Whether employers must continue to deduct union dues from employees’ paychecks and forward such deductions to the union (i.e., a “dues checkoff” provision) after the expiration of a collective bargaining agreement (CBA) is of critical importance in the negotiation process. Not having to deduct union dues is a powerful weapon for an employer to force a union to be reasonable at the bargaining table, since the union’s income stream with respect to the bargaining unit is cut off. By contrast, if the dues checkoff requirement survives the expiration of a CBA, there is much less incentive for the union to get a deal done since it is essentially “playing with the house’s money.”

The National Labor Relations Board (NLRB) has swung back and forth on whether an employer may unilaterally cease dues checkoff after the expiration of the collective bargaining agreement that provides for it. In 1962, the NLRB initially held that dues-checkoff arrangements expire with the agreement containing the checkoff provision. Bethlehem Steel, 136 NLRB 1500 (1962). This long-standing precedent remained until 2015, when the Board issued its decision in Lincoln Lutheran of Racine, 362 NLRB 1655, but ultimately it was reinstated in 2019’s Valley Hospital Medical Center, 368 NLRB 139.

In the most recent decision on the subject (issued Sept. 30, 2022), however, the Board reversed its prior decision in Valley Hospital after remand from the Ninth Circuit and has answered this question in the negative. Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center and Local Joint Executive Board of Las Vegas, 371 NLRB 160 (2022). The checkoff provision at issue in the case provided that the employer would deduct union dues “during the term of the Agreement.” The employer ceased its practice of dues checkoff approximately one year after the agreement expired. The Board found that this was improper and held that following contract expiration, an employer must continue to honor the dues checkoff arrangement in the contract until a new agreement is established or there is a bargaining impasse. Further, the NLRB’s ruling required the employer to pay the union for any dues it would have received without recouping this cost from employees.

The 2022 Valley Hospital decision represents the latest effort by the Biden NLRB to reverse Trump Board precedent and reinstate the more union-friendly conditions that characterized the Obama Board. Employers should brace themselves for more such reversals.