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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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See Shen-Mar Food Products, Inc., 221 NLRB 1329 (1976) (explaining that dues check-off authorization are exclusively a matter of federal law); See also Seapak v. Industrial, Technical and Professional Emp., Division of National Maritime Union, AFL-CIO, 300 F. Supp. 1197 (N.D. Ga. 1969), aff’d, 423 F.2d 1229 (5th Cir. 1970).

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers deduct monies from their paycheck to cover the cost of union dues. Once an employee authorizes dues check-off pursuant to a clearly-articulated authorization form, it may become irrevocable for up to one year. Additionally, unlike union-security provisions, federal law preempts state law attempting to govern dues check-off authorization. As explained infra, confounding dues check-off authorization with union-security provisions can lead to unnecessary confusion, and, seemingly fifty years of reliance on flawed precedent.

Section 2. The Development of the Bethlehem Steel Rule from 1962-2013.

In the beginning, the Board created the heavens, the earth, and Bethlehem Steel.

In 1962, the Board emphasized that an employer does not violate the Act when it ceases to honor a dues check-off provision after the collective bargaining agreement expires.34 Following expiration of the collective bargaining agreement between Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO (“Union”) and Bethlehem Steel Company (Shipbuilding Division) and Bethlehem-Sparrows Point Shipyard, Inc. (“Employer”) in the summer of 1959, the parties began negotiating a new contract.35 During negotiations, the Employer refused to honor the prior agreement’s union-security clause, the dues check-off provision, super-seniority provision, and the grievance procedure provision.36 In addition, the Employer implemented multiple changes in the employees’ work conditions, including seniority rules, work assignments, and special employee benefits.37 Subsequently, the Unionized employees went on strike to protest the Employer’s unilateral changes to their employment terms and conditions.38 The Union also filed a complaint with the Board, alleging that the Employer failed to bargain in good faith.39 Thereafter, the General Counsel issued an unfair labor practice complaint asserting that the Employer violated Section 8(a)(5) and 8(a)(1) by Bethlehem Steel Co. (New York, N.Y.), supra note 2.

Bethlehem Steel Co. (New York, N.Y.), 133 NLRB 1347, 1349 (1961).

Id.

Id.

Id.

Id.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers refusing to bargain in good faith with the Union.40 The General Counsel contended that the totality of the Employer’s conduct indicated that it failed to bargain in good faith.41 Specifically, the General Counsel pointed to the Employer’s unilateral decisions 1) to terminate the union-security clause, dues check-off provision, super-seniority provision, and the grievance procedure provision; and 2) to change the unionized members’ working conditions.42 Ultimately, the Board determined that the Employer violated Section 8(a)(5) of the Act by failing to bargain in good faith.43 The Board agreed that the Employer violated the Act “when it deprived union representatives of certain seniority rights and declined to process grievances as before.”44 However, the Board reached the opposite conclusion with respect to the Employer’s termination of the union-security agreement and dues check-off provision.45 The Board noted that dues check-off, similar to preferential seniority and union-security clauses, relates to “wages, hours, and other terms and conditions of employment.”46 Correctly, the Board determined that duescheck off is a mandatory subject of collective bargaining.47 Nevertheless, the Board reasoned that the employer’s obligation to check-off dues expired with the collective bargaining agreement.48 The Board explained that the union obtained the right to check-off dues through its contractual agreement with the employer.49 Under the Board’s analysis, it follows that the contractual right to dues check-off ceases to exist when the contract expires.50 Consistent with the Board’s decision in Bethlehem Steel, for fifty years the Board and United States’ Federal Courts subscribed to the idea that dues-check off provisions when linked to union-security clauses left such clauses vulnerable to lawful, unilateral Id. at 1347; all references hereafter to Section 8(a)(5) and Section 8(a)(1) refer to NLRA Sections 8(a)(5) and 8(a)(1).

Id. at 1349.

Id.

Bethlehem Steel Co. (New York, N.Y.), supra note 2, at 1500.

Id. at 1501.

Id.

Id. at 1502.

Id.

Id.

Id.

