NLRB Says Employers Must Continue to Deduct Union Dues After CBA Expiration

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Anna Pugh

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October 6, 2022
On October 3, in the case of Valley Hospital, the National Labor Relations Board answered a question that has impacted employers for almost 60 years: whether, under Section 8(a)(5) of the National Labor Relations Act, an employer may unilaterally cease to deduct union dues from the employee’s wages and remit the dues to the union after the expiration of the collective bargaining agreement that provides for it. The Board answered this question negatively, stating that “dues checkoff should be treated as part of the status quo that cannot be changed unilaterally after contract expiration.”
 
Members Kaplan and Ring disagreed with the majority opinion. They reasoned that since the Bethlehem Steel case in 1962, an employer’s statutory obligation to check off union dues ends at the same time as its collective bargaining agreement.
 
The Board’s Vacillation on Dues Checkoffs
Since the Bethlehem Steel decision, however, the rule has changed three times. During the Obama administration, the Board in the Lincoln Lutheran of Racine case overruled Bethlehem Steel and issued a rule prohibiting unilateral changes in most terms and conditions of employment, including the checkoff obligation, after the expiration of a collective bargaining agreement.
 
This rule shifted again during the Trump administration, when, in its first decision in Valley Hospital, the Board overruled Lincoln Lutheran and restored the Bethlehem Steel precedent. In so holding, the Board distinguished between terms that require bargaining, for example, pay and benefits, and terms that are assumed by the mere fact that parties entered into the collective bargaining agreement. Thus, the Board found terms like dues checkoff to be an exception to the usual requirement to maintain the status quo after a contract expires and not collectible upon expiration of the collective bargaining agreement.
 
However, following the presidential election in 2020, the Board has once again taken a turn, and its resurrection of the Lincoln Lutheran case holding was not unexpected. In holding that employers must continue to deduct union dues after expiration of the collective bargaining agreement, the Board reasoned that this rule “better effectuates the Act’s policy,” encourages the practice and procedure of collective bargaining, and protects “the ‘full freedom’ of workers in the selection of bargaining representatives of their own choice.”
 
The Bottom Line
The Board’s back and forth on the dues checkoff issue serves as an important reminder to employers: What was lawful just a short time ago may soon be unlawful under a new administration. 
 
For questions about this alert, please contact the authors or the Steptoe & Johnson Labor & Employment Team.