NLRB v. Jones & Laughlin Steel Corp. – Case Brief Summary
Summary of NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S. Ct. 615, 81 L. Ed. 893 (1937).
In a proceeding pursuant to the National Labor Relations Act of 1935 (NLRA), the National Labor Relations Board (NLRB, plaintiff) concluded that Jones & Laughlin Steel Corporation (D) had violated the Act by engaging in unfair labor practices affecting interstate commerce. Jones & Laughlin Steel was charged with discriminating against members of the union regarding hiring and tenure, and interfering with employees’ self-organization through coercion and intimidation in connection with the discharge of certain employees. The NLRB ordered the defendant to cease and desist from further discrimination and coercion, offer reinstatement to ten of the employees, compensate them for lost pay, and post notices that the defendant would not discharge or discriminate against members of the union or those desiring to become members.
Defendant failed to comply and the plaintiff petitioned the Circuit Court of Appeals to enforce the order. Defendant argued that the NLRB’s actions were unconstitutional because defendant’s plants were engaged in manufacturing and not interstate commerce, and Congress therefore had no power to regulate the activity in question under the Commerce Clause. The court of appeals found for defendant and denied the petition on the grounds that the order was unconstitutional. The Supreme Court granted certiorari.
1) Can Congress regulate activity related to manufacturing that significantly affects interstate commerce? 2) Can Congress regulate relations between labor and management under the commerce power? 3) What activity can be regulated by Congress pursuant to the commerce power?
Holding and Rule (Hughes)
1) Yes. Congress can regulate activity related to manufacturing that significantly affects interstate commerce. 2) Yes. Congress can regulate relations between labor and management under the commerce power. 3) Acts which directly burden or obstruct interstate or foreign commerce, or its free flow, are within the reach of the congressional commerce power, including labor disputes. It is no longer necessary to draw the distinction between ‘direct’ and ‘indirect’ effects on interstate commerce. Congress can regulate any activity that has a significant effect on interstate commerce whether direct or indirect.
Employees have a fundamental right to organize and select representatives of their own choosing for collective bargaining. Discrimination or coercion by an employer to prevent the free exercise of this right is a proper subject for condemnation by competent legislative authority.
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. Although activities may be intrastate in character when separately considered, Congress has the power to regulate 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.
The commerce power may not be extended to embrace effects upon interstate commerce so indirect and remote that to embrace them would effectively obliterate the distinction between what is national and what is local, thereby creating a completely centralized government. The question is necessarily one of degree. Whatever amounts to more or less constant practice, and threatens to obstruct or unduly burden the freedom of interstate commerce, is within the regulatory power of Congress under the Commerce Clause.
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.
The commerce power should be limited to activity in which the impact on interstate commerce is direct and material direct and material, not some mere possibility contingent on wholly uncertain events.
By its terms, the NLRA extends to employers, large and small, and declares that it shall be an unfair labor practice if an employer interferes with, restrains, or coerces any employee regarding his labor affiliations. The Act applies to both large and small employers upon grounds common to all. The Act may gravely affect a multitude of employers who engage in a great variety of private enterprises and puts into the hands of a Board power of control over purely local industry beyond anything heretofore deemed permissible.
This case is also cited as National Labor Relations Board v. Jones & Laughlin Steel Corp. See Youngstown Sheet & Tube Co. v. Sawyer for a constitutional law case brief involving issues of executive authority in the context of labor relations in the steel industry.