NLRB Rules Employers May Not Unilaterally Stop Union Dues Checkoff When Labor Contracts End

Today, the NLRB issued a decision in Valley Hospital Medical Center, Inc., on remand from United States Court of Appeals for the Ninth Circuit, finding that employers may not unilaterally stop union dues checkoff after a collective-bargaining agreement expires.

The Board’s initial decision on this issue, Bethlehem Steel (1962), held that an employer was free to end dues checkoff upon contract expiration.  The Ninth Circuit later criticized the Board for failing to adequately explain its approach.  Then, in Lincoln Lutheran (2015) the Board held dues checkoff to be subject to the general statutory rule requiring employers to maintain most terms and conditions of employment after contract expiration to facilitate bargaining for a new agreement.

In Valley Hospital I (2019), the prior Board majority reversed Lincoln Lutheran, again permitting employers to stop checkoff when a contract expires.  On review, the Ninth Circuit found the Board’s rationale for its decision to be insufficient.

Today’s decision reverses Valley Hospital I and returns to the rule of Lincoln Lutheran: that an employer, following contract expiration, must continue to honor a dues-checkoff arrangement established in that contract until either the parties have reached a successor collective-bargaining agreement or a valid overall bargaining impasse permits unilateral action by the employer.

“Prior Boards have never cogently explained why dues checkoff should not be part of the status quo that employers must maintain when a contract expires, and courts have struggled with this inconsistency in Board law.  Today the Board definitively resolves this issue by confirming that it is a violation of the Act to unilaterally stop dues checkoff when a contract expires,” said Chairman Lauren McFerran.

Chairman McFerran was joined in the decision by Members Wilcox and Prouty. Members Ring and Kaplan dissented.