An administrative law judge of the National Labor Relations Board has rejected the contention of the NLRB’s General Counsel that an employer bargained in bad faith by refusing to agree to the union’s “union security” (requiring all employees to join the union) and “dues checkoff” (requiring employees to have their union dues deducted from their paychecks) proposals during bargaining over an initial contract, despite failing to specifically explain to the union why. Apogee Retail, NY, LLC d/b/a Unique Thrift Store, JD (NY)-31-15 (July 30, 2015).

The National Labor Relations Act requires an employer to bargain in good faith with a union that represents the employer’s employees. However, the obligation to bargain in good faith “does not compel either party to agree to a proposal or require the making of a concession.” In determining whether an employer has bargained in good faith, the Labor Board analyzes the totality of the circumstances to determine if the employer’s conduct “indicate(s) a present intention to find a basis for agreement . . . .”

In Apogee Retail, during bargaining for an initial contract, the parties had numerous bargaining sessions and had agreed on all proposals except for union security and dues checkoff. At one session, the employer’s owner asked the union several questions about union dues and dues checkoff, and also noted that dues deduction would leave his employees at or below the minimum wage. At the next bargaining session, the union asked the employer if it would agree to the union security and checkoff proposals, and the employer responded that it would not because it did not have to. During subsequent email correspondence between the parties about the employer’s position on the union security and checkoff proposals, the employer’s attorney noted that other contracts do not contain union security, that the union knew why “many employers” do not want to accept dues checkoff, and that there is no obligation to agree to union security. Thereafter, the union filed an unfair labor practice charge against the employer alleging, among other things, that the employer had attempted to avoid reaching an agreement by refusing to explain why it would not accept union security and dues checkoff.   (A petition to decertify the union had been filed by an employee a month earlier and a decertification election was scheduled to be conducted by the NLRB a week later.)

The ALJ dismissed the allegation. First, he noted that even if the employer had only explained that it was rejecting the union security/dues checkoff proposals because it was not required to accept them, “it would still be a reason, albeit not much of a reasoned reason” and “. . . I know of no other type of mandatory subject contract proposal that would require, as a matter of law, that the proposal’s opponent justify or offer a reason for its opposition.” Alternatively, the judge found that the employer did raise business reasons for rejecting union security and dues checkoff when the employer’s owner raised questions during bargaining sessions. Finally, the judge determined that the evidence showed the parties had bargained in good faith because they had reached agreement on all issues, including wage increases and a grievance/arbitration procedure, evidence that the employer was not trying to avoid an agreement.

As noted by the administrative law judge, in other cases cited by the General Counsel in support of his position, an employer’s rejection of union security/dues checkoff has been considered as evidence of bad faith bargaining. However, in those cases, the employer had engaged in additional unlawful conduct which contributed to a finding of bad faith bargaining which did not exist in this case.

Although the employer prevailed in this case, a prudent employer should not “just say no.” Rather, a refusal to accept a proposal should be coupled with a good faith explanation for the rejection. This explanation will be helpful to demonstrate the employer’s good faith in the event an unfair labor practice charge is filed alleging the employer bargained in bad faith. In determining whether the charge has merit, the Labor Board will review the “totality of the circumstances” to decide if the employer was attempting to avoid reaching an agreement.

It is uncertain whether this decision will be appealed to the Labor Board by the General Counsel.