U.S. Supreme Court Consolidated Edison Co. v. Labor
Board, 305
U.S. 197 (1938) Consolidated Edison Co. v. National
Labor Relations Board No. 19 Argued October 14, 17,
1938 Decided December 5, 1938 305
U.S. 197 ast|>* 305
U.S. 197 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SECOND
CIRCUIT Syllabus 1. The power of the Federal Government and the provisions of the
National Labor Relations Act extend to the labor relations of
public utilities engaged in supplying electrical energy, gas, and
steam where the business and activities of the utilities are wholly
within a State and where the quantum of service rendered to
customers for strictly intrastate uses is vast and greatly
preponderant, but where, nevertheless, a part of that service, of
much importance in itself, is to railroads, steamships,
telegraphs, Page 305 U. S. 198 telephones, etc., engaged in interstate or foreign commerce, and
where that commerce would be seriously affected if such service
were cut off by industrial strife between the utilities and their
employees resulting from unfair labor practices. P. 305 U. S.
219 .

															Petitioners, an integrated system of public utilities, are
engaged in supplying electric energy, gas, and steam (and certain
byproducts) within New York City and adjacent Westchester County.
They serve over 3,500,000 customers with electricity and gas,
largely for residential and domestic purposes. In 1936, they
supplied about 97.5 percent. of the total electric energy sold in
the City, and about 100 percent. of that sold in the County. They
do not sell for resale without the State. They have about 42,000
employees, their total payrolls in 1936, with retirement annuities
and separation allowances, amounting to nearly $82,000,000. There
is also impressive evidence of the dependence of interstate and
foreign commerce upon the continuity of the service of the
petitioning companies. Upon that service depend: three railroad
companies for the lighting and operation of passenger and freight
terminals, and for the movement of interstate trains; the Port of
New York Authority for the operation of its terminal and a tunnel
between New York and New Jersey; a majority of the piers of
transatlantic and coastwise steamship companies along the North and
East Rivers, within the City of New York, for lighting, freight
handling and related uses; two telegraph companies and a telephone
company for power for transmitting and receiving messages, local
and interstate; also a transatlantic radio service; an airport, and
the Federal Government, for operation of lighthouses, beacons, and
harbor lights and for light, heat and power in various federal
buildings in New York City. In passing upon the status of these
petitioners with respect to the federal power of regulation, the
Court does not consider supplies of oil, coal, etc., although very
large, which come from without the State and are consumed in the
generation and distribution of electric energy and gas.

															2. The criterion of the federal constitutional power to suppress
unfair labor practices under the National Labor Relations Act is
the injurious effect upon interstate and foreign commerce, rather
than the source of the injury. P. 305 U. S.
222 .

															3. Whether or not particular action in the conduct of intrastate
enterprises affects interstate or foreign commerce in such a close
and intimate fashion as to be subject to federal control depends
upon the particular case. P. 305 U. S.
222 .

															4. The fact that a State has the power, and has enacted a
statute, to regulate the labor relations of intrastate enterprises
in order Page 305 U. S. 199 to prevent interruption of their services through industrial
disputes cannot affect the constitutional power of the Federal
Government to regulate those relations in order to protect
interstate and foreign commerce from the injury due to such
interruption. P. 305 U. S.
222 .

															5. But where, in such cases, the authority of the National Labor
Relations Board is invoked to protect interstate and foreign
commerce from interference or injury arising from the employers'
intrastate activities, the question whether the alleged unfair
labor practices do actually threaten interstate or foreign commerce
in a substantial manner is necessarily presented. And, in
determining that factual question, regard should be had to all the
existing circumstances, including the bearing and effect of any
protective action to the same end already taken under state
authority. The justification for the exercise of federal power
should clearly appear. But the question in such a case would relate
not to the existence of the federal power, but to the propriety of
its exercise on a given state of facts. P. 305 U. S.
223 .

															The present proceeding was begun before the New York Labor
Relations Act became effective, and there was no exertion of state
authority which could be taken to remove the need for the exertion
of federal authority to protect interstate and foreign commerce.
The exercise of the federal power to protect interstate and foreign
commerce from injury does not depend upon a clash with state
action, and need not await the exercise of state authority.

															6. Amendments to the complaint in a proceeding before the
National Labor Relations Board held discretionary rulings
affording no ground for challenging the validity of the hearing. P. 305 U. S.
224 .

															7. A refusal by the National Labor Relations Board to permit the
respondent employers to adduce certain additional testimony, highly
important, which could have been received without undue delay held unreasonable and arbitrary. P. 305 U. S.
225 .

															8. Where the National Labor Relations Board, in abuse of its
discretion, refuses to receive important additional testimony which
could have been received without undue delay of the proceeding, the
injured party has his remedy by application to the Circuit Court of
Appeals, upon review of the order, for leave to adduce the
additional evidence under § 10(e)(f) of the Act. P. 305 U. S.
226 .

															9. After the taking of the evidence by a trial examiner, in a
case under the National Labor Relations Act, the employers filed a
brief with him. Several weeks later, the case was transferred to
the Board. The examiner made no tentative report or findings, Page 305 U. S. 200 and there was no opportunity for a hearing before the Board
itself before the Board made its decision. Held: (1) That it must be assumed that the Board received and
considered the brief. P. 305 U. S.
226 .

															(2) Under the rules of the Board, the employers desiring an oral
hearing should have requested it after the transfer to the Board.
P. 305 U. S.
228 .

															(3) Though it cannot be said on this record that the Board did
not consider the evidence or the petitioner's brief or failed to
make its own findings in the light of that evidence and argument,
it would have been better practice for the Board to have directed
the examiner to make a tentative report with an opportunity for
exceptions and argument thereon. P. 305 U. S.
228 .

															10. In providing that "the findings of the Board as to the
facts, if supported by evidence, shall be conclusive," the Act
means supported by substantial evidence -- such evidence as a
reasonable mind might accept as adequate to support a conclusion.
P. 305 U. S.
229 .

															The statute provides that "the rules of evidence prevailing in
courts of law and equity shall not be controlling." The obvious
purpose of this and similar provisions is to free administrative
boards from the compulsion of technical rules, so that the mere
admission of matter which would be deemed incompetent in judicial
proceedings would not invalidate the administrative order. But this
assurance of a desirable flexibility in administrative procedure
does not go so far as to justify orders without a basis in evidence
having rational probative force. Mere uncorroborated hearsay or
rumor does not constitute substantial evidence.

															11. The National Labor Relations Board is authorized to bar the
resumption of an unfair labor practice which has lately been
abandoned. P. 305 U. S.
230 .

															The Court is satisfied from the evidence in this case that the
order of the Board, insofar as it required employer companies to
desist from certain discriminating and coercive practices, and to
reinstate certain employees, with back pay, and to post notices
assuring freedom from discrimination and coercion, rested upon
findings sustained by the evidence, and that the decree of the
Court of Appeals enforcing the order in these respects should be
affirmed.

															12. In a proceeding in which the National Labor Relations Board
found employer companies guilty of unfair labor practices violating
§ 8(1) and (3) of the National Labor Relations Act, but exculpated
them from alleged violation of § 8(2), which makes it an Page 305 U. S. 201 unfair labor practice "to dominate or interfere with the
formation or administration of any labor organization or contribute
financial support to it," the Board nevertheless attempted, in its
order, to set aside agreements which had been made, pending the
proceeding, between the companies and a Brotherhood of workers and
its local unions, all independent organizations not under the
companies' control. These agreements stipulated that the
Brotherhood should be the collective bargaining agency of those of
the companies' employees who were its members (comprising 80% of
all the companies' employees out of 38,000 eligible for
membership), and that the Brotherhood and its members would not
intimidate or coerce employees into membership in the Brotherhood
or solicit membership on the time or property of the employers.
They also provided against strikes or lockouts, and for the
adjustment and arbitration of labor disputes, thus insuring against
the disruption of the service of the companies to interstate or
foreign commerce through an outbreak of industrial strife. It was
conceded that the contracts were fair to both employer and
employee. Held, that so much of the Board's order as forbade the
companies to give effect to such agreements was beyond its
authority. Pp. 305 U. S. 231 , 305 U. S.
238 .

															(1) The Brotherhood and its locals, having valuable and
beneficial interests in the contracts, were entitled to notice and
hearing before they could be set aside. Labor Board v.
Pennsylvania Greyhound Lines, 303 U.
S. 261 , distinguished. P. 305 U. S.
232 .

