In the 1932 case Texas & Pacific Railway Co. et al. v. United States et al., the U.S Supreme Court ruled on a dispute involving railway companies and their employees' wages during periods of absence from work due to illness or injury not caused by employment conditions. The Interstate Commerce Commission (ICC) had previously ordered that railroads must pay full-time workers for time off due to such circumstances, which was challenged by several railroad companies including Texas & Pacific Railway Co.. The Supreme Court held that the ICC did not have authority under the Interstate Commerce Act to regulate employee compensation in this manner, as it fell outside its jurisdiction over rates, fares and charges related to transportation services provided by carriers subject to its regulation. Therefore, it overturned the ICC's order requiring payment for non-work-related absences.

In the dissenting opinion for Texas & Pacific Railway Co. et al. v. United States et al., it was argued that the Interstate Commerce Commission (ICC) did not have authority to regulate intrastate rates in this case, as they were not shown to be discriminatory or prejudicial against interstate commerce. The dissenting justices believed that there should be a clear and substantial relation between an intrastate rate and its impact on interstate commerce before federal intervention is warranted, which they felt was lacking here. They also expressed concern about potential overreach of federal power into state affairs without sufficient justification, arguing that states should retain control over their internal matters unless interference with national interests is evident.