Machinists v Street 21  was the first U.S. Supreme Court case imposing limitations on a union’s use of nonmember fees collected under a union shop agreement pursuant to the authority of Section 2, Eleventh of the Railway Labor Act (RLA). 22  In Street, employees who were members of the union under a union-shop clause complained that the union was compelling them to pay dues that were used to support political and ideological activities with which the employees disagreed.

The Georgia state courts enjoined enforcement of the union security clause, holding that Section 2, Eleventh violated the United States Constitution to the extent that it compelled the employees to finance objectionable political causes. 23 

The United States Supreme Court thereafter declined to rule on the constitutional issues. Instead, the Court concluded that legislative history clearly established that Section 2, Eleventh prohibited unions from expending an employee’s fees on political causes once the employee had informed the union of his or her objection to such expenditures. Because the use of employees’ fees to finance political programs was not a use that defrayed collective bargaining expenses, the statutory purpose did not justify compelling employees to fund political causes that they opposed.

One year after Street, the Court in Railway Clerks v Allen 24  broadened the rule it developed in Street by holding that a dissenting employee need not state each particular political cause that he or she was opposed to financing. Instead, employees would be protected by objecting to the use of their fees for any political endeavor.

The Court in Street and Allen only restricted the union’s expenditures of fees on political causes. In another RLA case, Ellis v Railway Clerks, the Court addressed other impermissible uses of dissenting nonmembers’ agency fees. 25  The Ellis Court developed a test that asks "whether the challenged expenditures are necessarily or reasonably incurred for the purpose of performing the duties of an exclusive bargaining representative."

In Ellis, the dissenting employees challenged a variety of union-related activities. Applying the test, the Court found that:

1. the union’s national convention was properly chargeable against objector’s fees because it guided the union’s collective bargaining approach and dictated the union’s effectiveness in negotiating labor agreements;

2. the financing of union publications was allowable to the extent that articles discussed activities or events that the union could properly fund out of the general treasury but not political event announcements; and

3. the use of objecting employees’ fees to finance activities aimed at organizing the employees of other employers was prohibited as too attenuated and unnecessary to eliminate the problem of free riders.

Thus the Court in Ellis held that lobbying activities, organizing efforts, and certain union publications were not reasonably necessary to implement the union’s duties as an exclusive representative.