The U.S. Supreme Court case Old Dominion Branch No. 496, National Association of Letter Carriers, AFL-CIO v. Austin et al., in 1973 revolved around the issue of labor unions and their rights to free speech under the First Amendment. The National Association of Letter Carriers (NALC) had a rule that labeled members who did not support union activities as "scabs." James E. Austin and other non-union postal workers sued NALC for libel due to this derogatory term being used against them in a union publication, arguing it damaged their reputations and violated their First Amendment rights. However, the Supreme Court ruled in favor of NALC stating that labor disputes should be allowed some leeway when it comes to heated rhetoric or name-calling during contentious negotiations or strikes because such language is often part-and-parcel with these situations; thus falling within protected speech under the First Amendment unless made with malice or reckless disregard for truth.

In the dissenting opinion for Old Dominion Branch No. 496, National Association of Letter Carriers, AFL-CIO v. Austin et al., Justice Douglas argued that the majority's decision to uphold a federal law prohibiting political activities by postal workers infringed upon their First Amendment rights. He contended that this restriction was not justified by any compelling state interest and therefore violated constitutional protections of free speech and association. Furthermore, he criticized the majority for failing to apply strict scrutiny in evaluating this infringement on fundamental rights - an approach he believed necessary given the significant impact on individual liberties at stake in this case. Finally, Douglas expressed concern about potential misuse of such restrictions to suppress dissident voices within public service unions or other government entities.