The Hughes Court ruled that the National Labor Relations Act (NLRA) was constitutional in its 1937 decision National Labor Relations Board v. Jones & Laughlin Steel Corp. The decision involved the nation’s fourth largest steel producer, Jones & Laughlin, which had plants in Pennsylvania.

Federal officials charged that the company violated the NLRA by firing workers who had organized fellow workers into a union. The NLRA prohibited such activity as an unfair labor practice. Attorneys for the steel producer contended that the NLRA amounted to an unconstitutional expansion of congressional power. They contended that the law invaded the reserved powers of the individual states.

The Court ruled that act constitutional by a 5–4 vote, determining that the actions at the plant affected interstate commerce. “The steel industry is one of the great basic industries affecting interstate commerce at every point,” Chief Justice Charles Evans Hughes wrote. “When industries organize themselves on a national scale, making their relating 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.”

In his dissenting opinion, Justice James C. McReynolds wrote, “Whatever effect any cause or discontent may ultimately have upon commerce is far too indirect to justify congressional regulation. Almost anything—marriage, birth, death—may in some fashion affect commerce.”