In the case of Fall River Dyeing & Finishing Corp. v. National Labor Relations Board, 1986, the U.S Supreme Court ruled in favor of the National Labor Relations Board (NLRB). The issue at hand was whether a new company that had taken over an old one was obligated to bargain with the original union representing employees from the previous business entity. The court held that if a new employer is essentially operating in "substantially identical" manner as its predecessor and has hired majority of its workforce from it, then it must recognize and negotiate with their existing labor union under federal law. This decision affirmed NLRB's broad interpretation of successorship doctrine which states that when there is substantial continuity between enterprises, bargaining obligations carry over to successors.

In the dissenting opinion for Fall River Dyeing & Finishing Corp. v. National Labor Relations Board, Justice Powell argued that the majority's decision was inconsistent with previous case law and failed to properly interpret the National Labor Relations Act (NLRA). He contended that a company should not be considered a "successor employer" under NLRA unless it continues its predecessor's business in substantially unchanged form. In this case, he believed there were significant changes in operations, personnel policies, and labor practices which made it inappropriate to impose an obligation on Fall River to bargain with a union representing employees of its predecessor. Furthermore, Powell criticized the majority’s reliance on “perfectly clear” successor doctrine as being too broad and potentially discouraging companies from purchasing struggling businesses due to fear of inheriting their labor disputes. Thus, he disagreed with imposing bargaining obligations without considering whether employees had freely chosen union representation under current circumstances.