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NLRB Reverses Longstanding Rule on Union Dues Checkoff

Labor & Employment Law Update David B. Kern

In yet another split decision favoring organized labor, the National Labor Relations Board ("NLRB" or "Board") has reversed 50 years of precedent on the issue of an employer's right to stop dues check off upon expiration of a collective bargaining agreement.

In WKYC-TV, Inc., the employer and its union engaged in bargaining pursuant to a contract reopener clause. When the contract expired pursuant to that reopener, based upon well-settled law, the employer ceased deducting and remitting union dues under the "check-off" clause in the terminated labor agreement. Under well-established precedent first recognized by the NLRB in 1962 in Bethlehem Steel Co., the employer was entitled to take that action. Bethlehem Steel held that both union security clauses (i.e., clauses requiring employees to remain members of the union and pay dues to the union) and dues check-off clauses became "inoperative" upon contract expiration as a matter of law. The Board in WKYC-TV flatly reversed Bethlehem Steel with respect to dues check off. What is perhaps most striking is that there was no need for the Board to take this drastic step. Indeed, the Board majority recognized the significance of its reversal, noting that to apply the decision retroactively would result in "manifest injustice", since employers have understood for decades their right to stop dues check off.

To be sure, the NLRB recognized that a select group of contractually-established terms and conditions of employment, such as arbitration clauses, no-strike clauses, management rights clauses, and union security clauses, do not survive contract expiration, even though they are mandatory subjects of bargaining. However, by reversing Bethlehem Steel, the NLRB eliminated a longstanding employer right that has been effectively used for years in order to bring the parties together to reach a collective bargaining agreement. Employers who exercised their Bethlehem Steel right to stop union dues check off brought economic pressure on the union, by cutting off the flow of dues to the union following contract expiration. Employers are now deprived of that economic weapon, which is likely to contribute to more protracted negotiations following the expiration of a labor agreement.

Member Hayes, in his dissenting opinion, clearly recognized the majority's motive in this new decision:

"To strip employers of that opportunity [to stop dues check off] would significantly alter the playing field that labor and management have come to know and rely on. Indeed, even in times of union boycott and other economic actions in opposition to an employer's legitimate bargaining position, the employer will be forced to act as the collection agent for dues to finance this opposition. This is the unspoken object of today's decision . . ."

WKYC-TV is simply another in a line of recent Board decisions, which alter the balance of power in the labor negotiation arena. Whether this reversal of longstanding precedent will withstand appellate court scrutiny remains to be seen. If you have questions regarding these issues, contact David B. Kern at (414) 277-5653 / david.kern@quarles.com, or your Quarles & Brady attorney.