NLRB+v+Jones+and+Laughlin+Steel++Corp+_1937_

NLRB+v+Jones+and+Laughlin+Steel++Corp+_1937_ - National...

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Unformatted text preview: National Labor Relations Board v Jones & Laughlin Steel Corp. The Parrish decision did not involve any fundamental shift in judi— cial attitudes toward governmental power. It simply reversed the Adkins precedent, which was anachronistic even in its own time. But a few weeks later,'perhaps under the pressures of Franklin D. Roosevelt’s attacks and public opinion, the Court significantly altered _ its stand on federal regulation of production. In 1985, Congress had passed the National Labor Relations Act, guaranteeing labor the right to organize and bargain collectively. Elaborate federal admin- istrative machinery was established to prevent employers from en- gaging in unfair labor practices. The law was predictably challenged as a regulation of production. Although Chief Justice Hughes did not specifically overrule the recent and embarrassing Schechter and Carter precedents, he did revive the line of commerce clause deci- sions from Swift v. United States through the liberal decisions of the 1920’s. Following the Jones 8: Laughlin case, there were a number of unsuccessful attempts by employers to challenge the law where it was applied to smaller, more local industries. (See, for example, N.L.R.B. v. Friedman-Harry Marks Clothing Company, 301 US. 58 [1937].) Chief Justice Hughes delivered the opinion of the Court. First. The scope of the Act. -— The Act is challenged in its entirety as an attempt to regulate all industry, thus invading the reserved powers ofthe States over their local concerns. It is asserted that the refer— ences in the Act to interstate and foreign commerce are colorable at best; that the Act is not a true regulation of such commerce or of matters which directly affect it but on the contrary has the fundamental object of placing under the compulsory supervision of the federal government all industrial labor relations Within the nation. The argument seeks support in the broad words of the preamble . . . and in the sweep of the provisions of the Act, and it is further insisted that its legislative history shows an essential universal purpose in the light of which its scope cannot be 301 U.»S. 1 (1.937) 394: National Labor Relations Board v. Jones 0 Laughlz’n Steel Corp. 395 limited by either construction or by the application of the separability clause. If this conception of terms, intent and consequent inseparability were sound, the Act would necessarily fall by reason of the limitation upon the federal power which inheres in the constitutional grant, as well as because of the explicit reservation of the Tenth Amendment. Schechter Corp. v. United States, 295 US. 495, 549, 550, 554. The authority of the federal government may not be pushed to such an extreme as to destroy the dis- tinction, which the commerce clause itself establishes, between commerce “among the several States” and the internal concerns of a State. That distinction between what is national and what is local in the activities of commerce is vital to the maintenance of our federal system. Id ..... We think it clear that the National Labor Relations Act may be con- strued so as to operate within the sphere of constitutional authority. The jurisdiction conferred upon the Board, and invoked in this instance, is found in § 10 (a), which provides: “SEC. 10 (a). The Board is empowered, as hereinafter provided, to prevent any person from engaging in any unfair labor practice (listed in section 8) affecting commerce.” The critical words of this provision, prescribing the limits of the Board’s authority in dealing with the labor practices, are “aifecting commerce.” The Act specifically defines the “commerce” to which it refers (§ 2 (6) ): “The term ‘commerce’ means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any Territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country.” There can be no question that the commerce thus contemplated by the Act (aside from that within a Territory or the District of Columbia) is interstate and foreign commerce in the constitutional sense. The Act also defines the term “aifecting commerce” (§‘ 2 (7)): “The term ‘aifecting commerce’ means 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.” ' This definition is one of exclusion as well as inclusion. The grant of authority to the Board does not purport to extend to the relationship be— tween all industrial employees and employers. Its terms do not impose collective bargaining upon all industry regardless of effects upon inter- state or foreign commerce. It purports to reach only what may be deemed 396 New Directions in Governmental Regulation to burden or obstruct that commerce and, thus qualified, it must be con- strued as contemplating the exercise of control Within constitutional bounds. It is a familiar Principle that acts which directly burden or ob- struct interstate or foreign commerce, or its free flow, are within the reach of the congressional power. Acts having that efiect are not rendered immune because they grow out of labor disputes. . It is the effect upon commerce, not the source of the injury, which is the criterion. . . Whether or not particular action does affect commerce in such a close and intimate fashion as to be subject to federal control, and hence to lie Within the authority conferred upon the Board, is left by the statute to be determined as individual cases arise. We are thus to inquire Whether in the instant case the constitutional boundary has been passed. Second. The unfair labor practices in question—The unfair labor practices found by the Board are those defined in § 8, subdivisions (1) and (3). These provide: Sec. 8. It shall be an unfair labor