In the 1985 case AT&T Technologies, Inc. v. Communications Workers of America et al., the U.S Supreme Court ruled that federal courts cannot compel arbitration of a labor dispute unless both parties have clearly agreed to such arbitration in their collective bargaining agreement. The court held that while federal policy generally favors resolving labor disputes through arbitration, this preference does not override the need for explicit mutual consent to arbitrate specific issues. In this case, AT&T and its union had disagreed over whether certain layoffs violated their collective bargaining agreement; when AT&T sought to resolve the disagreement through an arbitrator, as provided for by their contract's grievance procedure, the union objected on grounds that layoff decisions were excluded from mandatory arbitration under another clause in their contract. The court sided with the union and reversed lower courts' rulings which had ordered compulsory arbitration.

In the dissenting opinion for AT&T Technologies, Inc. v. Communications Workers of America et al., Justice Brennan disagreed with the majority's decision to deny arbitration in this case. He argued that federal labor policy strongly favors resolving disputes through arbitration and that courts should not interfere unless there is clear evidence that an issue falls outside of a contract's arbitration clause. In his view, the language of the collective bargaining agreement between AT&T and its workers was broad enough to include disputes over layoffs due to lack of work - which was at issue in this case - within its scope for mandatory arbitration. Therefore, he believed it was inappropriate for courts to intervene and prevent such issues from being arbitrated as agreed upon by both parties.