Id.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers termination by an employer when a contract expires.51 For instance, the D.C. Circuit Court explained that “the well established exceptions for union-shop and dues-checkoff provisions are rooted in § 8(a)(3) of the NLRA, 29 U.S.C. § 158(a)(3), and § 302(c)(4) of the Labor-Management Relations Act, 29 U.S.C. § 186(c)(4), which are understood to prohibit such practices unless they are codified in an existing collective-bargaining agreement.”52 In addition, the Supreme Court acknowledged that “dues check-off provisions are excluded from the unilateral change doctrine because of statutory provisions which permit these obligations only when specified by the express terms of a collective-bargaining agreement.”53 The Board also clarified that its decision in Bethlehem Steel is not limited to dues check-off provisions linked to union-security agreements. In Tampa Sheet Metal, the Board concluded that the Bethlehem Steel rule also applies in right-to-work states.54 In right-to-work states, state law prohibits collective bargaining agreements that contain union-security clauses.55 Thus, the Board had to determine if its decision in Bethlehem Steel applied to an isolated dues check-off provision in a collective bargaining agreement that was not associated with a union security clause. The Board concluded, “An employer's duty to check off union dues is extinguished upon the expiration of the collective-bargaining agreement.”56 Given the Board’s continued devotion to the Bethlehem Steel rule, it came as no surprise when the Board agreed to dismiss a union’s complaint in 2000 that alleged the See Teamsters Local 70 (Sea-Land of California), 197 NLRB 125, 128 (1972), enf’d. per curiam 490 F.2d 87 (9th Cir. 1973); Peerless Roofing Co., 247 NLRB 500, 505 (1980), enf’d. 641 F.2d 734 (9th Cir. 1981); Ortiz Funeral Home Corp., 250 NLRB 730, 731 fn. 6 (1980), enf’d. on other grounds 651 F.2d 136 (2d Cir. 1981), cert. denied 455 U.S. 946 (1982); Robbins Door & Sash Co., 260 NLRB 659, 659 (1982); Petroleum Maintenance Co., 290 NLRB 462, 463 fn. 4 (1988); R.E.C. Corp., 296 NLRB 1293, 1293 (1989); Xidex Corp., 297 NLRB 110, 118 (1989), enf’d. 924 F.2d 245, 254-255 (D.C. Cir. 1991); AMBAC, 299 NLRB 505, 507 fn. 8 (1990); U.S. Can Co., 305 NLRB 1127, 1127 (1992), enf’d. 984 F.2d 864, 869 (7th Cir. 1993); J. R. Simplot Co., 311 NLRB 572, 572 (1993), enf’d. mem. 33 F.3d 58 (1994), cert. denied 513 U.S. 1147 (1995); Sonya Trucking, Inc., 312 NLRB 1159.





1160 (1993); Katz's Deli, 316 NLRB 318, 334 fn. 23 (1995), enf’d. on other grounds 80 F.3d 755 (2d Cir. 1996);

Sullivan Bros. Printers, 317 NLRB 561, 566 fn. 15 (1995), enf’d. 99 F.3d 1217, 1231 (1st Cir. 1996);

Spentonbush/Red Star Cos., Cos., 319 NLRB 988, 990 (1995), enf. denied on other grounds 106 F.3d 484 (2d Cir.

1997); 87-10 51st Ave. Ownership Corp., 320 NLRB 993 (1996); Talaco Communications, Inc., 321 NLRB 762, 763 (1996); Able Aluminum Co., 321 NLRB 1071, 1072 (1996); and Valley Stream Aluminum, Inc., 321 NLRB 1076, 1077 (1996).

Sw. Steel & Supply, Inc. v. N.L.R.B., 806 F.2d 1111, 1114 (D.C. Cir. 1986).

Litton Fin. Printing Div., a Div. of Litton Bus. Sys., Inc. v. N.L.R.B., 501 U.S. 190, 199, (1991).

Tampa Sheet Metal, 288 NLRB 322 (1988).

Id.

Id. at fn 15.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers employer violated Section 8(a)(5) and 8(a)(1) by ceasing to deduct union dues.57 The Hacienda Resort Hotel and Sahara Hotel (“Employer”) and Culinary Workers Local 226 and Bartenders Local 165, Hotel and Restaurant Employees (“Union”) were parties to collective bargaining agreements that expired on May 31, 1994.58 After the parties unsuccessfully negotiated for a successor agreement from May 31, 1994 through June 1995, the Employer notified the union that it planned to cease honoring the dues checkoff provision in the expired agreements.59 Subsequently, the Union filed a Complaint with the Board against the Employer alleging Section 8(a)(5) and 8(a)(1) violations.

Following a hearing, the ALJ dismissed the Union’s Complaint based solely on the collective bargaining agreements’ language.60 The Board affirmed the ALJ’s decision to dismiss the Union’s Complaint, however, it based its decision on the Bethlehem Steel rule.61 Specifically, the Board based its decision on “well-established precedent that an employer’s obligation to continue a dues-checkoff arrangement expires with the contract that created the obligation.”62 The Board acknowledged that the Supreme Court’s decision in NLRB v.

