Adams v. Tanner

Facts

Washington state attempted to pass a law, supported by the then Federal Department of Labor, to prohibit private employment agencies charging fees to people seeking work. It read as follows,

The constitutionality of the law was challenged.

Majority

Chief Justice White, Justices Day, Van Devanter, Pitney and McReynold held that a ban would breach the principle of due process of law in the deprivation of liberty and property. The ban was arbitrary and oppressive. Mr Justice Reynold said,

"there is nothing inherently immoral or dangerous to public welfare in acting as paid representative of another to find a position in which he can earn an honest living. On the contrary, such service is useful, commendable, and in great demand." (at 593)

Dissent

Justice Brandeis (with whom Justice Holmes, Clarke and McKenna dissented) laid out in his dissenting judgment why employment agency activities were a legitimate concern. He highlighted sources from US Labor Department giving examples of abuse, attempts in over thirty states to regulate and have free public agencies compete. He stated how all methods short of abolition had ultimately failed (601-9).

In this period, the practice of charging destitute workers upfront fees for finding work was widespread. People might give up their last pennies for the chance of work. Sometimes, agencies made no effort to place the worker, or the work would last a few days and the employer would then split the next fee with the agent to bring in fresh replacements. Justice Brandeis cited from a report to a 1912 Congress Committee.

Mr Justice Holmes and Mr Justice Clarke concurred.

International Labour Organization policy

Probably inspired by the dissenting judgments in this case, the International Labour Organization's first ever Recommendation took on the views of Justice Brandeis. The Unemployment Recommendation, 1919 (No.1), Art. 1 called for each member to,

"take measures to prohibit the establishment of employment agencies which charge fees or which carry on their business for profit. Where such agencies already exist, it is further recommended that they be permitted to operate only under government licenses, and that all practicable measures be taken to abolish such agencies as soon as possible."

The Unemployment Convention, 1919, Art. 2 instead required the alternative of,

"a system of free public employment agencies under the control of a central authority. Committees, which shall include representatives of employers and workers, shall be appointed to advise on matters concerning the carrying on of these agencies."

In 1933 the Fee-Charging Employment Agencies Convention (No.34) formally called for abolition. The exception was if the agencies were licensed and a fee scale was agreed in advance. In 1949 a new revised Convention (No.96) was produced. This kept the same scheme, but secured an ‘opt out’ (Art.2) for members that did not wish to sign up. Agencies were an increasingly entrenched part of the labor market. The United States did not sign up to the Conventions. The latest Convention, the Private Employment Agencies Convention, 1997 takes a much softer stance and calls merely for regulation.

Supreme Court policy

In Ribnik v. McBride, 277 U.S. 350 (1928), the Court struck down a similar New Jersey law attempting to regulate agencies, Justices Stone, Brandeis and Holmes dissenting. This is probably no longer good law.

Doubt was placed on the leading dicta of Adams v. Tanner in Olsen v. State of Nebraska, 313 U.S. 236 (1941), and Lincoln Union v. Northwestern Co., 335 U.S. 525, 535 (1949). In the latter, Mr Justice Black said that Adams v. Tanner was part of the "constitutional philosophy" that struck down minimum wages and maximum working hours.