261 U.S. 525, 568 (1923)
Congress passed the Act of September 19, 1918, providing for the fixing of minimum wages for women and minors in the District of Columbia.1 The act established a Minimum Wage Board of three members appointed by the President.2 The board was authorized to investigate wages paid to women and minors and to ascertain and declare standards of minimum wages adequate to supply the necessary cost of living to maintain them in good health and protect their morals.3
The board could hold public hearings, summon witnesses, examine payroll records, and call conferences representative of employers, employees, and the public.4 After investigation the board could issue orders setting minimum wages that employers were required to pay.5 Violations constituted misdemeanors punishable by fine and imprisonment.6
Children's Hospital employed a large number of women under wage agreements that fell below the minimum set by the board.7 It brought suit in the Supreme Court of the District to enjoin enforcement of the board's order.8 A twenty-one-year-old woman worked as an elevator operator at the Congress Hall Hotel earning thirty-five dollars per month and two meals a day.9 Her services were satisfactory to the hotel and she wished to continue the employment, but after the board's order her employer terminated her position because it could not pay the higher minimum.10
The Supreme Court of the District denied the injunction and dismissed the bills in both cases.11 The Court of Appeals initially affirmed but later granted a rehearing and reversed.12 The trial court then entered decrees declaring the act unconstitutional and granting permanent injunctions.13 These decrees were affirmed on further appeal.14 The cases reached the Supreme Court on appeals from the final decrees of the Court of Appeals.15
Whether the Act of September 19, 1918, providing for the fixing of minimum wages for women and minors in the District of Columbia is constitutional under the Fifth Amendment?16
The right of the individual to contract with respect to his own labor is an essential part of the liberty protected by the due process clause of the Fifth Amendment.17 Freedom of contract is not absolute but is subject to reasonable restraints in the interest of the public health, safety, morals, or welfare.18 The minimum wage act is not a reasonable exercise of the police power.19 It fixes wages based on the cost of living without regard to the value of the services rendered or the character of the work.20 It applies to all occupations without limitation to those dangerous to health or morals.21
No. The Act of September 19, 1918 authorized the Minimum Wage Board to set minimum wages for women and minors based solely on the cost of living to maintain health and morals.22 This rule was applied when Children's Hospital was prohibited from paying agreed wages below the board's order.23 The elevator operator lost her employment at thirty-five dollars per month because the hotel could not comply with the higher minimum.24 This constitutes an arbitrary interference with the liberty of contract protected by the Fifth Amendment.25
The wage fixing does not depend on the efficiency of the worker or the nature of the occupation and therefore exceeds the bounds of reasonable police power regulation.26
The act in question passes the limit prescribed by the Constitution.27
Related opinions on this issue
Joined by Justice Sanford
Chief Justice Taft dissented on the ground that the act is a reasonable exercise of the police power.28 He argued that it is designed to protect women from the evils of low wages.29 Taft maintained that the liberty of contract is subject to reasonable restraints in the interest of the community.30
He concluded that the act is similar to the acts upheld in Muller v. Oregon and Bunting v. Oregon.31 Taft further contended that the distinction between minimum wages and maximum hours is not substantial enough to render the act invalid because both terms are equally important to the employment contract.32
Justice Holmes dissented on the ground that the power of Congress to establish minimum rates of wages for women in the District of Columbia is free from doubt.33 He emphasized that the end of removing conditions leading to ill health and immorality is within the scope of constitutional legislation.34 Holmes noted that the means have the approval of Congress, of many States, and of those governments from which the United States has learned its greatest lessons.35
He stressed that the criterion of constitutionality is not whether the court believes the law to be for the public good but whether reasonable men could believe the means effective.36 Holmes observed that many laws interfering with liberty of contract have been upheld, including those fixing hours of labor for women.37