Article I, Section 8, Clause 3:
[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .
In NLRB v. Jones & Laughlin Steel Corporation, the Court reduced the distinction between “direct” and “indirect” effects, thereby enabling Congress to regulate productive industry and labor relations.1 The National Labor Relations Act (NLRA) of 19352 granted workers a right to organize, forbade unlawful employer interference with this right, established procedures for workers to select representatives with whom employers were required to bargain, and created a board to oversee these processes.3
In an opinion by Chief Justice Charles Hughes, the Court upheld the NLRA, stating: “The close and intimate effect, 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.” 4 Considering defendant’s “far-flung activities,” 5 the Court expressed concern about strife between the industry and its employees, stating:
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.6
The Court held the NLRA to be within Congress’s constitutional powers because a strike that interrupted business “might be catastrophic.” 7 The Court also held that the NLRA applied to (1) two minor concerns,8 (2) a local retail auto dealer on the ground that he was an integral part of a manufacturer’s national distribution system,9 (3) a labor dispute arising during alteration of a county courthouse because one-half of the cost was attributable to materials shipped from out-of-state,10 and (4) a dispute involving a local retail distributor of fuel oil that it obtained from a wholesaler who imported it from another state.11 The Court stated: “This 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.” 12 Thus, the Court implicitly approved the National Labor Relations Board’s jurisdictional standards, which assumed a prescribed dollar volume of business had a requisite effect on interstate commerce.13
- 301 U.S. 1 (1937). Prior to this decision, President Roosevelt, frustrated by the Court’s invalidation of much of his New Deal program, proposed a “reorganization” of the Court that would have allowed him to name one new Justice for each Justice on the Court who was more than seventy years old, in the name of “judicial efficiency.” The Senate defeated the plan, which some have attributed to the Court having begun to uphold New Deal legislation in cases such as Jones & Laughlin. See William E. Leuchtenberg, The Origins of Franklin D. Roosevelt’s ‘Court-Packing’ Plan, 1966 Sup. Ct. Rev. 347 (P. Kurland ed.); Alpheus Thomas Mason, Harlan Fiske Stone and FDR’s Court Plan, 61 Yale L. J. 791 (1952); 2 Merlo J. Pusey, Charles Evans Hughes 759–765 (1951).
- 49 Stat. 449, as amended, 29 U.S.C. §§ 151 et seq.
- While Congress passed the NLRA during the Great Depression, the 1898 Erdman Act, 30 Stat. 424, concerning unionization of railroad workers and facilitating negotiations with employers through mediation provided some precedent. The Erdman Act, however, 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 provision of the Erdman Act outlawing “yellow-dog contracts” by which employers exacted promises from workers to quit or not join unions as a condition of employment. The Court held the provision did not regulate commerce on the grounds that an employee’s membership in a union was not related to conducting interstate commerce. Cf. Coppage v. Kansas, 236 U.S. 1 (1915).
In Wilson v. New, 243 U.S. 332 (1917), the Court upheld Congress’s passage of an act to establish an eight-hour day and time-and-a-half overtime for all interstate railway employees to settle a threatened rail strike. While the Court cited the national emergency in its decision, the case implied that the power existed generally, suggesting that Congress’s powers were not as limited as some judicial decisions had indicated.
The Court sustained Congress’s passage of the Railway Labor Act (RLA) of 1926, 44 Stat. 577, as amended, 45 U.S.C. §§ 151 et seq., recognizing a substantial connection between interstate commerce and union membership. Tex. & New Orleans R.R. v. Brotherhood of Ry. Clerks, 281 U.S. 548 (1930). In a subsequent decision, the Court sustained applying the RLA to “back shop” employees of an interstate carrier who made repairs to locomotives and cars withdrawn from service for long periods on the grounds that these employees’ activities related to interstate commerce. Virginian Ry. v. System Federation No. 40, 300 U.S. 515 (1937).
- NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 38 (1937).
- Id. at 41.
- Id. at 41–42.
- Id. at 41.
- NLRB v. Fruehauf Trailer Co., 301 U.S. 49 (1937); NLRB v. Friedman-Harry Marks Clothing Co., 301 U.S. 58 (1937). In a later case, the Court noted that the amount of affected commerce was not material. NLRB v. Fainblatt, 306 U.S. 601, 606 (1939).
- Howell Chevrolet Co. v. NLRB, 346 U.S. 482 (1953).
- Journeymen Plumbers’ Union v. Cnty. of Door, 359 U.S. 354 (1959).
- NLRB v. Reliance Fuel Oil Co., 371 U.S. 224 (1963).
- Id. at 226. See also Guss v. Utah Labor Bd., 353 U.S. 1, 3 (1957); Fainblatt, 306 U.S. at 607.
- Reliance Fuel, 371 U.S. at 225 n.2; Liner v. Jafco, 375 U.S. 301, 303 n.2 (1964).