On December 16, 2019, in Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center (368 NLRB No. 139 (2019)), the National Labor Relations Board (NLRB) overturned its 2015 decision in Lincoln Lutheran of Racine (362 NLRB 1655 (2015)), restoring the Board’s 50+ year precedent established under Bethlehem Steel (136 NLRB 1500 (1962), that there is no independent statutory obligation to check off and pay employees’ union dues after the expiration of the collective bargaining agreement (CBA), even where the contract does not contain a union security provision. The decision is part of a trend of the current Board to reinstate legal standards that had stood for decades before being overturned during the Obama administration’s union-friendly Board.

In Valley Medical Center, the CBA between the employer and the union expired on December 31, 2016. The parties continued to operate under the expired contract, which contained a “check-off” provision that stated “the Check-Off Agreement and system heretofore entered into and established by the Employer and the Union for the check-off of Union dues by voluntary authorization … shall be continued in effect for the term of the Agreement.” The authorization form also stated that it was valid “during the term of the Agreement.” On February 1, 2018, almost 13 months after the expiration of the parties’ contract, and after providing 5 days’ notice and without providing the Union with an opportunity to bargain, the employer stopped deducting Union employees’ dues.

The issue before the Board was whether an employer’s statutory obligation to check off union dues terminates upon expiration of a CBA. In a 3-1 decision, with Member McFerren dissenting, the Board found that contract provisions for dues checkoff, no-strike and no-lockout pledges, arbitration, management rights, and union security all expire with the CBA, unlike provisions relating to wages, pension and welfare benefits, hours, working conditions, and other mandatory subjects of bargaining. Ultimately, the Board held that “[t]here is no independent statutory obligation to check off and remit dues after expiration of a collective bargaining agreement containing a checkoff provision, just as no such obligation exists before parties enter into such an agreement.”

The practical takeaways of the decision are clear with regard to the balance of power between unions and employers. The Board stated that “as with similarly excepted contractual no-strike and no-lockout provisions, an employer is free upon contract expiration to use dues checkoff as an economic weapon in bargaining without interference from the Board.” In addition, the decision is retroactive, meaning it applies to any pending cases alleging that cutting off dues checkoff was an unlawful unilateral change.