In a December 16, 2019 decision, the National Labor Relations Board reverted to a legal principle that had stood for over 50 years. In 2015, the NLRB ruled that employers could no longer discontinue a union dues checkoff after a collective bargaining agreement had expired. Now a 3-1 Board majority restores the long-established standard from a 1962 case.
What Is Dues Checkoff?
Dues checkoff refers to the practice of deducting union dues from employees’ pay and remitting the money to the union. This practice is legal where the union and employer have agreed to it and employees have signed dues-deduction authorizations. Unions usually seek and obtain authorizations from most, if not all, bargaining unit members.
Unions typically bargain for provisions requiring employers to make a dues checkoff. This is at least an administrative convenience for unions. Otherwise, they would need to obtain the dues money directly from individual employees.
Legal Debate
Generally, many provisions of a collective bargaining agreement continue past contract expiration if no successor contract is in place. This results from the obligation to maintain the status quo on terms and conditions of employment. The employer can only make unilateral changes after contract expiration if it first bargains to impasse over desired changes.
There are exceptions to this unilateral change doctrine. These historically have included contract provisions for no-strike/lockout pledges, arbitration, management rights, union security, and dues checkoff.
In a 1962 case involving Bethlehem Steel, the NLRB found that dues checkoff was solely a contractual right that ends upon contract expiration. That analysis governed until 2015. Then, an Obama-era NLRB majority reasoned that “[u]nlike no-strike, arbitration, and management-rights clauses, a dues-checkoff provision in a collective-bargaining agreement does not involve the contractual surrender of any statutory or nonstatutory right be a party to the agreement”. The Board, in Lincoln Lutheran, continued, “similar to other voluntary checkoff agreements, such as employee savings accounts and charitable contributions, which the Board has recognized also create ‘administrative convenience’ and, notably, survive the contracts that establish them.”
New Ruling
In a case involving Valley Hospital Medical Center, the NLRB now reinstates the holding of the 1962 Bethlehem Steel case.
The Republican Board majority (all appointed by President Trump) reiterates that there would be no obligation to checkoff dues unless there is a contractual agreement to do so. Thus, once a contract including that obligation expires, the employer has no further duty to withhold and remit dues.
The Board’s lone Democratic member (whose term expired the day of this decision) strenuously objected. She argues that the majority’s analysis is “irrational” and “serves no legitimate statutory purpose.”
Ultimately, it’s tough to deny the purely partisan rift in opinion on this subject. Union dues checkoff is one of many areas where pro-business Republicans and pro-labor Democrats interpret the National Labor Relations Act differently. As such, future oscillation on this and other essential aspects of federal labor law is predictable.
Impact of New Dues Checkoff Rule
Under this latest ruling, employers have the (current) NLRB’s backing to stop a dues checkoff during periods of contract expiration. Employers must, of course, still negotiate in good faith for a new collective bargaining agreement. Assuming a new contract is reached, the company will likely have to reinstate the checkoff (barring the unlikely prospect of an agreement to remove it from the CBA.)
Note that even if the company ends the dues checkoff, the union may still collect dues directly from their members.