Landmark Supreme Court Case: NLRB v. Jones & Laughlin (1937)
NLRB v. Jones & Laughlin (1937) is the 70th landmark Supreme Court case, the 32nd in the Economics module, featured in the KTB Prep American Government and Civics series designed to acquaint users with the origins, concepts, organizations, and policies of the United States government and political system. The goal is greater familiarization with the rights and obligations of citizenship at the local, state, national, and global levels and the history of our nation as a democracy. While there is overlap, these landmark cases are separated into cases addressing:
- Foreign Policy
- Science & Technology
- Public Safety
- Death Penalty
- Speech, Press, and Protest
- Criminal Justice
- Politics, Society, Freedom, and Equality
The Supreme Court
The Supreme Court is the highest court in the United States. Article III of the U.S. Constitution created the Supreme Court and authorized Congress to pass laws establishing a system of lower courts. The Constitution elaborated neither the exact powers and prerogatives of the Supreme Court nor the organization of the Judicial Branch as a whole. Thus, it has been left to Congress and to the Justices of the Court through their decisions to develop the Federal Judiciary and a body of Federal law.
The number of Justices on the Supreme Court changed six times before settling at the present total of nine in 1869. Since the formation of the Court in 1790, there have been only 17 Chief Justices* and 102 Associate Justices, with Justices serving for an average of 16 years. On average a new Justice joins the Court almost every two years.
The Supreme Court of the United States hears about 100 to 150 appeals of the more than 7,000 cases it is asked to review every year. That means the decisions made by the 12 Circuit Courts of Appeals across the country and the Federal Circuit Court are the last word in thousands of cases.
Court of Appeals
In the federal court system’s present form, 94 district level trial courts and 13 courts of appeals sit below the Supreme Court. The 94 federal judicial districts are organized into 12 regional circuits, each of which has a court of appeals. The appellate court’s task is to determine whether or not the law was applied correctly in the trial court. Appeals courts consist of three judges and do not use a jury.
The appellate courts do not retry cases or hear new evidence. They do not hear witnesses testify. There is no jury. Appellate courts review the procedures and the decisions in the trial court to make sure that the proceedings were fair and that the proper law was applied correctly.
A court of appeals hears challenges to district court decisions from courts located within its circuit, as well as appeals from decisions of federal administrative agencies. In addition, the Court of Appeals for the Federal Circuit has nationwide jurisdiction to hear appeals in specialized cases, such as those involving patent laws, and cases decided by the U.S. Court of International Trade and the U.S. Court of Federal Claims.
The nation’s 94 trial courts are called U.S. District Courts. At a trial in a U.S. District Court, witnesses give testimony and a judge or jury decides who is guilty or not guilty — or who is liable or not liable. District courts resolve disputes by determining the facts and applying legal principles to decide who is right.
Trial courts include the district judge who tries the case and a jury that decides the case. Magistrate judges assist district judges in preparing cases for trial. They may also conduct trials in misdemeanor cases.
There is at least one district court in each state, and the District of Columbia. Each district includes a U.S. bankruptcy court as a unit of the district court.
Federal courts have exclusive jurisdiction over bankruptcy cases involving personal, business, or farm bankruptcy. This means a bankruptcy case cannot be filed in state court. Bankruptcy Appellate Panels (BAPs) are 3-judge panels authorized to hear appeals of bankruptcy court decisions. These panels are a unit of the federal courts of appeals, and must be established by that circuit. Five circuits have established panels: First Circuit, Sixth Circuit, Eighth Circuit, Ninth Circuit, and Tenth Circuit.
NLRB v. Jones & Laughlin (1937)
With the National Labor Relations Act (NLRA) of 1935, Congress determined that labor-management disputes were directly related to the flow of interstate commerce and, thus, could be regulated by the national government. Jones & Laughlin Steel, the fourth largest steel producer in the United States, was charged with discriminating against workers who wanted to join the Steel Workers Organizing Committee (SWOC). The company had fired ten employees at its plant in Aliquippa, Pennsylvania, after they moved to unionize.
The NLRB ruled against the company and ordered that the workers be rehired and given back pay, but Jones & Laughlin refused to comply on the grounds and believed the Act to be unconstitutional. Citing Supreme Court precedent, lower courts agreed.
Q: Was the NLRA consistent with the Commerce Clause?
A: Yes. The national government has power under the Commerce Clause to regulate labor relations.
5-4 decision holding Congress had the power, under the Commerce Clause, to regulate labor relations. Also, companies cannot discriminate against employees for exercising their fundamental right to unionize. The case represented a major expansion in the Court’s interpretation of Congress’s power under the Commerce Clause and effectively spelled the end to the Court’s striking down of New Deal economic legislation.
Any significant effect (direct or indirect) on interstate commerce allows Congress to regulate an activity under the Commerce Clause. The NLRA was narrowly constructed so as to regulate industrial activities which had the potential to restrict interstate commerce. The opinion was limited to exclude situations in which an activity had such an inconsequential or remote impact on interstate commerce that it exclusively impacted local matters.
While the manufacturing process or relationships between labor and management may not have a direct impact on the flow of goods, they have an aggregate impact on commerce. In this case, the potential secession of manufacturing activity due to conflicts between management and labor could potentially impede interstate commerce.
Next Economics Case: U.S. v. Carolene Products (1938)
Previous Economics Case: Steward Machine v. Davis (1937)
Next Case: De Jonge v. Oregon (1937)