In the 1941 case Southern Steamship Co. v. National Labor Relations Board, the U.S Supreme Court ruled in favor of the National Labor Relations Board (NLRB). The NLRB had previously found that Southern Steamship Company was guilty of unfair labor practices under Section 8(1) and Section 8(3) of the Wagner Act for refusing to reinstate striking employees after a strike caused by an employer's violation of collective bargaining requirements. The company argued that it should not be held accountable because its actions were justified due to violent conduct during strikes by some workers. However, the court upheld that while violence during a strike could justify disciplinary action against those involved, it did not absolve employers from their obligation to rehire innocent strikers or provide them with back pay as per federal law.

The dissenting opinion in the Southern Steamship Co. v. National Labor Relations Board case argued that the majority's decision to uphold the NLRB's authority over labor disputes on American vessels operating in international waters was an overreach of federal power and a violation of states' rights. The dissenters believed that Congress did not have constitutional authority to regulate labor relations aboard ships engaged in foreign commerce, as this would infrally upon state jurisdiction and sovereignty. They also contended that such regulation could potentially interfere with international law and treaties, creating unnecessary diplomatic complications for the United States government abroad.