The U.S. Supreme Court case GEMSCO, Inc. et al. v. Walling, Administrator of the Wage and Hour Division, U.S Department of Labor in 1944 revolved around whether or not certain employees were covered under the Fair Labor Standards Act (FLSA) of 1938 which established minimum wage and overtime pay standards among other worker protections for full-time and part-time workers in both private and public sectors. The plaintiffs were manufacturers who employed individuals to work from their homes creating embroidery pieces that would be used on clothing items sold by the companies involved in this lawsuit - GEMSCO Inc., National Embroidery Works Inc., & I.J Fox Incorporated Furriers New York City Corporation; they argued these home-workers should be classified as independent contractors rather than regular employees hence exempted from FLSA provisions. However, the court ruled against them stating that such homeworkers are indeed "employees" within meaning of FLSA because they were engaged directly or indirectly in commerce activities between states thus subject to its regulations including minimum wage requirements plus overtime compensation rules set forth by said law regardless if tasks performed at employer's premises or elsewhere like one's own residence.

In the dissenting opinion for GEMSCO, INC. et al. v. WALLING, Justice Roberts argued that the Fair Labor Standards Act of 1938 did not apply to employees involved in manufacturing goods for interstate commerce but rather only those directly engaged in such commerce. He contended that Congress had no constitutional authority to regulate wages and hours of workers employed by manufacturers who were not themselves engaged in interstate commerce, even if their products eventually entered into it indirectly through sales or distribution processes controlled by others. The majority's interpretation expanded federal power beyond its constitutionally defined limits and intruded upon states' rights to govern local labor conditions according to their own laws and standards.