Dues Checkoff Clear In Revocation Requirements, Says NLRB (By Default)

by Proskauer - Labor Relations
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[author: Mark Theodore]

The looming presidential election seems to have slowed the NLRB down, despite the fact the Board is currently at a full complement of five members. As of July 24, it will be down to four, as Member Flynn's resignation will become effective at that time.

The Board cases being decided these days largely involve mundane matters, which for many is a relief. One case issued this past week stuck out even though it too did not involve a novel legal issue or a change in precedent. It is interesting because it provides yet another small insight into the priorities of the agency.

Smith's Food & Drug Centers, Inc., 358 NLRB No. 66 (July 10, 2012).pdf involved the issue of a dues checkoff authorization, which is the mechanism by which unions are able to collect dues more efficiently. A signed checkoff authorization form permits the employer to deduct dues directly from the pay of bargaining unit members and then send one check right to the union each month. What a lot of people don't understand, however, is that dues checkoff authorization forms are considered a separate contract between the employee and the union, and in most cases they can cause an employee to pay dues even if he or she has resigned from the union. Such authorization forms are also lawful in the so-called "right to work" states, where employees cannot be forced to join unions as a condition of employment.

As one can imagine, the terms of these authorization forms, particularly the ability for an employee to revoke the authorization, can be very important. The Act gives some guidance. Section 302(c)(4) of the Act permits employers to deduct monies for dues "Provided, that the employer has received from each employee, on whose account such deductions are made, a written assignment which shall not be irrevocable for a period of more than one year or beyond the termination date of the applicable collective bargaining agreement, whichever is sooner."  

In Smith's Food and Drug Centers, Inc., a group of union-represented employees working in Nevada (a right to work state) resigned their membership from the union. The employer continued deducting dues from their paychecks and the union kept accepting the dues. During a period after the expiration of the contract, and before a new contract had been agreed upon, the employees attempted to revoke their dues authorizations.  Again, the employer continued deducting dues from their paychecks and the union kept accepting those monies.

The complaint alleged that both the failure to cease dues deduction upon resignation and during the contract hiatus were violations of the Act by both the union and the employer. The administrative law judge found both theories to be untenable because existing precedent clearly held that the language of the authorization form controlled. First, the authorization forms were not tied to membership and therefore resignation did not act to cancel the checkoff form. Second, the forms did not allow for revocation during a contract hiatus, but instead set forth a yearly revocation period. 

The applicable language of the form stated:

This authorization and assignment is voluntarily made in consideration for the cost of representation and collective bargaining and is not contingent upon my present or future membership in the Union.  This authorization and assignment shall be irrevocable for a period of one (1) year from the date of execution or until the termination date of the agreement between the Employer and Local 99, whichever occurs sooner, and from year to year theafter, unless not less than thirty (30) days and not more than forty-five (45) days prior the end of any subsequent yearly period I give the Employer and Union written notice of revocation bearing my signature thereto.

Such a model of clarity. It wasn't until the post-trial briefing to the judge that the General Counsel asserted this language was facially invalid. The Administrative Law Judge rejected this assertion because it was not asserted in the complaint (indeed, at the end of the trial the Judge apparently asked whether the General Counsel wanted to amend the complaint to include the allegation, and was told "no"). Having no viable claim before him, the Administrative Law Judge then dismissed the complaint, a finding that was upheld by the Board without comment.

An earth shattering decision? Not hardly. It is interesting, though, for a few reasons.

  • This particular NLRB spends untold resources evaluating employer policies using a vague standard that a "reasonable employee" might interpret the language in a manner that might, possibly, inhibit an employee from exercising his or her rights (although such has never been proven). Today, when investigating alleged unfair labor practice charges that do not involve employer policies, agency investigators ask for the handbook so that they may look for such violations.  Reportedly, the Acting General Counsel has set his sights on "at will" statements which he deems may implicate the Act. Yet, in a case with checkoff language that is written in legalistic terms and makes it difficult, if not impossible, for an employee to revoke it such an assertion is not even raised in the complaint.
  •  Of course, there are differences between a handbook poilcy, which the employee is generally required to at least acknowledge, and a voluntary checkoff authorization. In theory the employee could reject signing the authorization with no consequences; and in a right to work state would never have to pay dues. But, what exactly is voluntary? If an employer hands the checkoff authorization to employees along with all other employment paperwork, including the handbook acknowledgement, is it truly voluntary? The government would consider the acknowledgment to not be voluntary but what about the checkoff form? What happens if the employee asks a question about whether it is voluntary and is told "no"? Would this affect a decision over whether the employee understood it?  
  • The handbook is usually just acknowledged and in many cases employees don't bother reading them. Oftentimes an employee is unaware of what the handbook says for his or her tenure with the company and there are no consequences. In the case of the checkoff authorization it is an actual binding contract under which the employee is required to pay money. An employee's decision to not pay dues by checkoff is a protected right under the Act. Shouldn't the NLRB be paying (pardon the pun) closer attention to whether the langauage of such forms inhibits an employee's rights?

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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