In its original version, passed in the midst of the Great Depression, the Wagner Act only prohibited unfair labor practices by employers. Congress amended it twelve years later to impose a number of restrictions on unions and to limit the application of the Act in other ways; that package of amendments is commonly known as the Taft-Hartley Act.
Some commentators have suggested that Congress did not realize how far-reaching a statute they were passing at the time. That is debatable: at the time that Congress passed the Act, the nation had just gone through a number of tumultuous general strikes in San Francisco, California, Minneapolis, Minnesota and Toledo, Ohio. The Act was passed in order to channel those violent conflicts into more manageable channels, by recognizing workers' basic rights to form unions and to bargain collectively, while creating an administrative mechanism to determine whether they wanted union representation. While the Act did not deprive employers of their basic managerial prerogatives, it legalized the right to strike, barred employers from firing workers for engaging in union activities and subjected management's decisions to scrutiny by the federal government.
In the first few years of the Wagner Act, however, many employers simply refused to recognize it as law. The United States Supreme Court had already struck down a number of other statutes passed during the New Deal on the grounds that Congress did not have the constitutional authority to enact them under its power to regulate interstate commerce. Most of the initial appellate court decisions reached the same conclusion, finding the Act unconstitutional and therefore unenforceable. It was not until the Supreme Court upheld the constitutionality of the statute in 1937 in National Labor Relations Board v. Jones & Laughlin Steel Co. that the Wagner Act became law in practical terms as well. That was a surprising decision, issued as the controversy over Roosevelt's court packing plan was still hot—one wag called it the "switch in time that saved nine"—that marked a fundamental change in United States constitutional law and in the power of the federal government.
The Supreme Court, for its part, generally upheld the NLRB's interpretation of the Wagner Act in those early years, but imposed two major limitations on it. The Court held in National Labor Relations Board v. Mackay Radio & Telephone Co. in 1938 that while employers could not fire workers for going out on strike, they could permanently replace them - a largely academic distinction in practice that undercut workers' right to strike. The Court later held in National Labor Relations Board v. Virginia Electric & Power Co. that the First Amendment to the Constitution barred the NLRB from making it illegal for employers to express their opposition to unionism, so long as they did not try to coerce or threaten workers with reprisals for exercising their rights.
The Act was immediately controversial. The American Federation of Labor and some employers accused the NLRB of favoring the Congress of Industrial Organizations, particularly when determining whether to hold union elections in plantwide, or wall-to-wall, units, which the CIO usually sought, or to hold separate elections in separate craft units, which the craft unions in the AFL favored. While the NLRB initially favored plant-wide units, which tacitly underscored the CIO's industrial unionism, it retreated to a compromise position several years later under pressure from Congress.
Employers and their allies in Congress also criticized the NLRB for its expansive definition of "employee" and for allowing supervisors and plant guards to form unions, sometimes affiliated with the unions that represented the employees whom they were supposed to supervise or police. Many accused the NLRB of a general pro-union and anti-employer bias, pointing to the Board's controversial decisions in areas such as employer free speech and "mixed motive" cases, in which the NLRB held that an employer violated the Act by firing an employee for anti-union reasons, even if the employee had engaged in misconduct. In addition, employers campaigned over the years to outlaw a number of practices by unions, such as closed shops, secondary boycotts, jurisdictional strikes, mass picketing, strikes in violation of contractual no-strike clauses, pension and health and welfare plans sponsored by unions and multi-employer bargaining.
Opponents of the Wagner Act introduced several hundred bills to amend or repeal the law in the decade after its passage. All of them failed or were vetoed, however, until the passage of the Taft-Hartley amendments in 1947.
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