This Day in Labor History: April 9, 1923

On April 9, 1923, the Supreme Court ruled in Adkins v. Children’s Hospital that states or the federal government setting minimum wages for women was unconstitutional, as it violated the liberty of contract. This awful decision made clear just how powerful liberty of contract doctrine remained in the United States nearly a century after it developed and how the Supreme Court remained a major obstacle to even the most basic forms of workers’ rights through this era.

In 1918, Congress passed a minimum wage to cover women in the District of Columbia. This was a period when Progressives were fighting for progressive legislation to win rights for workers, especially women and children. The National Consumers’ League led the fight against child labor, while other Progressive organizations created the momentum for the victory in Muller v. Oregon in 1908, when the Court decided than an Oregon maximum hour law for women was constitutional. With growing middle-class support for labor struggles, such as the active support of Progressive organizations for the Uprising of the 20,000 and then the reforms people such as Frances Perkins led in the aftermath of the Triangle Fire, it did seem that the lives of workers would improve. The DC Children’s Hospital though, along with an elevator operator at a hotel, brought suit against Jesse Adkins, the chair of the Washington DC minimum wage board.

There was hope the Court would rule in favor of the minimum wage, as it had in a 1917 decision, even though it made a ruling against a child labor law in 1918. But in 1920, Warren Harding was elected to the presidency. And as usually happens when a Republican appoints justices to the Supreme Court, Harding was sure to give the positions to anti-labor conservatives. In 1922, the Court ruled against another child labor law. He appointed George Sutherland and former president William Howard Taft. Sutherland strongly believed in the idea of freedom of contract and Taft was seen to support this as well.

Freedom of contract went back to the beginnings of industrialization. The Farwell case in 1842 that ruled employers had no liability for workplace safety was an early iteration of this and as time went on after the Civil War, this hardened into ideology at the core of every employer opposition to unions, which they considered an unlawful restraint on trade because they violated the freedom of an individual worker to enter into a contract with an employer. This was the world that Warren Harding and George Sutherland still promoted, no matter the horrible lives of millions of workers.

Fighting this was Felix Frankfurter and his top assistant, Mary Dawson. They argued that the DC law was constitutional because it preserved living standards for working women and noted that it would increase business efficiency. Meanwhile, people like Alice Paul sided with the corporations, arguing that any protective laws for women made them second-class citizens, although Paul would later just go all in with corporations and oppose all labor legislation.

The court decided 5-3 in favor of Children’s Hospital. George Sutherland wrote the majority opinion, joined by Joseph McKenna, Willis Van Devanter, James McReynolds, and Pierce Butler. William Howard Taft wrote the dissent joined by Edward Sanford, while Oliver Wendell Holmes wrote a separate dissent. Louis Brandeis did not participate in the case. In that decision Sutherland wrote that Lochner was still the rule of the land, despite Muller, noting that the minimum wage was completely different from maximum hours and thus the latter case was irrelevant. He also argued that if the states could set minimum wage laws, they could also set maximum wage laws, something that I don’t think has ever been seriously discussed in American history, but when did reality get in the way of conservative thought? He also noted that since women now had the right to vote, there was no reason to treat them any differently than men at the workplace, a sentiment which Alice Paul strongly approved.

Taft’s dissent was surprising, since he was usually a conservative on these matters. But he found Sutherland’s differentation between wage and hour laws ridiculous. He wrote:

Legislatures in limiting freedom of contract between employee and employer by a minimum wage proceed on the assumption that employees, in the class receiving least pay, are not upon a full level of equality of choice with their employer and in their necessitous circumstances are prone to accept pretty much anything that is offered. They are peculiarly subject to the overreaching of the harsh and greedy employer. The evils of the sweating system and of the long hours and low wages which are characteristic of it are well known. Now, I agree that it is a disputable question in the field of political economy how far a statutory requirement of maximum hours or minimum wages may be a useful remedy for these evils, and whether it may not make the case of the oppressed employee worse than it was before. But it is not the function of this court to hold congressional acts invalid simply because they are passed to carry out economic views which the court believes to be unwise or unsound.

Legislatures which adopt a requirement of maximum hours or minimum wages may be presumed to believe that when sweating employers are prevented from paying unduly low wages by positive law they will continue their business, abating that part of their profits, which were wrung from the necessities of their employees, and will concede the better terms required by the law, and that while in individual cases, hardship may result, the restriction will inure to the benefit of the general class of employees in whose interest the law is passed, and so to that of the community at large.

