Children's Hospital of District of Columbia v. Adkins

VAN ORSDEL, Associate Justice. These cases present the question of the constitutionality of the Minimum Wage Law of the District of Columbia. Act of Congress Sept. 19, 1918, 40 Stat. 960 (Comp. St. Ann. Supp. 1919, §§ 3421i/2a-3421i/2w). By the' act in question, the commissioners of the District of Columbia were authorized to appoint a minimum wage board, composed^ of three members. This board is vested with power, after investigation as provided in the statute, to fix the minimum wages to be paid women employees in any occupation in the District of Columbia, where the board from its investigation is of opinion that women workers are receiving inadequate wages. The act also provides that, after a minimum wage has been fixed, any employer or agent, or any officer, director, or agent of any corporation, refusing to comply with the order of the board, shall be guilty of a criminal offense, and upon conviction punished by fine or imprisonment, or both. By a further provision of the act, the decision of the board, fixing a minimum wage, is made final, and no appeal to the courts from such decision is allowed except upon error of law. The board is given authority to examine the books of every individual or corporation, employing women in the District of Columbia, to ascertain the names of women employees and the wages paid, a register of which every employer is required to keep. It is made a criminal offense for any employer or his agent to discharge or discriminate in any manner against any employee who serves or is about to serve on any conference called by the board, or who has testified or is about to testify at any conference, or any employee whom the employer believes may serve on any conference or may testify “in any investigation or proceedings under or relative to this act.” Section 13 of the act (Comp. St. § 342l%m) provides: “That for any occupation in which only a minimum time-rate wage has been established, the board may issue to a woman whose earning capacity has been impaired by age or otherwise, a special license authorizing her employment at such wage less than such minimum time-rate wage as shall be fixed by the board and stated in the license.” In case No. 3438, the Children’s Hospital, a District of Columbia corporation, seeks to perpetually restrain the minimum wage board from enforcing an order requiring it to pay its women employees not less than $16.50 per week, or $71.50 per month. In case No. 3467, the — 615 — appellant, Willie A. Lyons, was operating an elevator in the Congress Hotel in the city of Washington, at a wage of $35 per month and two meals per day, when the board issued an order forbidding any hotel keeper to employ a woman or minor girl “at a rate of wages of less than 34% cents per hour, $16.50 per week, or $71.50 per month.” It is to restrain the enforcement of this order that appellant Lyons filed her bill in the court below. From decrees of the Supreme Court of the District of Columbia, dismissing the bills, these appeals are prosecuted. We will not stop to analyze the records in these cases for the purpose of determining the sufficiency of the averments to sustain the prayers for extraordinary relief. The single question presented involves the power of Congress, in the light of the limitations of the Constitution of the United States, to enact this legislation.. If the act is constitutional, unquestionably the averments are not sufficient to justify the interposition of equity; but any attempt to enforce an unconstitutional law, resulting in an invasion of property rights, is subject to equitable restraint. Truax v. Raich, 239 U. S. 33, 36 Sup. Ct. 7, 60 L. Ed. 131, L. R. A. 1916D, 545, Ann. Cas. 1917B, 283. The constitutionality of the act is assailed upon the theory that the power exerted extends to the regulation and limitation of the freedom of contract between private individuals, and that it is the initial step toward unlimited federal price-fixing legislation. The act clearly was neither passed to meet a temporary emergency nor “to tide over a passing trouble.” Its interpretation may be pursued without reference to the modern rule of emergency resorted to in support of certain so-called war legislation; nor does it appear that any situation has arisen in the District of Columbia, in respect of women workers, which has become so “publicly notorious” as to justify the inference of an emergency. True, Congress declared the purpose of the act to be “to protect the women and minors of the District from conditions detrimental to their health and morals resulting from wages which are inadequate to maintain decent standards of living.” It then undertakes to direct the interpretation of the act and forbids appeal to the courts, except upon questions of law. While statements of fact by a Legislature, as an inducement for the enactment of a law, are entitled to respect, they are by no means conclusive upon the courts; nor are the limitations upon interpretation and appeal, since the courts will have the last word in the event of any arbitrary action on the part of the board in carrying out the provisions of the act. Another contention may be disposed of in a word. True, a number of states have