Hunton Employment & Labor Perspectives

In numerous prior posts, we have reported about the pro-labor decisions and regulatory changes by the Democratic-majority National Labor Relation Board.  Unfortunately, the Board is at it again, this time in WKYC-TV, Inc., 359 NLRB No. 30 (2012) , reversing a fifty-year-old precedent regarding the effect of contract expiration on a dues checkoff clause contained in the expired contract.

Under the Board’s longstanding and uniformly enforced 1962 decision in Bethlehem Steel Co., 136 NLRB 1500 (1962), the Board held that an employer does not violate the National Labor Relations Act by refusing to honor a union dues checkoff clause upon expiration of the contract.  A union dues checkoff clause is a provision that obligates the signatory employer to deduct union dues from employees’ paychecks and revert the dues to the union, thus essentially making the employer the union’s dues collector and providing the union with a steady flow of operating revenue.  According to the Board in Bethlehem Steel Co., such clauses (as well as union security clauses) become “inoperative” as a matter of law upon contract expiration.

The Bethlehem Steel Co. decision gave employers economic leverage during negotiations for a new contract.  The mere threat of contract expiration and the corresponding cutoff of dues to the union brought pressure upon the union to agree to a successor contract, even if it meant yielding to some of the employer’s bargaining demands.   

The Board’s recent decision in WKYC-TV, Inc. overturned the portion of Bethlehem Steel Co. related to dues checkoff and thus has stripped employers of one of the very few pieces of economic leverage available during negotiations for a successor agreement.  According to the Democratic Board majority in WKYC-TV, Inc., the Bethlehem Steel Co. holding was based on “questionable reasoning” and “is inconsistent with established policy generally condemning unilateral changes in terms and conditions of employment.” 

Writing in dissent, Republican Member Hayes aptly described the unfairness of the majority’s holding:

[M]y colleagues know well that an employer’s ability to cease dues checkoff upon contract expiration has long been recognized as a legitimate economic weapon in bargaining for a successor agreement. . . .  To strip employers of that opportunity would significantly alter the playing field that labor and management have come to know and rely on.  Indeed, even in times of union boycott and other economic actions in opposition to an employer’s legitimate bargaining position, the employer will be forced to act as the collection agent for the dues to finance this opposition.  This is the unspoken object of today’s decision.

Whether the Board’s decision will be appealed, and whether such an appeal would be successful, is not clear at this time.  What is clear, however, is that the current Board will continue to take every opportunity to remove any perceived impediment to union success, even at the cost of overturning longstanding precedent.