The Supreme Court decision in NLRB v. Fansteel Metallurgical Corp. represents a definitive legal pivot in American labor relations, marking the judicial containment of the radical tactics that characterized the Great Depression era. To understand the historical significance of this ruling, one must analyze the socio-political climate of the mid-1930s, specifically the rise of the "sit-down" strike. Unlike traditional picketing, where workers withdrew labor and stood outside the factory gates, the sit-down strike involved workers occupying the physical plant, effectively holding the means of production hostage to prevent the use of strikebreakers. This tactic reached its zenith with the 1936-1937 Flint Sit-Down Strike against General Motors, which successfully forced the corporation to recognize the United Automobile Workers (UAW). However, while these actions achieved immediate industrial gains, they ignited a fierce national debate over the hierarchy of property rights versus collective bargaining rights.
The conflict at the Fansteel Metallurgical Corporation in North Chicago began in 1937 when the company refused to bargain with the Amalgamated Association of Iron, Steel and Tin Workers. In response, ninety-four employees occupied two key buildings. When they refused to vacate, the company summarily discharged them. The subsequent physical eviction by local police involved significant violence, leading to the arrest and fining of the occupiers. The National Labor Relations Board (NLRB), operating under the mandate of the 1935 Wagner Act, originally ordered Fansteel to reinstate the workers, arguing that the company’s initial unfair labor practices provoked the strike. The NLRB’s stance was rooted in the philosophy that labor peace was best achieved by neutralizing employer provocation, even if the employees' response was extralegal.
The Supreme Court’s intervention in February 1939 fundamentally rejected this administrative leniency. Chief Justice Charles Evans Hughes, writing for the majority, articulated a sharp distinction between the right to strike and the right to seize property. The Court held that the sit-down strike was "illegal in its inception and prosecution," characterizing it as a "high-handed proceeding without shadow of legal right." By focusing on the "illegal seizure" of the plant, the Court elevated the protection of private property above the remedial goals of the Wagner Act. The ruling asserted that the NLRB did not have the authority to compel the reinstatement of employees who had been discharged for the forcible seizure of their employer’s property, regardless of whether the employer had violated labor laws first.
This decision had immediate and lasting ramifications for the American labor movement. Primarily, it stripped the Congress of Industrial Organizations (CIO) of its most potent weapon. The sit-down strike had been effective precisely because it neutralized the "scab" system and prevented the removal of machinery. Once the Supreme Court labeled such tactics as a forfeiture of the protections afforded by the Wagner Act, the labor movement was forced to retreat to more conventional, and often less effective, forms of protest. The ruling also served as a precursor to the legislative restrictions that would eventually culminate in the Taft-Hartley Act of 1947. It signaled that the federal government’s support for collective bargaining had strict boundaries, specifically where those activities intersected with the fundamental tenets of capitalist property ownership.
Furthermore, Fansteel redefined the role of the NLRB. It limited the Board’s discretionary power to fashion remedies for unfair labor practices, establishing that administrative agencies could not sanction "lawless" behavior in the name of social equity. This helped stabilize the industrial order by reassuring the business community that the New Deal's legal framework would not descend into a sanctioned assault on corporate assets. Historically, the case represents the moment the American legal system domesticated the labor movement, channeling its energy away from revolutionary occupations and into the highly regulated, procedural environment of modern contract negotiation. The "industrial peace" sought by the Wagner Act was thus achieved not through the expansion of worker power into the physical realm of the factory, but through the strict judicial enforcement of the boundary between labor and capital.
References / More Knowledge:
Cornell Law School. NLRB v. Fansteel Metallurgical Corp., 306 U.S. 240 (1939). https://www.law.cornell.edu/supremecourt/text/306/240
The National Labor Relations Board. 1935 Wagner Act. https://www.nlrb.gov/about-nlrb/who-we-are/our-history/1935-wagner-act
National Archives. Records of the National Labor Relations Board. https://www.archives.gov/research/guide-fed-records/groups/025.html
The Supreme Court Historical Society. The Hughes Court (1930-1941). https://supremecourthistory.org/timeline/the-hughes-court/