Adkins v. Children's Hospital
Significance: This decision, in which the Supreme Court struck down a minimum-wage law, was a prime example of the Court's commitment to the freedom of contract doctrine and laissez-faire principles.
In 1918 Congress established a board with authority to set minimum wages for women and minors in the District of Columbia. The stated purpose of the law was to protect women and minors from conditions of poverty that would be “detrimental to their health and morals.” Children's Hospital, a private institution paying less than the minimum wage, argued that the law was a violation of the due process clause of the Fifth Amendment. In a 6-3 vote, the Supreme Court agreed with the hospital's position. Justice George Sutherland, speaking for the majority, based the ruling on two doctrines: substantive due process and freedom of contract. Although the government could exercise its police power to prevent specific evils, freedom of contract was “the general rule and restraint the exception.” Sutherland found that the law was demeaning to women, especially in view of the political equality that had resulted from the Nineteenth Amendment. In addition, any law that considered only the needs of workers was unjust to the needs of the employer. Chief Justice William H. Taft,usually a defender of substantive due process, dissented in the Adkins case. He emphasized that the Court had earlier approved of laws mandating a maximum-hour workday and a time-and-a-half provision for overtime, and he argued that there were no fundamental differences between regulations of hours and of wages. He insisted that the Court should not overturn laws that were simply considered to be based on “unwise or unsound” economic theories. In 1937 a majority of the justices agreed with Taft's dissent in West Coast Hotel Co. v. Parrish.