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National Labor Relations Board v. Jones & Laughlin Steel Corporation

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Supreme Court of the United States
National Labor Relations Board v. Jones & Laughlin Steel Corporation
Reference: 301 U.S. 1
Term: 1937
Important Dates
Argued: February 10-11, 1937
Decided: April 12, 1937
Outcome
United States Court of Appeals for the Fifth Circuit reversed
Majority
Chief Justice Charles Hughes • Louis Brandeis • Harlan F. Stone • Benjamin Cardozo • Owen Roberts
Dissenting
Willis Van Devanter • James C. McReynolds • George Sutherland • Pierce Butler

National Labor Relations Board v. Jones & Laughlin Steel Corporation is a case decided on April 12, 1937, by the United States Supreme Court that interpreted the Commerce Clause to give Congress authority over intrastate activities if they were substantially related to interstate commerce. The case concerned the constitutionality of the National Labor Relations Act of 1935, which established regulations on relations between employees and industrial employers. The Supreme Court reversed the ruling of the United States Court of Appeals for the Fifth Circuit, holding that the Act and the National Labor Relations Board (NLRB) it established were constitutional under the Commerce Clause.[1][2]

HIGHLIGHTS
  • The case: Jones & Laughlin Steel Corporation filed suit against the NLRB after the board ordered the corporation to rehire employees who were fired for attempting to unionize.
  • The issue: Did Congress have the authority under the Commerce Clause to regulate labor relations under the National Labor Relations Act of 1935?
  • The outcome: The Supreme Court held that the Commerce Clause granted Congress the authority to regulate intrastate labor relations because such issues directly and indirectly affected interstate commerce.


    • Why it matters: The Supreme Court's decision interpreted the Commerce Clause to give Congress the authority to regulate intrastate activities that were closely related to interstate commerce. Writing for the court, Chief Justice Charles Hughes argued, "Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control."


    Background

    See also: National Labor Relations Act of 1935
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    Congress passed the National Labor Relations Act of 1935 and established the NLRB to resolve disputes and regulate the relationships between industrial employers and their workers. The law created a right of unionization and collective bargaining for workers and prohibited companies from discriminating against unionized workers.[1]

    Jones & Laughlin Steel Corporation fired ten employees who attempted to unionize. The employees appealed to the NLRB, which determined the corporation had violated the National Labor Relations Act and ordered the rehiring of the employees with back pay.[1]

    The company sued, claiming the Act exceeded Congress' authority under the Commerce Clause. The United States Court of Appeals for the Fifth Circuit sided with Jones & Laughlin, citing Supreme Court precedent from Carter v. Carter Coal Company, Utah Power & L. Co. v. Pfost, and Chassaniol v. Greenwood, which supported a more limited understanding of the Commerce Clause. The NLRB appealed the decision to the Supreme Court, arguing that Congress could regulate industrial labor relations because they affected interstate commerce.[1]

    Oral argument

    Oral argument was held on February 10-11, 1937. The case was decided on April 12, 1937.[1]

    Decision

    The Supreme Court decided 5-4 that the National Labor Relations Act was constitutional under Commerce Clause because industrial labor relations affected interstate commerce.[1]

    Opinions

    Opinion of the court

    Chief Justice Charles Hughes argued that the Commerce Clause granted Congress authority to regulate matters that affected interstate commerce. Hughes determined industrial labor relations regulated under the National Labor Relations Act of 1935 were substantially related to interstate commerce and could be constitutionally regulated.

    “ The congressional authority to protect interstate commerce from burdens and obstructions is not limited to transactions which can be deemed to be an essential part of a "flow" of interstate or foreign commerce. Burdens and obstructions may be due to injurious action springing from other sources. The fundamental principle is that the power to regulate commerce is the power to enact "all appropriate legislation" for "its protection and advancement" (The Daniel Ball, 10 Wall. 557, 77 U. S. 564); to adopt measures "to promote its growth and insure its safety" (Mobile County v. Kimball, 102 U. S. 691, 102 U. S. 696, 102 U. S. 697); "to foster, protect, control and restrain." Second Employers' Liability Cases, supra, p. 223 U. S. 47. See Texas & N.O. R. Co. v. Railway Clerks, supra. That power is plenary, and may be exerted to protect interstate commerce "no matter what the source of the dangers which threaten it." Second Employers' Liability Cases, p. 223 U. S. 51; Schechter Corp. v. United States, supra. Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.

