In-house counsel across the country have unexpectedly learned about or reacquainted themselves with the National Labor Relations Act over the course of President Obama’s administration. Most of these lessons have been caused by the Obama administration’s National Labor Relations Board’s (NLRB) very strong efforts to re-establish the relevancy of the board that has been lost in recent times through the decline of union membership in private sector workplaces. The board has not shied away from controversy during the past four years and has seen increased attention as a result.        

This trend continued through the very end of 2012 as the NLRB issued what may be one of its most controversial decisions. Decades of precedent establishing an employer’s right to terminate dues-checkoff at the expiration of a collective bargaining agreement was cast aside in the NLRB’s Dec. 12, 2012, decision WKYC-TV, Inc.. Dues-checkoff refers to a way in which a union can collect membership dues from employees. As part of a collective bargaining agreement, the employer and union can agree that dues will be automatically deducted from the paychecks of union members. This provides an easy and efficient way to ensure that the union stays well-funded. It eliminates the need for the union to approach each individual bargaining unit member to collect his dues obligation.

WKYC-TV, Inc. addresses what happens to dues-checkoff terms once a collective bargaining agreement expires. As explained in the board’s analysis, an employer must continue the terms and conditions of employment as set under the expired agreement if they are mandatory subjects of bargaining. These terms remain in place until there is a new agreement or the parties reach an impasse in bargaining. Under the analysis of the 1962 NLRB decision Bethlehem Steel, a decision firmly in place for the past 50 years, the board held that union security and dues-checkoff clauses were an exception to this general rule and subject to unilateral termination by the employer upon the expiration of a collective bargaining agreement containing those terms. Board Chairman Mark Pearce and Members Richard Griffin and Sharon Block, writing for the majority in WKYC-TV, Inc., declared that an employer must continue dues-checkoff after expiration of a collective bargaining agreement. WKYC-TV, Inc. removes a valuable economic bargaining chip from the employer’s hand by requiring the employer to continue dues-checkoff. In his dissenting opinion, Member Brian Hayes argued that the board should continue to follow the Bethlehem Steel analysis.

This is an important decision for employers, regardless of whether their workforces are unionized. In the short term, negotiations with a union after the expiration of a collective bargaining agreement become more difficult under WKYC-TV, Inc. By continuing to force the employer to collect dues, the union ensures that it will stay well-funded through any lengthy dispute over the terms of a new agreement. Union personnel will no longer seek a deal for the sake of returning to a significant source of funding. Additionally, employers who want to discontinue dues-checkoff at the end of a collective bargaining agreement will now have to negotiate for such a term at the potential expense of something else. In the long term, this decision will likely provide a significant boost to efforts to maintain, strengthen and expand union membership in the private sector. Local sources of funding will be stronger than they were under the Bethlehem Steel rule. This will allow unions to pay more attention on expansion efforts than they could otherwise afford under the prior analysis.