What legal issues are addressed in this case?

The central issue is whether a state minimum wage law for women and minors deprives employers and workers of liberty of contract without due process of law under the Fourteenth Amendment. Related issues include whether Adkins v. Children's Hospital should be overruled, whether wage regulation differs constitutionally from hours regulation, and whether limiting the law to women is arbitrary discrimination.

What rule did the court rely on in this case?

Liberty under the Due Process Clause is not absolute, and freedom of contract is subject to restraint. Regulation reasonable in relation to its subject and adopted in the community's interest is due process, and economic legislation is valid if reasonably related to a proper legislative purpose and neither arbitrary nor discriminatory (Nebbia v. New York), with a strong presumption of constitutionality. The Court also relies on the line of cases recognizing unequal bargaining power and the State's special interest in protecting women's employment.

Would the case have come out differently if certain facts were changed?

Probably yes in part. The majority's reasoning rests on a reasonable relation to a legitimate purpose, so a statute arbitrary or unrelated to protecting workers' health and welfare, or lacking the commission process and special licenses for less productive workers, might not satisfy that deferential standard. A law extended to men would be tested under the same reasonableness standard, and the majority's rationale about sweating and unequal bargaining power would still support it, so the outcome likely would not change, though the Court did not decide that question. The dissent, by contrast, would have found the sex-based limitation arbitrary.

West Coast Hotel Co. v. Parrish

Supreme Court of the United States - 300 U.S. 379 (1937)

Main Takeaway

A state may regulate employer-employee contracts, including by setting minimum wages, so long as the regulation is reasonable and adopted in the community's interest; freedom of contract is a qualified right under the Due Process Clause. Adkins v. Children's Hospital is overruled.

Issues

Does a state minimum wage law for women and minors violate the Due Process Clause of the Fourteenth Amendment by depriving employers and employees of freedom of contract?

Facts

Washington enacted a 1913 statute, "Minimum Wages for Women," declaring that inadequate wages and unsanitary conditions of labor have a pernicious effect on the health and morals of women and minors. The Act made it unlawful to employ women workers at wages inadequate for their maintenance and created an Industrial Welfare Commission (later an Industrial Welfare Committee) to investigate wages and conditions in each occupation, convene conferences of employers, employees, and public representatives, and issue binding minimum wage orders. Special licenses permitted lower wages for women who were physically defective or crippled by age or otherwise, and for apprentices.

Elsie Parrish was employed as a chambermaid in a hotel operated by West Coast Hotel Company. The minimum wage fixed under the Act was $14.50 per week of 48 hours. Parrish and her husband sued to recover the difference between the wages paid to her and the statutory minimum. The hotel challenged the Act as repugnant to the Due Process Clause of the Fourteenth Amendment, relying on Adkins v. Children's Hospital, which had invalidated the District of Columbia minimum wage law for women under the Fifth Amendment.

Procedural History

The Parrishes sued West Coast Hotel Company in a Washington trial court to recover the difference between the wages paid and the statutory minimum wage. The trial court ruled for the hotel. The Supreme Court of Washington reversed, sustained the statute as a reasonable exercise of the police power, and directed judgment for the plaintiffs, Parrish v. West Coast Hotel Co., 185 Wash. 581, 55 P.2d 1083. The state court declined to treat Adkins v. Children's Hospital as controlling. The hotel appealed to the United States Supreme Court.

Holding and Rationale

(Hughes, C.J.)

No. The Washington minimum wage law does not violate the Due Process Clause of the Fourteenth Amendment. Adkins v. Children's Hospital, 261 U.S. 525 (1923), is overruled, and the state court's judgment is affirmed.

The Constitution does not speak of freedom of contract; it speaks of liberty and prohibits its deprivation without due process of law. Liberty is not absolute. It exists within a social organization that requires protection against evils menacing the health, safety, morals, and welfare of the people. Freedom of contract is therefore a qualified right, and regulation that is reasonable in relation to its subject and adopted in the interests of the community is due process. Chicago, B. & Q. R. Co. v. McGuire, 219 U.S. 549 (1911). The power to regulate employer-employee contracts has been repeatedly sustained, including in Holden v. Hardy, 169 U.S. 366 (1898), which recognized the inequality of bargaining position between employers and employees.

The State has a special interest in protecting women, as Muller v. Oregon, 208 U.S. 412 (1908), and later hours cases established. The distinction Adkins drew between regulating hours and regulating wages is unsupportable; as Chief Justice Taft and Justice Holmes observed in dissent, both terms of the bargain are equally affected. Adkins also cannot be reconciled with Nebbia v. New York, 291 U.S. 502 (1934), which held that economic regulation satisfies due process if it has a reasonable relation to a proper legislative purpose and is neither arbitrary nor discriminatory, and that courts may not second-guess the wisdom of the policy.

Protecting women's health from unscrupulous and overreaching employers is a legitimate end, and a fairly fixed minimum wage is an admissible means. The legislature could address the "sweating system" and the exploitation of workers with weak bargaining power. Economic experience of the Depression also showed that underpaid workers impose a burden on the community for their support, and the community need not subsidize unconscionable employers. Limiting the statute to women is not arbitrary discrimination, because a legislature may recognize degrees of harm and confine its restrictions to where the need is clearest.

Judges' Opinion

Dissent (Sutherland, J., joined by Van Devanter, McReynolds, and Butler, JJ.) The Washington statute is identical in every substantial respect to the one invalidated in Adkins, and if Adkins was correct, the statute is invalid. Each justice must decide constitutional questions according to his own convictions and oath, not by deferring to colleagues. The meaning of the Constitution does not change with economic events; if the Constitution blocks desirable legislation, the remedy is amendment, not reinterpretation by judges. Freedom of contract, including contracts for labor, is the general rule, and restraint is the exception justified only by exceptional circumstances. Hours legislation differs from wage-fixing because parties remain free to adjust wages. A minimum wage law takes account only of the employee's needs, ignores the value of the service and the employer's ability to pay, and shifts to employers a burden belonging to society as a whole. It also arbitrarily discriminates by regulating only women's wage contracts, since women stand on legal and political equality with men and bargaining ability does not depend on sex. The majority rejected this argument, holding that a legislature may confine its restrictions to where the need is clearest.