enacted similar laws, and they have generally been upheld by the state courts, but that by no means forecloses consideration of the present case. In Coppage v. Kansas, 236 U. S. 1, 35 Sup. Ct. 240, 59 L. Ed. 441, L. R. A. 1915C, 960, the court condemned an act making it a criminal offense for an employer to prevent, by contract, his employees joining labor unions, notwithstanding such laws existed in 13 states and the territory of Porto Rico. We are here called upon to weigh the subject-matter of certain leg — 616 — islation in the balance of the Constitution, the general power of Congress to fix wage contracts between private individuals. If Congress may establish a minimum wage for women, it may establish a maximum wage, or it may name a fixed wage. If it may regulate wages for women, it may by the exercise of the same power establish the wages to be paid men. The power of Congress to fix wages between private individuals is either constitutional or unconstitutional. There is no leeway for legislative or judicial discretion. A fundamental principle is involved, and it does not lie in the courts to declare a law fixing the wages of women constitutional and a law fixing the wages of men unconstitutional. The moral stimulus in the one instance is no greater than in the other. If higher wages are essential to preserve the morals of women, they are equally essential to preserve the morals of men. This leads to another angle. If the law is to be equitably enforced, it requires a most careful and judicious inquiry by the board into living conditions — the cost of rent, clothes, food, and recreation. If the power, therefore, exists to fix wages in the interest of good morals and the promotion of the general welfare, the power must likewise be conceded to fix the prices of all commodities entering into the determination of an equitable wage. In no other way can justice be accorded. The wage fixed for an employer to pay his employee cannot be justified, if based upon the unrestrained prices which the employee may have to pay the merchant for food and clothes, or the landlord for rent. The logical result of such a course relegates the whole matter of prices to the realm of legislation. The liberty protected by the Fifth and Fourteenth Amendments to the Constitution includes the freedom of contract and the right to contract with relation to one’s business. “It is undoubtedly true, as more than once declared by this court, that the general right to contract in relation to one’s business is part of the liberty of the individual, protected by the Fourteenth Amendment.” Muller v. Oregon, 208 U. S. 412, 421, 28 Sup. Ct. 324, 326 (52 L. Ed. 551, 13 Ann. Cas. 957). In Coppage v. Kansas, 236 U. S. 1, 14, 35 Sup. Ct. 240, 243 (59 L. Ed. 441, L. R. A. 1915C, 960), the court, affirming the doctrine announced in the Muller Case, said: “The principle is fundamental and vital: Included in the right of personal liberty and the right of private property — partaking of the nature of each — ■ is the right to make contracts for the acquisition of property. Chief among, such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property. If this right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long-established constitutional sense. The right is as essential to the laborer as to the capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way to begin to acquire property, save by working for money.” The public safety and welfare may justify the Legislature in limiting the hours of labor in mines and other hazardous industries, and require safeguards to be employed in conducting dangerous occupations. Such regulations, however, affect only the mode of operation, and do not invade the domain of prices. They are easily distinguished from the purely economic question of how much the employer shall — 617 — pay the employee for his services. In one case the business conducted is so inherently dangerous that its regulation, as to methods of operation, becomes a valid exercise of the police power. The public health and safety demand, not that the business be confiscated, not that proprietorship therein be curtailed or limited, not that the economic control thereof may be in the least affected, but that the business be so conducted that the public health and safety may not be seriously endangered. Legislation tending to fix the prices at which private property shall be sold, whether it be a commodity or labor, places a limitation upon the distribution of wealth, and is aimed at the correction of the inequalities of fortune which are inevitable under our form of government, due to personal liberty and the private ownership of property. These principles are embodied in the Constitution itself, and to interfere with their freedom of operation is to deprive the citizen of his constitutional rights. In other words, regardless of public sentiment or popular demand, such a radical change, if deemed necessary, should not be accomplished by legislative enactment or judicial interpretation, but by way of amendment- in the orderly way provided. Alexander Hamilton, whose keen vision seems to have forecast the dangers that would arise in the future, threatening the stability and the life of the republic, left a timely warning