															(2) Notice of the complaint, in which the legality of the
companies' "relations" with the Brotherhood was attacked, but not
the validity of the contracts, did not place the unions under a
duty to intervene before the Board in order to safeguard their
interests in the contracts. P. 305 U. S.
234 .

															(3) The rule that due process does not require an opportunity to
be heard before judgment if defenses may be presented upon appeal
assumes that the appellate review affords opportunity to present
all available defenses, including lack of proper notice to justify
the judgment or order complained of. P. 305 U. S.
234 .

															(4) The validity of the contracts was not necessarily in issue
because of the charges of unfair labor practices in the Board's
complaint, and amendment of the companies' answer, stating that the
contracts had made the proceeding moot, did not put them in issue
before the Board. P. 305 U. S.
234 .

															(5) The Act gives no express authority to the Board to
invalidate contracts with independent labor organizations. The
authority Page 305 U. S. 202 granted by § 10(c) to require that an employer guilty of unfair
labor practices desist from such practices, and "take such
affirmative action, including reinstatement of employees with or
without back pay, as will effectuate the policies of this Act," is
remedial, not punitive, and is to be exercised in aid of the
Board's authority to restrain violations and as a means of removing
or avoiding the consequences of violation where those consequences
are of a kind to thwart the purposes of the Act. P. 305 U. S.
235 .

															Here, there is no basis for a finding that the contracts with
the Brotherhood and its locals were a consequence of the unfair
labor practices found by the Board, or that these contracts, in
themselves, thwart any policy of the Act, or that their
cancellation would in any way make the order to cease the specified
practices any more effective.

															(6) The contracts were not invalid because made during the
pendency of the Board's proceeding. P. 305 U. S.
237 .

															The effect of such pendency extends to the practices of the
employers to which the complaint was addressed. It did not suspend
the right of the employees to self-organization, or preclude the
Brotherhood, as an independent organization chosen by its members,
from making fair contracts on their behalf.

															(7) The contention of the Board that the contracts were the
fruit of the unfair labor practices of the employers -- "a device
to consummate and perpetuate" the companies' illegal conduct, and
constituted its culmination -- is rejected as entirely too broad
and as not within the complaint and proof, but based on mere
conjecture. P. 305 U. S.
238 .

															(8) A provision of the Board's order requiring the companies to
cease recognizing the Brotherhood "as the exclusive representative
of their employees" is construed as merely providing that there
shall be no interference with an exclusive bargaining agency if one
other than the Brotherhood should be established in accordance with
the provisions of the Act, and is sustained as merely an
application of existing law. P. 305 U. S.
239 .

															95 F.2d 390 affirmed with modification.

															Certiorari, 304 U.S. 555, to review a judgment enforcing an
order of the National Labor Relations Board. See 4
N.L.R.B. 71. The case was before the court below upon a petition to
set aside the order, brought by the Consolidated Edison Company of
New York and its affiliates, and a like petition by the
International Brotherhood Page 305 U. S. 203 of Electrical Workers and its locals, which intervened in that
court, and upon the Board's petition to enforce, supported by the
United Electrical and Radio Workers of America, which also
intervened in that court. Page 305 U. S. 217 MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.

															The United Electrical and Radio Workers of America, affiliated
with the Committee for Industrial Organization, filed a charge, on
May 5, 1937, with the National Labor Relations Board that the
Consolidated Edison Company of New York and its affiliated
companies were interfering with the right of their employees to
form, join, or assist labor organizations of their own choosing,
and were contributing financial and other support, in the manner
described, to the International Brotherhood of Electrical Workers,
an affiliate of the American Federation of Labor. The Board issued
its complaint, and the employing companies, appearing specially,
challenged its jurisdiction. On the denial of their request that
this question be determined initially, the companies filed answers
reserving their jurisdictional objections. After the taking of
evidence before a trial examiner, the proceeding was transferred to
the Board, which, on November 10, 1937, made its findings and
order.

															The order directed the companies to desist from labor practices
found to be unfair and in violation of §§ 8(1) and (3) of the
National Labor Relations Act, [ Footnote 1 ] directed reinstatement of six discharged
employees with back pay, and required the posting of notices to the
effect that the companies would cease the described practices and
that their employees were free to join or assist any labor
organization Page 305 U. S. 218 for the purpose of collective bargaining, and would not be
subject to discharge or to any discrimination by reason of their
choice. 4 N.L.R.B. 71.

															It appeared that, between May 28, 1937, and June 16, 1937, the
companies had entered into agreements with the International
Brotherhood of Electrical Workers and its local unions providing
for the recognition of the Brotherhood as the collective bargaining
agency for those employees who were its members and containing
various stipulations as to hours, working conditions, wages, etc.,
and for arbitration in the event of disputes. The Board found that
these contracts were executed under such circumstances that they
were invalid, and required the companies to desist from giving them
effect. Id. At the same time, the Board decided that the
companies had not engaged in unfair labor practices within the
meaning of § 8(2) of the Act. [ Footnote 2 ] That clause makes it an unfair labor practice
to

															"dominate or interfere with the formation or administration of
any labor organization or contribute financial or other support to
it."

															Accordingly, the order dismissed the complaint, so far as it
alleged a violation of § 8(2), without prejudice. Id. The companies petitioned the Circuit Court of Appeals to set
aside the order, and a petition for the same purpose was presented
by the Brotherhood and its locals. These labor organizations had
not been parties to the proceeding before the Board, but intervened
in the Circuit Court of Appeals as parties aggrieved by the
invalidation of their contracts. The Board, in turn, asked the
court to enforce the order. The United Electrical and Radio Workers
of America appeared in support of the Board. The court granted the
Board's petition. 95 F.2d 390. We issued writs of certiorari upon
applications of the companies (No.19) and of the Brotherhood and
its locals (No. 25). Page 305 U. S. 219 The questions presented relate (1) to the jurisdiction of the
Board; (2) to the fairness of the hearing; (3) to the sufficiency
of the evidence to sustain the findings of the Board with respect
to coercive practices, discrimination, and the discharge of
employees, and (4) to the invalidation of the contracts with the
Brotherhood and its locals.

															The pertinent facts will be considered in connection with our
discussion of these questions. First. The jurisdiction of the Board. That is, was the
proceeding within the scope of its authority validly conferred? The
petitioning companies constitute an integrated system. With the
exception of one company which maintains underground ducts for
electrical conductors in New York City, they are all public
utilities engaged in supplying electric energy, gas, and steam (and
certain byproducts) within that City and adjacent Westchester
County. The enterprise is one of great magnitude. The companies
serve over 3,500,000 electric and gas customers -- a large majority
using the service for residential and domestic purposes. In 1936,
the companies supplied about 97.5 percent of the total electric
energy sold in the City of New York and about one hundred percent
of that sold in Westchester County. They do not sell for resale
without the State. They have about 42,000 employees, their total
payrolls in 1936, with retirement annuities and separation
allowances, amounting to nearly $82,000,000.

															Petitioners urge that these predominant intrastate activities,
carried on under the plenary control of the New York in the
exercise of its police power, are not subject to federal authority.
It does not follow, however, because these operations of the
utilities are of vast concern to the people of the City and New
York, that they do not also involve the interests of interstate and
foreign commerce in such a degree that the Federal Page 305 U. S. 220 Government was entitled to intervene for their protection. For
example, the governance of the intrastate rates of a railroad
company may be of great importance to the State and an appropriate
object of the exertion of its power, but the Federal Government may
still intervene to protect interstate commerce from injury caused
by intrastate operations, and, to that end, may override intrastate
rates and supply a dominant federal rule. The Shreveport
Case, 234 U. S. 342 ; Wisconsin Railroad Comm'n v. Chicago, B. & Q. R. Co., 257 U. S. 563 ; New York v. United States, 257 U.
S. 591 . See also Labor Board v. Jones & Laughlin
Steel Corp., 301 U. S. 1 , 301 U. S.
37 -41.

