Approximately four years ago, during the Obama Administration, the National Labor Relations Board upended decades of well-settled precedent by making it unlawful for employers to unilaterally cease dues checkoff pursuant to a contractual dues check-off provision upon the expiration of a collective bargaining agreement.  This week, the Republican-majority Board in Valley Hospital Medical Center, Inc. reversed that departure from established precedent and restored balance and stability in collective bargaining negotiations by holding that an employer has the right to stop withholding employees’ union dues from their pay when the parties’ contract expires.

For More Than 50 Years, Employers Could Unilaterally Cease Dues Checkoff Post-Expiration

Because employers have a duty to maintain the status quo upon expiration of a union contract, most contractually established terms and conditions generally continue in effect after the contract expires until a new agreement is reached or the parties reach impasses.  However, the Board has long recognized a limited category of provisions that do not survive contract expiration.  Prior to 2015, this limited category of exemptions from the status quo rule included no-strike/no-lockout and dues checkoff provisions, meaning unions could strike and employers could lock employees out and/or stop withholding and emitting union dues despite expired contract provisions prohibiting such actions.  This rule fostered balance and stability in negotiations by ensuring both unions and employers could deploy important economic weapons as leverage during contract negotiations.

Employers relied on this rule for more than 50 years.  In 2015, however, the Board in Lincoln Lutheran held employers could no longer unilaterally cease dues deductions when a contract expired, thereby removing a key economic weapon from employers’ arsenal.  The effect was to create a bargaining disparity in which unions had no restrictions on their economic weapons during post-expiration negotiations but employers did.

Obligations Whose Existence Depends Solely on the Contract Do Not Survive the Contract

The Board in Valley Hospital Medical Center has now rectified the inequity perpetuated by Lincoln Lutheran and reinstated employers’ ability to unilaterally discontinue dues checkoff after the expiration of a union contract. Adopting the rationale of a 2010 Board decision, the Board reasoned that dues checkoff provisions, like no-strike provisions, “cannot exist in a bargaining relationship until the parties affirmatively contract to be so bound.” Accordingly, “these obligations are coterminous with the contracts that gave rise to them.”  The Board distinguished these “contractually created” obligations from other terms and conditions of employment which can exist prior to and independent of a contract and, therefore, must be continued as part of the status quo after contract expiration.

The Board also noted that its decision better effectuates the policies of the National Labor Relations Act and the proper role of the Board.  Characterizing the Lincoln Lutheran decision as an “impermissible interference with the statutory bargaining process,” the Board noted the decision “undermin[ed] established bargaining practices and relationships that ordinarily promote labor relations stability” and had the potential to transform dues checkoff into “a considerably more divisive bargaining subject with the potential to frustrate efforts” to reach an initial or successor contract.

The Board also reiterated the Supreme Court’s edict that the Board should not function “as an arbiter of the sort of economic weapons the parties can use in seeking to gain acceptance of their bargaining positions.”  However, that is precisely what the Board did when, in 2015, it declared the post-expiration discontinuation of dues checkoff an invalid economic weapon.  Fortunately, now that the Board has corrected this short-lived restriction on employers’ economic weapons, employers can once again permissibly discontinue dues checkoff after contract expiration in support of their bargaining positions.