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Freedom of Contract vs. State Interventions: Lochner and Coppage Case Study, Study notes of Philosophy

The tension between the right to contract and the legitimate police powers of the state through two landmark supreme court cases: lochner and coppage. The lochner case revolves around a law limiting bakers' working hours, while coppage concerns a kansas law prohibiting employers from requiring employees to renounce union membership. The majority and dissenting opinions, the implications for freedom of contract and property rights, and nozickean arguments.

Typology: Study notes

2012/2013

Uploaded on 01/04/2013

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Lochner
Issue:
right of contract (sell and buy labor) vs. legitimate “police powers” of the state
not all contracts are valid (e.g., illegal contracts are not)
legitmate police powers include power to make laws to protect public health
Law: prevents bakers from working for more than ten hours a day
Majority Opinion
Law restricts freedom of contract:
(a) prevents bakers from entering into contracts to work longer hours
(b) prevents bakery-owners from making agreements with bakers
Law is not a health law, because it serves no legitimate health purpose:
(a) being a baker is not that dangerous
(b) the dangers are to the baker only, who voluntarily agrees to be in the situation
Key points:
(a) freedom of contract is an essential part of freedom generally speaking (see
Nozick)
(b) invocation of harm principle: baking is dangerous only to bakers, who have
entered into contracts voluntarily
Harlan (dissenting opinion)
Baking really is that unhealthy
When making contracts, employers and employees are not on “equal footing”. This
allows employers to dictate terms and undermines the voluntariness of these
contracts.
NY law is a health law. It aims at protecting the health of the bakers, which the
bakers are unable to protect for themselves (given the inequality between them and
their employers).
The Majority Opinion refuses to acknowledge this point about “unequal footing” and
its ramifications for freedom of contract.
Coppage
Law: The Kansas law in question prevented employers from requiring employees to sign
an agreement stating they would not join a union.
Coppage Majority directly rejects the “unequal footing” argument.
All bargaining reflects inequalities between parties
Freedom of contract and private property inevitably generate inequality
Therefore if all contracts are rendered invalid by “unequal footing”, the only solution
is to eliminate freedom of contract and private property
Majority also argues that Kansas law restricts right to maximum benefit:
All bargaining reflects the facts about inequalities between the bargaining parties.
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Lochner Issue:

  • right of contract (sell and buy labor) vs. legitimate “police powers” of the state
  • not all contracts are valid (e.g., illegal contracts are not)
  • legitmate police powers include power to make laws to protect public health
  • Law: prevents bakers from working for more than ten hours a day

Majority Opinion

  • Law restricts freedom of contract: (a) prevents bakers from entering into contracts to work longer hours (b) prevents bakery-owners from making agreements with bakers
  • Law is not a health law, because it serves no legitimate health purpose: (a) being a baker is not that dangerous (b) the dangers are to the baker only, who voluntarily agrees to be in the situation
  • Key points: (a) freedom of contract is an essential part of freedom generally speaking (see Nozick) (b) invocation of harm principle: baking is dangerous only to bakers, who have entered into contracts voluntarily

Harlan (dissenting opinion)

  • Baking really is that unhealthy
  • When making contracts, employers and employees are not on “equal footing”. This allows employers to dictate terms and undermines the voluntariness of these contracts.
  • NY law is a health law. It aims at protecting the health of the bakers, which the bakers are unable to protect for themselves (given the inequality between them and their employers).
  • The Majority Opinion refuses to acknowledge this point about “unequal footing” and its ramifications for freedom of contract.

Coppage Law: The Kansas law in question prevented employers from requiring employees to sign an agreement stating they would not join a union.

Coppage Majority directly rejects the “unequal footing” argument.

  • All bargaining reflects inequalities between parties
  • Freedom of contract and private property inevitably generate inequality
  • Therefore if all contracts are rendered invalid by “unequal footing”, the only solution is to eliminate freedom of contract and private property

Majority also argues that Kansas law restricts right to maximum benefit:

  • All bargaining reflects the facts about inequalities between the bargaining parties.

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  • Those with more generally have a bargaining advantage.
  • Therefore one benefit of acquiring wealth and property is that it gives one a bargaining advantage, an advantage that is “pecuniary”.
  • Laws like the Kansas law here restrict the ability of the wealthy to gain the full bargaining advantages they would have if the law were not in place.
  • Therefore these laws restrict the amount of benefit I can get from the use of my possessions.
  • Consequently, these laws violate my property rights, in particular my right to (maximum) benefit from my property.

Nozickean Arguments at Work:

  • Each person should be able to agree to whatever as long as doing so doesn’t violate the rights of others ( Lochner )
  • Equality or any other egalitarian pattern cannot be maintained without violating freedom of contract and individual property rights ( Coppage )
  • Restrictions on how much people benefit from their property are violations of their property rights (right to max benefit) ( Coppage )

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