Summary of Adkins v. Children’s Hospital

Citation:  261 U.S. 565 (1923)

Relevant Facts:  Congress sought to regulate the wages of women and children within the District of Columbia.  Children’s Hospital brought suit, claiming that the law violated constitutional prohibitions preventing interference with freedom of contract, and sought to enjoin Jesse Adkins (a member of the wage board created by the act) from enforcing the offending provisions.  Children’s Hospital claimed the right to contract with employees for wages agreeable to both parties and claimed that Mr. Adkins, in his official capacity on the board, inhibited execution of such contracts.  In a parallel case considered by the Court, a female elevator operator also challenged the law, seeking to continue in her position that would otherwise be eliminated by a law mandating higher wages.

Issue:  Do the specific restrictions of the law in question exceed Congressional authority to regulate working conditions in violation of freedom to contract guaranteed by the Constitution?

Holding:  Yes, minimum wage laws violate freedom of contract.  Constitutional guarantees of freedom to contract are violated by minimum wage laws even when, as here, they seek to protect classes of citizens traditionally viewed as necessitating greater protections.

Reasoning:  Justice Sutherland, writing for the Court, explained the role of the Court in reviewing statutes for compliance with the Constitution, and cautioned that acts of Congress should be afforded all reasonable deference and presumptions in attempting to find them constitutional.  However, when confronted with a statute that cannot stand consistent with the Constitution, the Court shall declare it so within the meaning of the case or controversy properly before the Court.

Justice Sutherland next recited the substantial of protections for the right to contract, the Court having long held that freedom to contract is an essential part of the liberty of the individual protected by the Fifth Amendment.  Labor contracts are similarly protected by the same basic rights guaranteed by the Fifth Amendment, leaving parties free to bargain for the best deal that they may obtain.  Legislative efforts to curtail contractual rights can only be justified by exceptional circumstances.

Next, the Court turned to the history of cases concerning interference with freedom to contract, attempting to distinguish them from the instant case.  Justice Sutherland found that statues proscribing the nature of work, and conditions for performance and payment, were different than absolute restrictions (in the form of a price floor) on wages.  Similarly, general minimum wage requirements are distinguishable from both contracts for public labor and contracts in industries affecting the public interest.  Finally, the Court explained that regulations may properly account for the differences between the sexes when setting work conditions, but equality demands that interference with freedom of contract should fall equally for men and women alike.  A law that regulates wages through operation of a board created for that purpose is inherently restrictive of freedom to contract, and under the circumstances here no such law can stand consistent with the liberty of individuals to bargain for their own terms of employment.

Dissent:  Chief Justice Taft dissented, arguing that it was not the proper duty of the Court to parse the wisdom of a variety of restrictions on the freedom to contract, and concluded that that majority erred in affording freedom to bargain for wages more protection than other contractual provisions.  Justice Holmes also dissented, citing a long list of cases in which restrictions on the freedom to contract were upheld.  On that basis, he argued, the Court was incorrect to draw an artificial line at the ability to determine adequate wages on behalf of contracting parties, notwithstanding that the law applied solely to women and Justice Holmes was prepared to defend legal distinctions between the sexes.

Conclusion:  Though Adkins has been impacted through subsequent cases and the changed nature of judicial views on regulations pertaining to economic liberties, at the time of the decision the Court made clear that the Constitution would not permit restrictions on minimum wages consistent with liberty of contract.