The Circuit Court of Appeals for the Seventh Circuit (which covers Wisconsin) recently addressed a Wisconsin law that provides employees the opportunity to revoke their authorization for union dues deductions with just 30 days of notice. In a 2-1 decision, the court ruled that federal law preempted the Wisconsin law.
A union dues authorization is a contract between an employer and an employee for payroll deductions to pay a union for representation and/or membership. Congress allows unions to enforce union dues authorizations, noting that such authorizations are “a convenient way for employees to pay their union dues.” By signing an authorization, the employee directs the employer to deduct union dues or fees routinely from the employee’s paycheck and to remit those funds to the union.
According to the court, the Wisconsin law sought “to modify the terms of voluntary payroll deductions.” Under federal law, employees can revoke previously-agreed-to dues authorizations, but federal law requires employees to wait until the time specified on the authorization (up to a year). A longer period of irrevocability makes unions far less susceptible to the immediate financial impact of sudden mass revocations. Wisconsin’s “Right to Work” Law (see § 9) attempted to shorten this maximum period of irrevocability to thirty days.
The International Association of Machinists District 10 sued the state over the law. The trial court found that federal labor law preempted Wisconsin’s attempt to impose its own time limit on dues checkoff authorizations. As a result, the court issued a permanent injunction barring enforcement of that provision.
The court of appeals agreed, effectively shuttering Wisconsin’s 30-day provision—for now. The state has requested that the case be reheard en banc (i.e., by the full court instead of a three-judge panel). The state could also appeal the decision to the U.S. Supreme Court.
For an employer to lawfully deduct union dues from employee wages, dues checkoff authorizations must be:
- individual for each employee,
- in writing, and
- irrevocable for no longer than one year or upon expiration of the applicable collective bargaining agreement.
An employer could bargain with the union to allow employees to revoke an authorization in a shorter period, say 30 days. Such changes, however, must be obtained through collective bargaining.
Regardless of the final outcome of this case, employers should ensure that they have authorizations on file for each employee from whom they deduct dues. Revocation of such authorizations must comply with the terms in the authorization itself and/or the collective bargaining agreement. Employers should also seek indemnification from the union for complying with the terms of such an authorization. Employees can revoke such authorizations but not on the 30-day timeline provided by the Wisconsin law, unless otherwise provided in the collective bargaining agreement.
Subject to a different ruling by the full court of appeals or the U.S. Supreme Court, for now, Wisconsin’s 30-day revocation requirement is not in force.