In the case of Wirtz, Secretary of Labor v. Hotel, Motel & Club Employees Union, Local 6 in 1967, the U.S. Supreme Court ruled that a union's welfare fund was subject to regulation under the Welfare and Pension Plans Disclosure Act (WPPDA). The court held that Congress intended for all funds established or maintained by an employer or employee representative for providing benefits to employees should be regulated under this act. This decision came after an investigation into allegations of misuse of funds by some trustees who were also officers in the union. The ruling clarified that such funds are not exempt from federal oversight just because they may have been created through collective bargaining agreements between employers and unions.

In the dissenting opinion for Wirtz v. Hotel, Motel & Club Employees Union, Local 6, Justice Douglas argued that Congress did not intend to regulate all labor disputes under the Commerce Clause when it passed the Labor Management Reporting and Disclosure Act (LMRDA). He contended that Congress intended only to regulate those disputes which had a direct effect on commerce. In this case, he believed that the dispute between a local union and an employer over wages and working conditions was too remote from interstate commerce to fall within congressional regulation under LMRDA. Furthermore, he expressed concern about federal intrusion into areas traditionally regulated by states - in this instance labor relations - arguing such intervention could undermine state sovereignty.