    ...
    Giving full weight to respondent's contention with respect to a break in the complete continuity of the "stream of commerce" by reason of respondent's manufacturing operations, the fact remains that the stoppage of those operations by industrial strife would have a most serious effect upon interstate commerce.[1][3]

    		”

    Dissent

    Justice James C. McReynolds, joined in dissent by Justices Willis Van Devanter, George Sutherland, and Pierce Butler, stated his disagreement with the opinion on the grounds outlined in Labor Board v. Friedman-Harry Marks Clothing Company. McReynolds argued Congress had exceeded the authority granted under the Commerce Clause, which he said only applied to interstate commerce itself, not direct or indirect influences on interstate commerce. He also claimed, contrary to the majority's opinion, that the discharge of 10 employees would not substantially or directly affect interstate commerce.

    “ Any effect on interstate commerce by the discharge of employees shown here would be indirect and remote in the highest degree, as consideration of the facts will show. In No. 419, ten men out of ten thousand were discharged; in the other cases, only a few. The immediate effect in the factor may be to create discontent among all those employed, and a strike may follow which, in turn, may result in reducing production, which ultimately may reduce the volume of goods moving in interstate commerce. By this chain of indirect and progressively remote events, we finally reach the evil with which it is said the legislation under consideration undertakes to deal. A more remote and indirect interference with interstate commerce or a more definite invasion of the powers reserved to the states is difficult, if not impossible, to imagine.

    ...
    There is no ground on which reasonably to hold that refusal by a manufacturer, whose raw materials come from states other than that of his factory and whose products are regularly carried to other states, to bargain collectively with employees in his manufacturing plant directly affects interstate commerce. In such business, there is not one, but two, distinct movements or streams in interstate transportation. The first brings in raw material, and there ends. Then follows manufacture, a separate and local activity. Upon completion of this, and not before, the second distinct movement or stream in interstate commerce begins, and the products go to other states. Such is the common course for small as well as large industries. It is unreasonable and unprecedented to say the commerce clause confers upon Congress power to govern relations between employers and employees in these local activities.[4][3]

    		”

    Impact

    The Supreme Court's holding in NLRB that the Commerce Clause gave Congress the authority to regulate activities with a "close and substantial relation to interstate commerce" has been cited in a number of Supreme Court cases expanding Congress' power under the clause.

    The majority in Wickard v. Filburn (1942) referenced NLRB in the opinion, which explicitly rejected the relevance of the distinction between direct and indirect effects on interstate commerce in determining Congress' power under the Commerce Clause. The court held in Wickard that Congress could regulate wheat production because the activities of farmers could affect national wheat prices and the national wheat market. William Rehnquist later said that Wickard v. Filburn signaled a trend of expansion of Congress' power over interstate commerce.[5]

    The Commerce Clause and precedent from NLRB and Wickard were also the claimed legal bases for the passage of the Gun-Free School Zones Act. In United States v. Lopez (1995) the federal government claimed that, since guns were articles of commerce, Congress could regulate their use. Chief Justice William Rehnquist's opinion ruling the Act unconstitutional marked the first major restriction of Congress' commerce power since the NLRB decision.[5][6]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Justia, "NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937)," accessed May 31, 2022
    2. ↑ Oyez, "National Labor Relations Board v. Jones & Laughlin Steel Corporation," accessed June 20, 2022
    3. ↑ 3.0 3.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    4. ↑ Justia, "Labor Board v. Friedman-Harry Marks Clothing Co., 301 U.S. 58 (1937)," accessed June 14, 2022
    5. ↑ 5.0 5.1 Justia, United States v. Lopez, accessed June 14, 2022
    6. ↑ Duke Law Journal, THE AMENDED GUN-FREE SCHOOL ZONES ACT: DOUBT AS TO ITS CONSTITUTIONALITY REMAINS, accessed June 14, 2022
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