In the 1914 case of Coppage v. State of Kansas, Frank Coppage was convicted for violating a Kansas statute that prohibited employers from preventing their employees from joining labor unions by making it a condition of employment. The Supreme Court overturned his conviction on the grounds that it violated his Fourteenth Amendment rights to due process and equal protection under the law. The court held that both employer and employee have the right to contract freely with each other, including agreements not to join a union as long as no coercion is involved in obtaining such an agreement. This decision reflected an interpretation favoring laissez-faire economics and limited government intervention in private contracts.

In the dissenting opinion for the case of Coppage v. State of Kansas, Justice Holmes argued that the majority's decision to strike down a Kansas law prohibiting "yellow-dog" contracts (agreements in which workers promise not to join a union) was based on an overly broad interpretation of freedom of contract. He contended that all contracts inherently involve some restriction on individual liberty and thus absolute freedom is impossible. Furthermore, he suggested that it is within the state's power to regulate economic relations and protect weaker parties from exploitation by more powerful ones. In this context, he believed that laws like those in question could be seen as legitimate efforts by states to redress imbalances between employers and employees rather than unconstitutional infringements upon personal liberty or property rights.