In the autumn of 1937, five shoe-manufacturing companies located within a few blocks of each other in New York City decided to move out of town. When the flight was over, the five companies had all settled down in small towns in New York and New England. Before they moved, each of the companies had an agreement with the Shoe Workers' Union covering wages, hours, and other conditions and granting the closed shop. On resuming operations in their new locations, the companies found themselves amply provided with nonunion labor at lower wages than in the city. The shoe workers of New York City were left without jobs during a period of rapidly increasing unemployment, and the union's strength and prestige were seriously threatened.

There were three possible courses which the union might pursue. It could desert its members in the city, follow the companies into the small towns, and attempt to organize the workers there as a basis for renewing agreements with the companies. It could sue the companies for breach of contract since the flight took place before the expiration of the agreements. Or it could charge the companies with violation of the National Labor Relations Act in attempting to evade collective bargaining. The union decided upon the third course of action.