In the 1984 case Allis-Chalmers Corp. v. Lueck, the U.S Supreme Court ruled that state law claims are preempted by federal labor laws when they involve issues directly related to collective bargaining agreements. The dispute began when Robert Lueck claimed his employer, Allis-Chalmers Corporation and its insurance company had delayed payment of disability benefits owed under a union-negotiated plan, constituting bad faith under Wisconsin's tort law. However, the court held that since resolution of this claim depended on an interpretation of terms in a collective-bargaining agreement (the amount and duration of such benefits), it was actually a matter for federal labor law governed by Labor Management Relations Act rather than state tort law as argued by Lueck’s counsel. This decision reinforced the principle that federal labor laws take precedence over state laws in matters concerning rights derived from collective-bargaining agreements.

In the dissenting opinion for Allis-Chalmers Corp. v. Lueck, Justice Blackmun argued that the majority's decision to preempt state law claims interfered with states' rights and undermined labor laws. He contended that federal labor law was not intended to supersede all state regulation of employment relationships, especially when it comes to issues such as insurance benefits which are traditionally regulated by states. Furthermore, he disagreed with the majority's view that allowing a tort claim would disrupt collective bargaining agreements; instead, he believed this could provide an additional layer of protection for workers without undermining union negotiations or federal interests in uniformity and stability in labor relations.