practice for an employer -— “(1) To interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” , “(3) By discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage mem- bership in any labor organization: . . ” Section 8, subdivision (1), refers to § 7, which is as follows: “SEC. 7. Employees shall have the right to self—organization, to form, join, or assist labor organizations, to bargain collectively through repre— sentatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection.” Thus, in its present application, the statute goes no further than to safe- guard the right of employees to self—organization and to select represent- atives of their own choosing for collective bargaining or other mutual protection Without restraint or coercion by their employer. That is a fundamental right. Employees have as clear a right to organ- ize and select their representatives for lawful purposes as the respondent has to organize its business and select its own officers and agents. Dis- crimination and coercion to prevent the free exercise of the right of em- ployees to self—organization and representation is a proper subject for condemnation by competent legislative authority. Long ago we stated the reason for labor organizations. We said that they were organized out of the necessities of the situation; that a single employee was helpless in dealing with an employer; that he was dependent ordinarily on his daily wage for the maintenance of himself and family; that if the employer refused to pay him the wages that he thought fair, he was nevertheless unable to leave the employ and resist arbitrary and unfair treatment; that union was essential to give laborers opportunity to deal on an equality National Labor Relations Board v. Jones b Laughlin Steel Corp. 397 with their employer. . . . 'Fully recognizing the legality of collective ac- tion on the part of employees in order to safeguard their proper interests, we [have] said that Congress was not required to ignore this right but could safeguard it. Congress could seek to make appropriate collective action of employees an instrument of peace rather than of strife. We said that such collective action would be a'mockery if representation were made futile by interference with freedom of choice. Hence the prohibition by Congress of interference with the selection of representatives for the purpose of negotiation and conference between employers and employees, “instead of being an invasion of the constitutional right of either, was based on the recognition of the rights of both.” . . . Third. The application of the Act to employees engaged in production. —-- The principle involved. - Respondent says that whatever may be said of employees engaged in interstate commerce, the industrial relations and activities in the manufacturing department of respondent’s enterprise are not subject to federal regulation. The argument rests upon the proposition that manufacturing in itself is not commerce. . . . Schechter Corp. v. United States . . . ; Carter v.Carter CoalC’o. . . . The Government distinguishes these cases. The various parts of re— spondent’s enterprise are described as interdependent and as thus involv— ing ' “a great movement of iron ore, coal and limestone along well-defined paths to the steel mills, thence through them, and thence in the form of steel products into the consuming centers of the country—— a definite and well—understood course of business.” It is urged that these activities constitute a “stream” or “flow” of com- merce, of which the Aliquippa manufacturing plant is the focal point, and that industrial strife at that point would cripple the entire movement. Reference is made to our decision sustaining the Packers and Stockyards Act. Stafford v. Wallace, 258 US. 495. The Court found that the stock— yards were but a “throat” through which the current of commerce flowed and the transactions which there occurred could not be separated from that movement. Hence the sales at the stockyards were not regarded as merely local transactions, for while they created “a local change of title” they did not “stop the flow,” but merely changed the private interests in the subject of the current. Distinguishing the cases which upheld the power of the State to impose a nondiscriminatory tax upon property which the owner intended to transport to another State, but which was not in actual transit and was held within the State subject to the disposi- tion of the owner, the Court remarked: "The question, it should be observed, is not with respect to the extent of the power of Congress to regulate interstate commerce, but whether ' a particular exercise of state power in View of its nature and operation must be deemed to be in conflict with this paramount authority.”- . . . 398 New Directions in Governmental Regulation Respondent contends that the instant case presents material distinctions. Respondent says that the Aliquippa plant is extensive in size and repre- 'sents a large investment in buildings, machinery and equipment. The raw materials which are brought to the plant are delayed for long periods and, after being subjected to manufacturing processes, “are changed sub- stantially as to character, utility and value.” The finished products which emerge “are to a large extent manufactured Without reference to pre- existing orders and contracts and are entirely different from the raw ma- terials which enter at the other end.” Hence respondent argues that “If importation and exportation in interstate commerce do not singly transfer purely local activities into the field of congressional regulation, it should follow that their combination would not alter the local situation.” . . . We do not find it necessary to determine whether these features of de— fendant’s business dispose of the asserted analogy to the “stream of commerce” cases. The instances in which that metaphor has been used are but particular, and not exclusive, illustrations of the protective power which the Government invokes in support of the present Act. The con- gressional 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 ad— vancement” . . . 