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«Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers AMERICAN BAR ASSOCIATION COMMITTEE ON THE DEVELOPMENT OF THE LAW UNDER THE ...»

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Dues Check-Off Dreams Do Come True, They Do, They Do

By Brian A. Powers

AMERICAN BAR ASSOCIATION

COMMITTEE ON THE DEVELOPMENT OF THE LAW

UNDER THE NATIONAL LABOR RELATIONS ACT

2013 MIDWINTER MEETING

California Dreamin’ (On Such A Mid-Winter’s Day)

Topic: All the Leaves are Brown and the Sky is Gray… Because My Dues CheckOff Agreement Went Away Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers & Andrew Kelser Summary: This paper explores an employer’s duty to honor a dues check-off provision after the expiration of a collective bargaining agreement. Since the Board’s decision in Bethlehem Steel (1962), the Board and Federal Courts adhered to the principle that dues check-off provisions terminate when the collective bargaining agreement expires.

However, the Ninth Circuit’s 2011 decision in Local Joint Executive Bd. of Las Vegas v.

N.L.R.B. (Hacienda III) called into question the Board’s longstanding commitment to the rule originally articulated in Bethlehem Steel and developed in subsequent cases by the Board. Fourteen months later, the Board abrogated its adherence to Bethlehem Steel when it decided WKYC-TV (2012). Significantly, in WKYC-TV the Board emphasized that an employer’s obligation to check-off union dues continues after the collective bargaining expires. The purpose of this paper is to 1) examine the development of the Board’s treatment of dues-check off provisions after the collective bargaining agreement expires, and 2) explore the effects of the Board’s decision in WKYC-TV on not only dues check-off provisions, but also other mandatory subjects of bargaining excepted from the Katz rule. In addition, this paper provides practice pointers on wording dues check-off authorizations in light of the Board’s decision in WKYC-TV.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers Introduction For the past fifty years, the National Labor Relations Board (“Board”) has consistently ruled that an employer’s obligation to check off union dues from employees’ wages ceased upon expiration of the collective bargaining agreement. Unlike other mandatory subjects of bargaining, the Board determined that dues check-off provisions did not survive the expiration of the collective bargaining agreement.1 Thus, employers could cease to check off union dues from employees’ wages after a collective bargaining agreement expired without violating the National Labor Relations Act (“Act”).

Employers that terminated dues check-off provisions post-contract expiration relied on the Board’s 1962 decision in Bethlehem Steel.2 In Bethlehem Steel, the Board concluded that the Act does not impose an obligation on an employer to continue to check-off dues after a collective bargaining agreement expires.3 Specifically, the Board held that an employer does not violate Section 8(a)(5) of the Act when it unilaterally ceases to abide by a dues check-off provision pursuant to a union-security agreement.4 Accordingly, absent contrary language in the agreement, the employer could unilaterally stop deducting union dues from an employee’s wages once the collective bargaining agreement expired.

In 2002, the Ninth Circuit first challenged the Board’s long-standing precedent established in Bethlehem Steel Co. Over the course of the next twelve years, the Ninth Circuit would unabashedly criticize the Board’s decision and reasoning in Bethlehem Steel Co. in a trio of cases known as Hacienda I, II, and III.5 The Hacienda saga See NLRB v. Katz, 369 U.S. 736, 742-743 (1962) (explaining that the National Labor Relations Act prohibits an employer from unilaterally changing mandatory subjects of bargaining post-contract expiration). For ease of reference, this paper refers to the obligation to honor terms and conditions of employment post-contract expiration as the Katz rule.

Bethlehem Steel Co. (New York, N.Y.), 136 NLRB 1500, 1501 (1962), enf’d in pertinent part, Bethlehem Steel Co.

v. NLRB, 320 F.2d 615 (3d Cir. 1963).

Id.

Id.

Hacienda I, 331 NLRB 665 (2000), vacated, Local Joint Executive Bd. of Las Vegas, Culinary Workers Union Local 226 v. N.L.R.B., 309 F.3d 578 (9th Cir. 2002); Hacienda II, 351 NLRB 504 (2007), vacated, Local Joint Executive Bd. of Las Vegas v. N.L.R.B., 540 F.3d 1072, (9th Cir. 2008); Hacienda III, 355 NLRB No. 154 (2010), vacated, Local Joint Executive Bd. of Las Vegas v. N.L.R.B., 657 F.3d 865 (9th Cir. 2011).

