An existing contract would ordinarily continue to have legal force until broken—for example, by a worker quitting or being fired—but under the National Labor Relations Act, collective bargaining agreements had become something of a special case:[1]The negotiations between union and management result in what often has been called a trade agreement, rather than in a contract of employment.

Without pushing the analogy too far, the agreement may be likened to the tariffs established by a carrier, to standard provisions prescribed by supervising authorities for insurance policies, or to utility schedules of rates and rules for service...The employer...is free to select those he will employ or discharge.

Justice Jackson distinguished this situation from one where negotiations were ongoing, but no agreement had been reached yet; then individual contracts could have effect.

This dispute was happening not only in the middle of World War II, but also in a period of other labor troubles for JI Case Company; a strike would begin in December 1945 at their factory in Racine, Wisconsin that would last for a historically-long 440 days.

[2] For the Supreme Court, this decision came seven years after West Coast Hotel Co. v. Parrish, a case that is generally seen as the end of the Lochner era, and the beginning of an era when the Court would uphold government regulations of business and industry more often.