## Facts

- Jones & Laughlin Steel Corporation operated a large steel enterprise with extensive interstate shipments and business activities.
- Employees affiliated with a labor union filed charges alleging the company interfered with employee self-organization and collective bargaining.
- The National Labor Relations Board found the company discriminated against union members in hiring and tenure and coerced and intimidated employees to deter union activity.
- The Board ordered the company to cease the unfair labor practices, reinstate ten discharged employees, and provide back pay to remedy lost wages.
- The company refused to comply, asserting the National Labor Relations Act (NLRA) was unconstitutional as applied to labor relations at a Pennsylvania plant characterized as local manufacturing activity.
- The court of appeals denied enforcement of the Board’s order, concluding it exceeded federal power.
- The Supreme Court granted review to determine the Act’s constitutionality and the Board’s authority to issue the order.

## Issues

1. Whether Congress may, under the Commerce Clause, regulate labor and employment practices that are local in form when they bear a close and substantial relation to interstate commerce.
2. Whether the NLRA’s collective-bargaining framework and Board procedures violate the Fifth Amendment’s Due Process Clause.

## Decision

- The Supreme Court reversed the court of appeals and upheld the NLRA as applied to Jones & Laughlin.
- The Court held Congress may regulate intrastate activities when their control is essential or appropriate to protect interstate commerce from burdens and obstructions, and this includes labor practices that can precipitate labor disputes disrupting commerce.
- The Court concluded the unfair labor practices found by the Board sufficiently affected interstate commerce given the company’s role in interstate steel production and distribution.
- The Court rejected the due process challenge and sustained the Act’s remedial and procedural scheme.

## Legal Principles

- Congress may regulate intrastate conduct that has such a close and substantial relation to interstate commerce that regulation is essential or appropriate to protect commerce from burdens and obstructions.
- The commerce power does not reach effects on interstate commerce that are indirect and remote; the constitutional inquiry turns on degree and practical effect.
- Labor disputes and employer practices that induce industrial strife may constitute burdens or obstructions to the free flow of interstate commerce and may be regulated when the enterprise’s operations link those disputes to commerce.
- Employee organization and selection of bargaining representatives may be protected by federal law where anti-union discrimination and coercion threaten commerce by increasing the risk of production stoppages.
- The NLRA is construed to apply where there is a real and substantial relation to interstate commerce, rather than to all employment relations in purely local enterprises.

## Conclusion

The Court sustained federal authority to regulate labor relations in a large manufacturing enterprise when employer interference with union activity poses a substantial threat to the flow of interstate commerce, and it upheld the NLRA’s procedures and remedies against due process objections.


Nat'l Labor Relations Bd. v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937)