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers originated in 2000 when the Board affirmed an Administrative Law Judge’s (“ALJ”) decision to dismiss a union’s allegation that the employer violated Section 8(a)(5) and 8(a)(1) of the Act by unilaterally terminating the dues check-off provision from an expired collective bargaining agreement before bargaining a new agreement or bargaining to impasse.6 In 2002, the Ninth Circuit granted the union’s petition for review, vacated the Board’s decision, and remanded with instructions to the Board to explain its rationale, or adopt and explain a different rule.7 Subsequently, the Board and the Ninth Circuit danced to the same tune in Hacienda II as in Hacienda I.8 On remand, the Board rejected the bright-line rule it relied on in Hacienda I.9 Instead, the Board examined the collective bargaining agreements and determined that the union waived its right to claim dues check-off in the agreements.10 Accordingly, the Board dismissed the Union’s complaint.11 On petition for review by the union, the Ninth Circuit again disagreed with the Board’s determination.12 The court explained that the Board’s decision improperly applied the rule from Metro. Edison Co. v. NLRB, 460 U.S. 692 (1983) that required the union to waive its right “clearly and unmistakably.”13 Consequently, the Ninth Circuit vacated the Board’s decision and remanded once again with instructions to explain its rationale for the rule adopted in Hacienda I, or adopt and explain a different rule.14 To the Ninth Circuit’s dismay, the Board again affirmed the ALJ’s decision to dismiss the union’s complaint by a split 2-2 vote.15 Not surprisingly, the Ninth Circuit vacated the Board’s ruling a third and final time on September 13, 2011.16 Specifically, the court held that an employers’ unilateral termination of dues check-off in a right-toHacienda I, 331 NLRB 665 (2000), vacated, Local Joint Executive Bd. of Las Vegas, Culinary Workers Union Local 226 v. N.L.R.B., 309 F.3d 578 (9th Cir. 2002).





Local Joint Executive Bd. of Las Vegas, Culinary Workers Union Local 226 v. N.L.R.B., 309 F.3d 578 (9th Cir.

2002).

Hacienda II, 351 NLRB 504 (2007), vacated, Local Joint Executive Bd. of Las Vegas v. N.L.R.B., 540 F.3d 1072, 9th Cir., Aug. 27, 2008.

Id.

Id.

Id.

Local Joint Executive Bd. of Las Vegas v. N.L.R.B., 540 F.3d 1072, 9th Cir., Aug. 27, 2008.

Id.

Id.

Hacienda III, 355 NLRB No. 154 (2010), vacated, Local Joint Executive Bd. of Las Vegas v. N.L.R.B., 657 F.3d 865 (9th Cir. 2011).

Local Joint Executive Bd. of Las Vegas v. N.L.R.B., 657 F.3d 865 (9th Cir. 2011).

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers work state constituted a violation of Section 8(a)(5) for refusal to bargain.17 The Ninth Circuit refused to provide the Board with a third open remand to craft its own rule.18 Rather, the Ninth Circuit remanded to the Board to determine the appropriate relief in light of its decision.19 Fourteen months after the Ninth Circuit’s decision in Local Joint Executive Bd. of Las Vegas v. N.L.R.B. (Hacienda III), the Board abandoned the Bethlehem Steel rule entirely.20 Exactly fifty years after the Board’s decision in Bethlehem Steel, the Board held that an employer’s obligation to check-off union dues continues after the collective bargaining agreement expires.21 As explained infra, in overruling Bethlehem Steel, the Board repudiated not only the conclusion, but also the reasoning relied on by the earlier Board’s decision. Consequently, the Board’s decision leaves many labor practitioners speculating potential concerning collateral effects of WKYC-TV.

The purpose of this paper is to explore the history of the Bethlehem Steel rule and potential effects of the Board’s decision WKYC-TV. This paper is divided into four sections: 1) an explanation of dues check-off authorizations, 2) the development of the Bethlehem Steel rule from 1962-2013, 3) WKYC-TV’s effect on dues check-off provisions after a collective bargaining agreement expires, and 4) potential secondary effects of the Board’s decision WKYC-TV, Inc., on other mandatory subjects of bargaining excepted from Katz. In Section 2, this paper also contains practice pointers on how to word dues check-off authorization provisions in collective bargaining agreements after the Board’s decision in WKYC-TV.

Section 1. Understanding Dues Check-Off Authorization.

A common misconception about dues check-off authorization has misled many employers, unions, labor law practitioners, and occasionally, even Board members.

