In the 1944 case United States et al. v. Pennsylvania Railroad Co. et al., the U.S Supreme Court ruled on a dispute involving railroad companies and their employees over wage increases during World War II, when railroads were under federal control due to wartime exigencies. The unions demanded higher wages but the government refused, leading to a threatened strike that could have disrupted war efforts significantly. President Roosevelt intervened by creating an emergency board to arbitrate, which recommended certain wage increases that were less than what was demanded by workers but more than what was offered by the government-controlled railroads. The issue before the court was whether or not these recommendations had binding effect; if they did not, then it would mean that strikes (which are generally legal) could proceed despite them - potentially disrupting vital transportation during wartime. The Supreme Court held in favor of the government's position: while acknowledging that ordinarily such recommendations from arbitration boards do not have legally binding force unless agreed upon by both parties involved in labor disputes, this principle does not apply when national security is at stake as it clearly was here given ongoing global conflict.

In the dissenting opinion for United States v. Pennsylvania Railroad Co., it was argued that the Interstate Commerce Commission (ICC) did not have the authority to regulate and control railroad rates in a manner that would allow them to recover costs incurred due to increased wages mandated by labor boards. The justice believed this overstepped their regulatory powers, as they were essentially dictating wage policies through indirect means. They also expressed concern about potential negative impacts on commerce if railroads were allowed to increase their rates without restriction or oversight beyond what is necessary for reasonable compensation. Furthermore, they disagreed with majority's interpretation of "just and reasonable" rate standards under federal law, arguing it should be based on fair return on property value rather than cost recovery alone.