On December 16, 2019, the National Labor Relations Board (the “Board”) issued its decision in Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (2019), examining the issue of whether an employer’s statutory obligation to check off union dues terminates upon expiration of the parties’ collective bargaining agreement (“CBA”). Overruling Lincoln Lutheran of Racine, 362 NLRB No. 188 (2015), and restoring precedent set by Bethlehem Steel, 136 NLRB No. 135 (1962), the Board held that dues-checkoff provisions are mandatory bargaining subjects created exclusively by CBAs and enforceable only for the duration of the CBAs establishing them.

Background

Approximately 13 months after the parties’ CBA expired, Valley Hospital Medical Center (the “Employer”) stopped deducting and remitting employees’ dues to the union. The Employer provided five days’ notice but did not provide the union an opportunity to bargain over the cessation of dues collection. Up to that point, the parties were still operating under the expired CBA’s terms. The union filed an unfair labor practice charge. The issue before the Board was whether it was unlawful for the Employer to cease checking off and remitting employees’ union dues after its CBA with the union expired.

The Employer’s unilateral action would have been lawful under nearly 60-year old NLRB precedent. In Bethlehem Steel, the NLRB held that an employer’s statutory obligation to check off union dues ends when the CBA establishing the checkoff provision expires. However, in 2015, in the case of Lincoln Lutheran of Racine, the Board overruled Bethlehem Steel, holding that an employer’s statutory obligation to check off union dues continues to be enforceable even after expiration of the CBA establishing the checkoff arrangement.

Decision and Order

The Board held that a dues-checkoff provision properly belongs to the limited category of mandatory bargaining subjects that are exclusively created by a CBA and enforceable, through Section 8(a)(5) of the Act, only for the duration of the contractual obligations created by the parties. The Board reasoned that there is no independent statutory obligation to check off and remit dues after expiration of a CBA containing a checkoff provision just as there is no such statutory obligation at the outset of collective bargaining. The Board’s new holding applies even in the absence of a union security provision in the same contract.

Applying their holding retroactively to the case, the Board found that the Employer had no obligation under the Act to continue checking off dues after the CBA expired. Chairman John F. Ring was joined by Members Marvin Kaplan and William Emanuel in the majority opinion. Member Lauren McFerran dissented.

Takeaway for Employers:

An employer’s obligation to check off union dues ends when the CBA establishing the checkoff provision expires. This applies even when contractual checkoff provisions appear in conjunction with union security clauses. The Board’s holding applies retroactively to all pending cases.

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If you have any questions regarding the Board’s decision in Valley Hospital Medical Center, 368 NLRB No. 139 (2019), please do not hesitate to contact us.
Putney, Twombly, Hall & Hirson LLP