In the 1935 case Morehead, Warden v. New York ex rel. Tipaldo, the U.S. Supreme Court ruled against a New York State law that established minimum wage standards for women and children. The court held in a 5-4 decision that this law was unconstitutional as it violated the liberty of contract under the Fourteenth Amendment's Due Process Clause - essentially arguing that employers and employees should have freedom to negotiate wages without government interference. This ruling came despite previous decisions upholding similar laws aimed at protecting health and safety in employment contracts; however, those were seen as valid exercises of state police power while this was not.

In the dissenting opinion for Morehead v. New York ex rel. Tipaldo, Justice Benjamin Cardozo argued that the majority's decision to strike down a minimum wage law for women was an overreach of judicial power and violated principles of federalism by not respecting state sovereignty in regulating their own economic affairs. He contended that states should be allowed to experiment with social and economic legislation without interference from courts unless there is clear constitutional violation. Furthermore, he believed that such laws were necessary to protect vulnerable workers from exploitation and ensure they received fair wages for their labor. The justice also criticized the court's reliance on outdated precedents which failed to consider changing societal conditions or advancements in legal thought about government regulation of economy.