In the case of National Labor Relations Board v. Burns International Security Services, Inc., 1971, the U.S. Supreme Court ruled that a company taking over an existing federal contract was not obligated to hire the previous contractor's employees or honor their union agreements. The court held that while Burns had hired many of its predecessor’s employees, it was under no obligation to recognize and bargain with their incumbent union as this would infringe on employee free choice and employer freedom of contract. However, if a majority of new workers were previously represented by a union at another company (as in this case), then they could call for an election to establish representation rights at the new workplace.

In the dissenting opinion for the case of NATIONAL LABOR RELATIONS BOARD v. BURNS INTERNATIONAL SECURITY SERVICES, INC., Justice Douglas argued that a company taking over an existing federal contract should be required to bargain with the union representing employees under the previous contractor before making any changes in wages or working conditions. He contended that this requirement is consistent with both labor law and past court decisions, which have recognized that successor employers inherit certain obligations from their predecessors. Furthermore, he expressed concern about potential abuses if companies could evade these responsibilities simply by changing contractors. In his view, such practices would undermine workers' rights and disrupt industrial peace - two key goals of national labor policy.