NLRB Reverses Precedent and Requires Dues Deduction After Contract Expires

Whether an employer is required to continue deducting union dues from employee paychecks after the expiration of a collective bargaining agreement is one of several laws related to unions that flip-flop depending on the make-up of the National Labor Relations Board.

In Bethlehem Steel (1962), the NLRB ruled employers were permitted to stop deducting union dues from employee paychecks once the collective bargaining agreement expired and while the parties negotiated a successor agreement.

The NLRB under President Obama overturned the law and ruled that employers are not allowed to stop deducting union dues when the collective bargaining agreement expires.

In its 2019 decision in Valley Hospital Medical Center, Inc., 68 NLRB No. 139, (Valley Hospital I) the Trump NLRB held that employers could again cease dues checkoff obligations after a CBA expired. The NLRB stated that dues checkoff provisions were mandatory subjects of bargaining that were exclusively created by a CBA and therefore were enforceable only for the duration of the CBA.

On September 30, 2022, in another Valley Hospital case, Valley Hospital Medical Center, Inc., Case 28-CA-213783 (Valley Hospital II), the Biden NLRB reverted to the Obama NLRB’s rule prohibit the cessation of union dues checkoff after a CBA expires until either the parties have reached a new agreement or the parties have reached impasse after bargaining.

Valley II clearly favors unions. Allowing employers to deduct dues does not mean that employees do not owe the dues; it just means that employees will pay the dues after their paychecks are deposited into their bank account instead of being deducted by the employer like insurance premiums.

Notably, the rate that employees who pay union dues after the money reaches their bank accounts plummets compared to the 100% payment rate for dues deduction.

Unions are businesses. They need dues revenue to pay bills for land, offices, vehicles, salaries, tax preparation, marketing materials, janitorial services, postage, legal and accounting fees, to pay utilities, and to organize new members among other expenditures. A cursory review of any union’s LM-2 filing shows just how much money unions spend and where it is spent. Stopping dues deductions effectively slows a union’s ability to function.

The cessation of dues, while it was lawful to do so, resulted in unions agreeing to contract terms they did not want to agree to during the negotiation of a successor collective bargaining agreement just to get the dues revenue pipeline flowing again. I’ve been involved in hundreds of negotiations where this has happened.

The decision to force employers to continue deducting dues after the expiration of a union contract eliminates the availability of this economic weapon. It allows unions to hold out for more favorable contract language while hanging the ever-present threat of striking over the employer’s head to force the employer to agree to contract terms it otherwise would not agree to.

This is yet another objective of the National Labor Relations Board’s General Counsel in her plight to re-write labor law so the scales of justice tip heavily in favor of unions.

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Matt Austin is a nationwide management labor lawyer. Labor laws govern virtually all private-sector employees regardless of union membership. Proactive management of labor relations is critical to maintaining flexibility and increasing profit.

Matt also runs Austin Legal’s HR Legal Compliance Program that, for a small monthly fee, ensures HR decisions are protected by the attorney-client privilege.

Matt’s experience is deeply rooted in helping manage many aspects of his clients’ businesses. To effectively manage labor relations, he must also manage budgets, forecasts, new growth areas, and projected market corrections. High emotional intelligence is also critical to negotiating union contracts and to properly advise HR Legal Compliance members through the nuances of the law, its application to their companies, and how it will be received by employees.

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