Publication

National Labor Relations Board Holds Employers Must Continue to Deduct Union Dues After Expiration of Collective Bargaining Agreement

October 11, 2022

Key Takeaways:
  • In a return to its Obama-era doctrine, the National Labor Relations Board (NLRB) has once again reversed its position on an employer’s obligation to continue complying with a contractual dues checkoff provision after the expiration of a collective bargaining agreement.
  • Under the NLRB’s ruling, employers are once again required to continue to deduct and transmit union dues pursuant to a contractual dues checkoff provision, even after the contract expires.
  • Unionized employers with dues checkoff obligations should ensure that their systems are set up to comply.

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With its decision in Valley Hospital Medical Center, the NLRB reversed its Trump-era precedent and held that dues checkoff provisions in collective bargaining agreements survive the expiration of the contract. Accordingly, employers subject to dues checkoff provisions must continue to deduct union dues from employee pay and transmit those dues to the union, even after the contract giving rise to that obligation has expired. The decision represents the third time in the past seven years that the NLRB has changed its position on this issue and, once again, unionized employers will need to ensure compliance with this oft-changing area of law.

Dues checkoff provisions, commonly included in collective bargaining agreements at the insistence of unions, require an employer to deduct union dues from the paychecks of unionized employees and transmit those dues to the union. The legal question at issue in Valley Hospital Medical Center was whether an employer is required to continue deducting and transmitting dues even after the expiration of the contract giving rise to the employer’s dues checkoff obligation. For most of the past 60 years, the answer has been no. However, in 2015, the Obama-era NLRB reversed course and held that, as with other terms and conditions of employment, employers must maintain the status quo on dues checkoff after collective bargaining agreement’s expiration. The Trump-era NLRB overruled this decision in 2019, but now the NLRB has returned the doctrine to where it stood from 2015 to 2019.

For unionized employers with dues checkoff provisions, the message is straightforward: make sure that your existing dues checkoff systems are set to continue even after your contract expires.