National Labor Relations Board v. Jones & Laughlin Steel Corp.

National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937), argued 10–11 Feb. 1937, decided 12 Apr. 1937 by vote of 5 to 4; Hughes for the Court, Sutherland, Van Devanter, McReynolds, and Butler in dissent. The Jones & Laughlin case was one of the five cases decided on 12 April 1937 that sustained the constitutionality of the National Labor Relations Act (NLRA) and proved to be a crucial turning point in the New Deal constitutional crisis. Passed by Congress in 1935, the NLRA guaranteed the right of workers to organize unions both in businesses operating in interstate commerce and in businesses whose activities affected interstate commerce and prohibited employers from dismissing or otherwise discriminating against their employees because of union membership or activities.

Commonly regarded as the most radical of the legislation enacted by Congress during President Franklin D. Roosevelt's New Deal, the NLRA was regarded at its passage as being of dubious constitutionality. In previous cases, the Court had held that liberty of contract (see Contract, Freedom of) was protected by the Due Process Clause of the Fifth Amendment and that under liberty of contract employers and employees had the right to bargain free of governmental interference. The Court had also held that labor relations associated with manufacturing or production enterprises only affected interstate commerce indirectly and were thus beyond the legitimate scope of congressional power under the Commerce Clause. The NLRA had been applied to employer‐employee relations at Jones & Laughlin's Aliquippa, Pennsylvania, plant, where steel and steel products were manufactured.

Frustrated by the Supreme Court's invalidation of much of the New Deal legislation passed by Congress from 1933 to 1936, President Roosevelt in early 1937 sought legislation authorizing him to appoint additional justices to the Court in order to obtain a pro‐New Deal majority. The key issue that spurred the introduction of this so‐called court‐packing plan was the disagreement between the Supreme Court and the president and Congress over the scope of national power to regulate the economy, with the Court construing such power narrowly, while the President and Congress construed it broadly (see Delegation of Powers). The issue was presented to the Court in the Jones & Laughlin case, which was argued less than a week after Roosevelt had proposed the court‐packing plan.

Dissenting in the Jones & Laughlin cases, Justices George Sutherland, Pierce Butler, Willis Van Devanter, and James McReynolds called for invalidation of the NLRA on both liberty of contract and Commerce Clause grounds. Only a year previously, both Chief Justice Charles Evans Hughes and Justice Owen Roberts had also endorsed the view that labor relations associated with production enterprises were local in nature and affected interstate commerce only indirectly. Yet both Hughes and Roberts voted to uphold the NLRA in the Jones & Laughlin case, and many observers felt that they had shifted their views because of the court‐packing plan.

In his opinion for the Court, Hughes brushed aside the due process and liberty of contract objections to governmental protection of the right of workers to organize unions. Hughes additionally held that the national government could legitimately protect the right of workers in manufacturing and production enterprises to organize and join unions as a means of preventing strikes in those enterprises that would affect interstate commerce. In effect, the Court abandoned the indirect effects test of the validity of Commerce Clause measures and instead adopted what is still the accepted view that, under the Commerce Clause, Congress can reach and regulate not only interstate commerce itself but also any activity affecting commerce, whether directly or indirectly. By upholding the validity of the NLRA on this basis, the Court signaled that it would no longer veto the national government's attempts to regulate the economy, thereby removing the principal reason for the Roosevelt court‐packing plan, which was eventually defeated in the Congress.

See also Commerce Power; History of the Court: The Depression and the Rise of Legal Liberalism; Labor.

Bibliography

Richard C. Cortner , The Wagner Act Cases (1964).

Richard C. Cortner