NLRB Abandons 50-Year-Old Precedent, Holds Dues Deductions Continue After Contract Expiration

In 1962, in a case known as Bethlehem Steel, 136 NLRB 1500 (1962), the National Labor Relations Board (NLRB) held that an employer’s obligation to make union dues deductions ended with the expiration of a collective bargaining agreement. Bethlehem Steel created an exception to the usual rule that an employer must maintain the status quo on all mandatory subjects of bargaining during the period between contract expiration and when a new contract takes effect, and gave employers a powerful economic tool after contract expiration. Though state collective bargaining statutes vary on the issue, some state labor boards have followed the rationale of Bethlehem Steel.

On December 12, 2012, the NLRB changed its mind, and ruled that dues deductions must, in fact, be continued after the expiration of a contract. In WKYC-TV, Inc., the NLRB criticized its own prior decisions as not having a “coherent explanation.”

The NLRB reasoned that “because it is critically important that collective bargaining be meaningful, it has long been established that an employer violates the law when it unilaterally changes represented employees’ wage, hours, and other terms and conditions of employment without bargaining. Under this rule, an employer’s obligation to refrain from unilaterally changing these mandatory subjects of bargaining applies both where a union is newly certified and the parties have yet to reach an initial agreement, and where the parties’ existing agreement has expired and negotiations have yet to result in a subsequent agreement.

“An employer’s decision to unilaterally cease honoring a dues checkoff arrangement in an expired collective bargaining agreement plainly contravenes these salutary principles. Unlike no strike, arbitration, and management rights clauses, a dues checkoff arrangement does not involve the contractual surrender of any statutory or nonstatutory right. Rather, it is simply a matter of administrative convenience to a union and employees whereby an employer agrees that it will establish a system where employees may, if they choose, pay their union dues through automatic payroll deduction. Payments via a dues checkoff arrangement are thus no different from other voluntary checkoff agreements, such as employee savings accounts and charitable contributions, which we have recognized also create administrative convenience and – notably – survive the contracts that establish them.”

In the end, the NLRB held that “like most other terms and conditions of employment, an employer’s obligation to check off union dues continues after expiration of a collective bargaining agreement that establishes such an arrangement.”

WKYC-TV, Inc., Case No. 08-CA-039190 (2012).

Note: As with the adoption of Bethlehem Steel in the first place, whether state labor boards adopt WKYC-TV will come down to whether the labor boards are persuaded by the NLRB’s logic.