«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 ...»
Ultimately, the goal should be to draft a collective bargaining agreement with an explicitly independent dues check-off provision. Where the dues check-off provision achieves an independent purpose and is clearly unconnected to the union-security clause, it’s less likely an opposing party will successfully argue that a dues check-off provision implements the union-security clause.
In addition, the Board underlined that its decision in WKYC-TV had prospective effect only.123 The Board explained that its general policy is to apply its decisions retroactively “’to all pending cases in whatever stage,’ unless retroactive application WKYC-TV, supra note 20, at fn 5 (“Deductions shall be limited to such Employees from whom the Corporation has received written authorization to deduct said dues and/or fees”).
Id. at *2.
Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers would work a ‘manifest injustice.’”124 Here, where the Employer relied on fifty-years of Board precedent, the Board found that retroactive application would certainly result in manifest injustice.125 Accordingly, the Board found that the Employer did not violate Sections 8(a)(5) and (1) under Bethlehem Steel and its progeny.126 Indeed, in several cases decided the same week and subsequent to WKYC-TV, the Board reaffirmed the decision’s prospective effect.127 In Nebraskaland, Inc., a case decided immediately after WKYC-TV, the Board applied Bethlehem Steel in finding that an employer did not violate the Act by discontinuing a dues check-off provision.128 The court acknowledged that in WKYC-TV it held that “an employer, following contract expiration, must continue to honor a dues-checkoff arrangement established in the contract until the parties have either reached agreement or a valid impasse permits unilateral action by the employer.”129 However, the Board also emphasized that it decided to apply the rule adopted in WKYC-TV prospectively.130 As a result, the Board affirmed the ALJ’s finding that the employer’s conduct did not violate Sections 8(a)(5) and 8(a)(1).
The Board’s decision in Nebraskaland, Inc., underscores one of the two major effects of the Board’s decision in WKYC-TV. Specifically, that the Board will only hold an employer liable for violating Sections 8(a)(5) and 8(a)(1) if it refuses to honor a dues check-off provision after its decision in WKYC-TV. The other major impact, as noted supra, is the Board’s holding that employers in non-right-to-work states violate Sections 8(a)(5) and 8(a)(1) when they discontinue dues check-off post-contract expiration.
Ultimately, the Board adopted the Ninth Circuit’s decision in Executive Bd. of Las Vegas v. N.L.R.B. (Hacienda III) and expanded it to apply to states that permit union-security agreements. Clearly, the Board’s decision in WKYC-TV had an immediate effect on the Board’s treatment of dues check-off provisions after a collective bargaining agreement expires. However, as discussed infra, the Board’s about-face in WKYC-TV on Id. at *10; citing SNE Enterprises, 344 NLRB 673, 673 (2005).
Id. at *11.
See Nebraskaland, Inc, 359 NLRB No. 25 (2012); Excelsior Golden Living Center, 359 NLRB No. 47 (2012);
and USIC Locating Services, Inc., 359 NLRB No. 33 (2012).
Nebraskaland, Inc., supra note 124.
Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers December 12, 2012, may affect more than just an employer’s duty to honor a dues check-off provision after contract expiration.
Section 4. Potential Secondary Effects of the Board’s Decision WKYC-TV, Inc.
The Board’s decision in WKYC-TV could affect more than the Board’s treatment of dues check-off provisions post-contract expiration. For instance, the Board has continuously held that no-strike clauses, arbitration clauses, and management-rights clauses also do not survive contract expiration. However, in light of the Board’s decision in WKYC-TV, could one of these collectively-bargained for clauses be next to experience the newfound, post-contract longevity of dues check-off provisions?
Naturally, labor practitioners are left to wonder, what is the next shoe to drop?
