In the case of Fibreboard Paper Products Corp. v. National Labor Relations Board et al., 1964, the U.S Supreme Court ruled in favor of the National Labor Relations Board (NLRB). The dispute arose when Fibreboard Corporation decided to contract out its maintenance work previously performed by its unionized employees without first bargaining with their union, United Steelworkers of America. The NLRB held that this was an unfair labor practice under Section 8(a)(5) and (1) of the National Labor Relations Act because it involved a "mandatory subject" for collective bargaining - terms and conditions of employment. On appeal, both Circuit Court and Supreme Court affirmed NLRB's decision stating that contracting out work constituted a change in working conditions hence required mandatory negotiation with unions before implementation.

In the dissenting opinion for Fibreboard Paper Products Corp. v. National Labor Relations Board, Justice Potter Stewart disagreed with the majority's interpretation of "conditions of employment" under Section 8(d) of the National Labor Relations Act (NLRA). He argued that contracting out work previously performed by union members does not fall within this definition and should not be subject to mandatory bargaining requirements. According to him, such an expansive interpretation could potentially extend NLRA obligations into areas traditionally left to management discretion, thereby disrupting a delicate balance between labor and management rights established by Congress in enacting the NLRA. Furthermore, he expressed concern about potential implications on business efficiency and economic growth if companies were forced into collective bargaining over every significant decision affecting their operations.