Adkins v. Children's Hospital, 261 U.S. 525 (1923), argued 14 Mar. 1923, decided 9 Apr. 1923 by vote of 5 to 3; Sutherland for the Court, Taft and Holmes in dissent, Brandeis not participating. Reflecting widespread popular acceptance of laissez‐faire economics, the Supreme Court in the 1890s fashioned the liberty of contract doctrine, which affirmed the constitutional right of private parties to enter contractual arrangements. This doctrine curtailed the power of government to interfere with contractual freedom through regulatory legislation. The landmark Adkins decision exemplified the Court's commitment to laissez‐faire principles and the liberty of contract.

At issue in Adkins was a 1918 federal law establishing a minimum wage for women in the District of Columbia. The announced purpose of the act was to protect the health and morals of women from detrimental living conditions caused by inadequate wages. Felix Frankfurter, a future Supreme Court justice, appeared as counsel in support of the legislation. He sought to justify the measure as a valid exercise of the police power to ameliorate the handicaps experienced by women in the marketplace. Children's Hospital, on the other hand, contended that the statute was a price‐fixing law that unconstitutionally interfered with the liberty of contract for employment.

Justice George Sutherland, speaking for the majority, invalidated the minimum wage law as a violation of the liberty of contract guaranteed by the Due Process Clause of the Fifth Amendment. Although Sutherland recognized that the terms of contracts could be regulated in certain situations, he stressed that “freedom of contract is … the general rule and restraint the exception” (p. 546). Distinguishing wage laws from measures limiting the hours of labor, he reasoned that the minimum wage law arbitrarily cast on employers a welfare function that belonged to society at large. In view of the Nineteenth Amendment and changes in the legal position of women, Sutherland further maintained that women could not be subjected to greater restrictions on their liberty of contract than men. He argued that the minimum wage law disregarded the “moral requirement implicit in every contract of employment” that the value of labor and wages should be equivalent (p. 558). In short, wages must be ascertained by the operation of the free market. (See Labor.)

In a forceful dissent, Chief Justice William Howard Taft asserted that lawmakers could limit the freedom of contract under the police power to regulate the maximum hours or minimum wages of women. He cautioned that the justices should not strike down regulatory statutes simply because they deem particular economic policies to be unwise. Justice Oliver Wendell Holmes questioned the constitutional basis of the liberty of contract doctrine. Noting that “pretty much all law consists in forbidding men to do some things that they want to do,” Holmes pointed out that the Court had sustained many laws that limited contractual freedom (p. 568). He argued that legislators might reasonably conclude that fixing minimum wages for female employees would improve their health and morals.

The Adkins decision was a striking expression of laissez‐faire constitutionalism. It demonstrated the Court's conviction that wage and price determinations were at the heart of the free‐market economy and must be secured against unwarranted legislative interference. During the 1920s and early 1930s, the Supreme Court frequently cited Adkins for a broad interpretation of the liberty of contract doctrine. In particular, the justices invoked Adkins to overturn several state minimum wage laws.

As a consequence of the Great Depression and the political triumph of the New Deal, the Supreme Court in 1937 abandoned laissez‐faire constitutionalism and permitted both federal and state governments to play a major role in directing economic life. The Court's new outlook was revealed in West Coast Hotel Co. v. Parrish (1937), in which the justices narrowly upheld a Washington minimum wage law for women and minors and overruled Adkins. The decision in West Coast Hotel marked the effective end of the liberty of contract doctrine as a constitutional norm.

See also Contract, Freedom of.

Bibliography

Michael J. Phillips , The Lochner Court, Myth and Reality: Substantive Due Process from the 1890s to the 1930s (2001).

James W. Ely, Jr.

