In the 1936 case of W. H. H. Chamberlin v. Andrews, Industrial Commissioner of New York, the U.S Supreme Court upheld a decision by the state's industrial commissioner to deny unemployment benefits to William Chamberlin, an employee who had been fired for misconduct on the job at his employer's business in New York City. The court ruled that under Section 506 of Article 18-A of Labor Law enacted by Legislature in New York State (Unemployment Insurance Law), an individual discharged for misconduct connected with his work is disqualified from receiving benefits until he has worked again and earned ten times his weekly benefit rate after such disqualification was imposed upon him.

In the dissenting opinion for W. H. H. Chamberlin v. Andrews, Industrial Commissioner of New York, Justice McReynolds argued that the majority's decision was a violation of constitutional rights and an overreach by the state government into private business affairs. He contended that it was not within the power of a state to dictate how much an employer must pay their employees or what hours they should work; these were matters to be determined between employers and employees themselves without governmental interference. Furthermore, he believed this ruling would have far-reaching implications on other industries beyond baking as well as on interstate commerce in general due to its potential impact on pricing and competition among businesses across different states with varying wage laws.