															In the present instance, we may lay on one side, as did the
Circuit Court of Appeals, the mere purchases by the utilities of
the supplies of oil, coal, etc., although very large, which come
from without the State and are consumed in the generation and
distribution of electric energy and gas. Apart from those
purchases, there is undisputed and impressive evidence of the
dependence of interstate and foreign commerce upon the continuity
of the service of the petitioning companies. They supply electric
energy to the New York Central Railroad Company, the New York, New
Haven, and Hartford Railroad Company, and the Hudson and Manhattan
Railroad Company (operating a tunnel service to New Jersey) for the
lighting and operation of passenger and freight terminals and for
the movement of interstate trains. They supply the Port of New York
Authority with electric energy for the operation of its terminal
and the Holland Tunnel. They supply a majority of the piers of
trans-Atlantic and coastal steamship companies along the North and
East Rivers, within the City of New York, for lighting, freight
handling and related uses. They serve the Western Union Telegraph
Company, the Postal Telegraph Company, and the New York Telephone
Company Page 305 U. S. 221 with power for transmitting and receiving messages, local and
interstate. They supply electric energy for the trans-Atlantic
radio service of the Radio Corporation of America. They provide
electric energy for the Floyd Bennett Air Field in Brooklyn for
various purposes, including field illumination, a radio beam, and
obstruction lighting. Under contracts with the Federal Government,
they supply electric energy for six lighthouses and eight beacon or
harbor lights; also light, heat, and power for the general post
office and branch post offices, the United States Barge Office, the
Customs House, appraisers' warehouse, and various federal office
buildings.

															It cannot be doubted that these activities, while conducted
within the State, are matters of federal concern. In their
totality, they rise to such a degree of importance that the fact
that they involve but a small part of the entire service rendered
by the utilities in their extensive business is immaterial in the
consideration of the existence of the federal protective power. The
effect upon interstate and foreign commerce of an interruption
through industrial strife of the service of the petitioning
companies was vividly described by the Circuit Court of Appeals in
these words:

															"Instantly, the terminals and trains of three great interstate
railroads would cease to operate; interstate communication by
telegraph, telephone, and radio would stop; lights maintained as
aids to navigation would go out, and the business of interstate
ferries and of foreign steamships, whose docks are lighted and
operated by electric energy, would be greatly impeded. Such effects
we cannot regard as indirect and remote."

															95 F.2d 390, 394.

															If industrial strife due to unfair labor practices actually
brought about such a catastrophe, we suppose that no one would
question the authority of the Federal Government to intervene in
order to facilitate the settlement of the dispute and the
resumption of the essential service to interstate Page 305 U. S. 222 and foreign commerce. But it cannot be maintained that the
exertion of federal power must await the disruption of that
commerce. Congress was entitled to provide reasonable preventive
measures, and that was the object of the National Labor Relations
Act.

															Congress did not attempt to deal with particular instances. It
created for that purpose the National Labor Relations Board. In
conferring authority upon that Board, Congress had regard to the
limitations of the constitutional grant of federal power. Thus, the
"commerce" contemplated by the Act (aside from that within a
Territory or the District of Columbia) is interstate and foreign
commerce. The unfair labor practices which the Act purports to
reach are those affecting that commerce. § 10(a). [ Footnote 3 ] In determining the constitutional
bounds of the authority conferred, we have applied the well settled
principle that it is the effect upon interstate or foreign
commerce, not the source of the injury, which is the criterion. It
is not necessary to repeat what we said upon this point in the
review of our decisions in the case of Labor Board v. Jones
& Laughlin Steel Corp,, supra. And whether or not
particular action in the conduct of intrastate enterprises does
affect that commerce is such a close and intimate fashion as to be
subject to federal control is left to be determined as individual
cases arise. Id.; see also Santa Cruz Fruit Packing Co. v.
Labor Board, 303 U. S. 453 , 303 U. S.
466 -467.

															Petitioners urge that the legislature of New York has enacted
comprehensive and adequate measures to protect against the
interruption of petitioners' services through labor disputes. Not
only has the State long had legislation relating to the operations
of public utility companies (Public Service Law) but the
legislature has recently enacted the New York State Labor
Relations Page 305 U. S. 223 Act (Laws of 1937, Chapter 443, effective July 1, 1937), which
provides a complete supervision of labor relations for employers in
intrastate enterprises similar to that set up by the National Labor
Relations Act with respect to interstate or foreign commerce. The
state act, with added details, follows closely the national act.
The state act provides for collective bargaining, including the
conduct of elections to determine the representation of employees,
and empowers the state Labor Relations Board to prevent unfair
labor practices. In seeking to avoid a clash with federal
authority, the state act is made inapplicable

															"to the employees of any employer who concedes to and agrees
with the board that such employees are subject to and protected by
the provisions of the national labor relations act or the federal
railway labor act. [ Footnote
4 ]"

															It is manifest that the enactment of this state law could not
override the constitutional authority of the Federal Government.
The State could not add to or detract from that authority. But it
is also true that, where the employers are not themselves engaged
in interstate or foreign commerce, and the authority of the
National Labor Relations Board is invoked to protect that commerce
from interference or injury arising from the employers' intrastate
activities, the question whether the alleged unfair labor practices
do actually threaten interstate or foreign commerce in a
substantial manner is necessary presented. And, in determining that
factual question, regard should be had to all the existing
circumstances, including the bearing and effect of any protective
action to the same end already taken under state authority. The
justification for the exercise of federal power should clearly
appear. Florida v. United States, 282 U.
S. 194 , 282 U. S.
211 -212. But the question in such a case would relate
not to the existence of the federal Page 305 U. S. 224 power, but to the propriety of its exercise on a given state of
facts.

															In the instant case, not only was this proceeding instituted
before the New York Labor Relations Act became effective, but, so
far as appears, no proceedings have been taken under it in relation
to the unfair labor practices here alleged. For the present
purpose, it is sufficient to say that there has been no exertion of
state authority which can be taken to remove the need for the
exertion of federal authority to protect interstate and foreign
commerce. The exercise of the federal power to protect interstate
and foreign commerce from injury does not depend upon a clash with
state action, and need not await the exercise of state
authority.

															We conclude that the Board had authority to entertain this
proceeding against the petitioning companies. Second. The fairness of the hearing -- procedural due
process. Apart from the action of the Board with respect to
the Brotherhood contracts, which we shall consider separately, the
contentions under this head relate (1) to amendments of the
complaint, (2) to the refusal to hear certain witnesses, and (3) to
the transfer of the proceeding to the Board and its determination
without an intermediate report or opportunity for hearing upon
proposed findings.

															The original complaint related to the discharge of five
employees, and alleged unfair labor practices in the employment of
industrial spies and undercover operatives, in allowing employees
to solicit membership in the Brotherhood during working hours and
on the property of the companies, in compensating such employees
while so engaged, and in furnishing them office space and financial
assistance while refusing such privileges to the United, and
generally in coercion of the employees to join the Page 305 U. S. 225 Brotherhood. The amendments were made from time to time in the
course of the hearing. In particular, they added another employee
to those alleged to have been wrongfully discharged, and supplied
an omitted allegation that the other unfair labor practices
affected commerce. At the close of the evidence, the trial examiner
granted a motion to conform the pleadings to the proof on the
statement of the attorney for the Board that no important change
was intended, and that the amendment was sought merely to make more
definite and certain what appeared in the complaint. These were
discretionary rulings which afford no ground for challenging the
validity of the hearing.

															A more serious question grows out of the refusal to receive the
testimony of certain witnesses. The taking of evidence began on
June 3, 1937, and was continued from time to time until June 23d,
when the attorney for the Board unexpectedly announced that its
case would probably be closed on the following day. At that time,
the Board completed its proof, with the reservation of one matter,
and, at the request of the companies' counsel, the hearing was
adjourned until July 6th in order that Mr. Carlisle, the chairman
of the board of trustees of the Consolidated Edison Company, and
Mr. Dean, the vice-president of one of its affiliates, who were
then unavailable, could testify. In response to the examiner's
inquiry, the companies' counsel stated that the direct examination
of all witnesses on their behalf would not occupy more than a day.
On July 6th, the testimony of Mr. Carlisle and Mr. Dean was taken,
and the companies also offered the testimony of two other witnesses
(then present in the hearing room) in relation to the discharge of
the employee with respect to whom the complaint had been amended as
above stated. The examiner refused to receive this testimony
following a ruling of the Board (made in the Page 305 U. S. 226 course of correspondence with the companies' counsel during the
adjournment) to the effect that no other testimony than that of Mr.
Carlisle and Mr. Dean would be received on the adjourned day. An
offer of proof was made which showed the testimony to be highly
important with respect to the reasons for the discharge. It was
brief, and could have been received at once without any undue delay
in the closing of the hearing.

