The U.S. Supreme Court case Building and Construction Trades Council of the Metropolitan District v. Associated Builders and Contractors of Massachusetts/Rhode Island, Inc., et al., 1992, revolved around a dispute over whether a city could require that all construction projects funded in part by the city must adhere to an agreement favoring union labor. The Boston Redevelopment Authority (BRA) had mandated that developers receiving financial assistance from the city or building on BRA-owned land needed to abide by such an agreement. However, this was challenged by non-union contractors who argued it violated federal law prohibiting states from regulating areas reserved for federal control - specifically labor relations. The Supreme Court ruled in favor of the BRA, stating that while cities cannot regulate private sector labor management relations directly, they can set terms tied to their proprietary interests as market participants without violating federal law. This meant when acting as proprietors rather than regulators (i.e., spending public money or leasing public land), cities could insist upon labor agreements even if these favored unions.

In the dissenting opinion for Building and Construction Trades Council of the Metropolitan District v. Associated Builders and Contractors of Massachusetts/Rhode Island, Inc., Justice Scalia argued that Boston's executive order mandating labor agreements on public construction projects did not violate federal law. He contended that Congress had not intended to preclude state or local governments from imposing such requirements when acting as market participants rather than regulators. The majority’s interpretation, he suggested, would lead to absurd results by preventing government entities from making ordinary business decisions about contract terms in a variety of contexts beyond just construction projects. Furthermore, he disagreed with the majority's view that Boston was regulating labor relations; instead, it was merely setting conditions under which it would permit work on its own property.