In the case of Social Security Board v. Nierotko, the U.S. Supreme Court ruled in favor of an employee who had been wrongfully discharged and later reinstated with back pay. The court held that such back pay should be considered as wages for purposes of calculating social security benefits under the Social Security Act (SSA). This decision was significant because it expanded the definition of "wages" under SSA to include not only regular compensation but also any payment made by an employer to an employee due to a legal obligation or settlement, even if no work was performed during that period. Thus, this ruling ensured that employees would not lose their potential social security benefits due to wrongful termination or other similar situations where they are entitled to receive back pay.

In the dissenting opinion for SOCIAL SECURITY BOARD v. NIEROTKO, Justice Burton argued that back pay should not be considered as wages for Social Security purposes. He believed that the majority's decision to include back pay in wage calculations would lead to an unjust enrichment of workers who were wrongfully terminated at the expense of their employers and other employees contributing to the social security fund. According to him, this interpretation was inconsistent with Congress' intent when they established Social Security laws which aimed at providing benefits based on regular earnings rather than irregular or exceptional income like back pay awards. Furthermore, he pointed out potential administrative difficulties in implementing such a policy given its retrospective nature and uncertainty about how much each worker might receive in future wrongful termination cases.