															We agree with the Circuit Court of Appeals that the refusal to
receive the testimony was unreasonable and arbitrary. Assuming, as
the Board contends, that it had a discretionary control over the
conduct of the proceeding, we cannot but regard this action as an
abuse of discretion. But the statute did not leave the petitioners
without remedy. The court below pointed to that remedy -- that is,
to apply to the Circuit Court of Appeals for leave to adduce the
additional evidence; on such an application and a showing of
reasonable grounds, the court could have ordered it to be taken. §
10(e)(f). [ Footnote 5 ]
Petitioners did not avail themselves of this appropriate
procedure.

															Shortly after the evidence was closed, the counsel for the
petitioning companies filed a brief with the trial examiner.
Several weeks later, on September 29th, the proceeding was
transferred to the Board. The examiner made no tentative report or
findings, and there was no opportunity for a hearing before the
Board itself. It must be assumed, however, that the brief for the
companies was transmitted to the Board and was considered by it in
making its decision. The Board contends that the companies
submitted their brief without asking for an oral argument, as
contemplated by the Board's rule (Rule 29), or for an intermediate
report, and hence that they are not in a position to complaint on
either score. Page 305 U. S. 227 The Board also insists that, after the transfer of the
proceeding, it was within the discretion of the Board to adopt any
one of the courses of procedure enumerated in its rule (Rule 38),
[ Footnote 6 ] of which
petitioners were informed by the Page 305 U. S. 228 service of a copy of the Board's rules at the beginning of the
proceeding. Petitioners say that, at the very outset, they had
asked, on their special appearance, for a hearing before the Board
upon the question of its jurisdiction, and that all proceedings be
transferred to the Board, and that the rules induced the belief
that, after the transfer to the Board at the close of the evidence,
there would be further proceedings at which they would be heard.
But we cannot say that the rules justified that expectation or
dispensed with the necessity, after the transfer, of a suitable
request by the petitioners for such additional hearing as they
desired. It does not appear that such request was made.

															It cannot be said that the Board did not consider the evidence
or the petitioners' brief or failed to make its own findings in the
light of that evidence and argument. It would have been better
practice for the Board to have directed the examiner to make a
tentative report with an opportunity for exceptions and argument
thereon. But, aside from the question of the Brotherhood contracts,
we find no basis for concluding that the issues and contentions
were not clearly defined, and that the petitioning companies were
not fully advised of them. Labor Board v. Mackay Radio &
Telegraph Co., 304 U. S. 333 , 304 U. S.
350 -351. The points raised as to the lack Page 305 U. S. 229 of procedural due process in this relation cannot be
sustained. Third. The sufficiency of the evidence to sustain the
findings of the Board with respect to coercive practices,
discrimination and discharge of employees. The companies
contend that the Court of Appeals misconceived its power to review
the findings and, instead of searching the record to see if they
were sustained by "substantial" evidence, merely considered whether
the record was "wholly barren of evidence" to support them. We
agree that the statute, in providing that "the findings of the
Board as to the facts, if supported by evidence, shall be
conclusive," § 10(e), means supported by substantial evidence. Washington, V. & M. Coach Co. v. Labor Board, 301 U. S. 142 , 301 U. S.
147 ,. Substantial evidence is more than a mere
scintilla. It means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion. Appalachian
Electric Power Co. v. Labor Board, 93 F.2d 985, 989; Labor
Board v. Thompson Products, 97 F.2d 13, 15; Ballston-Stillwater Knitting Co. v. Labor Board, 98 F.2d
758, 760. We do not think that the Circuit Court of Appeals
intended to apply a different test. In saying that the record was
not "wholly barren of evidence" to sustain the finding of
discrimination, we think that the court referred to substantial
evidence. Ballston-Stillwater Knitting Co. v. Labor Board,
supra. The companies urge that the Board received "remote hearsay" and
"mere rumor." The statute provides that "the rules of evidence
prevailing in courts of law and equity shall not be controlling."
[ Footnote 7 ] The obvious
purpose of this and similar provisions is to free
administrative Page 305 U. S. 230 boards from the compulsion of technical rules so that the mere
admission of matter which would be deemed incompetent in judicial
proceedings would not invalidate the administrative order. Interstate Commerce Comm'n v. Baird, 194 U. S.
25 , 194 U. S. 44 ; Interstate Commerce Comm'n v. Louisville & Nashville R.
Co., 227 U. S. 88 , 227 U. S. 93 ; United States v. Abilene & Southern Ry. Co., 265 U. S. 274 , 265 U. S. 288 ; Tagg Bros. & Moorhead v. United States, 280 U.
S. 420 , 280 U. S. 442 .
But this assurance of a desirable flexibility in administrative
procedure does not go so far as to justify orders without a basis
in evidence having rational probative force. Mere uncorroborated
hearsay or rumor does not constitute substantial evidence.

															Applying these principles, we are unable to conclude that the
Board's findings in relation to the matters now under consideration
did not have the requisite foundation. With respect to industrial
espionage, the companies say that the employment of "outside
investigating agencies" of any sort had been voluntarily
discontinued prior to November, 1936, but the Board rightly urges
that it was entitled to bar its resumption. Compare Federal
Trade Comm'n v. Goodyear Tire & Rubber Co., 304 U.
S. 257 , 304 U. S. 260 .
In relation to the other charges of unfair labor practices, the
companies point to the statement of Mr. Carlisle at a large meeting
of the employees in April, 1937, when the recognition of the
Brotherhood was under discussion, that the employees were
absolutely free to join any labor organization -- that they could
do as they pleased. Despite this statement, and assuming, as
counsel for the companies urges, that, where two independent labor
organizations seek recognition, it cannot be said to be an unfair
labor practice for the employer merely to express preference of one
organization over the other, by reason of the former's announced
policies, in the absence of any attempts at intimidation or
coercion, we think that there was still substantial evidence that
such attempts were made in this case. Page 305 U. S. 231 It would serve no useful purpose to lengthen this opinion by
detailing the testimony. We are satisfied that the provisions of
the order requiring the companies to desist from the discriminating
and coercive practices described in subdivisions (a) to (e)
inclusive and in subdivision (h) of paragraph one of its order,
[ Footnote 8 ] and to reinstate
the six employees mentioned with back pay, and to post notices
assuring freedom from discrimination and coercion as provided in
paragraph two of the order, rested upon findings sustained by the
evidence, and that the decree of the Circuit Court of Appeals
enforcing the order in these respects should be affirmed. Fourth. The Brotherhood contracts. The findings of the
Board that the contracts with the Brotherhood and its locals were
invalid, and the Board's order requiring the companies to desist
from giving effect to these contracts, present questions of major
importance. We approach them in the light of three cardinal
considerations. One is that the Brotherhood and its locals are
labor organizations Page 305 U. S. 232 independently established as affiliates of the American
Federation of Labor and are not under the control of the employing
companies. So far as there was any charge, under § 8(2) of the Act,
that the employing companies had dominated or interfered with the
formation or administration of any labor organization or had
contributed financial or other support to it, the charge was
dismissed. Another consideration is that the contracts recognize
the right of employees to bargain collectively; they recognize the
Brotherhood as the collective bargaining agency for the employees
who belong to it, and the Brotherhood agrees for itself and its
members not to intimidate or coerce employees into membership in
the Brotherhood and not to solicit membership on the time or
property of the employers. The third consideration is that the
contracts contain important provisions with regard to hours,
working conditions, wages, sickness, disability, etc., and also
provide against strikes or lockouts and for the adjustment and
arbitration of labor disputes, thus constituting insurance against
the disruption of the service of the companies to interstate or
foreign commerce through an outbreak of industrial strife. It is
not contended that these provisions are unreasonable or oppressive,
but, on the contrary, it was virtually conceded at the bar that
they are fair to both the employers and employees. It also appears
from the evidence, which was received without objection, that the
Brotherhood and its locals comprised over 30,000, or 80 percent, of
the companies' employees out of 38,000 eligible for membership.

