Overruling 50 years of precedent, the National Labor Relations Board (NLRB or Board) last week held that dues checkoff provisions survive the expiration of collective bargaining agreements (CBA or Contract). Thus, in the future, employers who cease honoring such provisions upon Contract expiration will violate National Labor Relations Act (NLRA) Section 8(a)(5).

Dues checkoff provisions require employers to deduct dues from the wages of employees - who have voluntary assented to such deductions - and remit payment directly to the union. Fifty years ago, in Bethlehem Steel, 136 NLRB 1500 (1962), the Board held that such clauses do not survive expiration of the CBA. Thus, as bargaining leverage, employers could cease participating in this arrangement - which is administratively convenient for the union and employees - upon expiration of the CBA. Not any more.

On December 12, in WKYC-TV, Inc., 359 NLRB No. 30 (2012), the Board stated that “we find compelling statutory and policy reasons to abandon the Bethlehem Steel rule.”

When a CBA expires, an employer must maintain the “status quo” as it relates to mandatory subjects of bargaining. As such, the Board held in WKYC-TV:

Under settled Board law, widely accepted by reviewing courts, dues checkoff is a matter related to wages, hours and other terms and conditions of employment within the meaning of the Act and therefore a mandatory subject of bargaining. The status-quo rule, then, should apply to dues checkoff, unless there is some cogent reason for an exception. We see no such reason. 

The Board went on to differentiate dues check off provisions from the other CBA provisions that do not survive Contract expiration - such as no-strike, arbitration, and management-rights clauses. It stated that those clauses involve the voluntary waiver of a statutory right, which must expire upon expiration of the CBA - as opposed to dues checkoff, which is “simply a matter of administrative convenience.” Moreover, other voluntary checkoff arrangements - such as employee savings accounts and charitable contributions - survive Contract expiration, the Board noted.

Referring to its decision to overturn Bethlehem Steel, the Board stated: “Unlike a good wine, a mistake does not get better with age.”

The WKYC-TV decision will be applied prospectively, rather than retroactively - meaning the new rule will not be applied to pending cases. And the Board did note that another holding of Bethlehem Steel will continue to stand: even after WKYC-TV, Union Security clauses do not survive Contract expiration.

But employers are now on notice that they cannot cease dues deductions upon Contract expiration.