So Much For Tradition – NLRB Overturns 50 Years of “Dues Checkoff” Precedent

“Going forward, the NLRB will no longer allow employers to unilaterally discontinue checkoff when the contract expires or terminates. The result: Employers subject to checkoff must keep a steady stream of union dues open and flowing to the unions that represent their employees, even though the union contract has expired.” (Davis Wright Tremaine)

The National Labor Relations Board just overturned 50 years of precedent relating to collective bargaining agreements.

Unlike other employment contracts, collective bargaining agreements remain in force after they expire, to give unions and employers the time they to negotiate new contracts. But not all of the terms in those agreements remain in force when that happens.

The so-called “dues checkoff” clause, which requires employers to automatically deduct union dues from the paychecks of employees and pay the dues directly to the union, was one such provision. For the past 50 years – up until December 12, 2012, that is – dues checkoff clauses ended when collective bargaining agreements expired.

That is no longer the case, writes Mark Theodore of law firm Proskauer:

“Claiming that the Board ‘has never provided a coherent explanation’ for the 50 year old rule that the obligation to continue deducting dues pursuant to a dues checkoff provision ceases upon expiration of the collective bargaining agreement, the NLRB recently announced it has overruled existing precedent. Dues checkoff provisions now survive the expiration of an agreement and may not be altered without negotiations.”

For your reference, here’s a roundup of what labor and employment attorneys are writing about the NLRB’s about-face:

NLRB Overturns Longstanding Precedent and Rules That a Dues Check Off Provision Survives Contract Expiration (Constangy, Brooks & Smith, LLP):

“Assuming the Board decision will stand, employers with existing collective bargaining agreements should review the agreements to determine whether they have check off provisions and, if so, whether the agreements address what happens to check off in the event of contract expiration. If the agreement is silent on the subject or does not have a clear and unmistakable waiver, the employer will be required to honor check off after contract expiration unless it can negotiate an alternative with the union.” Read on>>

NLRB Discards 50 Years Of Precedent – Dues Checkoff Clauses Now Survive Expiration Of Bargaining Agreement (Proskauer):

“As noted, the Board has previously considered overruling Bethlehem Steel [the 1962 ruling that checkoff could end when contracts expired] and so it cannot be too much of a surprise. It is odd, however, that the NLRB would consider tinkering with such a long-standing precedent when a court ruling on the validity of its membership is pending. The outcome of that litigation could nullify this (and many other) NLRB decisions.” Read on>>

NLRB Reverses Long-Standing Precedent on Employers’ Ability to Unilaterally Cease Checkoff for Union Dues (Davis Wright Tremaine LLP):

“There is some other good news: Because the NLRB’s decision wiping out 50 years of clear precedent has caught many employers off guard, the NLRB correctly concluded that it would result in “manifest injustice” to apply that decision retroactively. That means that the NLRB will decide all pending cases under the Bethlehem Steel rationale.” Read on>>

NLRB Changes Course Again, Invalidates 50 Years Of Precedent On Expired Collective Bargaining Agreements (Franczek Radelet P.C.):

“The Board’s latest decision removes yet another effective negotiation tool for employers involved in successor agreement negotiations. As Member Hayes observed, discontinuing dues checkoff has ‘long been recognized as a legitimate economic weapon’ during collective bargaining. Removing parties’ ability to ‘wield such weapons’ during negotiations ‘significantly alter[s] the playing field that labor and management have come to know and rely on.’” Read on>>

Find additional NLRB law news at JD Supra>>