															The Brotherhood and its locals contend that they were
indispensable parties, and that, in the absence of legal notice to
them or their appearance, the Board had no authority to invalidate
the contracts. The Board contests this position, invoking our
decision in Labor Board v. Pennsylvania
Greyhound Lines , 303 Page 305 U. S. 233 U.S. 261. That case, however, is not apposite, as there no
question of contract between employer and employee was involved.
The Board had found upon evidence that the employer had created and
fostered the labor organization in question and dominated its
administration in violation of § 8(2). The statement that the
"Association" so formed and controlled was not entitled to notice
and hearing was made in that relation. Id., pp. 303 U. S. 262 , 303 U. S.
270 -271. It has no application to independent labor
unions such as those before us. We think that the Brotherhood and
its locals having valuable and beneficial interests in the
contracts were entitled to notice and hearing before they could be
set aside. Russell v. Clark's
Executors , 7 Cranch 69, 11 U. S. 96 ; Mallow v.
Hinde , 12 Wheat. 193, 25 U. S. 198 ; Minnesota v. Northern Securities Co., 184 U.
S. 199 , 184 U. S. 235 ; Garzot v. Rios de Rubio, 209 U. S. 283 , 209 U. S. 297 ; General Investment Co. v. Lake Shore & M. S. Co., 260 U. S. 261 , 260 U. S. 285 .
The rule, which was applied in the cases cited to suits in equity,
is not of a technical character, but rests upon the plainest
principle of justice, equally applicable here. See Mallow v.
Hinde, supra. The Board urges that the National Labor Relations Act does not
contain any provision requiring these unions to be made parties;
that § 10(b) [ Footnote 9 ]
authorizes the Board to serve a complaint only upon persons charged
with unfair labor practices, and that only employers can be so
charged. In that view, the question would at once arise whether the
Act could be construed as authorizing the Board to invalidate the
contracts of independent labor unions not before it, and also as to
the validity of the Act if so construed. But the Board contends
that the Brotherhood had notice, referring to the service of a copy
of the complaint and notice of hearing upon a local union of the
Brotherhood on May 12, 1937, and of an amended notice of
hearing Page 305 U. S. 234 on May 25, 1937. Petitioners rejoin that the service was not
upon a local whose rights were affected, but upon one whose members
were not employees of the companies' system. The Board says,
however, that the Brotherhood, and the locals which were involved,
had actual notice, and hence were entitled to intervene, § 10(b),
and chose not to do so. But neither the original complaint, which
antedated the contracts, nor the subsequent amendments contained
any mention of them, and the Brotherhood and its locals were not
put upon notice that the validity of the contracts was under
attack. The Board contends that the complaint challenged the
legality of the companies' "relations" with the Brotherhood. But
what was thus challenged cannot be regarded as going beyond the
particular practices of the employers and the discharges which the
complaint described. In these circumstances, it cannot be said that
the unions were under a duty to intervene before the Board in order
to safeguard their interests.

															The Board urges further that the unions have availed themselves
of the opportunity to petition for review of the Board's order in
the Circuit Court of Appeals, and that due process does not require
an opportunity to be heard before judgment, if defenses may be
presented upon appeal. York v. Texas, 137 U. S.
15 , 137 U. S. 20 -21; American Surety Co. v. Baldwin, 287 U.
S. 156 , 287 U. S. 168 ; Moore Ice Cream Co. v. Rose, 289 U.
S. 373 , 289 U. S. 384 .
But this rule assumes that the appellate review does afford
opportunity to present all available defenses, including lack of
proper notice, to justify the judgment or order complained of. Id. Apart from this question of notice to the unions, both the
companies and the unions contend that, upon the case made before
the Board, it had no authority to invalidate the contracts. Both
insist that that issue was not actually litigated, and the record
supports that contention. The argument to the contrary, that the
contracts Page 305 U. S. 235 were necessarily in issue because of the charge of unfair labor
practices against the companies, is without substance. Not only did
the complaint, as amended, fail to assail the contracts, but it was
stated by the attorney for the Board upon the hearing that the
complaint was not directed against the Brotherhood; that "no issue
of representation [was] involved in this proceeding;" and that the
Board took the position that the Brotherhood was "a bona
fide labor organization" whose legality was not attacked. But
the Board says that, on July 6th (the last of the contracts having
been made on June 16th), the companies amended their answer stating
that the making of the contracts had rendered the proceeding moot,
and that this necessarily put the contracts in issue. We cannot so
regard it. We think that the fair construction of the position thus
taken on the last day of the hearings was entirely consistent with
the view that the validity of the contracts had not been, and was
not, in issue. And the counsel for the companies point to their
brief before the Board, which they produce, as proceeding on the
basis that the validity of the contracts had not been assailed.

															Further, the Act gives no express authority to the Board to
invalidate contracts with independent labor organizations. That
authority, if it exists, must rest upon the provisions of § 10(c).
[ Footnote 10 ] That section
authorizes the Board, when it has found the employer guilty of
unfair labor practices, to require him to desist from such
practices

															"and to take such affirmative action, including reinstatement of
employees with or without back pay, as will effectuate the policies
of this Act."

															We think that this authority to order affirmative action does
not go so far as to confer a punitive jurisdiction enabling the
Board to inflict upon the employer any penalty it may choose Page 305 U. S. 236 because he is engaged in unfair labor practices, even though the
Board be of the opinion that the policies of the Act might be
effectuated by such an order.

															The power to command affirmative action is remedial, not
punitive, and is to be exercised in aid of the Board's authority to
restrain violations and as a means of removing or avoiding the
consequences of violation where those consequences are of a kind to
thwart the purposes of the Act. The continued existence of a
company union established by unfair labor practices or of a union
dominated by the employer is a consequence or violation of the Act
whose continuance thwarts the purposes of the Act and renders
ineffective any order restraining the unfair practices. Compare
Labor Board v. Pennsylvania Greyhound Lines, supra. Here,
there is no basis for a finding that the contracts with the
Brotherhood and its locals were a consequence of the unfair labor
practices found by the Board, or that these contracts, in
themselves, thwart any policy of the Act, or that their
cancellation would in any way make the order to cease the specified
practices any more effective.

															The Act contemplates the making of contracts with labor
organizations. That is the manifest objective in providing for
collective bargaining. Under § 7, [ Footnote 11 ] the employees of the companies are entitled
to self-organization, to join labor organizations, and to bargain
collectively through representatives of their own choosing. The 80
percent of the employees who were members of the Brotherhood and
its locals had that right. They had the right to choose the
Brotherhood as their representative for collective bargaining, and
to have contracts made as the result of that bargaining. Nothing
that the employers had done deprived them of that right. Nor did
the contracts make the Brotherhood and its locals exclusive
representatives Page 305 U. S. 237 for collective bargaining. On this point, the contracts speak
for themselves. They simply constitute the Brotherhood the
collective bargaining agency for those employees who are its
members. The Board, by its order, did not direct an election to
ascertain who should represent the employees for collective
bargaining. § 9(c). [ Footnote
12 ] Upon this record, there is nothing to show that the
employees' selection as indicated by the Brotherhood contracts has
been superseded by any other selection by a majority of employees
of the companies so as to create an exclusive agency for bargaining
under the statute, and, in the absence of such an exclusive agency,
the employees represented by the Brotherhood, even if they were a
minority, clearly had the right to make their own choice. Moreover,
the fundamental purpose of the Act is to protect interstate and
foreign commerce from interruptions and obstructions caused by
industrial strife. This purpose appears to be served by these
contracts in an important degree. Representing such a large
percentage of the employees of the companies, and precluding
strikes and providing for the arbitration of disputes, these
agreements are highly protective to interstate and foreign
commerce. They contain no terms which can be said to "affect
commerce" in the sense of the Act, so as to justify their
abrogation by the Board. The disruption of these contracts, even
pending proceedings to ascertain by an election the wishes of the
majority of employees, would remove that salutary protection during
the intervening period.

															The Board insists that the contracts are invalid because made
during the pendency of the proceeding. But the effect of that
pendency would appropriately extend to the practices of the
employers to which the complaint was addressed. See Jones v.
Securities and Exchange Comm'n, 298 U. S.
1 , 298 U. S. 15 . It
did not reach so far as to suspend Page 305 U. S. 238 the right of the employees to self-organization or preclude the
Brotherhood as an independent organization chosen by its members
from making fair contracts on their behalf.

															Apart from this, the main contention of the Board is that the
contracts were the fruit of the unfair labor practices of the
employers; that they were "simply a device to consummate and
perpetuate" the companies' illegal conduct and constituted its
culmination. But, as we have said, this conclusion is entirely too
broad to be sustained. If the Board intended to make that charge,
it should have amended its complaint accordingly, given notice to
the Brotherhood, and introduced proof to sustain the charge.
Instead, it is left as a matter of mere conjecture to what extent
membership in the Brotherhood was induced by any illegal conduct on
the part of the employers. The Brotherhood was entitled to form its
locals, and their organization was not assailed. The Brotherhood
and its locals were entitled to solicit members, and the employees
were entitled to join. These rights cannot be brushed aside as
immaterial, for they are of the very essence of the rights which
the Labor Relations Act was passed to protect, and the Board could
not ignore or override them in professing to effectuate the
policies of the Act. To say that of the 30,000 who did join there
were not those who joined voluntarily, or that the Brotherhood did
not have members whom it could properly represent in making these
contracts, would be to indulge an extravagant and unwarranted
assumption. The employers' practices which were complained of could
be stopped without imperiling the interests of those who, for all
that appears, had exercised freely their right of choice.

