When a collective bargaining agreement (CBA) expires, what happens with the dues checkoff requirement? Does an employer retain it or cancel it? If you think you know the answer, keep reading—it has changed.

In September, the National Labor Relations Board (NLRB) released a decision stating that employers are prohibited from unilaterally ceasing the dues checkoff after a CBA has expired. This decision reverses a ruling from 2019 and returns to the standard from 2015.

What are the CBA and its requirements?

In 1962, the NLRB ruled in a case involving Bethlehem Steel Company, 136 NLRB 1500 (1962), that the dues checkoff provision should not survive the expiration of a CBA. That means that although employers were expected to continue most employment terms after the expiration of a CBA, they could stop withholding dues.

More than 50 years later, in 2015, the board reversed that decision. In a case involving Lincoln Lutheran of Racine, 362 NLRB 1655 (2015), the NLRB ruled that employers must continue withholding union dues after a CBA expiration.

Then, only four years later, in 2019, the board returned to the Bethlehem Steel standard, stating that employers could stop withholding dues after expiration.

What the new decision means for contractors

In the 2022 case involving Valley Hospital Medical Center, 371 NLRB No. 160 (2022), the NLRB reviewed its earlier decisions and determined that the 2015 Lincoln Lutheran case had been correct. According to that standard, after a CBA expiration, employers are required to continue the dues checkoff arrangement until one of two things happens: the parties reach a new CBA or the bargaining process reaches a valid impasse.

It is interesting to note that the board voted 3-2 along party lines in making this decision. Board Chair Lauren McFerran joined fellow Democratic members David Prouty and Gwynne Wilcox in voting for the dues-withholding requirement. Republicans Marvin Kaplan and John Ring dissented.

In the Valley Hospital case, the CBA stated the employer must withhold employees’ dues and provide them to the union. About 13 months after the CBA’s expiration, the employer stopped deducting dues. It did so with only five days’ notice and allegedly did not give adequate opportunity for the union to continue bargaining.

In this case, the board also applied the rule retroactively. So, Valley Hospital must remit all dues missed throughout the applicable period. This stipulation means any employer that unilaterally stopped deducting dues per the 2019 standard may be required to reimburse unions for any dues not withheld during the time in question.

What construction companies should know

This ruling could be a blow to many employers because it removes a bargaining chip they could use in negotiating a new CBA. Going forward, employers should consider adding language to the dues checkoff provision indicating that it remains in effect only as long as the CBA survives. Those without such a stipulation should use caution and avoid the automatic cessation of withholding union dues if their current CBA expires.

The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Trent Cotney is a partner and Construction Practice Group Leader at the law firm of Adams and Reese LLP and NRCA General Counsel. For more information, please contact him at [email protected].