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NLRB Overrules 50-Year Precedent; Dues Checkoff Arrangements Now Survive Expiration of Union Contracts

If your company's union contract expires in the near future, pay attention: in a departure from long-standing precedent, the National Labor Relations Board (NLRB) ruled that employers cannot terminate a dues checkoff arrangement just because a union contract has expired.


Dues checkoff refers to a voluntarily authorized and regular deduction of employees' wages by an employer to pay union dues out of earnings, instead of separate individual payments. Unions prefer this method of payment because it avoids the complexities and disorganization inherent to individual check payments, but the method places an additional administrative burden on employers.

Since 1962, an employer's union dues checkoff obligations generally expired at the same time a collective bargaining agreement with the union expired. On Aug. 27, 2015, the NLRB changed the state of the law in a nod to its marked disapproval of employers making unilateral changes in the terms and conditions of employment after the expiration of a union contract. Employers now must honor a dues checkoff arrangement established in a union contract until the employer and union have either agreed on a successor contract, or a valid bargaining impasse permits unilateral action by the employer.

Dissenting members of the NLRB believe that this policy will be a hindrance to the bargaining relationships between employers and unions upon contract expiration. One concern is that parties may now spend a more significant amount of energy haggling over proposals to eliminate dues checkoff, something that was not usually a point of contention in collective bargaining under the 1962 ruling.

The rule will only apply prospectively; any cessation of dues checkoff deductions occurring before Aug. 27, 2015, will be analyzed according to the NLRB's 1962 rule. Notably, participation in dues checkoff is entirely voluntary for employees, who always have the right to choose how to pay their dues. Any questions concerning compliance with the NLRB's ever-changing policies should be raised with counsel.



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