against attempted legislative or judicial amendment in response to public clamor. He declared it to be a— “fundamental principle of republican government, which admits the right ot the people to alter or abolish the established Constitution, whenever they find ■ it inconsistent with their happiness, yet it is not to be inferred from this principle that the representatives of the people, whenever a momentary inclination happens to lay hold of a majority of their constituents, incompatible with the provisions in the existing Constitution, would, on that account, be justifiable in a violation of those provisions; or that the courts would be under a greater obligation to connive at infractions in this shape than when they had proceeded wholly from the cabals of the representative body. Until the people have, by some solemn and authoritative act, annulled or changed the established form, it is binding upon themselves collectively, as well as individually; and no presumption, or even knowledge, of their sentiments, can warrant their representatives in a departure from it, prior to such an act. But it is easy to see that it would require an uncommon portion of fortitude in the judges to do their duty as faithful guardians of the Constitution, where legislative invasions of it had been instigated by the major voice of the community.” The Federalist, c. 78. The police power cannot be employed to level inequalities of fortune. Private property, cannot by mere legislative or judicial fiat be taken from one person and delivered to another, which is the logical result of price fixing. As was said by Mr. Justice Pitney, in the Cop-page Case: “But the Fourteenth Amendment, in declaring that a state shall not ‘deprive any person of life, liberty or property without due process of law,’ gives to each of these an equal sanction; it recogniv.es ‘liberty’ and ‘property’ as coexistent human rights, and debars the states from any unwarranted interference with either. And since a state may not strike them down directly it is elear that it may not do so indirectly, as by declaring in effect that the public — 618 — good requires the removal of those inequalities that are but the normal and inevitable result of their exercise, and then invoking the police power in order to remove the inequalities, without other object in view. The police power is broad, and not easily defined, but it cannot be given the wide scope that is here asserted for it, without in effect nullifying the constitutional guaranty.” In Frisby v. United States, 157 U. S. 160, 166, 15 Sup. Ct. 586, 588 (39 L. Ed. 657), the court, after reviewing a number of instances in which the police power had been validly exercised, made the following pertinent exception: “The possession of this power by government in no manner conflicts with the proposition that, generally speaking, every citizen has a right freely to contract for the price of his labor, services, or property.” But it is suggested that the act may be sustained, since Congress is legislating for a class. The constitutional limitations upon Congress involve fundamental principles of human rights reserved to the whole people and not to any favored class of citizenship. They are for the protection alike of the rich and the poor, the strong and the weak, the high and the low, and may not, either by legislative or judicial fiat, be used to extend special protection or privileges to any particular class of citizens. No reason is apparent why the operation of the law should be extended to women to the exclusion of men, since women have been accorded full equality with men in the commercial and political world. Indeed, this equality in law has been sanctioned by constitutional amendment; and so fixed has the tendency in this direction become established in English-speaking lands, that the opportunity for official and business preferment, upon complete equality with men, is limited only by the scope of her aspirations. The right of Willie Lyons to contract her labor in any lawful calling is a property right, of which, if the property clauses of the Constitution mean anything, she cannot be deprived. When the minimum wage of $71.50 per month for women was fixed by the board in this district, Willie Lyons was operating an elevator in the Congress Hotel at a wage of $35 per month and two meals per day. As a result she lost her position. The law worked but one way. The hotel manager was not compelled to employ her at a fixed wage, and her position went to a man, who was willing to perform the service at a lower wage than that fixed by the board. She was without the power to compel her employment, and, because of her inability to measure up to the minimum scale, the law to promote the good morals and general welfare of the community cast her adrift. She was not even in position to avail herself of the provisions of section 13 of the act, since she was fully qualified to perform the work for which she was employed. Her earning capacity as an elevator operator was not “impaired by age or otherwise.” The only way, therefore, by which she could have been saved from competitive injury, would have been to have fixed the minimum wage of elevator operators at $32.50 per month and two meals per