Keokee Consolidated Coke Co. v. Taylor

Background

Workers brought suit to collect money on orders that had been issued as scrip—advances of monthly wages—that directed payment “in merchandise only from your store.” The facts were agreed. A federal Circuit Court ruled for the workers, the state’s highest court declined a writ of error, and the case came to this Court for review. The state law in question, enacted in 1888, forbids coal, ore, and various manufacturing employers from issuing orders for wage payment unless those orders can be redeemed for their face value in lawful United States money.

Reasoning

The core question was whether that state law violated the Constitution by interfering with freedom of contract or by unfairly singling out certain businesses. The Court relied on earlier decisions and explained that legislatures may target places where a problem is thought to be most serious. The Court said it would not overturn the law just because other kinds of businesses could also issue similar scrip. On that basis the Court rejected the constitutional objections and affirmed the lower-court judgments.

Real world impact

The decision means employers in the named industries may not lawfully pay workers with store-only orders that cannot be redeemed in lawful money. Employers who used scrip as wage advances must give redeemable pay instead. Because this opinion affirms the state courts’ construction of the statute and relies on precedent, it leaves the statute in force and the workers’ money claims sustained.