5 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. . . . Undoubtedly the scope of 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, in view of our complex society, would 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. . That intrastate activities, by reason of close and intimate relation to interstate commerce, may fall within federal'control is demonstrated in I the case of carriers who are engaged in both interstate and intrastate transportation. There federal control has been found essential to secure the freedom of interstate traffic from interference or unjust discrimination and to promote the efiiciency of the interstate service. Shreveport Case, National Labor Relations Board v. Jones i7 Laughlin Steel Corp. 399 234 U.S. 342, 351, 352. . .. . It is manifest that intrastate rates deal pri- marily with a local activity. But in rate-making they bear such a close rela- tion to interstate rates that eifective control of the one must embrace some control over the other. . . . Under the Transportation Act, 1920, Con- gress went so far as to authorize the Interstate Commerce Commission to establish a state-wide level of intrastate rates in order to prevent an unjust discrimination against interstate commerce. . . . The close and intimate effect which brings the subject within the reach of federal power may be due to activities in relation to productive indusin although the industry when separately viewed is local. This has been abundantly illustrated in the application of the federal Anti-Trust Act. In the Standard Oil and American Tobacco cases, 221 U.S. 1, 106, that statute was applied to combinations of employers engaged in productive industry. . . . Upon the same principle, the Anti-Trust Act has been applied to the conduct of employees engaged in production. . . . It is thus apparent that the fact that the employees here concerned were engaged in production is not determinative. The question remains as to the effect upon interstate commerce of the labor practice involved. In the Schechter case, supra, we found that the effect there was so remote as to be beyond the federal power. To find “immediacy or directness” there was to find it “almost everywhere,” a result inconsistent with the maintenance of our federal system. . . . Fourth. Effects of the unfair labor practice in respondent’s enterprise. ——- 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 eifect 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. Because there may be but indirect and remote effects upon interstate commerce in connection with a host of local enterprises throughout the country, it does not follow that other industrial activities do not have such a close and intimate relation to interstate commerce as to make the presence of indus- trial strife a matter of the most urgent national concern. When industries , organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate com— merce from the paralyzing consequences of industrial war? We have often said that interstate commerce itself is a practical conception. It is 400 New Directions in Governmental Regulation equally true that interferences with that commerce must be appraised by a judgment that does not ignore actual experience. Experience has abundantly demonstrated 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. Refusal to confer and negotiate has been one of the most prolific causes of strife. . . . These questions have frequently engaged the attention of Congress and have been the subject of many inquiries. The steel industry is one of the great basic industries of the United States, with ramifying activities affect— ing interstate commerce at every point. The Government aptly refers to the steel strike of 1919—1920 with its far-reaching consequences. The fact that there appears to have been no major disturbance in that industry in the more recent period did not dispose of the possibilities of future and like dangers to interstate commerce which Congress was entitled to fore- see and to exercise its protective power to forestall. It is not necessary again to detail the facts as to respondent’s enterprise. Instead of being beyond the pale, we think that it presents in a most striking way the close and intimate relation which a manufacturing industry may have to inter- state commerce and we have no doubt that Congress had constitutional authority to safeguard the right of respondent’s employees to self-organ- ization and freedom in the choice of representatives for collective bar- gaining. Fifth. The means which the Act employs. — Questions under the due process clause and other constitutional restrictions. —- Respondent asserts its right to conduct its business in an orderly manner without being sub- jected to arbitrary restraints. What we have said points to the fallacy in the argument. Employees have their correlative right to organize for the purpose of securing the redress of grievances and to promote agreements with employers relating to rates of pay and conditions of work. . . . Be- straint for the purpose of preventing an unjust interference with that right cannot be considered arbitrary or capricious. . . . The Act does not compel agreements between employers and em- ployees. It does not compel any agreement whatever. It does not prevent the employer “from refusing to make a collective contract and hiring in- dividuals on whatever terms” the employer “may by unilateral action determine.” T...
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