In the case of Goldberg, Secretary of Labor v. Whitaker House Cooperative, Inc., et al., 1960, the U.S. Supreme Court ruled that members of a cooperative who were also its only employees fell under the wage and hour provisions of the Fair Labor Standards Act (FLSA). The Whitaker House Cooperative was comprised entirely of home workers who produced knitted goods from their homes for sale by the cooperative. The Department of Labor argued that these individuals were "employees" within FLSA's meaning and thus entitled to minimum wages and overtime pay protections. In contrast, Whitaker contended they were not "employees," but rather independent contractors or business owners themselves since they shared in profits as member-owners. The court sided with the Department of Labor stating that economic reality rather than technical concepts must guide determination on whether an employer-employee relationship exists under FLSA; it found such a relationship existed here despite co-op membership status because members' work was integral to co-op's business operations while lacking meaningful control over those operations or ability to negotiate terms.

In the dissenting opinion for Goldberg v. Whitaker House Cooperative, Inc., Justice Whittaker argued that the Fair Labor Standards Act (FLSA) was not intended to apply to homeworkers like those in the cooperative. He contended that these workers were more akin to independent contractors than employees, as they had significant control over their own work schedules and conditions. Furthermore, he suggested that applying FLSA standards would be impractical and burdensome for such workers due to difficulties in tracking hours worked at home. Finally, he expressed concern about potential negative impacts on industries reliant on homeworkers if they were required to comply with wage and hour regulations designed for traditional workplaces.