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In 1935, Congress passed the National Labor Relations Act, which protected private workers’ right to form labor unions. The act provided for the creation of the National Labor Relations Board (NLRB), an agency charged with overseeing collective bargaining and investigating unfair labor practices.
The NLRB received a complaint against Jones & Laughlin Steel Corporation, a Pennsylvania-based steel company with a massive workforce. The complaint alleged that Jones had wrongfully terminated a number of workers based on their leadership in the local labor union.
After a hearing, the NLRB determined Jones had discriminated against the employees. The board ordered the company to rehire the workers and pay them back wages.
Jones refused and challenged the order in federal court. Ultimately, the United States Supreme Court took up the case to determine whether Congress had authority under the Commerce Clause to pass the National Labor Relations Act.
In a split decision, the Court narrowly held that Congress had the power to pass laws governing labor disputes, provided those disputes had a sufficient nexus with interstate commerce. In so doing, the Court shifted the focus of its Commerce Clause jurisprudence away from the type of activity being regulated to focus on the impact the activity had on interstate commerce.