In the case of New York Telephone Co. et al. v. New York State Department of Labor et al., 1978, the U.S Supreme Court upheld a ruling that required employers to contribute to unemployment benefits for striking workers in New York state. The court ruled by a 5-4 majority that such payments did not violate federal labor law or interfere with collective bargaining processes between unions and companies, as argued by the telephone company and other businesses involved in the lawsuit. The decision was based on an interpretation of federal laws which allowed states some discretion over their own unemployment compensation schemes, provided they didn't conflict with national policy objectives set out in those laws.

In the dissenting opinion for New York Telephone Co. et al. v. New York State Department of Labor et al., Justice William Rehnquist disagreed with the majority's view that unemployment benefits could be extended to striking workers without violating the National Labor Relations Act (NLRA). He argued that such a decision interfered with federal labor policy, which aims to maintain neutrality in labor disputes and strikes by not favoring either employers or employees financially. By allowing state-funded unemployment benefits for strikers, he believed this would disrupt the balance of economic power between unions and companies during negotiations, thus undermining federal law designed to regulate these conflicts fairly. Furthermore, he contended that it was inappropriate for states to intervene in matters typically governed by federal legislation like NLRA.