															We conclude that the Board was without authority to require the
petitioning companies to desist from giving effect to the
Brotherhood contracts, as provided in subdivision (f) of paragraph
one of the Board's order. Page 305 U. S. 239 Subdivision (g) of that paragraph, requiring the companies to
cease recognizing the Brotherhood "as the exclusive representative
of their employees," stands on a different footing. The contracts
do not claim for the Brotherhood exclusive representation of the
companies' employees, but only representation of those who are its
members, and the continued operation of the contracts is
necessarily subject to the provision of the law by which
representatives of the employees, for the purpose of collective
bargaining, can be ascertained in case any question of
"representation" should arise. § 9. [ Footnote 13 ] We construe subdivision (g) as having no
more effect than to provide that there shall be no interference
with an exclusive bargaining agency if one other than the
Brotherhood should be established in accordance with the provisions
of the Act. So construed, that subdivision merely applies existing
law.

															The provision of paragraph two of the order as to posting
notices should be modified so as to exclude any requirement to post
a notice that the existing Brotherhood contracts have been
abrogated.

															The decree of the Circuit Court of Appeals is modified so as to
hold unenforceable the provision of subdivision (f) of paragraph
one of the order and the application to that provision of paragraph
two subdivision (c), and, as so modified, the decree enforcing the
order of the Board is affirmed. Modified and affirmed. * Together with No. 25, International Brotherhood of
Electrical Workers et al. v. Labor Board et al., also on writ
of certiorari to the Circuit Court of Appeals for the Second
Circuit.

															[ Footnote 1 ]

															49 Stat. 449; 29 U.S.C. §§ 158(1), (3).

															[ Footnote 2 ]

															29 U.S.C. § 158(2).

															[ Footnote 3 ]

															29 U.S.C. § 160(a).

															[ Footnote 4 ]

															New York State Labor Relations Act, § 715.

															[ Footnote 5 ]

															29 U.S.C. § 160(e)(f).

															[ Footnote 6 ]

															Rules 37 and 38 are as follows:

															"Sec. 37. Whenever the Board deems it necessary in order to
effectuate the purposes of the Act, it may permit a charge to be
filed with it, in Washington, or may at any time after a charge has
been filed with a Regional Director pursuant to Section 2 of this
Article, order that such charge, and any proceeding which may have
been instituted in respect thereto --"

															"(a) be transferred to and continued before it, for the purpose
of consolidation with any proceeding which may have been instituted
by the Board, or for any other purpose; or"

															"(b) be consolidated for the purpose of hearing, or for any
other purpose, with any other proceeding which may have been
instituted in the same region; or"

															"(c) be transferred to and continued in any other Region, for
the purpose of consolidation with any proceeding which may have
been instituted in or transferred to such other Region, or for any
other purpose."

															"The provisions of Sections 3 to 31, inclusive, of this Article
shall, insofar as applicable, apply to proceedings before the Board
pursuant to this Section, and the powers granted to Regional
Directors in such provisions shall, for the purpose of this
Section, be reserved to and exercised by the Board. After the
transfer of any charge and any proceeding which may have been
instituted in respect thereto from one Region to another pursuant
to this Section, the provisions of Sections 3 to 36, inclusive, of
this Article, shall apply to such charge and such proceeding as if
the charge had originally been filed in the Region to which the
transfer is made."

															"Sec. 38. After a hearing for the purpose of taking evidence
upon the complaint in any proceeding over which the Board has
assumed jurisdiction in accordance with Section 37 of this Article,
the Board may --"

															"(a) direct that the Trial Examiner prepare an Intermediate
Report, in which case the provisions of Sections 32 to 36,
inclusive, of this Article shall insofar as applicable govern
subsequent procedure, and the powers granted to Regional Directors
in such provisions shall for the purpose of this § be reserved to
and exercised by the Board; or"

															"(b) decide the matter forthwith upon the record, or after the
filing of briefs or oral argument; or"

															"(c) reopen the record and receive further evidence, or require
the taking of further evidence before a member of the Board, or
other agent or agency; or"

															"(d) make other disposition of the case."

															"The Board shall notify the parties of the time and place of any
such submission of briefs, oral argument, or taking of further
evidence."

															[ Footnote 7 ]

															§ 10(b); 29 U.S.C. § 160(b).

															[ Footnote 8 ]

															These provisions of the order in substance required the
companies to desist from discouraging membership in the United or
encouraging membership in the Brotherhood, or any other labor
organization of their employees, by discharges, or threats of
discharge, or refusal of reinstatement, because of membership or
activity in connection with any such labor organization; from
permitting representatives of the Brotherhood to engage in
activities in its behalf during working hours or on the employers'
property unless similar privileges were granted to the United and
all other labor organizations; from permitting employees who were
officials of the Employees' Representation Plans to use the
employers' time, property, and money in behalf of the Brotherhood
or any other labor organization; from employing detectives to
investigate the activities of their employees in behalf of the
United or other labor organizations, or employing for such purpose
any other sort of espionage, and from

															"in any other manner interfering with, restraining, or coercing
its employees in the exercise of the right to self-organization, to
form, join or assist labor organizations,"

															or to bargain collectively or to engage in concerted activities
for that purpose or other mutual aid or protection.

															[ Footnote 9 ]

															29 U.S.C. § 160(b).

															[ Footnote 10 ]

															29 U.S.C. § 160(c).

															[ Footnote 11 ]

															29 U.S.C. § 157.

															[ Footnote 12 ]

															29 U.S.C. § 159(c).

															[ Footnote 13 ]

															29 U.S.C. § 159.

															MR. JUSTICE BUTLER.

															I agree with the Court's decision that the Board was without
authority to require employers to cease and desist from giving
effect to the contracts referred to in Page 305 U. S. 2440 subdivision (f) of the first paragraph of the order. And I am of
opinion that the entire order should be set aside.

															The Board was without jurisdiction. The facts on which it
assumed to exert power need not be narrated; they are sufficiently
stated by the lower court and in the opinion here. Both courts
rightly treat the case as one where neither employers nor employees
are engaged in interstate or foreign commerce. Here, the employers
are engaged solely in intrastate activities. A very small
percentage of the products, furnished in that State to others, is
by the latter used in interstate commerce. This Court has held that
Congress cannot regulate relations between employers and employees
engaged exclusively in intrastate activities.

															In Schechter Poultry Corp. v. United States, 295 U. S. 495 ,
decided shortly before passage of the National Labor Relations Act,
we held that the federal government cannot regulate the wages and
hours of labor of persons employed in the internal commerce of the
State.

															In Carter v. Carter Coal Co., 298 U.
S. 238 , decided shortly after passage of the National
Labor Relations Act, we held that provisions of the Bituminous Coal
Conservation Act of 1935 looking to the control of wages, hours,
and working conditions of persons engaged in producing coal about
to move in interstate commerce and seeking to guarantee their right
of collective bargaining were beyond the power of Congress for the
reasons that it has no general power of regulation to promote the
general welfare; that the power to regulate commerce does not
include the power to control the conditions in which coal is
produced; that the effect upon interstate commerce of labor
conditions involved in the production of coal, including disputes
and strikes over wages and working conditions, is indirect.

															In the period, less than a year, intervening between the Carter case and Labor Board v. Jones & Laughlin
Steel Corp., 301 U. S. 1 , and
other Labor Board Cases Page 305 U. S. 241 decided on the same day, [ Footnote
2/1 ] -- and, as I think, wrongly decided -- it was, on the
authority of the Schechter and Carter cases, held
by four circuit courts of appeals and six district courts that the
power of Congress does not extend to regulations between employers
and their employees engaged in local production. Their decisions
are cited in the dissenting opinion in the Labor Board cases. 301 U. S. 301 U.S. 76. In that period, the lower courts were bound by our
decisions to condemn the National Labor Relations Act, construed to
apply to production or intrastate commerce, as not within the power
of Congress.

