National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1; 57 S. Ct. 615; 81 L. Ed. 893 (1937)

Facts—In a proceeding under the National Labor Relations Act of 1935, the National Labor Relations Board found that the Jones & Laughlin Steel Corporation had violated the act by engaging in unfair labor practices. The unfair labor practices included discriminating against the members of the union with regard to hiring and tenure of employment and coercing and intimidating its employees. The National Labor Relations Board tried to enforce the provisions of the act, and the corporation failed to comply. The Circuit Court of Appeals refused to enforce the order of the board, holding that the order lay beyond the range of federal power.

Question—Can Congress regulate labor relations under its interstate commerce power?

Decision—Yes.

Reasons—C.J. Hughes (5–4). “The fundamental principle is that the power to regulate commerce is the power to enact ‘all appropriate legislation’ for its protection or advancement; . . . to adopt measures ‘to promote its growth and insure its safety’ . . . ‘to foster, protect, control and restrain.’ . . . That power is plenary and may be exerted to protect interstate commerce ‘no matter what the source of the dangers which threaten it.’ . . . 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. The fact remains that the stoppage of those operations by industrial strife would have a most serious effect upon interstate commerce. In view of respondent’s far-flung activities, it is idle to say that the effect would be indirect or remote. It is obvious that it would be immediate and might be catastrophic. 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.”

The cardinal principle of statutory construction is to save and not to destroy. The Court has repeatedly held that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, its plain duty is to adopt that which will save the act. The main purpose of the act was to obstruct interference with the flow of interstate commerce.

The steel industry is one of the great basic industries of the United States, affecting interstate commerce at every point. The steel strike of 1919–1920 had far-reaching consequences. The fact that there appeared to have been no major disturbance in this case, did not dispose of the possibilities of the future. Congress had constitutional authority to safeguard the right of the employees to self-organization and freedom in the choice of representatives for collective bargaining.

J. McReynolds authored a dissent in a companion case, pointing to the Court’s departure from well-established precedents that distinguished be- tween regulations of production and of subsequent commerce and between the regulation of industries that have a direct effect and those that have only an indirect effect on interstate commerce.

Note—Jones & Laughlin Steel and West Coast Hotel v. Parrish (1937) pointed to a shift to a more governmentally regulated industrial economy. The underpinnings of Carter v. Carter Coal Co., 298 U.S. 238 (1936), were reversed.