day. Unless, therefore, the board is to be accorded arbitrary power, section 13 has no application to her case. The sacredness of the right of the citizen to freely contract his labor — 619 — was upheld in Adair v. United States, 208 U. S. 161, 174, 28 Sup. Ct. 277, 280 (52 L. Ed. 436, 13 Ann. Cas. 764), where the court, speaking through Mr. Justice Harlan, said: “The right of a person to sell his labor upon such terms as he deems proper is, in its essence, the same as the right of the purchaser of labor to prescribe the conditions upon which he will accept such labor from the person offering to sell it. * * * In all such particulars the employer and the employee have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.” We come now to the consideration o£ two recent cases upon which counsel for appellees chiefly rely. In Wilson v. New, 243 U. S. 332, 37 Sup. Ct. 298, 61 L. Ed. 755, L. R. A. 1917E, 938, Ann. Cas. 1918A, 1024, known as the Adamson Raw Case, the court was considering a statute establishing an eight-hour working day for railway employees on interstate railroads, and incidentally providing that the then existing scale of wages should be continued in force until the parties could agree. The court clearly pointed out that the law constituted a regulation of a business impressed with a public interest. It affected an instrumentality of interstate commerce, the control of which is expressly reserved to Congress in the Constitution. The court held that Congress not only had power to legislate for the protection of the public interest in keeping open the channels of commerce, but possessed authority to regulate matters incidental to the proper exercise of that power. In upholding the provisions of the act continuing the wage scale in force until the parties could agree, the court said: “And this emphasizes that there is no question here of purely private right since the law is concerned only with those who are engaged in a business charged with a public interest where the subject dealt with as to all the parties is one involved in that business and which we have seen comes under the control of the right to regulate to the extent that the power to do so is appropriate or relevant to the business regulated.” In no respect did the court even intimate that the power of Congress to fix wages for railway employees could be invoked, except where, through failure of agreement, commerce is jeopardized. The authority of Congress is expressed in the opinion in a single sentence: “Here again it is obvious that what we have previously said is applicable and decisive, since whatever would be the right of an employee engaged in a private business to demand such wages as he desires, to leave the employment if he does not get them and by concert of action to agree with others 'to leave upon the sanie condition, such rights are necessarily subject to limitation when employment is accepted in a business charged with a public interest and as to which the power to regulate commerce possessed by Congress applied and the resulting right to ñx in case of disagreement and dispute a standard of wages as we have seen necessarily obtained.” The Adamson Law (Comp. St. §§ 8680a-8680d) was not a wage-fixing statute and the court so held. The power of Congress to continue the wage scale in force was limited to ’its power to legislate generally in respect of commerce, and to the failure of the parties to agree upon a satisfactory scale of wages. In no place is it intimated — 620 — that Congress, even in the exercise of its delegated authority to regulate commerce, would have power to legislate upon the question of wages where an agreed scale existed. In Block v. Hirsh, 256 U. S. 135, 41 Sup. Ct. 458, 65 L. Ed. 865, 16 A. L. R. 165, involving the validity of the Ball Rent Act for the District of Columbia (41 Stat. 298), the court held the renting of property in the District of Columbia, under existing conditions, to be a business affected with a public interest. The act, however, was upheld only upon the theory that the power to fix rentals is limited to an existing emergency. The act was held to be a temporary measure, “made necessary by emergencies growing out of the war * * * embarrassing the fedéral government in the transaction of the public business.” This act was passed to correct an abuse which had become “publicly notorious,” and the emergency which had made this condition possible was held to justify the act. “The regulation is put and justified only as a temporary measure. See Wilson v. New, 243 U. S. 332, 345, 346; Ft. Smith & Western R. R. Co. v. Mills, 253 U. S. 206. A limit in time, to tide ever a passing trouble, well may justify a law that could not be upheld as a permanent change.” In the recent decision of the Supreme Court of the United States, Edgar A. Levy Leasing Co., Inc., v. Jerome Siegel, 258 U. S. 242, 42 Sup. Ct. 289, 66 L. Ed. —, upholding the New York Rent Law, the court, placing its decision upon the same basis as in the Hirsh Case, said: “In terms the acts involved are ‘emergency’ statutes, and, designed as they were by the Legislature to promote the health, morality, comfort and peace of the people of the state, they are obviously a resort to the police power to promote the public