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New Franczek Series: Labor Updates

Labor & Employment Publications

As we’ve previously reported, union organizing is on the upswing and the NLRB is beginning to issue decisions that reverse Trump-era precedents that were generally more favorable to employers.  This is the first in what we plan to be regular updates on labor development impacting both unionized and non-union employers. 

NLRB holds that employers cannot cease remitting dues to unions after collective bargaining agreements expire 

On September 30, the National Labor Relations Board (NLRB) ruled that employers violate federal labor law when ceasing to remit dues to unions after collective bargaining agreements (CBAs) expire. In their holding, the Democratic-majority board reversed the 2019 decision Valley Hospital Medical Center, Inc. in which the NLRB held that employers were permitted to withhold union dues after contract expiration. This ruling restores an earlier Obama-era Board precedent requiring employers to deduct dues from workers’ checks and transmit them to unions after CBAs lapse. 

This ruling represents the latest shift in the NLRB’s position on dues checkoff provisions. Dues checkoff provisions in CBAs require employers to deduct dues from employee paychecks and remit them to their unions. In the 1962 case Bethlehem Steel, the NLRB ruled that dues checkoff provisions lapse upon the expiration of the CBA, and thus employers may stop remitting dues to unions after CBAs expire. This interpretation stood for more than 50 years until the NLRB ruled in Lincoln Lutheran of Racine in 2015 that dues checkoff clauses are not an exception to the Supreme Court’s holding in NLRB v. Katz (1962), which requires employers to adhere to the status quo as to terms and conditions of employment after CBAs expire. Thus, the Democratic majority concluded, employers are required to bargain before abandoning dues checkoff clauses. 

However, in 2019 the Trump-era NLRB returned to the Bethlehem Steel precedent and held that dues checkoff provisions expired upon the expiration of the CBA. The Republican majority distinguished between terms of employment that are intrinsic to the workplace, such as pay and benefits, that must be bargained before changes may be made to CBAs after they expire, and terms such as dues checkoff provisions that are “created by…contracts” and therefore lapse when CBAs expire. The Valley Hospital case was appealed to the Ninth Circuit, which vacated and remanded the ruling to the NLRB.  

In reversing the 2019 ruling, the NLRB stated that the contract creation rule would “logically require the board to create many additional exceptions to the status quo requirement” and thus undermine the “foundational policy favoring collective bargaining” under the Act. The NLRB stated that it would apply the ruling to current cases.  

In light of the NLRB’s most recent ruling, employers should make sure to avoid withholding union dues after CBAs expire, and instead continue to deduct dues from employees’ paychecks and remit them to unions in a timely manner until they have the opportunity to bargain regarding this provision.  

Supreme Court to examine whether NLRA preempts lawsuits against unions for property damage during strikes 

On October 3, the Supreme Court granted review of a case in which the central issue is whether the National Labor Relations Act (NLRA) preempts lawsuits brought against unions for causing property damage while conducting strikes.  

The case, Glacier Northwest, Inc. v. International Brotherhood of Teamsters Local Union No. 174, involves a lawsuit by a construction materials company seeking damages from a Teamsters local for concrete that spoiled during a strike. The construction company accused the Teamsters local for conspiring with employees to destroy the concrete by timing the strike during concrete deliveries, during which the concrete hardened and spoiled.  

A state court dismissed the claims under the Garmon preemption doctrine, which blocks state-law suits pertaining to conduct that is “arguably” protected by the NLRA, such as strikes. The Garmon doctrine is derived from a 1959 U.S. Supreme Court case San Diego Building Trades Council v. Garmon, in which the Court held that state and federal courts “must defer to the exclusive competence of the National Labor Relations Board” regarding activity “arguably” subject to the NLRA. The Court recognized two exceptions, permitting lawsuits to move forward if the activity is “merely peripheral” to the NLRA or implicates interests that are “so deeply rooted in local feeling and responsibility” that courts may not infer that Congress intended to block states from acting. 

The construction company argued that the “local feeling” exception applied in the Glacier case. However, the state court held that the NLRA preempted the lawsuit. An appellate panel reversed the decision, stating that the National Labor Relations Board clearly determined that intentional property destruction during legal strikes is not protected under the NLRA. The Washington Supreme Court reversed the appellate decision. The construction company petitioned the U.S. Supreme Court to determine whether the NLRA preempts state-law suits against unions for intentional destruction of employer property during disputes. The Teamsters local opposed the petition, arguing that the strike was “arguably protected” by the NLRA. They also raised a factual dispute, stating that instead of intending to spoil the concrete, the employees returned the trucks and left them running so that the construction company could salvage the concrete, and that the company’s failure to do so caused the spoilage. 

We will continue to monitor this case, so stay tuned for updates. 

Upcoming Franczek Webinar: Momentum in the Labor Movement Part II 

On Wednesday, October 26 at 12 p.m., Franczek attorneys Sally Scott, Mike Warner, and Tracey Truesdale will lead an interactive discussion highlighting the NLRB General Counsel’s aggressive agenda, most notably the priority to change or modify existing law regarding union organizing campaigns. We will also discuss recent NLRB decisions, and the practical implications for both union and non-unionized employers moving forward. 

Register here to attend.