Reversing a rule that has been in place for over 50 years, the NLRB has ruled that a “dues checkoff” provision in a union contract outlasts the termination of the contract establishing it. The 3-2 decision, which came out earlier this year, but was overshadowed by the hullabaloo over the joint employer decision, is a complete reversal of a rule established in 1962.
By way of a quick background, “dues checkoff” is a clause in a union contract by which an employer agrees to withhold directly from the pay of an employee the monthly union dues (and sometimes other assessments or fees) the employee owes to the union. The employer then pays that money directly to the union. Employees must authorize the deduction by way of a writing that permits the employer to take money from their paycheck. The provision is obviously a helpful one for unions, as it enables them to collect dues revenue with a minimum of expense and difficulty.
In the case at issue, the CBA included a checkoff provision. The parties began negotiating for a successor agreement, but didn’t reach agreement by the end of the term. Thus, the CBA expired. Upon expiration, the employer decided to stop withholding union dues from its employees’ pay. It didn’t bargain with the union before taking this action.
On these facts, the NLRB majority held that the employer’s discontinuation of dues checkoff constituted an unlawful unilateral action. To support its conclusion, the majority set forth both statutory and policy arguments. The majority reasoned that dues check-off constituted a “convenience to employees,” and was a term or condition of employment that was no different from wages, benefits, or other working conditions. These terms cannot be changed unilaterally by an employer merely because the contract setting them forth expired. Nor did the dues checkoff provision involve a surrender of an employer or union’s contractual rights. Therefore, the employer’s unilateral discontinuation of the checkoff was unlawful. To hold otherwise, the majority argued, would frustrate the union’s status as the employees’ bargaining representative and create hurdles for employees to stay in good standing with their unions.
Now former-Member Johnson (R) and Member Miscimarra (R) dissented. They criticized the majority for abandoning its own longstanding rule, which served to balance union-security measures. The dissent also noted that Congress, rather than the NLRB, should be the branch to change the rule for discontinuation of dues checkoff upon expiration of the contract. To the dissent, the majority’s decision will only exacerbate the difficulties facing employers and unions when attempting to adopt collective bargaining agreements.
In a glimmer of good news for unionized employers, the NLRB unanimously agreed that the majority’s rule should not apply to the employer and union in the present case. The NLRB majority acknowledged its departure from its decades-old standard and thus rejected an opportunity to apply its new rule retroactively, i.e. to currently pending cases. The NLRB noted that while it typically applies its new rules retroactively, doing so here would result in unfair results.
The decision raises all sorts of interesting policy questions. For the labor professional, however, there is one key, practical lesson. The majority expressly noted that it was dealing with a dues checkoff provision that, by its terms, didn’t state when it would expire. Thus, if an employer and a union agreed to language permitting the discontinuation of dues checkoff upon contract termination, the outcome could be different. Any such language must constitute a “clear and unmistakable waiver” – a term of art in NLRB case law – of the union’s right to have the check-off continue. Labor professionals facing upcoming contract negotiations should consider whether such language should be a bargaining goal, and if so, consult with qualified labor law counsel over what language would be sufficient.