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NLRB Overturns Longstanding Precedent and Rules That a Dues Check Off Provision Survives Contract Expiration

Client Bulletin #487
December 20, 2012

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Overruling approximately 50 years of its own precedent, the National Labor Relations Board has decided that a union dues check off provision in a collective bargaining agreement will survive expiration of the agreement. The Board held 3-1 in WKCY-TV, Inc., that the check off provision is part of the status quo terms and conditions of employment that must be maintained by an employer until agreement or impasse in bargaining with a union, unless the parties to the agreement "clearly and unmistakably" agree otherwise. The WKCY decision overrules the 1962 case of Bethelehem Steel, which the Board had followed since 1962 and through the administrations of 10 presidents of both parties. The Board in WKCY held that its new rule would not be applied retroactively to pending cases, but would be applied prospectively.

Chairman Mark Gaston Pearce, and Members Sharon Block and Richard Griffin, reasoned that Bethlehem Steel should be overturned largely because a dues check off provision was (1) comparable to benefits provisions that survive post-contract expiration, and (2) fundamentally different from the other types of contract provisions that typically do not continue as part of the status quo, such as no-strike, arbitration, union security, and management rights provisions. According to the majority, the latter type of provision involves "waivers" that should expire with the contract, while check off does not. Accordingly, the majority said, check off provisions should continue as part of the status quo, "consistent with the language of the Act, its relevant legislative history, and the general rule against unilateral changes in terms and conditions of employment."

Member Brian Hayes, the sole Republican on the Board, whose term expired this week, dissented, contending that the majority had advanced no valid policy reasons for departing from the Bethlehem Steel rule, which had lasted for 50 years and had promoted peaceful resolution of labor disputes. In Member Hayes' view, a dues check off provision is analogous to the other types of contract provisions that do not survive contract expiration, absent the parties' agreement that such a provision should survive.

At this time, it is unclear whether the decision will be appealed. The employer has little incentive, apart from principle, to do so because the rule applies only prospectively – meaning that the employer in the case will face no remedial order.

Assuming the Board decision will stand, employers with existing collective bargaining agreements should review the agreements to determine whether they have check off provisions and, if so, whether the agreements address what happens to check off in the event of contract expiration. If the agreement is silent on the subject or does not have a clear and unmistakable waiver, the employer will be required to honor check off after contract expiration unless it can negotiate an alternative with the union. Otherwise, the status quo will need to be maintained until subsequent agreement or impasse, despite the fact that the Board's new rule imposing that "status quo" did not exist when the parties negotiated the contract.

Although, theoretically at least, an employer whose contract has not yet expired could negotiate for a "clear and unmistakable" right to stop the dues check off on or after contract expiration, it is doubtful that a union would be required to bargain mid-term over this and even more doubtful that the current Board would require a union to do so. Unfortunately, this is true even though the Board itself created this wholly new issue for bargaining mid-term.

If you would like to discuss the impact of WKCY-TV, Inc., on your company, please contact any member of Constangy's Labor Relations Practice Group, or the Constangy attorney of your choice.

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Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A "Go To" Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, and Top One Hundred Labor Attorneys in the United States, and the firm is top-ranked by the U.S. News & World Report/Best Lawyers Best Law Firms survey. More than 140 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Alabama, California, Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Texas, Virginia and Wisconsin. For more information, visit www.constangy.com.