															This case is not distinguishable from the Schechter case or the Carter case. There, as here, the activities of
the employers and their employees were exclusively local. It
differs from the Jones & Laughlin case and all the
other Labor Board cases. [ Footnote
2/2 ] In each of them, the employer was to an extent engaged in
interstate commerce. The opinion just announced points to no
distinction between this case and the Schechter or Carter case. Nor does it refer to the Labor Board cases as
controlling here. But, to support this federal advance into local
fields, the Court brings forward three railroad rate cases: Houston & Texas Ry. Co. v. United States (The Shreveport
Case), 234 U. S. 342 , Wisconsin Railroad Comm'n v. Chicago, B. & Q. R. Co., 257 U. S. 563 , and New York v. United States, 257 U.
S. 591 .

															These cases give no support to the idea that, in absence of
conflict between state and federal policy or regulation, Page 305 U. S. 242 Congress has power to control labor conditions in production or
intrastate transportation. In each, the federal interference is
shown necessary in order to protect national authority, interstate
commerce, and interstate rates established under federal law. Brief
reference to the conditions that led up to these cases and the
substance of the decisions will be sufficient to show they have no
application here.

															In 1906 and 1907, Minnesota reduced intrastate rates
substantially below lawfully established interstate rates. Suits
were brought by their stockholders to restrain the carriers from
obeying, and state officers from enforcing, the local rates on the
ground, inter alia, that they were repugnant to the
commerce clause and that enforcement would necessarily interfere
with and burden interstate transportation by the carriers. The Minnesota Rate Cases, 230 U. S. 352 . The
controversy was everywhere regarded as important. See p. 230 U. S. 395 .
The facts found by the special master and adopted by the circuit
court are stated in its opinion ( Shepard v. Northern Pac. Ry.
Co., 184 F. 765, 775-794) and summarized in the opinion of
this Court. P. 230 U. S.
381 -395. They show that the intrastate rates
discriminated against interstate commerce and made it impossible
for the carriers to collect, or for the United States to enforce,
valid higher interstate rates. The trial court held the state
measures repugnant to the commerce clause, and upon that ground,
among others, enjoined enforcement of the rates they
prescribed.

															The cases were argued here in April, 1912, and decided June 9,
1913. This Court upheld the state rates notwithstanding the
commerce clause, the Act to Regulate Commerce, the interstate rates
lawfully established in accordance with federal law, and the
destructive discrimination. It held that, in the absence of a
finding by the Interstate Commerce Commission of unjust
discrimination, Page 305 U. S. 243 the intrastate rates were valid. The opinion reserved, p. 230 U. S. 419 ,
the question whether the Commission was empowered to make the
determination. And that question was decided in the Shreveport case, 234 U. S. 342 , 234 U. S.
357 .

															That case was pending here before the decision in the Minnesota Rate Cases, and was decided in June, 1914. The
Interstate Commerce Commission had found that rates prescribed by
Texas operated to discriminate against interstate traffic from
Shreveport, Louisiana, into Texas moving on lawfully established
interstate rates. In order to eliminate the discrimination, the
Commission directed the carriers to cease charging higher rates for
interstate transportation than those charged for transportation
between Texas points. This Court held the carriers free to raise
the intrastate rates so as to remove the discrimination. Wisconsin Railroad Comm'n v. Chicago, B. & Q. R.
Co., 257 U. S. 563 ,
upheld § 15a of the Interstate Commerce Act, added by § 422,
Transportation Act, 1920, which empowered the Interstate Commerce
Commission to remove discrimination resulting from intrastate rates
unduly low as compared with corresponding rates fixed under that
section. New York v. United States, 257 U.
S. 591 , held that intrastate rates so low that they
discriminated against interstate commerce within the meaning of the
Transportation Act, 1920, may constitutionally be increased under
that Act by the Commission to conform with like rates in interstate
commerce fixed by it.

															The constitutional questions decided in these three cases were
essentially different from the one of federal power here presented.
The state measures there overborne were repugnant to existing
federal regulations of interstate commerce. Application of the
lower state rates made it impossible for federal authority to
require, or to enable, Page 305 U. S. 244 carriers to collect interstate rates lawfully established as
just and reasonable. The policy and provisions of the New York
State Labor Relations Act are in substance precisely the same as
the national policy and the National Labor Relations Act. The
State's interest, purpose, and ability to safeguard against
possible interruption of production and service by labor disputes
are not less than those of the federal government. The State's need
of continuous service is immediate, while the effect of
interruption on interstate or foreign commerce would be mediate,
indirect, and relatively remote. The record fails to disclose any
condition, existing or threatened, to suggest as necessary federal
action to protect interstate commerce, or any other interest of the
government against interruption or interference liable to result
from controversies between these employers and their employees. The
right of the States, consistently with national policy and law,
freely to exert the powers safeguarded to them by the Federal
Constitution is essential to the preservation of this government. United States v. E. C. Knight Co., 156 U. S.
1 , 156 U. S. 12 -13; Kidd v. Pearson, 128 U. S. 1 , 128 U. S. 21 .
Asseveration of need to uphold our dual form of government and the
safeguards set for protection of the States and the liberties of
the people against unauthorized exertion of federal power does not
assure adherence to, or conceal failure to discharge, duty to
support the Constitution. See Schechter Poultry Corp. v. United
States, supra, pp. 295 U. S.
548 -550. Cf. Labor Board v. Jones & Laughlin
Steel Corp., supra, pp. 301 U. S.
29 -30.

															MR. JUSTICE McREYNOLDS concurs in this opinion.

															[ Footnote 2/1 ] Labor Board v. Fruehauf Trailer Co., 301 U. S.
49 ; Labor Board v. Friedman-Harry Marks Clothing
Co., 301 U. S. 58 ; Associated Press v. Labor Board, 301 U.
S. 103 ; Washington Coach Co. v. Labor Board, 301 U. S. 142 .

															[ Footnote 2/2 ] Labor Board v. Fruehauf Trailer Co., 301 U. S.
49 ; Labor Board v. Friedman-Harry Marks Clothing
Co., 301 U. S. 58 ; Associated Press v. Labor Board, 301 U.
S. 103 ; Washington, Virginia Coach Co. v. Labor
Board, 301 U. S. 142 ; Labor Board v. Pennsylvania Greyhound Lines, 303 U.
S. 261 ; Labor Board v. Pacific Greyhound Lines, 303 U. S. 272 ; Santa Cruz Fruit Packing Co. v. Labor Board, 303 U.
S. 453 ; Labor Board v. Mackay Radio & T.
Co., 304 U. S. 333 .

															MR. JUSTICE REED concurring in part, dissenting in part.

															While concurring in general with the conclusions of the Court in Consolidated Edison Company v. Labor Board and International Brotherhood of Electrical Workers v. Labor
Board, I find myself in disagreement with the conclusion that
the National Labor Relations Board was

															"without authority to require the petitioning companies Page 305 U. S. 245 to desist from giving effect to the Brotherhood contracts, as
provided in subdivision (f) of paragraph one of the Board's
order."

															In that paragraph, the petitioner companies are ordered to:

															"I. Cease and desist from:"

															" * * * *" "(f) Giving effect to their contracts with the International
Brotherhood of Electrical Workers."

															It is agreed that the

															"fundamental purpose of the Act is to protect interstate and
foreign commerce from interruptions and obstructions caused by
industrial strife."

															This is to be accomplished by contracts with labor
organizations, reached through collective bargaining. The labor
organizations, in turn, are to be created through the
self-organization of workers, free from interference, restraint, or
coercion of the employer. [ Footnote
3/1 ] The forbidden interference is an unfair labor practice,
which the Board, exclusively, is empowered to prevent by such
negative and affirmative action as will effectuate the policies of
the Act. [ Footnote 3/2 ] To
interpret the Act to mean that the Board is without power to
nullify advantages obtained by the Edison companies through
contracts with unions, partly developed by the unlawful
interference of the Edison companies with self-organization, is to
withdraw from the Board the specific authority granted by the Act
to take affirmative action to protect the workers' right of
self-organization, the basic privilege guaranteed by the Act.
Freedom from employer domination flows from freedom in
self-organization.

