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 Corporation.822 Here the statute involved was the National Labor Relations Act of 1935,823 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.824

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 effects 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.”825

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,826 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.827 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,828 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,829 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.830

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.”831 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.832

Footnotes

822
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, 61 YALE L. J. 791 (1952); 2 M. PUSEY, CHARLES EVANS HUGHES 759–765 (1951). [Back to text]
823
49 Stat. 449, as amended, 29 U.S.C. §§ 151et seq. [Back to text]
824
The NLRA was enacted against the backdrop of depression, although obviously it went far beyond being a mere antidepression measure, and Congress could find precedent 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). In Wilson v. New, 243 U.S. 332 (1917), the Court did uphold 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’s powers were not as limited as some judicial decisions had indicated. Congress’s enactment of the Railway Labor Act in 1926, 44 Stat. 577, as amended, 45 U.S.C. §§ 151et 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. v. System Federation No. 40, 300 U.S. 515 (1937). [Back to text]
825
NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 38, 41–42 (1937). [Back to text]
826
NLRB v. Fruehauf Trailer Co., 301 U.S. 49 (1937); NLRB v. Friedman-Harry Marks Clothing Co., 301 U.S. 58 (1937). [Back to text]
827
NLRB v. Fainblatt, 306 U.S. 601, 606 (1939). [Back to text]
828
Howell Chevrolet Co. v. NLRB, 346 U.S. 482 (1953). [Back to text]
829
Journeymen Plumbers’ Union v. County of Door, 359 U.S. 354 (1959). [Back to text]
830
NLRB v. Reliance Fuel Oil Co., 371 U.S. 224 (1963). [Back to text]
831
371 U.S. at 226. See also Guss v. Utah Labor Bd., 353 U.S. 1, 3 (1957); NLRB v. Fainblatt, 306 U.S. 601, 607 (1939). [Back to text]
832
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). [Back to text]