The National Labor Relations Board has held that an employer has no obligation to continue deducting union dues from employee paychecks pursuant to a dues checkoff provision in a collective bargaining agreement (CBA) after the CBA expires. Valley Hospital Medical Center, 368 NLRB No. 139 (Dec. 16, 2019). Chairman John Ring and Members William Emanuel and Marvin Kaplan were in the majority. Member Lauren McFerran dissented.

The NLRB overruled Lincoln Lutheran of Racine, 362 NLRB 1655 (2015), in which the Board held an employer continues to have an obligation to deduct union dues from employee paychecks despite the expiration of a CBA containing a dues checkoff provision on which the deductions were based.

Background

Most CBAs contain a dues checkoff provision obligating the employer to deduct union dues from employee paychecks and remit those funds to the union. Whether checkoff provisions were part of the “status quo” that had to be maintained after a contract expired or whether the obligation expired with the contract was an open question until 1962. In 1962, the Board, for the first time, in Bethlehem Steel, 136 NLRB 1500 (1962), held that a dues checkoff provision was not part of the “status quo,” and the obligation to deduct dues expired when the contract expired. This, of course, provided an employer significant leverage to engage in negotiations for a new contract. If the contract expired, the employer could exercise its right to cease deducting and remitting dues to the union, eliminating a union revenue stream.

In 2015, the Board, comprised of members appointed by President Barack Obama, overruled Bethlehem Steel in Lincoln Lutheran of Racine, effectively altering the balance of bargaining power that existed for more than 50 years. Lincoln Lutheran held that dues checkoff was part of the “status quo” that must be maintained after contract expiration (like wages and benefits). The Obama Board viewed the promise to deduct dues as a convenience for employees, akin to deductions for charitable contributions or deposits into savings accounts. Therefore, checkoff was to be treated as a term and condition of employment that could not be altered until the employer met its obligation to bargain with the union to an impasse or to a new contract. The practical effect of the decision was that it became easier for a union to play “hard ball” in bargaining since the employer no longer had the ability to cut off its revenue.

Valley Hospital Medical Center

In Valley Hospital Medical Center, the Board returned to the 1962 standard, expressly overruling Lincoln Lutheran and holding that dues checkoff does not survive contract expiration as part of the status quo. Unless there is a contract in force requiring it do so, an employer may cease deducting dues from employee paychecks, the Board ruled. This is true whether the checkoff provision was part of a contract that included union security or whether it was a stand-alone provision, not connected to union security (common in right to work states).

The practical effect of the decision on the balance of power between unions and employers is clear. Comparing dues checkoff provisions to no-strike and no-lockout provisions which also expire when the CBA expires, the Board stated:

Accordingly, as with similarly excepted contractual no-strike and no-lockout provisions, an employer is free upon contract expiration to use dues checkoff cessation as an economic weapon in bargaining without interference from the Board.

(Emphasis added.)

 

 

 

 

 

 

 

 

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Jonathan J. Spitz Jonathan J. Spitz

Jonathan J. Spitz is a Principal in the Atlanta, Georgia office of Jackson Lewis P.C. and he is the national co-Coordinator of the Firm’s Collegiate and Professional Sports industry group.

Mr. Spitz coordinates Jackson Lewis’ labor practice for the Southeast region of the…

Jonathan J. Spitz is a Principal in the Atlanta, Georgia office of Jackson Lewis P.C. and he is the national co-Coordinator of the Firm’s Collegiate and Professional Sports industry group.

Mr. Spitz coordinates Jackson Lewis’ labor practice for the Southeast region of the United States. He understands the practical and operational needs of clients, helping design pragmatic strategies to minimize risk and maximize performance. He was selected as a “Leader in the Field” by Chambers USA in 2009 and 2010.

He has represented management in numerous counter-organizing drives and participated in dozens of unfair labor practice proceedings, discrimination charges and other matters before the National Labor Relations Board, the Equal Employment Opportunity Commission and various federal and state administrative agencies, as well as in collective bargaining, arbitration and in employment litigation before state and federal courts. Mr. Spitz regularly counsels employers in employee relations and discipline and discharge matters, and also assists employers in drafting employment policies and in complying with the Family and Medical Leave Act, drug testing laws and regulations, the Americans with Disabilities Act and other federal and state employment laws.

Mr. Spitz has extensive experience in assisting employers to create union and litigation avoidance strategies suitable to the individual organization, values and industry. He has led teams conducting multi-facility labor vulnerability assessments and has advised employers in responding to corporate campaigns and demands for card check and neutrality.

Mr. Spitz is a contributing author of Employer’s Guide to Union Organizing Campaigns, Aspen Publishers, 2007. In addition, he has authored many articles regarding labor and employment law issues which have appeared in national trade publications.

Mr. Spitz is admitted to practice in the Second, Fourth, Sixth, Eleventh and District of Columbia Circuit Courts of Appeals; the United States District Court for the Middle District of Georgia; and the Georgia Supreme Court.

He received his Bachelor of Arts degree, cum laude, from Tufts University in 1990. He earned his J.D. from Emory University in 1993