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NLRB Must Squarely Address Dues Checkoff Revocations After a CBA Expires: DC Circuit
Practical Law Legal Update w-007-1261 (Approx. 5 pages)
NLRB Must Squarely Address Dues Checkoff Revocations After a CBA Expires: DC Circuit
by Practical Law Labor & Employment
| Law stated as of 25 Jul 2018 • USA (National/Federal) |
In Stewart v. NLRB, the US Court of Appeals for District of Columbia Circuit (DC Circuit) vacated a National Labor Relations Board (NLRB) decision holding that an employer and union did not commit an unfair labor practice (ULP) by prohibiting a group of employees from revoking their dues checkoff authorizations after the collective bargaining agreement (CBA) expired.
On March 21, 2017, in Stewart v. NLRB, the US Court of Appeals for District of Columbia Circuit (DC Circuit) vacated an NLRB decision that rejected unfair labor practice (ULP) charges against an employer and union for continuing to collect and transfer dues payments from a group of employees who had attempted to revoke their checkoff authorizations after the collective bargaining agreement (CBA) expired. The DC Circuit questioned the NLRB's reasoning because not all employees were given the opportunity to revoke their authorizations at the expiration of the CBA. ( (D.C. Cir. Mar. 21, 2017).)
Background
Fry's Food Stores was party to a CBA with United Food & Commercial Workers Local 99, AFL-CIO. The CBA included a dues-checkoff provision and specified that employees' checkoff authorizations should include the following language:
"This authorization and assignment shall be irrevocable for a period of one (1) year from the date of execution or until the termination date of the agreement between the Employer and Local 99, whichever occurs sooner, and from year to year thereafter, unless not less than thirty (30) days and not more than forty-five (45) days prior to the end of any subsequent yearly period I give the Employer and Union written notice of revocation bearing my signature thereto."
The CBA expired in October 2008 and the parties did not agree to a successor until November 2009. In the gap period between contracts, a group of employees resigned their memberships with the union and attempted to revoke their checkoff authorizations. The union honored the employees' resignations but did not give effect to their checkoff revocations because they were not made within the specified 15-day window preceding the CBA's expiration. The employer continued to collect and transfer dues payments from the employees to the union.
The employees filed ULP charges against the employer, and the NLRB's General Counsel issued a complaint against both the employer and the union. An NLRB administrative law judge (ALJ) interpreted the terms of the checkoff authorizations to mean that:
"Every employee who signed an authorization during contract could revoke the authorization during the window periods preceding the yearly anniversary date that the employee signed the authorization … In addition, employees who signed authorizations during the last year of the contract could revoke their authorizations upon the expiration of that contract."
The ALJ then applied Frito-Lay, Inc. a previous NLRB decision which approved of the use of escape periods in checkoff authorizations, and dismissed the complaint (243 N.L.R.B. 137 (1979)). The panel (Board) heading the NLRB's judicial functions summarily affirmed the ALJ's decision. The employees appealed to the DC Circuit. (Smith's Food & Drug Ctrs., Inc., (N.L.R.B. Mar. 20, 2015), summarily affirming analysis from 358 N.L.R.B. 704 (July 10, 2012).)
Outcome
The DC Circuit vacated and remanded the Board's decision. The DC Circuit reasoned that:
- Section 302(c)(4) of the Labor Management Relations Act (LMRA) imposes criminal liability on an employer for giving payments to a union, except as part of a dues-checkoff arrangement authorized by the employee. However, the statute requires that employees be given the opportunity to revoke their checkoff authorizations after one year or on the CBA's expiration, whichever occurs sooner. (29 U.S.C. § 186(c)(4).)
- The Board has held that employers and unions violate Sections 8(a)(1)(3) and 8(b)(1)(A) of the NLRA if they check off union dues without the employee's authorization. In line with Section 302(c)(4), the Board requires that employees be allowed to revoke their checkoff authorizations on each anniversary of signing the authorization and on the CBA's expiration. (Atlanta Printing Specialties, 215 N.L.R.B. 237, 237-38 (1974).)
- The Board has approved of the use of escape periods in checkoff authorizations, so long as employees have the opportunity to revoke their authorizations within a specified time period before the anniversary of the authorization and before the CBA's expiration (Frito-Lay, 243 N.L.R.B. at 138-39).
- This case does not fit into the Frito-Lay framework because the ALJ interpreted the checkoff-authorization language to mean that only employees who signed authorizations during the final year of the CBA could revoke their authorizations during the escape period before the CBA expired. However, the ALJ treated this case as though it were a straightforward application of Frito-Lay.
- If the Board wishes to reach the same result on remand, it must explain how the result in this case is compatible with its precedent and governing law.
In dissent, Judge Silberman argued that:
- The majority misread the ALJ's decision. The ALJ's decision indicates that all employees were able to revoke their checkoff authorizations during the escape period before the CBA expired.
- The Board's Frito-Lay decision does not correctly apply Section 302(c)(4). Under the statute, it is impermissible for employers and unions to limit employees' right to revoke their checkoff authorizations to an escape period before the expiration of the CBA.
Practical Implications
This case demonstrates the importance of drafting precise language when negotiating a checkoff authorization that will be included as part of a CBA. A court may determine that the checkoff authorization is facially invalid if it appears to restrict the right of employees to revoke the authorization at the times specified under Section 302(c)(4) of LMRA. Additionally, both the employer and the union may be opening themselves up to ULP liability if they refuse to give effect to an employee's revocation of a checkoff authorization under these circumstances.
UPDATE: On remand, the Board:
- Disavowed the ALJ's legal and contractual analysis that it previously adopted.
- Affirmed that Frito-Lay and Atlanta Press remain the precedent governing revocations of dues checkoffs during hiatus periods between CBAs.
- Again dismissed the ULP complaint against the dues collecting-employer and the dues-receiving union, holding that under Frito-Lay and Atlanta Press, the respondent was not obliged to cease processing dues contributions during a hiatus period based on an untimely request to revoke dues checkoffs, not submitted during either:
- specified annual revocation periods tied to the anniversary of employees' signing dues checkoff authorizations; or
- the specified pre-CBA expiration window.