The right of the Legislature under the Fifth and Fourteenth Amendments to limit the hours of employment on the score of the health of he employee, it seems to me, has been firmly established.

Holmes, reversing his previous anti-worker stance, wrote on much the same lines:

When so many intelligent persons, who have studied the matter more than any of us can, have thought that the means are effective and are worth the price it seems to me impossible to deny that the belief reasonably may be held by reasonable men. If the law encountered no other objection than that the means bore no relation to the end or that they cost too much I do not suppose that anyone would venture to say that it was bad. I agree, of course, that a law answering the foregoing requirements might be invalidated by specific provisions of the Constitution. For instance it might take private property without just compensation. But in the present instance the only objection that can be urged is found within the vague contours of the Fifth Amendment, prohibiting the depriving any person of liberty or property without due process of law. To that I turn.

The earlier decisions upon the same words in the Fourteenth Amendment began within our memory and went no farther than an unpretentious assertion of the liberty to follow the ordinary callings. Later that innocuous generality was expanded into the dogma, Liberty of Contract. Contract is not specially mentioned in the text that we have to construe. It is merely an example of doing what you want to do, embodied in the word liberty. But pretty much all law consists in forbidding men to do some things that they want to do, and contract is no more exempt from law than other acts. Without enumerating all the restrictive laws that have been upheld I will mention a few that seem to me to have interfered with liberty of contract quite as seriously and directly as the one before us. Usury laws prohibit contracts by which a man receives more than so much interest for the money that he lends. Statutes of frauds restrict many contracts to certain forms. Some Sunday laws prohibit practically all contracts during one-seventh of our whole life. Insurance rates may be regulated. …

I confess that I do not understand the principle on which the power to fix a minimum for the wages of women can be denied by those who admit the power to fix a maximum for their hours of work. I fully assent to the proposition that here as elsewhere the distinctions of the law are distinctions of degree, but I perceive no difference in the kind or degree of interference with liberty, the only matter with which we have any concern, between the one case and the other. The bargain is equally affected whichever half you regulate. …

This statute does not compel anybody to pay anything. It simply forbids employment at rates below those fixed as the minimum requirement of health and right living. It is safe to assume that women will not be employed at even the lowest wages allowed unless they earn them, or unless the employer’s business can sustain the burden. In short the law in its character and operation is like hundreds of so-called police laws that have been upheld. I see no greater objection to using a Board to apply the standard fixed by the Act than there is to the other commissions with which we have become familiar or than there is to the requirement of a license in other cases. …

The criterion of constitutionality is not whether we believe the law to be for the public good. We certainly cannot be prepared to deny that a reasonable man reasonably might have that belief in view of the legislation of Great Britain, Victoria and a number of the States of this Union. The belief is fortified by a very remarkable collection of documents submitted on behalf of the appellants, material here, I conceive, only as showing that the belief reasonably may be held. In Australia the power to fix a minimum for wages in the case of industrial disputes extending beyond the limits of any one State was given to a Court, and its President wrote a most interesting account of its operation. 29 Harv. Law Rev. 13. If a legislature should adopt what he thinks the doctrine of modern economists of all schools, that ‘freedom of contract is a misnomer as applied to a contract between an employer and an ordinary individual employee,’ Ibid. 25, I could not pronounce an opinion with which I agree impossible to be entertained by reasonable men. If the same legislature should accept his further opinion that industrial peace was best attained by the device of a Court having the above powers, I should not feel myself able to contradict it, or to deny that the end justified restrictive legislation quite as adequately as beliefs concerning Sunday or exploded theories about usury. I should have my doubts, as I have them about this statute—but they would be whether the bill that has to be paid for every gain, although hidden as interstitial detriments, was not greater than the gain was worth: a matter that it is not for me to decide.

The Adkins decision devastated the Progressives struggling to remain relevant in the 1920s. Florence Kelley broke with Felix Frankfurter in the aftermath, as the two could not agree on what strategy to take going forward. Kelley and the Consumers League and hoped that carving out laws for women would be the first step toward creating labor rights for everyone and when the legal strategy didn’t work out, they didn’t know what to do. The entire 1920s was horrible for both organized labor and worker rights. It would take the shock of the Great Depression to change this. Of course, the minimum wage became a major goal of the workers’ movement of the 1930s and would finally be guaranteed nationally with the Fair Labor Standards Act of 1938, even if there were enormous carveouts necessary to ensure that enough conservatives would vote for it to pass. The Court itself would reverse Adkins in 1937, with West Coast Hotel Co. v. Parrish, which I will write about eventually.

This is the 217th post in this series. Previous posts are archived here.