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CRS Annotated Constitution

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National Labor Relations Act.—The case in which the Court reduced the distinction between “direct” and “indirect” effects to the vanishing point and thereby placed Congress in the position to regulate productive industry and labor relations in these industries was NLRB v. Jones & Laughlin Steel Corp.737 Here the[p.191]statute involved was the National Labor Relations Act of 1935,738 which declared the right of workers to organize, forbade unlawful employer interference with this right, established procedures by which workers could choose exclusive bargaining representatives with which employers were required to bargain, and created a board to oversee all these processes.739

The Court, speaking through Chief Justice Hughes, upheld the Act and found the corporation to be subject to the Act. “The close and intimate effect,” he said, “which brings the subject within the reach of federal power may be due to activities in relation to productive industry although the industry when separately viewed is local.” Nor will it do to say that such effect is “indirect.” Considering defendant’s “far–flung activities,” the effect of strife between it and its employees “would be immediate and [it] might be catastrophic. We are asked to shut our eyes to the plainest facts of our national life and to deal with the question of direct and indirect ef[p.192]fects in an intellectual vacuum. . . . When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war? We have often said that interstate commerce itself is a practical conception. It is equally true that interferences with that commerce must be appraised by a judgment that does not ignore actual experience.”740

While the Act was thus held to be within the constitutional powers of Congress in relation to a productive concern because the interruption of its business by strike “might be catastrophic,” the decision was forthwith held to apply also to two minor concerns,741 and in a later case the Court stated specifically that the smallness of the volume of commerce affected in any particular case is not a material consideration.742 Subsequently, the act was declared to be applicable to a local retail auto dealer on the ground that he was an integral part of the manufacturer’s national distribution system,743 to a labor dispute arising during alteration of a county courthouse because one– half of the cost—$225,000—was attributable to materials shipped from out–of–State,744 and to a dispute involving a retail distributor of fuel oil, all of whose sales were local, but who obtained the oil from a wholesaler who imported it from another State.745

Indeed, “[t]his Court has consistently declared that in passing the National Labor Relations Act, Congress intended to and did vest in the Board the fullest jurisdictional breadth constitutionally permissible under the Commerce Clause.”746 Thus, the Board has formulated jurisdictional standards which assume the requisite effect on interstate commerce from a prescribed dollar volume of business and these standards have been implicitly approved by the Court.747


Footnotes

737 301 U.S. 1 (1937). A major political event had intervened between this decision and those described in the preceding pages. President Roosevelt, angered at the Court’s invalidation of much of his depression program, proposed a “reorganization” of the Court by which he would have been enabled to name one new Justice for each Justice on the Court who was more than 70 years old, in the name of “judicial efficiency.” The plan was defeated in the Senate, in part, perhaps, because in such cases as Jones & Laughlin a Court majority began to demonstrate sufficient “judicial efficiency.” See Leuchtenberg, The Origins of Franklin D. Roosevelt’s “Court–Packing” Plan, 1966 Sup. Ct. Rev. 347 (P. Kurland ed.); Mason, Harlan Fiske Stone and FDR’s Court Plan,” 61Yale L. J.791 (1952); 2 M. Pusey, Charles Evans Hughes (Cambridge: 1951), 759–765.
738 49 Stat. 449 , as amended, 29 U.S.C. Sec. 151 et seq.
739 The NLRA was enacted not only against the backdrop of depression, although obviously it went far beyond being a mere antidepression measure, but Congress could as well look to its experience in railway labor legislation. In 1898, Congress passed the Erdman Act, 30 Stat. 424 , which attempted to influence the unionization of railroad workers and facilitate negotiations with employers through mediation. The statute fell largely into disuse because the railroads refused to mediate. Additionally, in Adair v. United States, 208 U.S. 161 (1908), the Court struck down a section of the law outlawing “yellow–dog contracts,” by which employers exacted promises of workers to quit or not to join unions as a condition of employment. The Court held the section not to be a regulation of commerce, there being no connection between an employee’s membership in a union and the carrying on of interstate commerce. Cf. Coppage v. Kansas, 236 U.S. 1 (1915).
The Court did uphold in Wilson v. New, 243 U.S. 332 (1917), a congressional settlement of a threatened rail strike through the enactment of an eight–hour day and a time–and–a-half for overtime for all interstate railway employees. The national emergency confronting the Nation was cited by the Court but with the implication that the power existed in more normal times, suggesting that Congress’ powers were not as limited as some judicial decisions had indicated.
Congress’ enactment of the Railway Labor Act in 1926, 44 Stat. 577 , as amended, 45 U.S.C. Sec. 151 et seq., was sustained by a Court decision admitting the connection between interstate commerce and union membership as a substantial one. Texas & N.L.R. Co. v. Brotherhood of Railway Clerks, 281 U.S. 548 (1930). A subsequent decision sustained the application of the Act to “back shop” employees of an interstate carrier who engaged in making heavy repairs on locomotives and cars withdrawn from service for long periods, the Court finding that the activities of these employees were related to interstate commerce. Virginian Ry. Co. v. System Federation No. 40, 300 U.S. 515 (1937).
740 NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 38, 41–42 (1937).
741 NLRB v. Fruehauf Trailer Co., 301 U.S. 49 (1937); NLRB v. Friedman–Harry Marks Clothing Co., 301 U.S. 58 (1937).
742 NLRB v. Fainblatt, 306 U.S. 601, 606 (1939).
743 Howell Chevrolet Co. v. NLRB, 346 U.S. 482 (1953).
744 Journeymen Plumbers’ Union v. County of Door, 359 U.S. 354 (1959).
745 NLRB v. Reliance Fuel Oil Co., 371 U.S. 224 (1963).
746 Id., 226. See also Guss v. Utah Labor Board, 353 U.S. 1, 3 (1957); NLRB v. Fainblatt, 306 U.S. 601, 607 (1939).
747 NLRB v. Reliance Fuel Oil Co., 371 U.S. 224, 225 n. 2 (1963); Liner v. Jafco, 375 U.S. 301, 303 n. 2 (1964).
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