Notably, the Board in WKYC-TV distinguished dues check-off provisions from nostrike, arbitration, and management-rights clauses.131 The Board explained that nostrike, arbitration, and management-rights clauses, similar to dues check-off provisions, are mandatory subjects of bargaining.132 Also like dues check-off provisions prior to WKYC-TV, earlier Board decisions demonstrate that no-strike, arbitration, and management-rights clauses do not survive contract expiration.133 However, the Board in WKYC-TV noted a crucial difference between dues check-off provisions and nostrike, arbitration, and management-rights clauses. Specifically, the Board stressed that, “In agreeing to [no-strike, arbitration, and management-rights] arrangements… parties have waived rights that they otherwise would enjoy in the interest of concluding an agreement, and such waivers are presumed not to survive the contract.”134 In other words, once the contract expires, the parties’ waiver of rights they are otherwise entitled Id. at *3, *10.
Id. at *3.
Id.; Citing Sterling Drug, Inc., Hilton-Davis Chem. Co. Div., 185 NLRB 241, 242 (1970) (“the Board held that parties have no postexpiration duty to honor a contractual agreement to arbitrate, reasoning that such an agreement ‘is a voluntary surrender of the right of final decision which Congress has reserved to the [ ] parties’ because arbitration is, ‘at bottom, a consensual surrender of the economic power which the parties are otherwise free to utilize’”); Southwestern Steel & Supply, Inc. v. NLRB, 806 F.2d 1111, 1114 (D.C. Cir. 1986) (“For similar reasons, a contractual no-strike clause normally does not act as a clear and unmistakable waiver of the union's right to strike after the contract expires”); Beverly Health & Rehabilitation Services, 335 NLRB 635, 636 (2001) (“The Board has also held that a management-rights clause normally does not survive contract expiration, because ‘the essence of [a] management-rights clause is the union's waiver of its right to bargain. Once the clause expires, the waiver expires, and the overriding statutory obligation to bargain controls’”).
Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers to exercise also expire. Consequently, the duty to refrain from unilaterally changing employment terms and conditions post-contract expiration does not apply to no-strike, arbitration, and management-rights clauses.
In contrast, dues check-off provisions do not require the union to waive any statutory or non-statutory right.135 As the Board indicated in WKYC-TV, dues check-off is “simply a matter of administrative convenience to a union and employees whereby an employer agrees that it will establish a system where employees may, if they choose, pay their union dues through automatic payroll deduction.”136 Unlike no-strike, arbitration, and management-rights clauses, the employer does not fundamentally receive the surrender of any rights from the union in exchange for a dues check-off agreement. Thus, a plain reading of the Board’s decision in WKYC-TV strongly suggests that the Board will not change course on no-strike clauses, arbitration clauses, and management-rights clauses.
With regard to arbitration clauses, it’s worth highlighting that the Board relied on its holding in Bethlehem Steel in explaining why arbitration clauses do not survive
contract expiration.137 Specifically, the Board explained:
“Our view in this regard is not unprecedented. We have also declined to apply Katz to unilateral abandonment of union-security and dues-checkoff provisions following contract expiration because they, like arbitration, are purely creatures of contract. See Bethlehem Steel Co., 136 NLRB 1500, 1502 (1962).”138 Notably, the Board’s decision in WKYC-TV rejects the notion that dues check-off provisions are subject to termination at contract expiration because they are “purely creatures of contract.” Instead, as noted supra, the legal justification for excepting arbitration provisions from the Katz rule corresponds to the union’s waiver of rights.
Arguably, labor practitioners could creatively draft free-standing arbitration clauses similar to dues check-off provisions described supra. For instance, there may be situations where arbitration provisions do not involve the waiver of some other statutory or non-statutory right, such as a no-strike clause. Under those circumstances, Id.
Indiana & Michigan Elec. Co., 284 NLRB 53, 77 (1987) Id.
Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers a labor practitioner could draft an arbitration clause highlighting its independent status.
