NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937)
Congress has the authority to regulate intrastate activities that significantly affect interstate commerce, directly or indirectly.
Ten employees at an Aliquippa, Pennsylvania plant of Jones & Laughlin, a major steel producer, were fired after they tried to form a union. As a result, the National Labor Relations Board brought charges of discrimination against the company under the National Labor Relations Act. After the NLRB ordered the company to reinstate the workers and provide them with back pay, among other remedies, the company refused to comply with the order on the grounds that the NLRB's action were unconstitutional. Jones & Laughlin pointed out that it did not directly engage in interstate commerce, which meant that they were not covered by the Commerce Clause and thus not within the scope of the federal government's authority.Opinions
- Charles Evans Hughes (Author)
- Louis Dembitz Brandeis
- Harlan Fiske Stone
- Owen Josephus Roberts
- Benjamin Nathan Cardozo
The majority found that companies cannot discriminate against employees for exercising their fundamental right to unionize. Moving away from the distinction between direct and indirect effects on interstate commerce, Hughes stated that any significant effect (direct or indirect) on interstate commerce allows Congress to regulate an activity under the Commerce Clause. While the manufacturing process or relationships between labor and management may not have a direct impact on the flow of goods, they have an aggregate impact on commerce. In this instance, the potential stoppage of manufacturing activity due to conflicts between management and labor could be expected to impede interstate commerce. However, Hughes carefully limited the opinion to exclude situations in which an activity had such an inconsequential or remote impact on interstate commerce that it was entirely tied to local matters.
- James Clark McReynolds (Author)
- Willis Van Devanter
- George Sutherland
- Pierce Butler
Adhering to the distinction between direct and indirect effects, McReynolds argued that the impact on interstate commerce needed to be more certain and clearly defined to invoke the Commerce Clause. He felt that the National Labor Relations Act, which gave the Board its authority, was overly broad and could extend to local, small-scale activities.Case Commentary
The Commerce Clause typically has been interpreted to extend broadly, and thus Congress has felt justified in using it for a range of regulations that may seem to relate only tangentially to interstate commerce. Decisions like this case encourage that trend.
U.S. Supreme CourtNLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937)
National Labor Relations Board v. Jones & Laughlin Steel Corp.
Argued February 10, 11, 1937
Decided April 12, 1937*
301 U.S. 1
1. The distinction between what is national and what is local in the activities of commerce is vital to the maintenance of our federal form of government. P. 301 U. S. 29.
2. The validity of provisions which, considered by themselves, are constitutional, held not affected by general and ambiguous declarations in the same statute. P. 301 U. S. 30.
3. An interpretation which conforms a statute to the Constitution must be preferred to another which would render it unconstitutional or of doubtful validity. P. 301 U. S. 30.
4. Acts which directly burden or obstruct interstate or foreign commerce, or its free flow, are within the reach of the congressional
power, and this includes acts, having that effect, which grow out of labor disputes. P. 301 U. S. 31.
5. Employees in industry have a fundamental right to organize and select representatives of their own choosing for collective bar gaining, and discrimination or coercion upon the part of their employer to prevent the free exercise of this right is a proper subject for condemnation by competent legislative authority. P. 301 U. S. 33.
6. 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 such commerce. Pp. 301 U. S. 34-36.
7. 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 has the power to exercise that control. P. 301 U. S. 37.
8. This power must be considered in the light of our dual system of government, and may not be extended so as to embrace effects upon interstate commerce so indirect and remote that to embrace them would, in view of our complex society, effectually obliterate the distinction between what is national and what is local and create a completely centralized government. The question is necessarily one of degree. P. 301 U. S. 37.
9. Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce, is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and meet it. P. 301 U. S. 37.
10. 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. P. 301 U. S. 38.
11. The relation to interstate commerce of the manufacturing enterprise involved in this case was such that a stoppage of its operations by industrial strife would have an immediate, direct and paralyzing effect upon interstate commerce. Therefore, Congress had constitutional authority, for the protection of interstate commerce, to safeguard the right of the employees in the manufacturing plant to self-organization and free choice of their representatives for collective bargaining. P. 301 U. S. 41.
Judicial notice is taken of the facts that the recognition of the right of employees to self-organization and to have representatives of their own choosing for the purpose of collective bargaining is often an essential condition of industrial peace, and that refusal to confer and negotiate has been one of the most prolific causes of strife.
12. The National Labor Relations Act of July 5, 1935, empowers the National Labor Relations Board to prevent any person from engaging in unfair labor practices "affecting commerce"; its definition of "commerce" (aside from commerce within a territory or the District of Columbia) is such as to include only interstate and foreign commerce, and the term "affecting commerce" it defines as meaning
"in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce."
