NLRB Rules Employers Must Continue Dues Deductions Past Contract Expiration

By Greg Hoff posted 10-07-2022 15:15


Employers must continue deducting union dues from employee paychecks pursuant to dues checkoff agreements even after a collective bargaining agreement (CBA) expires, per a recently issued NLRB decision. The decision marks the second significant precedent-changing ruling issued by the current Board, after a major employer uniform policy decision last month.

Background: Dues check off agreements are provisions in collective bargaining agreements that require employers to automatically deduct dues from employee paychecks and remit them to the union. For over five decades, National Labor Relations Board precedent held that such provisions expire along with a collective bargaining agreement – meaning that once a CBA expires, employers are no longer required to deduct and remit union dues from employee paychecks. In 2015, the Obama Board changed this rule, and held that dues check off provisions remain in effect following the expiration of a CBA. This decision was itself overturned in 2019, when the Trump Board restored the original rule that had been in effect prior to 2015. 

The current Board’s divided 3–2 decision in Valley Hospital Med. Ctr., 371 NLRB No. 160 reverts to the Obama-era rule and once again upends decades of Board precedent, holding that employers may not unilaterally stop union dues checkoff after a CBA expires. Employers must continue dues checkoff until either the employer and the union have reached a new CBA or a lawful bargaining impasse that permits unilateral action by the employer. 

The decision provides unions increased leverage at the bargaining table, as they can continue to rely on a dues revenue stream even where a CBA is no longer in effect. Previously, unions were incentivized to bargain as efficiently as possible to ensure that any window within which dues were not being paid was as small as possible. Under the Board’s new rule, such an incentive no longer exists. 

Outlook: The Board’s decision is its second major precedent change since a Democratic majority was installed in August 2021, and its third major action in the last month after a relatively quiet first year. The uptick in activity is expected to continue through the end of the year, with decisions in several significant pending cases expected within the next few months.

Catch up on all the latest NLRB developments with the latest installment of HR Policy’s NLRB Quarterly Report for the third quarter, which saw the Board slowly transitioning from its relatively “quiet” period over the last twelve months towards its long-expected role as the main change agent for the Biden administration’s labor law and policy agenda. The NLRB Q3 report includes insight and analysis on:

  • Significant decisions from the last three months, including new restrictions on employer uniform policies;
  • The Board’s proposed rule on joint employer status under federal labor law; and
  • Important cases to watch going forward.
1 view