NLRB Holds That Dues Checkoff Obligations Continue After Contract Expiration

NLRB Holds That Dues Checkoff Obligations Continue After Contract Expiration

In a reversal of 50 years of precedent, the National Labor Relations Board (NLRB or Board) held recently that an employer’s obligation to check off union dues from employees’ paychecks should continue even after the expiration of the collective bargaining agreement that establishes the checkoff obligation. WKYC-TV, Inc., 359 NLRB No. 30 (Dec. 12, 2012).

“Dues checkoff” is the bargained-for obligation of an employer to deduct union dues from an employee’s wages and remit those dues to the union. In 1962, in Bethlehem Steel, the Board established the rule that an employer’s obligation to check off union dues terminates when the collective bargaining agreement establishing that obligation expires. However, reasoning that “[t]he Board…has never provided a coherent explanation for this rule,” the Board in WKYC-TV held that there were “compelling statutory and policy reasons to abandon the Bethlehem Steel rule.”

In this case, WKYC-TV, a Cleveland, Ohio-based television station, had a collective bargaining agreement with the National Association of Broadcast Employees and Technicians that terminated in June 2009. After several months of bargaining, the station implemented portions of its final offer in January 2010, which included union security and dues checkoff. The station informed the union that those provisions were not intended to be part of the final offer, but the station continued to deduct union dues from employees’ wages and remit those dues to the union until October 2010. After the station stopped deducting union dues, the union filed an unfair labor practice charge, contending that the station should have been required to bargain with the union over the cessation of dues checkoff. The Board agreed, opining that “[n]othing in [f]ederal labor law or policy…suggests that dues-checkoff arrangements should be treated less favorably than other terms and conditions of employment for purposes of the status quo rule.”

This case is of obvious importance to unionized employers, many of whom likely have some form of dues checkoff obligations. It should also serve as an example to nonunion employers of the current Board’s willingness to set new precedent, frequently in a manner favorable to labor organizations.

John T. Merrell is an associate in the Greenville office of Ogletree Deakins.

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In a reversal of 50 years of precedent, the National Labor Relations Board (NLRB or Board) held recently that an employer’s obligation to check off union dues from employees’ paychecks should continue even after the expiration of the collective bargaining agreement that establishes the checkoff obligation. WKYC-TV, Inc., 359 NLRB No. 30 (Dec. 12, 2012).

“Dues checkoff” is the bargained-for obligation of an employer to deduct union dues from an employee’s wages and remit those dues to the union. In 1962, in Bethlehem Steel, the Board established the rule that an employer’s obligation to check off union dues terminates when the collective bargaining agreement establishing that obligation expires. However, reasoning that “[t]he Board…has never provided a coherent explanation for this rule,” the Board in WKYC-TV held that there were “compelling statutory and policy reasons to abandon the Bethlehem Steel rule.”

In this case, WKYC-TV, a Cleveland, Ohio-based television station, had a collective bargaining agreement with the National Association of Broadcast Employees and Technicians that terminated in June 2009. After several months of bargaining, the station implemented portions of its final offer in January 2010, which included union security and dues checkoff. The station informed the union that those provisions were not intended to be part of the final offer, but the station continued to deduct union dues from employees’ wages and remit those dues to the union until October 2010. After the station stopped deducting union dues, the union filed an unfair labor practice charge, contending that the station should have been required to bargain with the union over the cessation of dues checkoff. The Board agreed, opining that “[n]othing in [f]ederal labor law or policy…suggests that dues-checkoff arrangements should be treated less favorably than other terms and conditions of employment for purposes of the status quo rule.”

This case is of obvious importance to unionized employers, many of whom likely have some form of dues checkoff obligations. It should also serve as an example to nonunion employers of the current Board’s willingness to set new precedent, frequently in a manner favorable to labor organizations.