In the case of Shea, Executive Director, Department of Social Services of Colorado, et al. v. Vialpando in 1973, the U.S Supreme Court ruled that states cannot reduce Aid to Families with Dependent Children (AFDC) benefits when a recipient refuses employment due to union membership or collective bargaining agreements. The court held that federal law preempted state regulations which reduced AFDC payments if recipients refused jobs because they were subject to labor disputes or their acceptance would violate union rules and contracts. The decision was based on the fact that Congress had not intended for welfare recipients to be used as strikebreakers nor did it intend for them to undermine established labor standards by accepting substandard wages or conditions under threat of losing their benefits.

In the dissenting opinion for Shea v. Vialpando, Justice Powell argued that the majority's interpretation of federal law was incorrect and overly broad. He contended that while Congress intended to provide a work incentive for welfare recipients, it did not intend to subsidize all employment-related expenses without limit or consideration of their reasonableness. He also disagreed with the majority's view on disregarding child care costs in calculating income available for basic needs, arguing this could lead to absurd results where families earning substantial incomes could still qualify for public assistance due to high childcare costs. Furthermore, he expressed concern about potential abuse and fraud if there were no limits or checks on what can be claimed as work-related expenses under Aid to Families with Dependent Children (AFDC) program rules.