The yellow dog contract was a device used by employers prior to the NEW DEAL era to prevent collective bargaining by employees. By a yellow dog contract a worker agreed not to join or remain a member of a labor organization and to quit his job if he joined one. At a time in our history when the courts shaped the law so that its major beneficiary was industrial capitalism, yellow dog contracts were enforceable, even though workers had little choice in accepting their terms. Workers either signed such contracts or forfeited the opportunity of working. In effect, a yellow dog contract blackmailed an employee into promising not to join a union; his supposed free choice to accept a job or look elsewhere for work turned out to be a choice between being blackmailed or blacklisted. In one perspective, yellow dog contracts robbed workers of their FREEDOM OF CONTRACT. The courts thought otherwise, however.
In the 1890s fifteen states enacted laws that promoted COLLECTIVE BARGAINING by outlawing yellow dog contracts, and in 1898 section 10 of the ERDMAN ACT, passed by Congress, also outlawed their use by interstate railroads. In Adair v. United States (1908) the Supreme Court held the Erdman Act unconstitutional. SUBSTANTIVE DUE PROCESS of law provided one ground of decision. The Court reasoned that section 10 abridged freedom of contract, a liberty the Court found in the Fifth Amendment's DUE PROCESS CLAUSE, because Congress had violated the right of workers to make contracts for the sale of their labor. In COPPAGE V. KANSAS (1915) the Court applied this reasoning to state statutes that had banned yellow dog contracts.
Having disabled both the national commerce power and the STATE POLICE POWER from forbidding yellow dog contracts, the Court then sustained the legality of such contracts. In HITCHMAN COAL AND COKE CO. V. MITCHELL (1917) the Court reversed a federal circuit court's determination that a yellow dog contract was not...