In late 1927, Franz Schubert, an engineer by trade, submitted a legal brief to the Hamburg Administrative Court contesting the fact that he had been forced to become a member of the city's Locksmiths and Mechanical Engineers Guild. According to the German Business Ordinance (Gewerbeordnung), handicraft guilds could constitute themselves as mandatory organizations whenever a majority of eligible craftsmen in a locality had so voted. Schubert objected that such compulsion violated his right to free economic combination under the Weimar Constitution. He wished instead to join the Association of Iron Industrialists (Verband der Eisenindustriellen), which he claimed had a more advantageous collective bargaining agreement with its workers. The Court rejected his arguments. It responded that the state had not established mandatory guilds simply to pursue business affairs and protect the interests of employers, but to further social, educational and cultural goals of national importance. It was therefore inappropriate for any individual to argue that such institutions were unconstitutional. Schubert had no other choice than to honor his legal obligation, regardless of his personal preferences.

Engineer Schubert's case was not unique. Ever since the Reich had established handicraft chambers and mandatory guilds in an 1897 amendment (Handwerkernovelle) to the Business Ordinance, the legal distinction between handicraft and industry had been an issue of great controversy in artisanal, employer, labor and political circles. Since the law itself had not differentiated the two productive sectors, chambers and guilds often took matters into their own hands, enrolling enterprises in their organizations as they saw fit.