NLRB Holds Dues Continue Beyond Contract's Expiration

• Published date: 06 October 2022
• Subject Matter: Employment and HR, Employee Rights/ Labour Relations
• Law Firm: Littler Mendelson
• Author: Christopher Henderson

For those that closely follow the National Labor Relations Board, it comes as no surprise that the current Biden Board overruled a decision previously issued by the Trump Board. The target this time: union dues. The NLRB held on October 3 that the employer's obligation to deduct union dues from an employee's wages and remit to the union under a collective bargaining agreement, must continue after the expiration of that collective bargaining agreement. This decision in Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center and Local Joint Executive Board of Las Vegas overruled a 2019 case of the same name that gave employers the right to stop collecting union dues after the expiration of the collective bargaining agreement containing that requirement. This action is another reversal of longstanding precedent.

The Law As It Once Was

As a general matter, the employer's duty to bargain with the exclusive bargaining agent of employees pursuant to Section 8(d) of the National Labor Relations Act prohibits the employer from unilaterally changing the terms and conditions of employment without first bargaining with the union. NLRB v. Katz, 369 U.S. 736 (1962). As with any law, there are exceptions, which the Board has previously recognized. One such exception was that certain provisions of an expired collective bargaining agreement need not be honored because the contract is no longer in effect. Prior to its recent decision, the Board in Bethlehem Steel, 136 NLRB 1500 (1962), stated that dues checkoff provisions were one of these exceptions. Therein, the Board stated that "[t]he checkoff provisions in Respondent's contracts with the Union implemented the union-security provisions. The Union's right to such checkoffs in its favor, like its right to the imposition of union security, was created by the contracts and became a contractual right which continued to exist so long as the contracts remained in force." Simply put - no contract, no dues checkoff. The same principle held true for other terms of the collective bargaining agreement such as management rights clause, and importantly the no-strike provision. Once the contract expires, the previously enforceable terms expire with it.

The Board overturned this 50-year-old precedent in 2015 in Lincoln Lutheran of Racine, 362 NLRB 1655 and then re-established it again in 2019 in Valley Hospital Medical Center, 368 NLRB No. 139 (2019). With the October 3 decision, the Board returns to the Lincoln...