In the case of Phelps Dodge Corp. v. National Labor Relations Board, 1940, the U.S Supreme Court ruled in favor of the National Labor Relations Board (NLRB). The dispute arose when Phelps Dodge Corporation fired several employees who were involved in union activities and refused to rehire them after a strike ended. The NLRB found that this action violated Section 8(1) and (3) of the National Labor Relations Act as it constituted unfair labor practices by discouraging membership in a labor organization through discrimination regarding hire or tenure of employment or any term or condition thereof. On appeal, Phelps argued that these provisions were unconstitutional because they interfered with freedom of contract and due process rights under Fifth Amendment but was rejected by lower courts. The Supreme Court upheld these rulings stating that Congress had broad power to regulate interstate commerce which includes preventing obstructions caused by industrial strife such as strikes; thus it could lawfully authorize measures like those contained within NLRA for achieving peaceable labor relations including reinstatement orders against employers engaging in unfair practices affecting commerce.

The dissenting opinion in the case of Phelps Dodge Corp. v. National Labor Relations Board argued that the majority's decision was a misinterpretation of the National Labor Relations Act (NLRA). The dissenters believed that, contrary to what the majority held, an employer is not required under NLRA to rehire workers who had been previously dismissed for participating in strikes or other labor activities if there are valid reasons for their non-reemployment such as inefficiency or insubordination. They contended that this interpretation would unfairly penalize employers and could potentially encourage misconduct among employees by providing them with undue protection against dismissal. Furthermore, they expressed concerns about how this ruling might affect future cases and set a precedent which could undermine employers' rights and disrupt industrial relations balance.