Does Capping Executive Pay Violate the Constitution?

Short answer: no. But, some people who are stuck in the 1920s seem to think so. For example, Andrew Napolitano (a senior judicial analyst for Fox News) argues, “Salary caps are unconstitutional because they violate the well-grounded doctrine against unconstitutional conditions.” In other words, the government may not require someone to give up a constitutional right in exchange for some sort of governmental benefit. He analogizes: “The government cannot say to individual welfare recipients that they may not criticize the Congress or their welfare checks will be cut off.” Apparently the right to enter into a $15,000,000 contract is just as constitutionally protected as the freedom of speech. Who knew?

So, Mr. Napolitano is relying on the “right to contract,” an idea championed by the oft-maligned Lochner v. New York, which held unconstitutional a statute limiting the number of hours a baker could work (if a baker wants to work 100 hours a week, who are we to stop him?). The same idea was applied to strike down minimum wage laws in Adkins v. Children’s Hospital (if someone wants to work for $.01 per hour, who are we to stop him?). The theory is that the 14th Amendment’s guarantee of due process of law protects the so-called “right to contract.” While Lochner has not been technically overruled, it has been de-fanged, and it has been held that the Constitution does not protect a fundamental right to contract. So, unless we are to jump in a time machine and travel back to 1920, Mr. Napolitano’s argument doesn’t work.

But wait, there’s more. He also asserts that the salary cap is an unconstitutional “taking.” The “takings clause” of the Fifth Amendment reads, “…nor shall private property be taken for public use, without just compensation.” You may be thinking, “How is a salary cap an unconstitutional taking?” Napolitano attempts to explain:


Published in: on February 7, 2009 at 6:35 pm Comments Off on Does Capping Executive Pay Violate the Constitution?
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