In the case of Textile Workers Union of America v. Lincoln Mills of Alabama, 1956, the U.S Supreme Court ruled that federal courts had jurisdiction to enforce arbitration agreements in labor disputes under Section 301(a) of the Labor Management Relations Act (LMRA). The dispute arose when Lincoln Mills violated a collective bargaining agreement with Textile Workers Union by refusing to arbitrate certain grievances. The union sued for specific performance and an injunction against future violations. While lower courts were divided on whether they could grant such relief, the Supreme Court held that Congress intended for Section 301(a) to be more than just jurisdictional - it also provided substantive law applicable in suits involving collective bargaining agreements. This meant federal courts could use their full range of equitable powers to effectuate national labor policies and ensure good faith negotiations between employers and unions.

In the dissenting opinion for Textile Workers Union of America v. Lincoln Mills of Alabama, Justice Felix Frankfurter argued that Congress did not intend to give federal courts the power to create substantive law when it passed Section 301(a) of the Labor Management Relations Act. He contended that this section was only meant to provide jurisdiction over labor disputes and not a mandate for courts to develop a body of federal common law governing those disputes. According to him, such an interpretation would be inconsistent with historical limitations on judicial power and could lead to arbitrary decision-making by judges without clear legislative guidance or democratic accountability. Furthermore, he expressed concern about potential conflicts between state laws and any new federal common law created by judges under this expansive reading of Section 301(a).