The U.S. Supreme Court case Chicago Teachers Union, Local No. 1, AFT, AFL-CIO v. Hudson et al., 1985 dealt with the issue of non-union members being required to pay agency fees to a union for collective bargaining services provided on their behalf. The court ruled that while it was constitutional for unions to charge such fees, there must be procedural safeguards in place to ensure that these charges were not used towards political or ideological activities unrelated to collective bargaining without the express consent of those paying the fee. These safeguards included an adequate explanation of how the fee was calculated and an opportunity for non-members to challenge this amount before an impartial decision maker if they believed part of their fee was going towards activities they did not support.

In the dissenting opinion for Chicago Teachers Union, Local No. 1, AFT, AFL-CIO v. Hudson et al., Justice Powell argued that the majority's decision imposed unnecessary administrative burdens on unions and infringed upon their First Amendment rights. He contended that while non-union members have a right not to fund union activities unrelated to collective bargaining, they do not have an inherent right to pre-audit disclosure of how their fees are spent or a prompt hearing before an impartial decision-maker if they disagree with the union's allocation of funds. These requirements were seen as overly intrusive and burdensome by Justice Powell who believed it was sufficient for unions to provide basic financial information and offer dissatisfied fee payers an internal dispute resolution process.