In the National Licorice Co. v. National Labor Relations Board case of 1939, the U.S Supreme Court ruled in favor of the National Labor Relations Board (NLRB). The court held that an employer's contracts with its employees, which restricted their rights to collective bargaining and other union activities, violated Section 8(1) of the Wagner Act (National Labor Relations Act), thereby making them unenforceable. The company had argued that these agreements were individual contracts between it and its workers; however, this was rejected by the court as they found such arrangements interfered with employees' rights to engage in concerted activities for mutual aid or protection under federal labor law. This ruling reinforced workers' right to organize and bargain collectively without interference from employers.

In the dissenting opinion for National Licorice Co. v. National Labor Relations Board, Justice McReynolds disagreed with the majority's decision to uphold the NLRB's ruling that certain company practices violated employee rights under Section 7 of the Wagner Act (National Labor Relations Act). He argued that there was no substantial evidence supporting this conclusion and criticized how broadly they interpreted "unfair labor practice." Furthermore, he contended that even if some employees were coerced into signing contracts waiving their right to collective bargaining, it did not justify invalidating all such agreements made by other workers who may have done so willingly. He also expressed concern about potential overreach by administrative agencies like NLRB and warned against undermining contractual freedom in employment relations.