In the case of Local 20, Teamsters, Chauffeurs & Helpers Union v. Morton (1963), the U.S. Supreme Court ruled on a dispute between a trucking company and its unionized employees over compensation for damages caused by an illegal strike. The court held that federal law does not permit employers to recover damages for secondary boycotts under state law because such remedies are preempted by federal labor laws which only allow recovery of actual losses directly resulting from unlawful activities. This decision clarified that while unions may be liable for their actions in violation of the National Labor Relations Act, they cannot be held accountable beyond what is specified in this act - even if those same actions might constitute violations under state tort laws.

In the dissenting opinion for the case Local 20, Teamsters, Chauffeurs & Helpers Union v. Morton, Justice Black argued that federal law should not be used to limit state courts' ability to award damages in labor disputes. He believed that Congress did not intend for such a limitation when it passed the Labor Management Relations Act and other related laws. Furthermore, he contended that limiting state court awards could potentially undermine workers' rights by discouraging unions from engaging in collective bargaining or strikes due to fear of excessive financial penalties if they lose a dispute. In his view, this would tilt the balance of power too far towards employers and away from employees.