged in commerce or production activities rather than small local operations like those involved in this case (a chain of restaurants). The justice believed that by including such small-scale operations within the scope of federal wage and hour laws, it would impose an undue burden on them which could potentially lead to their closure - a result he felt Congress did not intend when drafting these labor standards regulations.