Adair v. United States

The Erdman Act was only one of numerous labor laws brought before the High Court from the 1880s. As the United States became more industrialized, both Congress and individual states passed laws regulating the conditions of workers. These laws limited hours of work, prohibited child labor, and improved the conditions of working women. They promoted safety and legalized worker's compensation for workplace injuries. They also outlawed "yellow dog" contracts and required employers to pay wages in cash rather than in company script.

Taken together, these labor laws greatly increased the power of governments in new ways. Were they a legitimate expression of congressional and state authority? There were few precedents in the traditions of American (and British) common law.

Gradually, the Supreme Court developed guidelines which overturned some federal and state labor laws. Liberty of contract was protected as part of due process under the Fifth Amendment, which states that "No person shall be . . . deprived of life, liberty, or property without due process of law." The Fourteenth Amendment incorporated the Fifth and protected due process rights against state laws.

State governments could abridge these rights, but only under specific conditions. Article I of the Constitution empowers Congress to "regulate commerce . . . among the several states." As for the states, they have a police power to protect public safety, health, and morals. However, for a law to be constitutional, it had to be directly connected to one of these legitimate goals: safety, health, or the regulation of interstate commerce. Governments could not act solely to redistribute power from business to organized labor.

The classic statement of freedom of contract came in Lochner v. New York (1905). In this case, the Court invalidated a state law limiting bakers to ten hours of work a day. There was no direct connection, the Court ruled, between safety and fewer hours of work. Thus, "[s]tatutes of the nature of that under review, limiting the hours in which grown and intelligent men may labor and earn their living, are mere meddlesome interferences with the rights of the individual."