NLRB v. Fain-Blatt
Headline: Court upholds labor board authority over a small New Jersey contract garment shop, allowing enforcement of union-protection orders even though the employer does not itself engage in interstate commerce.
Holding:
- Allows NLRB to regulate small contract manufacturers whose operations touch interstate shipments.
- Enables enforcement of orders requiring reinstatement and banning employer anti-union actions.
- Means volume of interstate trade does not limit Board jurisdiction.
Summary
Background
A small business called Somerset Manufacturing Company in Somerville, New Jersey, processed cloth and made women's sports garments under contract for Lee Sportswear Company of New York. Raw materials were shipped from New York and from mills outside New Jersey to Somerset, and finished garments were sent back to New York or to customers around the country. The National Labor Relations Board found the employer committed unfair labor practices, that those practices led to a strike of 34 workers in September 1935, and that output and shipments fell sharply. The Board ordered the employer to stop the unfair practices and to reinstate some workers; a federal appeals court refused to enforce that order.
Reasoning
The Court addressed whether the National Labor Relations Act reaches an employer who does not itself carry on interstate commerce but processes goods that move across state lines. The Justices held that transportation across state lines is interstate commerce and that Congress intended the Act to cover unfair practices that have led or tend to lead to labor disputes burdening that commerce. The Court explained volume of shipments does not limit Congress’s power and that the proper test is whether the employer’s relationship to interstate shipments makes labor disputes likely to obstruct the flow of commerce. Because the Board’s findings showed a strike and a large drop in output, the Court found Board jurisdiction supported and reversed the appeals court.
Real world impact
The decision allows the Board to enforce orders protecting workers and unions at small contract manufacturers whose work involves materials or products that move between states, even if the interstate shipments are not large.
Dissents or concurrances
A dissent warned this reasoning expands federal power over many local businesses and threatens traditional state control over local industry.
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