In the 1983 case of Bureau of Alcohol, Tobacco and Firearms v. Federal Labor Relations Authority et al., the U.S Supreme Court ruled that federal agencies are not required to negotiate with labor unions over matters related to employee rights under investigation for alleged criminal activities. The dispute arose when a union representing employees in the Bureau of Alcohol, Tobacco and Firearms (ATF) sought negotiations on procedures used by ATF during internal investigations into potential criminal conduct by its employees. The Federal Labor Relations Authority (FLRA) initially sided with the union, but this decision was reversed by the Supreme Court. In a unanimous ruling, it held that Congress did not intend for such issues to be subject to collective bargaining under provisions set out in Civil Service Reform Act of 1978 because they were covered elsewhere in law enforcement statutes.

In the dissenting opinion for Bureau of Alcohol, Tobacco and Firearms v. Federal Labor Relations Authority et al., Justice O'Connor argued that the majority's decision was a misinterpretation of Congress' intent in drafting the Civil Service Reform Act (CSRA). She contended that while CSRA does grant federal employees certain rights to bargain collectively, it also explicitly excludes matters related to "the classification of any position" from this right. The majority’s interpretation would allow unions to negotiate over pay grades which is directly tied with job classifications - something she believed Congress intended to prohibit. Furthermore, she expressed concern about potential negative impacts on government operations if every agency had different wage structures due to collective bargaining agreements. Lastly, Justice O’Connor criticized the FLRA for exceeding its authority by interpreting statutory provisions outside its expertise area.