News

NLRB: Dues Checkoff Does Not Continue Post-Contract Expiration

December 23, 2019

By Noah R. Jordan, Esq.

On December 16, 2019, the National Labor Relations Board issued a decision and order in Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center and Local Joint Executive Board of Las Vegas, case number 28-CA-213783.  The issue presented in the case was whether it is unlawful for an employer to cease checking off and remitting employees’ union dues, pursuant to dues checkoff provision in a Collective Bargaining Agreement, after the expiration of a CBA.  The NLRB most recently addressed this very issue when it ruled in 2015 in Lincoln Lutheran of Racine, 362 NLRB 1655, that employers were obligated to continue to check off union dues after expiration of a CBA, as part of its obligation to maintain status quo.  We wrote about that decision here.  The decision in Lincoln Lutheran overturned roughly fifty years of previous precedent, beginning with Bethlehem Steel, 136 NLRB 1500 (1962), holding that dues checkoff did not automatically continue post-expiration.

In Valley Hospital Medical Center, the NLRB reverted to its pre-Lincoln Lutheran standard by overruling that decision and holding that “a dues-checkoff provision properly belongs to the limited category of mandatory bargaining subjects that are exclusively created by the contract and are enforceable through Section 8(a)(5) of the Act only for the duration of the contractual obligation created by the parties.”  Thus, the Board held that “There is no independent statutory obligation to check off and remit dues after expiration of a collective-bargaining agreement containing a checkoff provision, just as no such statutory obligation exists before parties enter into such an agreement.”

Unlike its ruling in Lincoln Lutheran which the Board applied only prospectively, the Board’s decision is to be applied retroactively to all other pending cases relating to this issue.

Why this decision is important for you:  This decision, like most of those issued by the NLRB in recent years, represents the new Board majority’s shift to a distinctly pro-employer posture.  Under this new standard, when a CBA expires, unions may have to operate without the ability to have the employer deduct and remit dues to the union, should the employer opt to discontinue complying with a dues checkoff provision.  As such, unions will have to develop an alternative method to collect dues directly from members until agreement can be reached on terms of a new CBA containing a dues checkoff provision.  Although this undoubtedly is not a positive development for unions, it merely reverts back to the pre-Lincoln Lutheran standard which, as stated above, had been in place for half a century.  Therefore, many unions previously would have developed contingencies to deal with this challenge, which they now may have to return to.  For unions which have not dealt with this before, though, this decision presents a potential new challenge to maintaining the operation of those unions while not under contract with an employer.