welfare. They are a consistent interrelated group of acts essential to accomplish their professed purposes. The warrant for this legislative resort to the police power was the conviction on the part of the state legislators that there existed in the larger cities of the state a social emergency, caused by an insufficient supply of dwelling houses and apartments, so grave that it constituted a serious menace to the health, morality, comfort, and even to the peace of a large part of the people of the state. That such an emergency, if it really existed, would sustain a resort, otherwise valid, to the police power for the purpose of dealing with it, cannot be doubted, for, unless relieved, the public welfare would suffer in respects which constitute the primary and undisputed, as well as the most usual basis and justification, for exercise of that power.” We are of the opinion that the act cannot be upheld upon the theory that the contracting for labor between private individuals is a business impressed with a public interest. Unlike the operation of an elevator to handle indiscriminately the grain of the public and the rates to be charged for such service (Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77), or the trust relation arising from the depositing of funds in banks (Noble State Bank v. Haskell, 219 U. S. 104, 31 Sup. Ct. 186, 55 L. Ed. 112, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A, 487), or the rates to be charged the public by insurance companies (German Alliance Insurance Co. v. Kansas, 233 U. S. 389, 34 Sup. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, 1189), we are here dealing with a private business, conducted between private individuals, in which the public has no direct economic interest. It follow's, therefore, that if the doc — 621 — trine of “public interest,” is to be extended to the point of fixing by law the rate at which the individual citizen may contract his labor, by placing a limitation upon the freedom of private contract between employer and employee, it is difficult to understand just where the limitations of the extension of police power may be reached. It amounts to converting the police power into a convenient experimental agency for distinguishing, extending, or abrogating express limitations of the Constitution. The difficulty arises, we think, from the failure to distinguish between legislative discretion and legislative power. A mere declaration of necessity assumes the existence of power to act, and where there is power, legislative discretion, in its exercise, will be accorded favorable presumption; but, if there' is a total lack of power, no jurisdiction is reposed in the Legislature to determine for itself the possession of the power, and a declaration to that effect is without persuasive force. As the court said, in Truax v. Raich, supra: “We have frequently said that the Legislature may recognize degrees of evil and adapt its legislation accordingly, but underlying the classiiication is the authority to deal with that at which the legislation is aimed.” We are here dealing with the power of Congress to restrict freedom of contract which is expressly guaranteed in the Constitution. In the Coppage Case, the court held that— “The mere restriction of liberty or of property rights cannot of itself be denominated 'public welfare,’ and treated as a legitimate object of the police power; for such restriction is the very thing that is inhibited by the [Fourteenth] Amendment.” Coming now to the consideration of the vindication of the act as a proper exercise of the police power, we are of the opinion that it cannot be upheld. High wages do not necessarily tend to good morals, or the promotion of the general welfare. The standard of virtue and morality is no higher among the prosperous than among the poor. Their worth cannot be measured in dollars and cents, or promoted by a legal subsidy. Never have wages been so high as since the outbreak of the late war, and never in the history of the republic has crime been so universal; and this condition, it must be conceded, has made a like unfavorable impression upon the morals of the people. A wage based upon competitive ability is just, and leads to frugality and honest industry, and inspires an ambition to attain the highest possible efficiency, while the equal wage paralyzes ambition and promotes prodigality and indolence. It takes away the strongest incentive to human labor, thrift, and efficiency, and works injustice to employee and employer alike, thus affecting injuriously the whole social and industrial fabric. Experience has demonstrated that a fixed minimum wage means, in the last analysis, a fixed wage; since the employer, being compelled to advance some to a wage higher than their earning capacity, will, to equalize the cost of operation, lower the wage of the more competent to the common basis. Any intimation that the Constitution is flexible, even in response to the police power, is unsound. Powers expressly delegated by the Con — 622 — stitution — such, for example, as the regulation of interstate commerce —may be extended to meet changing conditions, providing it can be accomplished without altering fundamental principles; but the principles are immutable, not elastic, or