In the case of National Labor Relations Board v. Natural Gas Utility District of Hawkins County, Tennessee (1970), the Supreme Court ruled that a public utility district established under state law was an "employer" within the meaning of Section 2(2) of the National Labor Relations Act (NLRA). The court held that Congress intended to include political subdivisions in its definition of employer when it amended NLRA in 1947. This decision came after a dispute between employees and management over union representation rights at a natural gas company owned by Hawkins County, Tennessee. The county argued it was not subject to federal labor laws because it is a government entity rather than private business. However, Justice Thurgood Marshall wrote for majority opinion stating that there's no reason why publicly-owned businesses should be exempt from these rules if they compete with privately-owned ones.

In the dissenting opinion for the case of NATIONAL LABOR RELATIONS BOARD v. NATURAL GAS UTILITY DISTRICT OF HAWKINS COUNTY, TENNESSEE, 1970, it was argued that the Natural Gas Utility District of Hawkins County should not be considered a political subdivision and therefore exempt from National Labor Relations Board (NLRB) jurisdiction. The dissenting justices believed that just because an entity is created by state law does not automatically make it a political subdivision if its function is more commercial than governmental. They pointed out that many entities are created by state laws but operate in ways similar to private corporations. Therefore, they contended that these types of organizations should fall under NLRB's jurisdiction as their operations have significant impacts on commerce and labor relations.