A divided National Labor Relations Board (NLRB) has ruled that the 50-year Bethlehem Steel precedent that an employer may discontinue deducting union dues upon the expiration of a collective bargaining agreement (CBA) was poorly reasoned and, therefore, must be overturned. While the NLRB is not applying this decision retroactively to those employers who, relying on Bethlehem Steel, have already discontinued dues deductions, those employers whose current CBAs contain dues deductions clauses (also called "dues checkoff") will be required to continue dues deductions beyond those CBAs' expiration until the parties reach an agreement or impasse.
In 1962, the Bethlehem Steel Board found that dues checkoff was interdependent upon the union security clause, which the National Labor Relations Act (Act) provides expires upon CBA expiration and, therefore, dues deduction similarly expires upon CBA expiration. Last week, in WKYC-TV, 359 NLRB No. 30, the NLRB overturned that precedent, stating that the Board had "never provided a coherent explanation" for this rationale. Under the Act, an employer cannot unilaterally change the terms and conditions of represented employees' employment without giving the union notice and an opportunity to bargaining about the proposed changes. After CBA expiration, the employer similarly must maintain the status quo. However, the Board has recognized several exceptions this rule, including, in addition to the Bethlehem Steel dues checkoff exception, exceptions warranting post-CBA expiration discontinuance of management rights clauses, arbitration provisions and no strike clauses.
The current Board majority, however, determined that the Act warrants these other exceptions because, unlike when a union and employer agree to dues checkoff, in the other three instances, the parties have waived rights they otherwise possessed. For example, an agreement to arbitrate disputes is a waiver of the parties' right to use their respective economic power to achieve their desired resolution. The Board held that dues checkoff does not implicate the waiver of any established right, but is just a matter of administrative convenience.
The Board recognized the principle that union security provisions expire upon CBA expiration, but rejected the Bethlehem Steel Board's position that, because dues checkoff implements union security, it similarly does not survive CBA expiration because it, too, is a contractual right. In rejecting this rationale, the Board stated that Section 302(c)(4) of the Taft-Hartley Act contemplates dues checkoff continuing beyond CBA expiration. The Board also found that the fact that some CBAs contain dues checkoff clauses but no union security provision undermines the rationale that dues checkoff is interdependent upon union security and, thus, should warrant this exception. The Board further stated that when Congress passed the NLRA and the Taft-Hartley Act, it excepted union security but did not except dues checkoff and, thus, intended they be treated differently. The Board also noted the involuntary nature of union security in contrast to the voluntary nature of dues checkoff as a rationale for different treatment. Finally, the Board noted that while an employer may, regardless of Bethlehem Steel, continue post-CBA expiration dues checkoff if it chooses to do so, it may not choose to continue enforcing a union security provision post-CBA expiration.
Member Hayes, in a lengthy dissent, stated that Bethlehem Steel's rationale is "consistent with the Board's long-standing, common sense recognition that a union security clause operates as a powerful inducement for employees to authorize dues checkoff, and that it is unreasonable to think that employees generally would wish to continue having dues deducted from their pay once their employment no longer depends on it." Hayes said that exempting dues deduction from automatic post-CBA expiration continuation is consistent with "the principle of 'voluntary unionism' established by the Act. The majority's decision today is not." Hayes noted the unlikelihood that employees would recall or even understand the often complicated revocation language in their dues deduction authorizations, which often offer narrow time windows within which they may revoke, or the concept that their dues-paying obligations terminated upon contract expiration. Hayes also noted that, unlike other terms and conditions, like wages and benefits, which exist before a contract is reached and must remain status quo upon contract termination, dues checkoff does not exist prior to its inclusion in a CBA. In addition, while the Board majority contends the other exceptions are distinguishable from the dues checkoff exception because they waive a statutory or non-statutory right, dues checkoff similarly waives an employer's right to refrain from supporting any labor organization.
What this means for unionized employers is that, regardless of the parties' intent during bargaining, employers must continue dues checkoff post-CBA expiration unless the CBA clearly and unmistakably waives the Union's right to have dues deductions continue after CBA expiration. Unionized employers also may want to consider their strategy in future negotiations concerning their willingness to include a dues checkoff provision in future CBAs and/or may want to consider appropriate language to include to ensure they are not obligated to continue dues deduction in the absence of a CBA.For more information on this topic, please contact any Faegre Baker Daniels labor and employment lawyer.