Contract Expired So You Want To Stop Deducting Dues From Employee Paychecks? Think Again!

Franczek P.C.

On August 27, 2015, the National Labor Relations Board overturned 53 years of precedent under Bethlehem Steel, and found that going forward an employer could no longer unilaterally stop deducting union dues from employee paychecks once the union contract had expired. In Lincoln Lutheran of Racine, the Board found that an employer’s obligation to honor a dues deduction or dues checkoff provision survives the expiration or termination of the collective bargaining agreement. As we noted in an earlier alert, the Board previously attempted to overrule Bethlehem Steel with its 2012 decision in WKYC-TV, Inc. That decision was later invalidated by the Supreme Court’s Noel Canning decision, and employers continued to rely on Bethlehem Steel when deciding whether to stop deducting union dues.

In Lincoln Lutheran, the Board held that requiring employers to honor a dues checkoff provision after the expiration of an agreement served the goal of the National Labor Relations Act of “promoting collective bargaining.” The Board determined that dues checkoff was a matter related to wages, hours, and other terms and conditions of employment and a mandatory subject of bargaining. Thus, an employer’s decision to unilaterally cease honoring dues checkoff violates the Act, and an employer is obligated to uphold the provision as agreed upon until the parties reach a successor agreement or a valid impasse. Acknowledging the hardship imposed on employers that have relied on Bethlehem Steel for the past five decades, the Board ruled that Lincoln Lutheran will apply prospectively rather than retroactively to employers.

With this decision, the Board has taken away from employers a long-held bargaining tool. It also signals that the Board may reconsider its position on other contract terms that it has historically found do not survive contract expiration such as the obligation to arbitrate grievances that arise after the contract expires. Employers currently in negotiations or about to begin that process would be wise to reevaluate their bargaining strategies in light of Lincoln Lutheran.

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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