In the 1937 case of Santa Cruz Fruit Packing Co. v. National Labor Relations Board, the U.S Supreme Court upheld the constitutionality of the National Labor Relations Act (NLRA) and affirmed that it did not infringe upon employers' rights to free speech. The court ruled in favor of the National Labor Relations Board (NLRB), which had found that Santa Cruz Fruit Packing Company was guilty of unfair labor practices under NLRA for interfering with, restraining, and coercing its employees in their right to self-organization and collective bargaining. The company argued that these findings violated their First Amendment rights as they were based on non-coercive statements made by management expressing opposition to unionization. However, Justice Harlan Fiske Stone writing for a unanimous court rejected this argument stating that employer's freedom of speech must be balanced against employee's rights to associate freely & engage in concerted activities.

In the dissenting opinion for Santa Cruz Fruit Packing Co. v. National Labor Relations Board, Justice James Clark McReynolds argued that the majority's decision was an overreach of federal power and a violation of states' rights. He contended that labor disputes were local matters and should be handled by individual states rather than being regulated at a national level by the NLRB. Furthermore, he believed that Congress did not have constitutional authority to regulate intrastate commerce in this manner under the Commerce Clause, as it had done with its creation of the NLRB through The Wagner Act (National Labor Relations Act). In his view, such regulation could potentially lead to excessive governmental control over private businesses which would infringe upon their liberties and autonomy.