The key issue in Local Joint Executive Board of Las Vegas v. NLRB was whether employers in a right-to-work state (Nevada) violated the National Labor Relations Act (NLRA) when they unilaterally terminated their employees' union dues-checkoff after their respective CBAs expired.

Resort Hotel and Casino and Sahara Hotel and Casino (employers) operated in Nevada, a right-to-work state, which prohibits union security clauses that condition continued employment on membership in a union. Two local unions had nearly identical CBAs with the employers. The CBAs included dues-checkoff provisions, which required the employers to deduct union dues automatically from the paychecks of unionized employees who authorized the deductions. The CBAs expired in May 1994, and the parties unsuccessfully negotiated for new agreements through the end of 1994. After the CBAs expired, the employers continued to deduct union dues from employees’ paycheck. However, in June 1995, the employers informed the unions that they would stop deducting union dues and shortly after they stopped the deductions. The unions filed unfair labor practice (ULP) charges with the NLRB, alleging that terminating the dues-checkoff was a unilateral change to a mandatory subject of bargaining, in violation of the duty to bargain collectively under the NLRA. An NLRB administrative law judge (ALJ) found that the employer was permitted to terminate the dues checkoff unilaterally after the CBA had expired because the CBA granted the employer that right, which was consistent with long-standing Board precedent. The unions appealed the ALJ's decision by filing exceptions to the five-member panel (Board) that heads the NLRB's judicial functions.

The Board affirmed the ALJ's decision relying on Bethlehem Steel, where the Board first held that a dues checkoff provision in a CBA does not survive the CBA's expiration. In Bethlehem Steel, the dues checkoff provision was held to expire with the CBA because it was tied to a union security provision that was required by statute to expire with the CBA under Section 8(a)(3) of the NLRA (29 U.S.C. § 158(a)(3)). The Board and numerous appellate courts have relied on Bethlehem Steel for nearly 50 years for the general principle that an employer’s checkoff obligation, unlike other mandatory subjects of bargaining, terminates with CBA expiration, even in situations where the dues checkoff provision in a CBA was not connected to a union security provision in an expiring CBA (see Tampa Sheet Metal).

The unions petitioned the Ninth Circuit for review, which remanded the case finding the Board's decision arbitrary. The Board issued a second decision affirming the ALJ's decision, this time adopting the ALJ's rationale. On a second petition for review, the Ninth Circuit rejected the Board's decision and remanded the case to the Board for a second time. After the case had twice been remanded for failure to provide a reasoned explanation of its holding, the Board issued a third decision, stating it was deadlocked two to two on the merits of the case, and that existing precedent required the ALJ's ruling to stand. The unions once again appealed the decision to the Ninth Circuit.

On September 13, 2011, the Ninth Circuit court overturned the Board's decision as arbitrary because it failed to provide a reasoned explanation for excluding dues checkoff from the unilateral change doctrine, where it was not connected to an expiring union security CBA provision, which would be true in any right-to-work state where union security provisions are barred. Due to the parties' 15 year wait for a resolution, the Ninth Circuit stated that a third remand would be inappropriate and decided the merits of the case. The court ruled that the employers violated Section 8(a)(5) of the NLRA by unilaterally ceasing dues checkoff, without bargaining to impasse. The court emphasized that the dues-checkoff provision in the employers' CBAs was not designed as a union security measure, which would be unlawful in Nevada under its right-to-work law, but rather was a negotiated employee benefit, subject to mandatory collective bargaining. While the court set out a new rule regarding the termination of dues checkoffs in right-to-work states, it invited the NLRB to adopt a different rule for future cases provided if it is rationally supported and complies with the NLRA.

This decision overrules Board precedent that is more than 50 years old. Employers that assumed that dues checkoff provisions would cease when CBAs expired and did not specify when dues checkoff would cease into their CBAs now must deal with entirely different legal framework. This decision's implications may be narrow initially, but will have far broader implications if the Board adopts any part of the Ninth Circuit's analysis:

In a decision and order dated September 10, 2015, a three member Board panel (Members Hirozawa, Miscimarra, McFerran) accepted the Ninth Circuit's third remand in this case and held that the employer unlawfully ceased dues checkoff after expiration of the parties' CBAs without first bargaining to an agreement or impasse. A majority of the panel (Members Miscimarra and McFerran) held that:

Member Hirozawa dissented from the majority's decision not to order a standard make-whole remedy for the violation found by the court. (Hacienda Hotel, Inc. Gaming Corp., 363 N.L.R.B. No. 7 (Sep. 10, 2015).)

In a decision dated February 27, 2018, the Ninth Circuit granted the unions' petition for review, and vacated and remanded the Board's September 10, 2015 decision in this case. The Ninth Circuit held that Board abused its remedial discretion by not ordering the customary make-whole remedy. (Local Joint Executive Board of Las Vegas v. NLRB, (Feb. 27, 2018).)

On March 5, 2019, the Board accepted the law of the case and ordered a make-whole relief, subject to customary set-offs for previously dues transfer payments, consistent with the Ninth Circuit's instructions on remand (Hacienda Hotel, Inc. Gaming Corp., 367 N.L.R.B. No. 101 (Mar. 5, 2019)).

•Local Joint Executive Board of Las Vegas v. NLRB, 657 F.3d 865 (9th Cir. 2011).

•Hacienda Hotel, Inc. Gaming Corp., 355 N.L.R.B. 742 (2010).

•Hacienda Hotel, Inc. Gaming Corp., 351 N.L.R.B. 504 (2007).

•Hacienda Hotel, Inc. Gaming Corp., 331 N.L.R.B. 665 (2000).

•Bethlehem Steel, 136 N.L.R.B. 1500 (1962).

•Tampa Sheet Metal, 288 N.L.R.B. 322 (1988).