WASHINGTON—The Supreme Court on Tuesday heard a challenge to a decades-old precedent authorizing public-sector unions to collect fees from workers who refuse to join the union but benefit from collective bargaining.
The court's liberals seemed firmly planted on the union side, with Justice Elena Kagan saying that the plaintiffs' argument "would radically restructure the way workplaces across the country are run."
Some conservative justices, in contrast, seemed open to the challenge, which contends that the "agency fees" the state allows the union to collect from public employees violate the First Amendment by compelling them to subsidize bargaining positions with which they may disagree.
"I'm talking about whether or not a union can take money from an employee who objects to the union's position on fundamental political grounds," said Justice Anthony Kennedy, referring, for instance, to a younger worker who might disagree with a union's decision to focus on protecting pensions.
"In an era where government is getting bigger and bigger…this is becoming more and more of an important issue to more people," he said.
The case could further hurt unions fighting to maintain ground in states grappling with financial woes.
Paul Smith, the lawyer representing the union position, said any burden on the objecting employees "arises only because somebody has chosen to come take this job working for the state on terms the state offers."
The union position received a surprisingly sympathetic hearing from Justice Antonin Scalia, who in other cases has joined with conservatives against organized labor's position.
The plaintiffs' lawyer, William Messenger of the National Right to Work Legal Defense Foundation, described the issue as the government compelling individuals to support "lobbying" officials for causes they oppose.
Justice Scalia, however, repeatedly framed the case under precedents that distinguish between the government's function of regulating public conduct, where it is constrained by constitutional protections, and its role as an employer, where it holds much of the discretion private employers have in managing the workplace.
"There are some private employers who think they're better off with a closed shop and they just want to deal with one union," Justice Scalia said. "Why can't the government have the same interest?"
The case originated in Illinois, which authorized home health-care aides to unionize for collective bargaining with the state.
The aides are paid through Medicaid to care for the disabled. One group of health aides voted to join the Service Employees International Union. The union's agreement with the state requires workers who don't want to belong to the union to pay a fee to cover their share of collective bargaining costs.
Justice Samuel Alito questioned the arrangement's origins.
"I thought the situation was that Gov. [Rod] Blagojevich got a huge campaign contribution from the union and virtually as soon as he got into office he took out his pen and signed an executive order that had the effect of putting, what was it, $3.6 million into the union coffers," he said.
Some of the eight plaintiffs are covered by the SEIU agreement but don't belong to the union. Others belong to a separate group of health aides that voted against unionization. Together, they argue that even if public employees can be required to pay union fees for collective bargaining, the health aides shouldn't be classified as state workers because they can be terminated by the individuals who employ them.
The Seventh U.S. Circuit Court of Appeals, in Chicago, rejected the suit, ruling that the aides are state employees and that the union fees are permitted under a 1977 Supreme Court precedent. That decision allows state employees, like those in the private sector, to refuse to fund union activities outside collective bargaining, such as political campaigning.
But if state law allows, union contracts can require all members of the bargaining unit to pay "fair-share" fees for collective bargaining costs.
Solicitor General Donald Verrilli, arguing in support of the union position, said that was justified because the union has a legal duty of fair representation, requiring it to protect all employees in the bargaining unit whether they belong to the union or not.
Although Justice Scalia also questioned Mr. Verrilli, he seemed sympathetic to the free-rider argument. If the challenge prevails, it's not just objectors who might stop paying union fees, he said. Workers might reason, "Hey, I don't have to pay. The union is going to do this stuff anyway."
A decision in the case, Harris v. Quinn, is expected by June.
Write to Jess Bravin at jess.bravin@wsj.com and Melanie Trottman at melanie.trottman@wsj.com