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Expriation of labor agreement no longer ends employer dues check-off obligations

In a 3-2 decision, the National Labor Relations Board (Board) overturned a fifty-year old precedent and held that employers may not cease checking-off union dues when a labor agreement with a union expires. Lincoln Lutheran of Racine and SEIU, 262 NLRB 188 (2015).

In 1962, the Board held that an employer’s dues check-off obligation (when an employer agrees to deduct union dues and fees from an employee’s wages and remit them directly to the union, upon written authorization from the employee) ends when a labor agreement expires. Bethlehem Steel, 136 NLRB 1500 (1962). At that time, the Board reasoned that check-off dues implemented union security provisions. Under union security provisions, employers and unions agree that union membership is a condition of employment for all non-management employees. Employees who fail to pay union dues face termination. Union security provisions are a contractual right created by a labor contract, and end when the contract ends. The Bethlehem Steel Board determined that, because union security provisions and check-off dues were interdependent, employers had the ability to cease deducting and remitting union dues and fees from employees.

In Lincoln Lutheran, the Board explained that there was no “coherent” reason for the precedent. The Board held that check-off dues are a term and condition of employment, which an employer may not unilaterally change without providing notice to the union and an opportunity to bargain. The Board distinguished dues check-off from union security provisions and “the contractual surrender of statutory and non-statutory rights,” such as arbitration, management rights and no-strike clauses. The Board also argued that the language of the National Labor Relations Act further supports their interpretation. Based on this reasoning, the Board held that the precedent could not continue.

The Board’s decision is prospective; employers must now honor dues check-off arrangements after a labor agreement expires, unless the employee revokes the authorization.

September 08, 2015

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