Where there is no waiver of any specific right in exchange for inclusion of an arbitration provision, the Board’s discussion in WKYC-TV loses its force. Theoretically, the creative arbitration-clause drafter could reasonably argue the arbitration provision is no different from a stand-alone dues check-off provision. How this argument plays out before the current board, or subsequent boards, is impossible to predict. Indeed, the secondary effects of the Board’s decision in WKYC-TV will only become clear in years to come.
Conclusion. Have we come to the end of the road with dues check-off provisions?
From 1962 until December, 2012, the NLRB majority steadfastly and consistently ruled that an employer’s obligation to deduct union dues expired with the contract.
Employers could lawfully unilaterally cease honoring dues check-off provisions without violating Sections 8(a)(5) and 8(a)(1). After a “fifteen year dialogue” with the Ninth Circuit in the Hacienda trilogy, as characterized by the Board in WKYC-TV in 2012, the Board overturned fifty years of precedent and held that an employer’s obligation to check-off union dues continues after the collective bargaining agreement expires.
Naturally, the Board’s decision in WKYC-TV had immediate consequences for labor law practitioners. Specifically, the Board’s decision underlined the importance of separating dues check-off provisions from union-security clauses in collective bargaining agreements. The Board explained that where dues check-off provisions are unrelated to a union-security clause, they presumptively survive contract expiration.
However, the Board also emphasized that the decision only applied prospectively.
Accordingly, unions seeking to challenge employer’s unilateral termination of dues check-off provisions prior to December 12, 2012, are left without a remedy.
Nevertheless, in the future, failure to continue deducting dues after a contract expires will violate Section 8(a)(5) and 8(a)(1) of the Act.
The Board’s decision also left many unanswered questions for potential impact on other exceptions to the Katz doctrine. As a practical matter, the Board’s decision in WKYC-TV seems to undercut the possibility of this current Board extending postcontract survival rights to arbitration provisions, as well as management-rights and noDues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers strike clauses. As noted supra, the Board’s discussion in WKYC-TV suggests that the waiver of statutory rights associated with the above-referenced clauses precludes the Board from likening them to dues check-off provisions. However, as also explained above, creative contract drafting could open the door for the Board to reverse its course on arbitration provisions as well.
In the dynamic world of labor-relations, only time will tell the long-term effects of the Board’s decision in WKYC-TV. Ultimately, the Board’s decision in WKYC-TV proves one thing: there are areas of Board law, including fifty-years of Board precedent, which labor practitioners can successfully challenge through diligence, creative argument, and a little help from the Circuit Courts.
Dues Check-Off Dreams Do Come True, They Do, They Do By Brian A. Powers
Modified version of the authorization in Kroger Co., 334 NLRB 847 (2001)139 You are hereby authorized and directed to deduct from my wages, commencing with the next payroll period, an amount equivalent to dues and initiation fees as shall be certified by [the Union], and remit same to [the Union].
This authorization and assignment is voluntarily made in consideration for the cost of representation and collective bargaining and is not contingent upon my present or future members in [the Union]. This authorization and assignment shall be irrevocable for a period of one (1) year from the date of execution or until the termination date of the agreement between the Employer and [the Union], whichever occurs sooner, and from year to year thereafter, unless not less than thirty (30) days and not more than forty-five (45) days prior to the end of any subsequent yearly period I give the Employer and [the Union] written notice of revocation bearing my signature thereto.
[The Union] is authorized to deposit this authorization with any Employer under contract with it and is further authorized to transfer this authorization to any other Employer under contract with it in the event that I should change employment.
This authorization will remain in effect in the event that I am laid off, leave work on a leave of absence or separated from employment with my present Employer.
I authorize deductions to resume upon the resumption of employment. If I have not requested an Honorable Withdrawal Card while on leave or layoff status with the Company, then upon my recall from leave or layoff, the Company will also deduct in addition to current dues (1) all delinquent monthly dues that are owed during the leave or layoff period, but not to exceed three months past dues, and (2) any past due initiation fee arising from employment with the Company.
Henry M. Willis, Schwartz, Steinsapir, Dohrmann & Sommers LLP, modified this sample language.