Elsie Parrish, a chambermaid working at the Cascadian Hotel in Wenatchee, Washington (owned by the West Coast Hotel Company), along with her husband, sued the hotel for the difference between what she was paid, and the $14.50 per week of 48 hours established as a minimum wage by the Industrial Welfare Committee and Supervisor of Women in Industry, pursuant to Washington state law. The trial court, using Adkins as precedent, ruled for the defendant. The Washington Supreme Court, taking the case on a direct appeal, reversed the trial court and found in favor of Parrish. The hotel appealed to the U.S. Supreme Court.
The Court, in an opinion by Chief Justice Hughes, ruled that the Constitution permitted the restriction of liberty of contract by state law where such restriction protected the community, health and safety, or vulnerable groups, as in the case of Muller v. Oregon, where the Court had found in favor of the regulation of women's working hours. Hughes CJ said the following:
The principle which must control our decision is not in doubt. The constitutional provision invoked is the due process clause of the Fourteenth Amendment governing the states, as the due process clause invoked in the Adkins Case governed Congress. In each case the violation alleged by those attacking minimum wage regulation for women is deprivation of freedom of contract. What is this freedom? The Constitution does not speak of freedom of contract. It speaks of liberty and prohibits the deprivation of liberty without due process of law. In prohibiting that deprivation, the Constitution does not recognize an absolute and uncontrollable liberty. Liberty in each of its phases has its history and connotation. But the liberty safeguarded is liberty in a social organization which requires the protection of law against the evils which menace the health, safety, morals, and welfare of the people. Liberty under the Constitution is thus necessarily subject to the restraints of due process, and regulation which is reasonable in relation to its subject and is adopted in the interests of the community is due process.
This essential limitation of liberty in general governs freedom of contract in particular. More than twenty-five years ago we set forth the applicable principle in these words, after referring to the cases where the liberty guaranteed by the Fourteenth Amendment had been broadly described.
'But it was recognized in the cases cited, as in many others, that freedom of contract is a qualified, and not an absolute, right. There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards. Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community.' Chicago, Burlington & Quincy R. Co. v. McGuire, 219 U.S. 549, 565, 31 S.Ct. 259, 262, 55 L.Ed. 328.