The "unfair labor practices," as defined by the Act and involved in this case, are restraint or coercion of employees in their rights to self-organization and to bargain collectively through representatives of their own choosing, and discrimination against them in regard to hire or tenure of employment for the purpose of encouraging or discouraging membership in any labor organization. §§ 7 and 8. The Act (§ 9a) declares that representatives, for the purpose of collective bargaining, of the majority of the employees in an appropriate unit shall be the exclusive representatives of all the employees in that unit; but that any individual employee or a group of employees shall have the right at any time to present grievances to their employer. Held:
(1) That in safeguarding rights of employees and empowering the Board, the statute, insofar as involved in the present case, confines itself to such control of the industrial relationship as may be constitutionally exercised by Congress to prevent burden or obstruction to interstate or foreign commerce arising from industrial disputes. P. 301 U. S. 43.
(2) The Act imposes upon the employer the duty of conferring and negotiating with the authorized representatives of the employees for the purpose of settling a labor dispute, but it does not preclude such individual contracts as the employer may elect to make directly with individual employees. P. 301 U. S. 44.
(3) The Act does not compel agreements between employers and employees. Its theory is that free opportunity for negotiation
with accredited representatives of employees is likely to promote industrial peace, and may bring about the adjustments and agreements which the Act, in itself, does not attempt to compel. P. 301 U. S. 45.
(4) The Act does not interfere with the normal right of the employer to hire, or with the right of discharge when exercised for other reasons than intimidation and coercion, and what is the true reason in this regard is left the subject of investigation in each case, with full opportunity to show the facts. P. 301 U. S. 45.
13. A corporation which manufactured iron and steel products in its factories in Pennsylvania from raw materials, most of which it brought in from other States, and which shipped 75% of the manufactured products out of Pennsylvania and disposed of them throughout this country and in Canada, was required by orders of the National Labor Relations Board to tender reinstatement to men who had been employed in one of the factories but were discharged because of their union activities and for the purpose of discouraging union membership. The orders further required that the company make good the pay the men had lost through their discharge, and that it desist from discriminating against members of the union, with regard to hire and tenure of employment, and from interfering by coercion with the self-organization of its employees in the plant. Held that the orders were authorized by the National Labor Relations Act, and that the Act is constitutional as thus applied to the company. Pp. 301 U. S. 30, 301 U. S. 32, 301 U. S. 34, 301 U. S. 41.
14. The right of employers to conduct their own business is not arbitrarily restrained by regulations that merely protect the correlative rights of their employees to organize for the purpose of securing the redress of grievances and of promoting agreements with employers relating to rates of pay and conditions of work. P. 301 U. S. 43.
15. The fact that the National Labor Relations Act subjects the employer to supervision and restraint and leaves untouched the abuses for which employees may be responsible, and fails to provide a more comprehensive plan, with better assurance of fairness to both sides and with increased chances of success in bringing about equitable solutions of industrial disputes affecting interstate commerce, does not affect its validity. The question is as to the power of Congress, not as to its policy, and legislative authority, exerted within its proper field, need not embrace all the evils within its reach. P. 301 U. S. 46.
16. The National Labor Relations Act establishes standards to which the Board must conform. There must be complaint, notice and hearing. The Board must receive evidence and make findings. These findings as to the facts are to be conclusive, but only if supported by evidence. The order of the Board is subject to review by the designated court, and only when sustained by the court may the order be enforced. Upon that review, all questions of the jurisdiction of the Board and the regularity of its proceedings, all questions of constitutional right or statutory authority, are open to examination by the court. These procedural provisions afford adequate opportunity to secure judicial protection against arbitrary action, in accordance with the well settled rules applicable to administrative agencies set up by Congress to aid in the enforcement of valid legislation. P. 301 U. S. 47.
17. The provision of the National Labor Relations Act, § 10(c), authorizing the Board to require the reinstatement of employees found to have been discharged because of their union activity or for the purpose of discouraging membership in the union, is valid. P. 301 U. S. 47.
18. The provision of the Act, § 10(c), that the Board, in requiring reinstatement, may direct the payment of wages for the time lost by the discharge, less amounts earned by the employee during that period, does not contravene the provisions of the Seventh Amendment with respect to jury trial in suits at common law. P. 301 U. S. 48.
83 F.2d 998, reversed.
CERTIORARI, 299 U.S. 534, to review a decree of the Circuit Court of Appeals declining to enforce an order of the National Labor Relations Board.