ADKINS V. CHILDREN'S HOSPITAL

ADKINS V. CHILDREN'S HOSPITAL, 261 U.S. 525 (1923), is a major precedent in the development of liberty of contract and substantive due process. In 1897, the United States Supreme Court held that the due process clauses of the Fourteenth and Fifth Amendments protect the rights of persons to enter into contracts (Allgeyer v. Louisiana). Lochner v. New York (1905) extended this to contracts of employment, and restricted the states' police powers to regulate hours of employment previously acknowledged in Holden v. Hardy (1898). But in Muller v. Oregon (1908), the court accepted state regulation of female employees' hours, and in Bunting v. Oregon (1917) it upheld state regulation of both hours and overtime wages, for both men and women. Knowledgeable observers concluded that Bunting had implicitly overruled Lochner.

Adkins nevertheless held a District of Columbia minimum-wage statute unconstitutional. In his first major opinion, Justice George Sutherland held that "freedom of contract is…the general rule and restraint the exception." Regulation of women's wages fit none of the hitherto recognized categories of permissible state regulation, and violated "the moral requirement implicit in every contract of employment" that wages reflect exactly the value of the worker's contribution. Sutherland stated that ratification of the Nineteenth Amendment in 1920 put women and men on a footing of equality, thereby implicitly condemning Muller. He denounced the policy of minimum-wage laws for forcing employers to shoulder welfare responsibilities. In dissents, Chief Justice William Howard Taft and Oliver Wendell Holmes criticized the majority for substituting their policy preferences for the legislatures'. Holmes ridiculed the notion that the Nineteenth Amendment had eliminated differences between men and women, and questioned the idea of liberty of contract itself as a constraint on the police power.

Adkins inhibited regulation of women's hours and wages until it was overruled by West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937).

BIBLIOGRAPHY

Arkes, Hadley. The Return of George Sutherland: Restoring a Jurisprudence of Natural Rights. Princeton, N.J.: Princeton University Press, 1994. Warmly supportive of the decision and its author.

Powell, Thomas Reed. "The Judiciality of Minimum-Wage Legislation." Harvard Law Review 37 (1924): 545–573. A now classic contemporary condemnation of the decision.

William M.Wiecek

See alsoLochner v. New York ; Muller v. Oregon .

Adkins v. Children's Hospital (1923).During the early twentieth century, Progressives sought to ameliorate the consequences of industrialization by enacting minimum wage laws. Conservatives and business groups challenged these laws in the courts. In Adkins, the U.S. Supreme Court, by a vote of five to three, struck down a 1918 congressional statute setting a minimum wage for women in the District of Columbia. The 1918 law, the Court held, violated the liberty of contract protected by the due process clause of the Fifth Amendment. Writing for the Court, Justice George Sutherland emphasized that under the Constitution, freedom of contract was the general rule and restraint the exception. Minimum wage laws, he argued, foisted on employers a welfare function that properly belonged to society as a whole. Moreover, Sutherland insisted, in light of the Nineteenth Amendment, women could not be more restricted in the exercise of contractual freedom than men.

Chief Justice William Howard Taft and Justice Oliver Wendell Holmes Jr. wrote dissenting opinions. Taft maintained that legislators could regulate the hours of work or minimum wages of women under the government's police powers. Holmes expressed doubt about the constitutional basis for the liberty‐of‐contract doctrine.

The Adkins decision stands as a classic expression of the Court's commitment to contractual freedom. It made clear the Court's determination to keep wages and prices free of regulatory interference. During the New Deal Era of the 1930s, however, the Supreme Court moderated its long‐standing commitment to economic liberty and freedom of contract. Adkins was overruled in West Coast Hotel Company v. Parrish (1937), in which the justices, on a five–four vote, sustained a Washington State minimum wage law.
See also Bill of Rights; Progressive Era.

Bibliography

Hadley Arkes , The Return of George Sutherland: Restoring a Jurisprudence of Natural Rights, 1994.
James W. Ely Jr. , The Guardian of Every Other Right: A Constitutional History of Property Rights, 2d ed., 1998.

James W. Ely Jr.