A federal appeals court narrowly upheld Indiana’s right to work law Tuesday, banning mandatory union fees as a condition of employment.

The 7th Circuit Court of Appeals upheld the law with a 2-1 ruling. It was signed by then Gov. Mitch Daniels in 2012 and also stated that workers may also join worksite unions without paying any fees or donating an equal amount to a charity, according to Bloomberg Business Week.

Lawyers for the International Union of Operating Engineers and Local 150 of the AFL-CIO, who were the groups suing over the law, argue that it creates a “free rider problem” by requiring unions to represent nonmembers equally.

In a statement, Indiana Attorney General Greg Zoeller, declared, “Now that the federal courts have concluded the statute the people’s elected representatives in the Legislature passed does not violate federal law, we will argue that the statute also complies with the Indiana Constitution and ought to be upheld.”

Chief Judge Diane Wood dissented, writing that federal labor law “does not support such sweeping force for Indiana’s right-to-work law,” according to Fox Business News.

The Indiana Supreme Court is set to hear arguments Thursday on a pair of cases that challenges the law on state constitutional grounds.

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