															It is assumed that the terms of these contracts in all respects
are consistent with the requirements of the National Labor
Relations Act, and are, in themselves, considered apart from the
actions of the Edison companies in securing their execution,
advantageous in preserving industrial harmony. Page 305 U. S. 246 The Board found that the Consolidated Edison Company and its
affiliates, the respondents before the Board,

															"deliberately embarked upon an unlawful course of conduct, as
described above, which enabled them to impose the I.B.E.W. upon
their employees as their bargaining representative and at the same
time discourage and weaken the United, which they opposed. From the
outset, the respondents contemplated the execution of contracts
with the I.B.E.W. locals which would consummate and perpetuate
their plainly illegal course of conduct in interfering with,
restraining, and coercing their employees in the exercise of the
rights guaranteed to them under § 7 of the Act. It is clear that
the granting of the contracts to the I.B.E.W. by the respondents
was a part of the respondents' unlawful course of conduct, and, as
such, constituted an interference with the rights of their
employees to self-organization. The contracts were executed under
such circumstances that they are invalid, notwithstanding that they
are in express terms applicable only to members of the I.B.E.W.
locals. If the contracts are susceptible of the construction placed
upon them by the respondents -- namely, that they were exclusive
collective bargaining agreements -- then a fortiori they
are invalid. [ Footnote 3/3 ]"

															The evidence upon which this finding is based is summarized in
detail in 4 N.L.R.B. pages 83 to 94. It shows a consistent effort
on the part of the officers and foremen of the Edison Company and
its affiliates, as well as other employees of the Edison companies
-- formerly officers in the recently disestablished "Employees'
Representation Plans," actually company unions -- to further the
development of the I.B.E.W. unions by recognition, contracts for
bargaining, openly expressed approval, Page 305 U. S. 247 establishment of locals and by permitting solicitation of
employees on the time and premises of the Edison companies. By the
Wagner Act, employees have "the right to self-organization." It is
an "unfair labor practice for an employer" to "interfere with,
restrain, or coerce employees" in the exercise of that right.
[ Footnote 3/4 ] The Board concluded
that the contracts with the I.B.E.W. unions were a part of a
systematic violation by the Edison companies of the workers' right
to self-organization.

															This determination set in motion the authority of the Board to
issue an order to cease and desist from the unfair labor practice
and to take "such affirmative action . . . as will effectuate the
policies of this Act." § 10(c). The evidence was clearly sufficient
to support the conclusion of the Board that the Edison companies
entered into the contracts as an integral part of a plan for
coercion of and interference with the self-organization of their
employees. This justified the Board's prohibition against giving
effect to the contracts. The "affirmative action" must be connected
with the unfair practices, but there could be no question as to the
materiality of the contracts. As this Court only recently said as
to the purpose of the Congress in enacting this Act:

															"It had before it the Railway Clerks case, which had
emphasized the importance of union recognition in securing
collective bargaining, Report of the Senate Committee on Education
and Labor, S.Rep. 573, 74th Cong., 1st Sess., p. 17, and there were
then available data showing that, once an employer has conferred
recognition on a particular organization, it has a marked advantage
over any other in securing the adherence of employees, and hence in
preventing the recognition of any other. [ Footnote 3/5 ]"

															To this it is answered that the extent of the coercion is left
to "mere conjecture;" that it would be an "extravagant" Page 305 U. S. 248 assumption to say that none of the 30,000 members "joined
voluntarily," and that the

															"employers' practices which were complained of could be stopped
without imperiling the interests of those who, for all that
appears, had exercised freely their right of choice. [ Footnote 3/6 ]"

															On the question whether or not the Edison companies' activities
as to these contracts were a part of a definite plan to interfere
with the right of self-organization, these answers are immaterial.
It is suggested that the problem of the contracts should be
approached with three cardinal considerations in mind: (1) that one
contracting party is an "independently established" labor
organization, free of domination by the employer; (2) that the
contracts grant valuable collective bargaining rights, and (3) that
they contain provisions for desirable working privileges. Such
considerations should affect discretion in shaping the proper
remedy. They are negligible in determining the power of the Board.
They would, if given weight, permit paternalism to be substituted
for self-organization. The findings of the Board, based on
substantial evidence, are conclusive. [ Footnote 3/7 ] There was evidence of coercion and
interference, and the Board did determine that the policies of the
Act would be effectuated by requiring the companies to cease giving
effect to these contracts.

															The petitioners, however, aside from the merits, raise
procedural objections. It is contended that, before the Board could
have authority to order the Edison companies to cease and desist
from giving effect to their contracts with the unions, it was
necessary that the unions, as well as the Edison companies, should
have legal notice or should appear; that the unions were
indispensable parties. This Court has held to the contrary in Labor Board v. Pennsylvania Greyhound Lines, 303 U.
S. 261 . Page 305 U. S. 249 This case determined that, where an employer has created and
fostered a labor organization of employees, thus interfering with
their right to self-organization, the employer can be required,
without notice to the organization, to withdraw all recognition of
such organization as the representative of its employees. It is
said that this case

															"is not apposite, as there no question of contract between
employer and employee was involved. The Board had found upon
evidence that the employer had created and fostered the labor
organization in question and dominated its administration in
violation of § 8(2). [ Footnote
3/8 ]"

															In the instant case, it was found that no such domination
existed. In the Greyhound case, the Board found not only
domination under § 8(2), but also, as in this case, an unfair labor
practice under § 8(1). The company's violation of § 8(1) was
predicated on its interference with self-organization. [ Footnote 3/9 ] In the Greyhound case, it was said that the organization was not entitled to notice
and hearing because "the order did not run against the
Association." [ Footnote 3/10 ]
Here, the unions are affected by the action on the contracts
exactly as the labor organization in the Greyhound case
was affected by the order to withdraw recognition. It would seem
immaterial whether those contracts were violative of one or both or
all the prohibited unfair labor practices.

															A further procedural objection is found in the failure of the
complaint, or any of its amendments, to seek specifically a cease
and desist order against continued operation under the contracts.
The companies were charged with allowing organization meetings on
the company time and on company property, permitting
solicitation Page 305 U. S. 250 of membership during company time, and paying overtime
allowances to those engaged in soliciting or coercing workers to
join the contracting unions. The complaint said that similar aid
was not extended to a competing union, and that office assistance
was given to the effort to get members for the contracting unions.
These charges made it obvious that the contracts were obtained from
the unions which were improperly aided by the Edison companies in
violation of the prohibitions against interference with
self-organization. Contracts so obtained were necessarily at issue
in an examination of the acts in question.

															Certainly the Edison companies and the contracting unions could
have been allowed on a proper showing a further hearing on the
question of the companies continuing recognition of the contracts.
By § 10(f), the Edison companies and the unions could obtain a
review of the Board's order. In that hearing, either or both could
show to the court, § 10(e), that additional evidence as to the
contracts was material and that it had not been presented because
the aggrieved parties had not understood that the contracts were
subject to a cease and desist order or had not known of the
proceeding. The court could order the Board to take the additional
evidence. This simple practice was not followed. Although all
parties were before the lower court on the review, the petitioners
chose to rely on the impotency of the Board to enter an order
affecting the contracts.

															In these circumstances, the provision of the order requiring the
Edison companies to cease from giving effect to their contracts
with the contracting unions is proper. This order prevents the
Edison companies from reaping an advantage from those acts of
interference found illegal by the Board.

															MR. JUSTICE BLACK concurs in this opinion.

															[ Footnote 3/1 ] Labor Board Cases, 301 U. S. 1 .

															[ Footnote 3/2 ]

															§§ 7, 8, 10, Act of July 5, 1935, 49 Stat. 452-455.

															[ Footnote 3/3 ]

															4 N.L.R.B. 71, 94.

															[ Footnote 3/4 ]

															§§7 and 8, Act of July 5, 1935, 49 Stat. 452.

															[ Footnote 3/5 ] Labor Board v. Pennsylvania Greyhound Lines, 303 U. S. 261 , 303 U. S.
267 .

															[ Footnote 3/6 ] Ante, p. 305 U. S.
238 .

															[ Footnote 3/7 ] Washington, V. & M. Coach Co. v. Labor Board, 301 U. S. 142 , 301 U. S.
146 .

															[ Footnote 3/8 ] Ante, p. 305 U.S.
233 .

															[ Footnote 3/9 ] Labor Board v. Pennsylvania Greyhound Lines, 303 U. S. 261 , 303 U. S.
263 .

															[ Footnote 3/10 ] Id., 303 U. S.
271 .

Summary: In Consolidated Edison Co. v. National Labor Relations Board, the Supreme Court ruled that the National Labor Relations Act extends to public utilities engaged in supplying energy and utilities, even when their business activities are wholly within a single state. The case involved a group of companies that supplied electric energy, gas, and steam to customers in New York City and Westchester County. The Court found that any disruption in their services due to labor disputes would significantly impact interstate and foreign commerce, justifying federal regulation. The Court also addressed the companies' labor contracts, finding that the National Labor Relations Board's order requiring the companies to cease recognizing the contracts was valid, as it prevented them from benefiting from illegal interference in labor organizing activities.