On Monday, the NLRB reinstated its long-standing position that the NLRA does not require employers to continue dues checkoff after the expiration of a collective bargaining agreement. The case, entitled Valley Hospital Medical Center, 368 N.L.R.B. No. 139 (“Valley Hospital”), came after a four-year-long departure from that long-standing position.
Many labor professionals may see the NLRB’s ruling as a return to normalcy. The NLRB’s position on this issue dates back over half a century to a case entitled Bethlehem Steel, 136 N.L.R.B. 1500 (1962). In Bethlehem Steel, the NLRB held that dues checkoff provisions fell into the category of terms and conditions of employment which an employer may unilaterally change following the expiration of a collective bargaining agreement. Accordingly, employers were not required to continue dues checkoff following the expiration of a collective bargaining agreement.
The NLRB had adopted a different view in 2015. For years, the U.S. Court of Appeals for the Ninth Circuit had prodded the NLRB to articulate a “reasoned explanation” supporting the NLRB’s holding that employers could unilaterally remove dues checkoff following the expiration of a CBA. The NLRB had attempted to offer several (the NLRB readily admitted in its most recent ruling that its Bethlehem Steel ruling was short on explanation), but the Ninth Circuit rejected them all. Finally, in 2015, a different NLRB majority gave up on justifying its previous stance and, in a case entitled Lincoln Lutheran of Racine, 362 N.L.R.B. 1655 (2015) (“Lincoln Lutheran”), overturned fifty-three years of precedent in holding that, under the NLRA, employers must continue dues checkoff even after a CBA expired. This blog covered the Board’s surprising about-face when it happened in 2015.
Not long after the Lincoln Lutheran ruling, Valley Hospital and the Local Joint Executive Board of Las Vegas became embroiled in a lengthy bargaining dispute. The parties’ 2013-2016 CBA eventually expired, and for the next thirteen months the parties continued to operate under its terms. Ultimately, on January 26, 2018, Valley Hospital provided the Union five-days’ notice that it would stop dues checkoff (without providing the Union an opportunity to bargain in the meantime). Valley Hospital made good on its word on February 1, 2018, and the parties’ dispute made it all the way up to the NLRB.
The current NLRB saw this as an opportunity to right what it viewed as a wrong and reinstate the Bethlehem Steel ruling—this time with a “reasoned explanation” (despite neither Valley Hospital nor the Union arguing that Lincoln Lutheran should be overturned). The NLRB began its analysis by distinguishing between those terms and conditions of employment which employers can unilaterally change following the expiration of a CBA and those which employers cannot. It looked to U.S. Supreme Court precedent, which noted that the “the obligation not to make unilateral changes is rooted not in the contract but in preservation of existing terms and conditions of employment and applies before any contract has been negotiated.” Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (emphasis added).
Relying upon that passage, the NLRB adopted what it called a “contract creation” rationale to explain its Bethlehem Steel ruling. The NLRB explained that the terms and conditions of employment which employers may not unilaterally change (i.e., those that must be preserved) are those which are in place before the existence of a CBA—things like wages, pension and welfare benefits, working conditions, and hours. Conversely, the terms and conditions which only exist because of a CBA—things such as the duty to refrain from strikes or lockouts, arbitration, or dues checkoff—are rooted in the contract and therefore there is no obligation not to make unilateral changes to them.
In dissenting from the majority’s ruling, Member McFerran (D) attempted to distinguish dues checkoff from the other contract provisions that employers may unilaterally change by arguing that all such provisions, excepting dues checkoff, were waivers of statutory rights. Moreover, Member McFerran also contended that dues checkoff could not be distinguished on the basis of its contractual origin because “virtually all, if not all, of employees’ terms and conditions of employment are the result of collective bargaining.”
For the labor professional, the primary takeaway from this case relates to what you need to have on your bargaining “to do” list. The decision is certainly a return to the rule that prevailed for decades prior to Lincoln Lutheran: employers no longer need to continue dues checkoff following the expiration of a CBA (assuming no contradictory contract provisions exist which would otherwise continue the obligation). Having said that, however, a future NLRB majority may reverse course yet again. So, negotiating a provision into the CBA that permits cessation of check-off upon expiration of the CBA is still something that employers may want to consider.