In the case of Parker Seal Co. v. Cummins, 1976, the United States Supreme Court dealt with issues related to labor law and collective bargaining agreements. The plaintiff was a union member who sued his employer for breach of contract after he was laid off due to lack of work and not recalled when positions became available again. He claimed that this violated both the company's seniority system and its obligation under a collective bargaining agreement to recall him before hiring new employees. The main issue in dispute was whether an individual employee could sue their employer directly for violations of a collective bargaining agreement or if such disputes had to be resolved through grievance procedures outlined in the agreement itself. The court ruled against Cummins, stating that while unions have exclusive rights in negotiating and administering collective agreements, individual employees still retain the right to enforce their own contractual rights as well - including suing employers directly over alleged breaches.

In the dissenting opinion for Parker Seal Co. v. Cummins, it was argued that the majority's decision to allow a lawsuit filed outside of Kentucky's statute of limitations period contradicted previous Supreme Court rulings and undermined state sovereignty over their own laws. The dissent pointed out that federal courts should respect state-imposed time limits on filing lawsuits, as they are part of states' substantive rights and obligations under their respective legal systems. By allowing this case to proceed despite being filed after Kentucky’s deadline had passed, the majority effectively created a new federal common law rule in direct violation of Erie Railroad Co. v Tompkins (1938), which held that there is no general federal common law; instead, federal courts sitting in diversity apply state law.