Article I, Section 8, Clause 3:
[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .
In NLRB v. Jones & Laughlin Steel Corporation, the Court reduced the distinction between direct
and indirect
effects, thereby enabling Congress to regulate productive industry and labor relations.1 The National Labor Relations Act (NLRA) of 19352 granted workers a right to organize, forbade unlawful employer interference with this right, established procedures for workers to select representatives with whom employers were required to bargain, and created a board to oversee these processes.3
In an opinion by Chief Justice Charles Hughes, the Court upheld the NLRA, stating: The close and intimate effect, which brings the subject within the reach of federal power may be due to activities in relation to productive industry although the industry when separately viewed is local.
4 Considering defendant’s far-flung activities,
5 the Court expressed concern about strife between the industry and its employees, stating:
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. 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 commerce from the paralyzing consequences of industrial war? We have often said that interstate commerce itself is a practical conception. It is equally true that interferences with that commerce must be appraised by a judgment that does not ignore actual experience.6
The Court held the NLRA to be within Congress’s constitutional powers because a strike that interrupted business might be catastrophic.
7 The Court also held that the NLRA applied to (1) two minor concerns,8 (2) a local retail auto dealer on the ground that he was an integral part of a manufacturer’s national distribution system,9 (3) a labor dispute arising during alteration of a county courthouse because one-half of the cost was attributable to materials shipped from out-of-state,10 and (4) a dispute involving a local retail distributor of fuel oil that it obtained from a wholesaler who imported it from another state.11 The Court stated: This Court has consistently declared that in passing the National Labor Relations Act, Congress intended to and did vest in the Board the fullest jurisdictional breadth constitutionally permissible under the Commerce Clause.
12 Thus, the Court implicitly approved the National Labor Relations Board’s jurisdictional standards, which assumed a prescribed dollar volume of business had a requisite effect on interstate commerce.13