In Significant Win for Unions, NLRB Reinstates Rule Mandating Employers Comply with Dues Checkoff Provisions After Expiration of Collective Bargaining Agreement

By Jordan Konell

In Valley Hospital Medical Center, Inc., a decision announced on October 3, 2022, the National Labor Relations Board (NLRB) held that employers may not unilaterally refuse to maintain a dues checkoff provision—which requires an employer to deduct union dues from wages and transfer them to the union—upon the expiration of a collective bargaining agreement. In making its ruling, the NLRB affirmed that a dues checkoff provision is part of the status quo, meaning that an employer must maintain it, or bargain before changing it, even after the collective bargaining agreement expires, at least until impasse is reached. The decision arose from a 2018 challenge from Las Vegas’ Culinary Workers Local 226, after the Valley Hospital Medical Center unilaterally stopped deducting and remitting union dues 13 months after its collective bargaining agreement with the Local parties expired.

This decision marks a departure from a short-lived 2019 NLRB ruling by the Trump Board involving the same employer, which held that an employer could unilaterally stop deducting union dues from workers’ paychecks once a labor agreement expired. At the direction of a federal court, the 2019 ruling had been remanded for the NLRB to provide further explanation for its reasoning. Valley Hospital Medical Center Inc. reinstates the Obama-era rule, aligning the dues checkoff provision with the majority of other terms and conditions of employment that must be bargained over before an employer changes them after a collective bargaining agreement ends.

The opinion, authored by NLRB Chairman Lauren McFerran and Members Gwynne A. Wilcox and David M. Prouty, cements the importance of permitting dues checkoff provisions to survive the end date of a collective bargaining agreement for achieving labor stability and protecting workers. The Board explained: “[T]reating contractual dues-deduction provisions comparably with nearly all contractual provisions, which establish terms and conditions of employment that cannot be changed unilaterally after contract expiration, implements the [National Labor Relations] Act’s policy goals of both encouraging the practice and procedure of collective bargaining and of safeguarding employees’ free choice in the exercise of their Section 7 rights.”

The decision represents a significant win for unions, as employers had previously used the threat of unilaterally ending the dues checkoff to pressure workers to concede to less favorable contractual terms during bargaining. Importantly, the ruling applies retroactively, meaning that an employer that has already stopped remitting dues after the end of a labor contract now can be found to have violated the National Labor Relations Act for doing so. Where there are pending ULP charges over the cessation of dues checkoff, the employer will be ordered to pay the back dues from its own funds without seeking to recover them from the union members. Even if there are no pending charges, an employer that has unilaterally decided to cease to comply with a dues checkoff provision after termination of a collective bargaining agreement should upon demand restore dues checkoff.

The experienced labor attorneys at Willig, Williams & Davidson are available to offer guidance to clients on the impacts of this ruling, especially in light of an expired or soon expiring collective bargaining agreement.

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