The Supreme Court has held that unions can collect service fees from nonmembers to cover expenses for collective bargaining and contract administration, but cannot collect service fees from nonmembers to support political or ideological expression. In this case, the Maine State Employees Association (MSEA), the exclusive bargaining agent for certain state employees, paid a portion of the service fees collected from nonmembers to its national affiliate, the Service Employees International Union (SEIU), who in turn used part of it to pay for litigation activities undertaken by SEIU throughout the country.
The nonmembers challenged on First Amendment grounds the portion of the service fee attributable to SEIU's litigation costs. The federal district court held that collecting the service fee was not unconstitutional, because the union adequately explained the basis for the fee, provided the employees an opportunity to challenge the fee in impartial arbitration, and provided for escrow of disputed amounts.
The First Circuit held that MSEA may lawfully collect service fees from nonmembers for this "extra-unit litigation" because it is related to the union's collective bargaining duties. The Supreme Court agreed to decide whether a union serving as the exclusive bargaining agent for state employees can charge nonmembers for litigation expenses incurred by its national affiliate.
On Jan. 21, 2009, the Court allowed the union's charge for national litigation expenses as long as (1) the litigation is of a kind that would be chargeable if it were local (appropriately related to collective bargaining rather than political activities), and (2) the charge is reciprocal (other locals contribute similarly).