Dues Checkoff Can Continue After Contract Ends, NLRB Rules

Author: Robert S. Teachout, Brightmine Legal Editor

October 5, 2022

Employers are required to continue withholding union dues from employees' wages and remitting them to the union after a collective bargaining agreement expires, the National Labor Relations Board (NLRB) held in its second decision reversing a major Trump-era Board ruling. The ruling is unusual in that the NLRB's determination is the second one issued in the same case, but with opposite results.

The question raised in Valley Hospital Medical Center is whether an employer may unilaterally cease dues checkoff after the expiration of the collective bargaining agreement (CBA) that requires it.

When the NLRB first addressed that question in 1962's Bethlehem Steel decision, it held that an employer's obligation to continue dues checkoff ended with the expiration of the CBA, even when bargaining with the union was ongoing for a successor contract. The 9th Circuit Court of Appeals criticized that approach but did not overrule it.

Then in 2015, the Board held in Lincoln Lutheran that dues checkoff should be subject to the general statutory rule that requires employers to maintain the status quo for most terms and conditions of employment after contracts expire.

A split Board reversed Lincoln Lutheran in the first ruling of the Valley Hospital case (Valley Hospital I) in 2019, once more permitting employers to stop collecting and remitting union dues when a contract expires. However, the 9th Circuit ruled that the Board's reasoning was insufficient and sent the case back to the NLRB for further consideration. But by then the Board's majority had shifted to Democratic appointees, resulting in Valley Hospital II restoring the dues checkoff requirement.

"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," said NLRB Chairman Lauren McFerran. "Today the Board definitively resolves this issue by confirming that it is a violation of the [National Labor Relations Act] to unilaterally stop dues checkoff when a contract expires."