Enter to open, tab to navigate, enter to select
NLRB Restores Longstanding Union Dues Checkoff Rule
Practical Law Legal Update w-023-3811 (Approx. 5 pages)
NLRB Restores Longstanding Union Dues Checkoff Rule
by Practical Law Labor & Employment
| Law stated as of 06 May 2024 • USA (National/Federal) |
In Valley Hospital Medical Center, Inc., the National Labor Relations Board (NLRB) held that a dues checkoff provision contained in a collective bargaining agreement (CBA) is enforceable under Section 8(a)(5) of the National Labor Relations Act (NLRA) only for the duration of the contract.
On December 16, 2019, in Valley Hospital Medical Center, Inc., a 3-1 majority of the panel (Board) heading the NLRB's judicial functions held that:
- An employer's statutory obligation to check off union dues ends when the collective bargaining agreement (CBA) containing the checkoff provision expires.
- A dues checkoff provision in a CBA belongs to the limited category of mandatory bargaining subjects:
- exclusively created by the contract; and
- enforceable through Section 8(a)(5) of the NLRA only for the duration of the contract.
- There is no independent statutory obligation to check off and remit dues after the expiration of a CBA containing a checkoff provision.
- This applies even where the contract does not contain a union security provision.
This decision overrules Lincoln Lutheran of Racine (362 N.L.R.B. 1655 (2015)) and returns to the longstanding precedent set by Bethlehem Steel (136 N.L.R.B. 1500 (1962)). The Board is applying this holding retroactively in this case and other pending cases.
Member Lauren McFerran dissented.
UPDATE:
On December 30, 2020, in Local Joint Executive Board of Las Vegas v. NLRB, the Ninth Circuit issued an unpublished memorandum opinion remanding this case to the NLRB so it may explain its approach to dues checkoff after a CBA's expiration and explicitly address the precedents cited by the petitioning union as contradicting the NLRB's "contract-creation" rationale (see Am. Gypsum Co., 285 N.L.R.B. 100, 100, 102 (1987); Bethlehem Steel Co., 136 N.L.R.B. 1500, 1503 (1962); Sage Dev. Co., 301 N.L.R.B. 1173, 1179 (1991); Frontier Hotel & Casino, 309 N.L.R.B. 761, 766 (1992); Frankline, Inc., 287 N.L.R.B. 263, 263–64 (1987); PRC Recording Co., 280 N.L.R.B. 615, 618 (1986); KBMS, Inc., 278 N.L.R.B. 826, 849 (1986); Vin James Plastering Co., 226 N.L.R.B. 125, 132 (1976)). The Ninth Circuit clarified that:
- The court is not vacating the NLRB's dues checkoff rule. The court noted that the NLRB likely will be able to cure the challenged flaw in its decision making process.
- The NLRB's dues checkoff rule may stand while it supplements its reasoning.
- The Ninth Circuit panel retains jurisdiction over any later petition for relief.
UPDATE:
On remand, a 3-2 Board majority (Chairman McFerran and Members Wilcox and Prouty) reversed Valley Hospital Medical Center and readopted the rule articulated in Lincoln Lutheran of Racine that an employer's obligation to deduct and remit union dues survives the expiration of a CBA that establishes the checkoff arrangement. The majority reasoned that dues checkoff provisions are distinguishable from union security provisions, which terminate on contract expiration under Section 8(a)(3) of the NLRA, and other contractual provisions that are unenforceable after contract expiration because they involve the waiver of statutory and non-statutory rights, such as mandatory arbitration, no-strike, and management rights provisions. Rather, the majority concluded that dues checkoff clauses are analogous to other payroll deductions established for employees' administrative convenience that survive contract expiration and therefore continue to enjoy protection against unilateral change under Section 8(a)(5). The decision applies retroactively to all pending cases, including the instant case. Members Kaplan and Ring dissented. (Valley Hosp. Med. Ctr., Inc., 371 N.L.R.B. No. 160 (Sept. 30, 2022); see also NLRB News Release: NLRB Rules Employers May Not Unilaterally Stop Union Dues Checkoff When Labor Contracts End.)
UPDATE:
On February 20, 2024, the Ninth Circuit denied the employer's petition for review and granted the Board's cross-application for enforcement of its order (Valley Hosp. Med. Ctr., Inc., 93 F.4th 1120 (9th Cir. 2024), amended and superseded on denial of rehearing en banc by (9th Cir. May 6, 2024)); for more information, see Practice Note, 2024 Traditional Labor Law Developments Tracker: Section 8(a)(5): Employer Refusal to Bargain).