In the 1940 case of Opp Cotton Mills, Inc. v. Administrator of the Wage and Hour Division of the Department of Labor, the U.S Supreme Court upheld that Congress had constitutional authority to establish minimum wage and maximum hour standards for workers in industries engaged in interstate commerce under Fair Labor Standards Act (FLSA) passed in 1938. The cotton mill company argued that these regulations were an unconstitutional exercise of legislative power by Congress as it interfered with their freedom to contract with employees on mutually agreeable terms. However, Justice Harlan Fiske Stone writing for majority held that such regulation was a valid use of Congressional power under Commerce Clause because poor labor conditions caused by substandard wages and excessive hours could burden or obstruct interstate commerce directly or indirectly. This decision marked a significant expansion in federal regulatory powers over businesses involved in interstate commerce.

In the dissenting opinion for OPP Cotton Mills, Inc. v. Administrator of the Wage and Hour Division of the Department of Labor, Justice James Clark McReynolds argued that Congress had overstepped its constitutional bounds by setting a minimum wage through legislation rather than allowing market forces to determine wages. He contended that this was an infringement on states' rights and individual liberty as it interfered with private contracts between employers and employees. Furthermore, he believed that such regulation could potentially harm businesses by imposing financial burdens they may not be able to bear, leading to unemployment or business failure. In his view, these issues were better left in the hands of state governments who are more familiar with local conditions and needs.