Morehead v. New York

Petitioner
Warden Morehead
Respondent
People of State of New York
Petitioner's Claim
That the minimum wage law that allowed the New York State Industrial Commission to fix wages based upon the class of services provided by female employeesdenies the employer the right to enter into contracts as provided under theFourteenth Amendment of the Constitution of the United States.
Chief Lawyer for Petitioner
Henry Epstein
Chief Lawyers for Respondent
Nathan L. Miller, Arthur Levitt
Justices for the Court
Pierce Butler (writing for the Court), James Clark McReynolds, Owen JosephusRoberts, George Sutherland, Willis Van Devanter
Justices Dissenting
Louis D. Brandeis, Benjamin N. Cardozo, Charles Evans Hughes, Harlan Fiske Stone
Place
Washington, D.C.
Date of Decision
1 June 1936
Decision
The New York act was found unconstitutional due to its violation of the rightof due process of the law between the employer and the employee.
Significance
Morehead v. New York challenged the establishment of a minimum wage for women and minors based upon "the value of the service or class of service rendered." This case denied the states' rights in regulating wages and fair labor laws for women and minors. The Supreme Court declared the New York LaborAct unconstitutional, stating that it violated the right of due process to enter into contracts granted by the Fourteenth Amendment of the Constitution ofthe United States. The judgment in this case upheld the employer's right tonegotiate wages with female employees even though those wages were below thestandard established by the state industrial commissioner.
Morehead, a manager of a laundry, was jailed by the state industrial commissioner of New York for not adhering to the mandatory minimum wage set for women. Morehead appealed his case in the Supreme Court of New York, where the NewYork Labor Act was found to be in violation of both New York State and U.S. Constitutions. Because of the federal implications of Morehead's case, the U.S. Supreme Court granted a writ of certiorari (a written order commanding that the lower court forward the proceedings of a case to a higher court for review) and acted upon the case. The U.S. Supreme Court ruled that the NewYork act violated the U.S. Constitution and upheld the lower appellate court's decision that Morehead had the right to negotiate contracts with employees, thereby releasing him from illegal imprisonment.
In 1936, the conservative justices of the Supreme Court had a narrow view ofa minimum wage. They believed that by establishing minimum wages and standards boards to control wages, the states were enacting laws that opposed the rights and freedoms established by the Fifth Amendment and upheld by the Fourteenth Amendment of the U.S. Constitution. Justice Butler, writing for the majority, stated

The right to make contracts about one's affairs is apart of the liberty protected by the due process clause. Within this libertyare provisions of contracts between employer and employee fixing the wages tobe paid. In making contracts of employment, generally speaking, the partieshave equal right to obtain from each other the best terms they can by privatebargaining.

These regulatory boards were seen as an extension of police power for the states.
Ruling in favor of Morehead prevented state legislature from overseeing and protecting employees who found it difficult to act in their own behalf, especially women and minors. This decision also gave employers an unfair advantageto contract wages that were sub-standard and based on perceived value of theservice, rather than being adequate to meet the cost of living needs of womenin sole support of dependents.
The justices used a similar case from 1923, Adkins v. Children's Hospital, as the guiding principles for deciding this case. In 1918, Congress enacted a law in the District of Columbia that guaranteed a minimum wage to womenand children that met their needs to "maintain decent standards of living."This case was challenged in 1923 before the Supreme Court of the United States, and was ruled unconstitutional. The District of Columbia Act, as it becameknown, was seen as an extension of police power for the state, which interfered with the ability of an employer and employee to enter into private contracts. The Supreme Court ruled that this act prohibited due process of the lawas granted by the Fifth Amendment.
A Dissenting Opinion
Four of the justices, including Chief Justice Hughes, disagreed with the majority opinion. Hughes, writing the dissenting opinion, cited several points. He stated "I can find nothing in the Federal Constitution which denies to thestate the power to protect women from being exploited by overreaching employers through the refusal of a fair wage as defined in the New York statute andascertained in a reasonable manner by competent authority." He first noted that the petitioner, Warden Morehead, did not challenge the fairness of the wage being prescribed by the state industrial commissioner and that the investigation into the wages Morehead was contracting was "careful and deliberate." The justices had to assume that the procedures had been followed as established by the New York act.
Hughes also found that the definition of a fair wage was more restrictive inthe Adkins case, and therefore should not be applied to the case before the Court in 1936. The New York act provided not only for a fair wage for women based upon the standard of an adequate living wage, but also upon a standard of reasonable value of the services provided. The District of Columbia'sact prescribed a wage that provided an adequate standard for the cost of living. This additional element as stated by Justice Hughes was meant to improvethe standard "by requiring a fair equivalence of wage and service."
One of the most crucial points of dissension for the justices was the limitations placed upon the liberty of contract. The overriding question was whetheror not the Fifth and the Fourteenth Amendments of the U.S. Constitution interfered with the state's power to protect special groups of citizens. Hughes,Brandeis, Stone, and Cardozo took into consideration whether groups of employees who had no organizing body such as a trade union and weak collective bargaining power were being protected by the state act by establishing a minimumwage and commission to oversee its enactment. In previous decisions, the U.S.Supreme Court agreed that the "liberty of contract" was a qualified right inwhich limitations could be used to protect exploited groups and to serve thepublic interest, and in such a light, the act was appropriate according to the dissenting justices.
Resolution and Reversal
In 1937, less than one year later, the Morehead decision and the Adkins v. Children's Hospital verdicts were reversed. There was a public outcry at both national party conventions, denouncing the decision. When West Coast Hotel v. Parrish was brought before the U.S. Supreme Court in December of 1936, the justices decided in a 5-4 decision "that the establishmentof minimum wages for women was constitutionally legitimate." It was noted "that the Constitution did not speak of the freedom of contract, and that liberty was subject to the restraints of due process." States were empowered to set the standards of public welfare and control labor relations.
Impact
By ruling in favor of Morehead, and declaring the New York Labor Act unconstitutional, the Supreme Court gave employers the power to control wages for women and minors. The states no longer had jurisdiction over the employment contractual process, and special groups were no longer protected from unscrupulous or overreaching employers who sought to gain higher profits by offering lower wages. Employee groups with weak bargaining power and little organization,and who had to accept whatever wages were offered in order to subsist, wereleft with little recourse to seek payment for the services provided to employers.
The Court's narrow view of minimum wage legislation so outraged the voting public that this decision was denounced at the national conventions for both political parties and was later reversed, conferring the right of states to establish minimum wage protection. In 1938, the Fair Labor Standards Act went into effect providing a national minimum wage of no less than 80 cents and theestablishment of regulatory boards to oversee wage and hours standards.
Minimum wage legislation is still a hotly debated topic 50 years after the first provisions of the Fair Labor Standards Act were enacted. Today, approximately 80 percent of the workers in the United States are protected by this actand are guaranteed a minimum wage. Similar to the New York Labor Act of 1936, minimum wage legislation today guarantees an income above poverty level that will enable all workers to fulfill the basic needs of food, clothing and housing for themselves, their families, and dependents.
Related Cases

• Lochner v. New York, 198 U.S. 45 (1905).
  
• Bunting v. State of Oregon, 243 U.S. 426 (1917).
  
• Adkins v. Children's Hospital, 261 U.S. 525 (1923).
  
• Meyer v. Nebraska, 262 U.S. 390 (1923).
  
• West Coast Hotel v. Parrish, 300 U.S. 379 (1937).