subject to change. That a state may not impair the obligations of a contract, or that no person can be deprived of his property without due process of law, are principles fundamental, and if the Legislature, in response to public clamor for an experimental social reform, may break down these constitutional guaranties by calling an act a “health law,” or a “public morality law,” or a “public welfare law,” all guaranties of the Constitution, under the alleged exercise of the police power, may be changed, modified, or totally eliminated. Nor is the extent of such modification a matter of judicial discretion. To hold that the courts may declare a law, violating the same principle, constitutional under one state of fact, and unconstitutional under another, is the exercise of arbitrary power — a power said to exist nowhere in our system of government. And nowhere could it be lodged with more dangerous results than in the courts. The tendency of the times to socialize property rights under the subterfuge of police regulation is dangerous, and if continued will prove destructive of our free institutions. It should be remembered that of the three fundamental principles which underlie government, and for which government exists, the protection of life, liberty, and property, the chief of these is property; not that any amount of property is more valuable than the life or liberty of the citizen, but the history of civilization proves that, when the citizen is deprived of the free use and enjoyment of his property, anarchy and revolution follow, and life and liberty are without protection. The highest freedom consists in obedience to law, and a strict adherence'to the limitations of the Constitution. In no way can the freedom of the citizen be more effectively curtailed and ultimately destroyed than by a deprivation of those inherent rights safeguarded by our fundamental law. The security of society depends upon the extent of the protection afforded the individual citizen under the Constitution against the demands and incursions of the government. The only tyranny the citizenship of this republic need fear is from the government itself. The character and value of government is measured by the security which surrounds-the individual in the use and enjoyment of his property. These rights will only remain secure so long as the Bill of Rights — the first ten amendments of the Constitution — are construed liberally in favor of the individual and strictly against the government. They were early adopted because of a widespread apprehension that the time might come when the government would assume to trespass upon those inalienable individual rights announced in the Declaration of Independence and afterwards incorporated in the Bill of Rights. Courts, therefore, should be slow to lend aid to the government in this modern tendency to invade individual property rights. “Illegitimate and unconstitutional practices get their first footing in that way, namely, by silent approaches and slight deviations from legal modes of — 623 — procedure. This can only be obviated by adhering to the rule that constitutional provisions for the security of person and property should be liberally construed. A close and literal construction deprives them of half their efficacy, and leads to gradual depreciation of the right, as if it consisted more in sound than in substance. It is the duty of courts to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments thereon. Their motto should be obsta principiis.” Boyd v. United States, 116 U. S. 616, 635, 6 Sup. Ct. 524, 535 (29 L. Ed. 746). No greater calamity could befall the wage-earners of this country than to have the legislative power to fix wages upheld. It would deprive them of the most sacred safeguard which the Constitution affords. .Take from the citizen the right to freely contract and sell his labor for the highest wage which his individual skill and efficiency will command, and the laborer- would be reduced to an automaton — a mere creature of the state. It is paternalism in the highest degree, and the struggle of the centuries to establish the principle that the state exists for the citizen, and not the citizen for the state, would be lost. If, in the exercise of the police power for the general welfare, power lies in the Legislature to fix the wage which the citizen must accept, or choose idleness, or, as in the case of Willie Lyons, be deprived of the means of earning a living, it is but a step to a legal requirement that the industrious, frugal, economical citizen must divide his earnings with his indolent, worthless neighbor. The modern tendency toward indiscriminate legislative and judicial jugglery with great fundamental principles of free government, whereby property rights are being curtailed and destroyed, logically will, if persisted in, end in social disorder and revolution. Let no one imagine for a moment that our civilization is such that property rights can thus be socialised without the grossest abuse of the privileges granted, or that the restraint of the abuses can be left with safety to legislative or judicial discretion. The decrees are reversed, with costs, and the causes remanded for further proceedings, not inconsistent with this opinion.