Katz prohibits a party from unilaterally changing most mandatory subjects of bargaining after a contract expires.63 However, the Board stressed that the NLRA excepts various contractually-established employment terms and conditions from the general prohibition established in Katz, including dues-checkoff arrangements.64 Accordingly, the Court applied the 38 year old “bright-line rule” from Bethlehem Steel and dismissed the Union’s Complaint.65 Notably, Board members Fox and Liebman dissented from the 3-2 majority opinion.66 In contrast to the majority, Fox and Liebman asserted that the Employer Hacienda I, supra note 5.

Id. at 665.

Id.

Id. at 666.

Id Id.

Id.; NLRB v. Katz, 369 U.S. 736 (1962).

Id.; Citing Southwestern Steel & Supply v. NLRB, 806 F.2d 111, 114 (D.C. Cir. 1986), enfg 276 NLRB 1569 (1985) ; See also Indiana & Michigan Electric Co., 284 NLRB 52, 54-55, 58-59 (1987).

Id. at 667.

Id.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers violated 8(a)(5) and (1) when it unilaterally ceased to check off dues after the collective

bargaining agreement expired.67 Fox and Liebman explained:

In our view, there is no statutory or policy justification for excepting dues checkoff from the general rule that following the expiration of a collectivebargaining agreement, an employer is obliged to maintain the status quo with regard to employees' terms and conditions of employment until the parties agree on changes or bargain to impasse.68 Fox & Liebman were prepared to overrule 38 years of Board policy established in Bethlehem Steel. Fox & Liebman also disagreed with the ALJ’s determination that the language in the collective bargaining agreement permitted the Employer to terminate the dues check-off system after the contract expired.69 They underscored that Section 8(d) and Section 8(a)(5) impose a statutory obligation to continue to check-off dues after a contract expires until the parties bargain to impasse or agree on changes.70 Thus, the contractual language confining the employer’s obligation to check-off dues “to the term of the agreement” was inoperable.71 Consequently, Fox & Liebman would have held that the Employer violated Section 8(a)(5), 8(a)(1), and 8(d).72 Fox & Liebman’s dissent in Hacienda I would end up carrying the day roughly a decade later. As discussed infra, the Ninth Circuit ultimately reached the same conclusion as Fox & Liebman in 2011 in Local Joint Executive Bd. of Las Vegas v.

N.L.R.B. (Hacienda III).

In 2001, the Union petitioned the Ninth Circuit for review of the Board’s order in Hacienda I.73 After oral argument and briefing, the Ninth Circuit granted the petition for review, vacated the Board’s decision, and remanded to the Board to convey an explanation for its rule, or adopt and explain a separate rule.74 In reaching its conclusion, the court emphasized that it was “unable to discern the Board’s rationale for excluding dues-checkoff from the unilateral change doctrine in the absence of union Id.

Id.

Id. at 671.

Id.

Id.

Id. at 672.

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

2002) Id. at 580.

Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers security.”75 Specifically, the court highlighted the Third Circuit’s explanation in enforcing

Bethlehem Steel:

The right to require union membership as a condition of employment is dependent upon a contract which meets the standards prescribed in §8(a)(3). The checkoff is merely a means of implementing union security.

Since there was no contract in existence when the company discontinued these practices, its action was in conformity with the law.76 The court stressed that the collective bargaining agreements at issue did not contain a union security clause.77 Therefore, the court concluded that the Board’s decision and reasoning in Bethlehem Steel failed to support the rule the Board adopted in Hacienda I.

Five years later, the Board “accepted the remand of the U.S. Court of Appeals for Ninth Circuit” and affirmed its initial decision.78 Pursuant to the Ninth Circuit’s Order, the Board adopted a separate rule in reaching its conclusion.79 Coincidentally, the Board adopted the ALJ’s initial reason for dismissing the Union’s Complaint – that the “duescheckoff clauses in the parties’ collective-bargaining agreements contained explicit language limiting the Respondents’ dues-checkoff obligation to the duration of the agreements.”80 The Board noted that the language in the agreement “clearly” linked dues check-off to the agreements’ duration.81 Thus, the Union waived its right to dues check-off as an employment term and condition after the contract expired.82 Member Liebman again dissented, this time joined by Member Walsh.83 The dissenting opinion underlined the same flaws in the majority’s decision as in Hacienda I, including the inexplicable exclusion of dues check-off from the Katz doctrine.84 Accordingly, Member Liebman reiterated her earlier opinion that the Employer violated Section 8(a)(5) and 8(a)(1).

Id.



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