National Labor Relations Board v. Jones & Laughlin Steel Corp.

The National Labor Relations Act was generally regarded as the most radical of Franklin Roosevelt's New Deal proposals. In upholding it, the Supreme Court gave a clear signal that it was abandoning its previous allegiance to the concept of freedom of contract, empowering organized labor.

The National Labor Relations Act of 1935 (NLRA) was the most daring part of President Franklin Roosevelt's attempt to combat the severe economic woes of the Great Depression with a loose collection of legislation he called the New Deal. The New Deal, which gave Congress unprecedented control of the economy, was based on the power given Congress in Article I, section 8 of the Constitution to "regulate Commerce . . . among the several states." For decades, the Supreme Court had curtailed Congress's power under the Commerce Clause, emphasizing instead a laissez faire approach to economic matters--that is, letting the market take care of itself, free from government intervention. The cornerstone of this philosophy was freedom of contract, which the Court said was protected by the Due Process Clause of the Fifth Amendment, which says that "No person shall be . . . deprived of life, liberty, or property, without due process of law." Nothing would seem to be more opposed to the Court's exalted conception of the right of employers and employees to bargain free of government interference than legislation designed to protect labor unions.

In the mid-1930s, relations between Jones & Laughlin Steel Corporation and the employees at its Aliquippa, Pennsylvania, plant were disintegrating. Alleging that Jones & Laughlin was engaging in unfair labor practices such as discriminating against union members in hiring and firing, Local 200 of the Amalgamated Association of Iron, Steel, and Tin Workers of America filed a complaint with the National Labor Relations Board (NLRB), the agency charged with enforcing the NLRA. The NLRB upheld the complaint and ordered the corporation to cease its unfair practices. When Jones & Laughlin refused to comply, the NLRB petitioned the Fifth Circuit Court of Appeals to enforce the order. The circuit court, however, claimed that the order exceeded the bounds of federal power, and declined to enforce it. The NLRB then looked to the U.S. Supreme Court.

Prior to 1937, Roosevelt and the Supreme Court had done battle over the New Deal, with the Court striking down virtually every important piece of legislation designed to alleviate the Great Depression by regulating the economy. In 1937, however, Roosevelt brought about a constitutional crisis by developing a plan to "pack" the Court with enough justices of his own choosing to override what had been the majority's opposition to the New Deal. The court-packing plan ultimately failed to pass in Congress, but it did succeed in persuading at least two members of the Court, Chief Justice Hughes and Roberts, to reorient their attitudes towards Roosevelt's program. On 12 April 1937, less than a week after Roosevelt announced his court-packing plan, the Supreme Court handed down five decisions sustaining the constitutionality of the NLRA.