The National Recovery Act of Roosevelt was a vital US consumer and labor law passed during the first US presidential administration to authorize the president to regulate industry to promote fair wages and affordable prices, which would stimulate economic recovery in the country. Roosevelt's National Recovery Act established the Office of Price Administration (OPA), which set up the consumer protection measures that are the essence of today's consumer protection laws. It was also crucial in the establishment of the Federal Trade Commission (FTC) and the National Consumer Service (NCS). The FTC and NCS were established to protect consumers from unfair, deceptive, and deceptive practices by businesses across all industries.
The Roosevelt administration was determined to use the powers of the federal government to protect American workers from unfair competition from foreign corporations. However, the New Dealers Association led by businessmen opposed the plans of the administration. The association argued that the Roosevelt recovery plan went against the doctrine of constitutional amendment called for in Article XX of the US Constitution known as the “power of the purse”. The power of the purse is the right of the states to protect their people from unfair competition or restraint by others. In other words, the power of the purse is a declaration of the federal government's right to control the economy on the basis of its wisdom, resources and the needs of the people.
As a result, in the National Recovery Act, section 7a was added to the Fair Labor Standards Act (FLSSA), which provides protection to workers from being discriminated based on race, gender, religion, age, or any other category. This section was designed to ensure that both white and black Americans were able to remain employed in their jobs. According to the FLSSA manual, “No person may be denied the right to work in any State or position in any business because of race, sex, or national origin.” The manual went on to define “sex” as “any physical distinction, even the difference of an organ such as the penis or the nose, that results in a perception of sex or sexual preference by a person. An individual who has a physical defect that significantly affects his or her ability to work must also be protected.”
The National Recovery Act further defined the FLSSA as “an Act giving the rights to employees generally applicable to all workers similarly situated and requiring equal treatment in employment practices.” The sections of the Act dealing with FLSSA covered entities such as government agencies, state and local governments, labor organizations, and privately owned enterprises. These include all private employers in the private sector, as well as state and local governments. Similarly, the FLSSA includes not only white collar industries but also all service sectors including retailing and services for the elderly.
Similar to the FLSSA, the Blue Eagle Act is another important piece of legislation protecting workers from abusive actions of management and other employees. According to the Blue Eagle Act, “no employee or agent of any firm, corporation, office, or agency of or for any business may be disciplined, demoted, discharged, or laid off during any period for cause of negligence.” The Blue Eagle Act also prohibits retaliation . . . . . . against employees for reporting or participating in an investigation or inquiry by an authorized office of the Federal Trade Commission or the Labor-management Division of the U.S. Department of Labor. It also requires any employer who employs a worker who has been subjected to an unfair employment practice to provide notice of the charges to the worker and provide him an opportunity to cure the alleged discrimination.
In holding that the National Recovery Act was constitutional, the U.S. Supreme Court found the following: “The Federal Trade Commission's power to discipline, limit, and regulate all interstate commerce with respect to the advertising and marketing of products was beyond any constitutional or legal authority. Congress has never had the power to extend such authority. There is nothing in the Constitution or the history of Congress that indicates that it intended to grant the commission the power to regulate interstate commerce.” The U.S. Supreme Court did not resolve the issue of whether or not the National Recovery Act was unconstitutional because it held that Congress could not impose taxes on purely local activities, such as the retailing of newspapers, when those activities were “commerce among the states.”