For this reason, Adair is often seen as defining what has come to be known as the Lochner era, a period in American legal history in which the Supreme Court tended to invalidate legislation aimed at regulating business.

In the majority opinion, written by Justice John M. Harlan, the question to be decided was described as such: May Congress make it a criminal offense against the United States – as by the tenth section of the act of 1898 it does – for an agent or officer of an interstate carrier, having full authority in the premises from the carrier, to discharge an employee from service simply because of his membership in a labor organization?In answering this question, Harlan first examined whether Section 10 of the act on which the indictment against Adair was based "is repugnant to the Fifth Amendment."

In reference to the prerogatives of both parties in the termination of a labor contract, Harlan wrote: In all such particulars, the employer and the employee have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.Having found that the Fifth Amendment barred against limiting the right of an employer to fire an employee due to membership in a labor union, Harlan concluded that Congress could not criminalize such action.

In the second part of the opinion, Harlan examined this claim, at first acknowledging that Congress had "a large discretion in the selection or choice of the means to be employed in the regulation of interstate commerce".

In reference to the right of an employer to fire an employee at will, which would unravel Congress' arbitration scheme, McKenna asked: How can it be an aid, how can controversies which may seriously interrupt or threaten to interrupt the business of carriers (I paraphrase the words of the statute), be averted or composed if the carrier can bring on the conflict or prevent its amicable settlement by the exercise of mere whim and caprice?In apparent admonition of the reasoning in the majority opinion, McKenna cautioned: "Liberty is an attractive theme, but the liberty which is exercised in sheer antipathy does not plead strongly for recognition."

I quite agree that the question what and how much good labor unions do is one on which intelligent people may differ – I think that laboring men sometimes attribute to them advantages, as many attribute to combinations of capital disadvantages, that really are due to economic conditions of a far wider and deeper kind – but I could not pronounce it unwarranted if Congress should decide that to foster a strong union was for the best interest not only of the men, but of the railroads and the country at large.The Court followed up the decision in Adair with Coppage v. Kansas (1915), which denied to states as well the power to ban yellow-dog contracts.

David P. Currie has remarked that the Court's decision in Adair is difficult to square with two of its other decisions that same year: Damselle Howard v. Illinois Central Railroad Company (1907), in which the Court held that it was within Congress' power to abrogate the fellow-servant rule (which absolves an employer of liability for injury to a worker resulting from the negligence of a co-worker) for railway employees injured in interstate commerce; and Loewe v. Lawlor (1908), in which it held that Congress could prevent union members from boycotting goods shipped from one state to another.