By the late 1940s, labor organizations had become a powerful force in America. The government worked with unions to prevent work stoppages, but widespread fear remained about the crippling effects of large-scale strikes. In response, Congress, over President Truman's veto, passed the Taft-Hartley Labor Act in 1947, which limited the negotiation tools unions had in collective bargaining disputes. This did nothing to soothe the contentious relationship between Congress and the President, who had been vocal in his criticism for the do-nothing Congress in his re-election campaign.
Youngstown Sheet and Tube Company v. Sawyer involved a labor dispute in the early 1950s between steel mill owners and employees about their collective bargaining agreements. The two sides were unable to come to terms even after federal mediators arrived to help. The workers prepared to strike.
At the time, the United States was involved in the Korean War, and steel was needed for the military. President Truman believed the reduction in steel production from a strike would compromise national defense. He issued an executive order instructing Secretary of Commerce Sawyer to take control of the nation's steel mills and ensure uninterrupted production.
Youngstown Sheet and Tube Company and other mill operators sued Sawyer in federal court. Youngstown alleged that the president's order was unconstitutional because it amounted to legislation, which was Congress's proprietary role. The government argued that because the president was acting in response to a national emergency, the order was authorized under the aggregate of his constitutional powers as the nation's chief executive and the commander-in-chief. The district court granted an injunction on the ground that the president had exceeded his constitutional authority.
but the Court of Appeal, sitting en banc, temporarily stayed the injunction. The Supreme Court granted Cerciari to consider whether the president had exceeded his executive powers when he issued the order.