On September 30, 2022, the National Labor Relations Board (“NLRB”) held that employers violate Section 8(a)(5) of the National Labor Relations Act when they cease dues checkoff after the expiration of a collective bargaining agreement. Valley Hospital Medical Center, Inc., 371 NLRB No. 160 (“Valley Hospital II”). The split decision came on remand from the Ninth Circuit after protracted litigation in federal courts.

A dues checkoff clause is a provision contained in a collective bargaining agreement that requires the employer to automatically deduct monthly union dues from its employees’ paychecks and to remit those dues to the union. Guided by the Ninth Circuit’s opinion, NLRB Chairman Lauren McFerran and Members Gwynne Wilcox and David Prouty concluded, “an employer, following contract expiration, must continue to honor a dues-checkoff arrangement established in that contract until either the parties have reached a successor collective-bargaining agreement or a valid overall bargaining impasse permits unilateral action by the employer.” Further, the majority made the rule retroactive to all pending cases, to “avoid the potential for inconsistency” and “more efficiently restore clarity to this area of law.” Members Marvin Kaplan and John Ring dissented.

This is the third change to the treatment of dues checkoff provisions in recent years. The NLRB’s initial decision on this issue, Bethlehem Steel,136 NLRB 1500 (1962), allowed employers to end dues checkoff when a contract expired. The NLRB first reversed course on its decades-old precedent in Lincoln Lutheran of Racine,362 NLRB 1655 (2015), before restoring the rule in Valley Hospital Medical Center, 368 NLRB No. 139 (2019)(“Valley Hospital I”). On review, the Ninth Circuit expressed concerns about Valley Hospital I, ultimately finding the majority’s rationale inadequate. Local Joint Executive Board of Las Vegas v. NLRB, 840 F.Appx. 134 (9th Cir. 2020).

Valley Hospital II represents the latest reversal of precedent by the NLRB. We will continue to keep you updated on this ever-changing area of law.

Peyton Demith also contributed to this article.