Despite assertions to the contrary, dues check-off authorization is not fundamentally linked to a union-security clause. Rather, dues check-off authorization is an independent, contractual clause in a collective bargaining agreement that allows Id.

Id.

Id.

WKYC-TV, Inc. & Nat'l Ass'n of Broad. Employees & Technicians, Local 42 a/w Communications Workers of Am., AFL-CIO, 359 NLRB No. 30 (2012).

Id.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers employees to elect to deduct monies from their paycheck to cover the cost of union dues. This is a matter of administrative convenience for unions and employees alike.

In addition, it removes the inefficiency inherent in shop stewards collecting union dues on company property or even on company time. Dues check-off authorization is also 1) voluntary, 2) irrevocable, and 3) preempted by state law.

The Act requires that parties that agree to dues check-off authorization ensure that it is completely voluntary.22 Specifically, the Act prohibits a union from requiring an employee to authorize dues check-off as an employment condition.23 Section 7 of the Act guarantees employees the right to refuse to sign a dues check-off authorization.24 Accordingly, a union violates Section 8(b)(1)(A) of the Act by requiring an employee to sign a dues check-off authorization.25 Significantly, once an employee voluntarily authorizes dues check-off, his or her authorization may be irrevocable for a maximum of one year assuming the contractual language is unambiguous. The Labor Management Relations Act (“LMRA”) Section 302(c)(4) permits parties to make dues check-off authorization irrevocable for one year from the execution date or until contact expiration, whichever period is shorter.26 After the one-year period or contract expires, authorization is revocable during an “escape period,” which is usually a ten to twenty day window immediately after the irrevocability period expires.27 Unless a party revokes their dues check-off authorization, dues deduction automatically continues for another one-year period or until the contract expires, whichever occurs first, and the renewal period will commence once a successor contract is negotiated.28 Local 74, Serv. Employees Int'l Union (Parkside Lodge of Connecticut, Inc.), 323 NLRB 289, 293 (1997) (“[I]t is well settled that the dues-checkoff authorization must be voluntarily made and that an employee has a right under Section 7 to refuse to sign a checkoff authorization.”) Id.

Id.

Id.

Int'l Broth. of Elec. Workers, Local No. 2008, 302 NLRB 322, 325 (1991).

Machinists Monroe Lodge 770 v. Litton Bus. Sys., 334 F. Supp. 310 (W.D. Va.), aff’d, 80 LRRM 2379 (4th Cir.

1971); Williams v. N.L.R.B., 105 F.3d 787, 792 (2d Cir. 1996) Machinists Monroe Lodge 770, supra note 27.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers Notably, the irrevocability period applies to members, non-members, and members that authorize dues deduction but resign during the applicable time period.29 In Electrical Workers IBEW Local 2088 (Lockheed Space Operations), the Board emphasized that dues “may properly continue to be deducted from the employee's earnings and turned over to the union during the entire agreed-upon period of irrevocability, even if the employee states he or she has had a change of heart and wants to revoke the authorization.”30 The check-off authorization must contain explicit language obligating an employee to pay dues even in the absence of union membership.31 Thus, where an authorization contains language clearly authorizing dues deduction irrespective of union membership, dues check-off is irrevocable for the period described in LMRA Section 302(c)(4).32 In addition, the LMRA exclusively governs dues check-off authorization and preempts state law prohibiting dues check-off.33 LMRA Section 302(c)(4) explicitly authorizes dues check–off provisions. As noted supra, dues check-off provisions are entirely independent of union-security provisions, which are governed by NLRA Section 8(a)(3) and LMRA Section 14(b). LMRA Section 14(b) only permits States to prohibit “agreements requiring membership in a labor organization as a condition of employment.” Unlike union-security provisions, dues check-off provisions are entirely voluntary and cannot be required as an employment condition. Thus, LMRA Section 14(b) does not apply to dues check off-provisions. Consequently, LMRA Section 302(c)(4) preempts state law attempts to prescribe dues check-off authorization through “right to work” laws.

Ultimately, it’s essential to appreciate the voluntary nature of dues check-off authorization to understand how it fundamentally differs from union-security provisions.

In contrast to union-security provisions, employees must voluntarily agree to dues check-off authorization. Employees that voluntarily authorize dues check-off elect to N.L.R.B. v. U.S. Postal Serv., 833 F.2d 1195, 1197 (6th Cir. 1987), decision supplemented, 837 F.2d 476 (6th Cir.

1988) Id. at 328.

Id.

United Steelworkers of Am., Local 4671 & Calvin Eugene Dugger, 302 NLRB 367 (1991).



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