NLRB Rules that Union Dues Checkoff Survives Contract Expiration

An employer that deducts union dues from employees’ wages (dues checkoff) under a collective bargaining agreement (CBA) must now continue to do so after the CBA expires. According to a recent National Labor Relations Board (NLRB) ruling, the dues checkoff obligation continues after CBA expiration until the parties reach either a new agreement or a valid bargaining impasse. The 3-1 decision in WKYC-TV, Inc., issued on December 12, 2012, overrules 50 years of precedent to the contrary. Because of the previous long-standing precedent, the Board’s decision will apply only prospectively.

In 1962, the NLRB ruled in Bethlehem Steel that an employer’s dues checkoff obligation expires with the expiration of the CBA. Employers have thus long relied on Bethlehem Steel in interpreting their obligations under the National Labor Relations Act (NLRA or the Act). In WKYC-TV, a three-member majority of the NLRB overruled Bethlehem Steel, finding that “requiring employers to honor dues checkoff arrangements following contract expiration is consistent with (1) the language of the Act; (2) its relevant legislative history; and (3) the general rule against unilateral changes in terms and conditions of employment.”

The NLRB examined Section 8(a)(5) of the NLRA, which prohibits unilateral changes to employees’ wages, hours, and other terms and conditions of employment without bargaining with the union. The Board concluded that the dues checkoff is a mandatory subject of bargaining and must continue after CBA expiration until a new agreement or a lawful impasse is reached. The Board likened dues checkoff provisions to other types of voluntary wage deductions, such as contributions to employee savings accounts and charitable contributions, which survive a CBA’s expiration.

The NLRB also concluded that, under the Taft-Hartley Act, Congress contemplated that a dues checkoff provision would survive expiration of the CBA, citing language that permits an employer to remit dues to a union under employees’ written authorization if the assignment is not irrevocable “beyond the termination date of the applicable collective agreement.” The Board also relied on the law’s different treatment of employee trust funds and dues checkoff provisions to conclude that the latter survive CBA expiration.

Finally, the Board concluded that Bethlehem Steel was incorrect in inextricably linking dues checkoff provisions with union security clauses (which require employees to be union members to maintain employment and expire with the expiration of the CBA). The Board noted that, in right-to-work states, a CBA may not contain a union security clause, but may contain a dues checkoff provision, demonstrating the independence of the two clauses. Thus, the Board determined that the presence of a union security clause in the CBA does not dictate the expiration of the dues checkoff provision.

Board member Brian E. Hayes, whose term has now expired, wrote a lengthy dissent in WKYC-TV, noting Bethlehem Steel recognized that a union security clause is a large inducement for employees to authorize dues checkoff. Thus, Mr. Hayes found it “unreasonable” to believe that employees would prefer to have dues deducted from pay when their employment no longer depended on union membership. He also said the majority’s decision did not recognize the principle of “voluntary unionism.”

As Mr. Hayes noted, the Board’s decision in WKYC-TV removes a “legitimate economic weapon” previously wielded by an employer in bargaining for a successor contract, which may result in “significantly alter[ing] the playing field that labor and management have come to know and rely on” as employers will now be required to continue enabling the funding of union activity rather than forcing the union to face the administrative difficulty of collecting dues. In addition, as he noted, to be able to discontinue dues checkoff, an employer will have to eliminate the provision in its final proposal to the union before reaching impasse, which may further stall resolution of a new agreement.

Members of Ballard Spahr’s Labor and Employment Group are available to discuss the WKYC-TV decision and to assist employers facing negotiation of expiring CBAs. For more information, contact Constantinos G. Panagopoulos at 202.661.2202 or cgp@ballardspahr.com, Amy L. Bashore at 856.761.3402 or bashorea@ballardspahr.com, or the member of the Labor and Employment Group with whom you work.

Topics:  Bethlehem Steel, Collective Bargaining, Dues Checkoff, NLRA, NLRB, Union Dues, Unions

Published In: Administrative Agency Updates, General Business Updates, Labor & Employment Updates

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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