On October 3, 2022, the National Labor Relations Board (NLRB) ruled that employers must continue deducting union dues from employees’ paychecks, pursuant to their labor contracts, even after the contracts expire. The case is Valley Hospital Medical Center, Inc., N.L.R.B. Case 28-CA-213783 (Valley Hospital II).

Dues checkoff previously served as an exception to the National Labor Relations Act’s unilateral change rule, which prohibits employers from changing mandatory subjects of bargaining, such as wages and hours, without giving unions the opportunity to negotiate over their terms. The Board first implemented the dues check-off exception in 1962, in Bethlehem Steel. That rule lasted until  2015, when the Obama-era Board reversed it in its Lincoln Lutheran of Racine decision.

The Trump-era Board then resurrected Bethlehem Steel in Valley Hospital in 2019 (Valley Hospital I), but on appeal, the Ninth Circuit remanded that case for further review.  And on remand, in Valley Hospital II, the NLRB’s new Democratic-majority Board concluded that dues check-off is indeed a mandatory subject that cannot be changed upon contract expiration.

In its dissent, the NLRB’s Republican Board minority criticized Valley Hospital II  as contrary to the Bethlehem Steel rule that was consistently applied for over 50 years. The Republican minority also criticized the decision as inconsistent with Section 302 of the LMRA. Not only does that statute prohibit employers from deducting dues absent the employee’s written consent, but also, it  expressly states that such consent must be revocable once the “applicable collective bargaining agreement” expires. According to the Republican minority, this language gives dues check-off a special status apart from other terms and conditions. The majority disagreed, however, and Valley Hospital II is now the law.

Valley Hospital II  is a meaningful victory for unions, as it boosts their leverage in labor negotiations. Previously, employers had the option to cancel dues deductions, weakening the union’s revenue stream  and thereby incentivizing the union to reach a new agreement more expeditiously.  Under Valley Hospital II, those deductions will continue while the union leverages its other economic weapons, such as striking. To be sure, the employer can still deploy its own weapons in these situations, but Valley Hospital II does help shift the leverage in favor of the union.

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Photo of Michael J. Frantz Michael J. Frantz

For over forty years, Mike’s practice has been devoted to the exclusive representation of employers and their management teams in dealing with the full range of labor and employment issues. He has represented employers in contract negotiations with virtually every major union in…

For over forty years, Mike’s practice has been devoted to the exclusive representation of employers and their management teams in dealing with the full range of labor and employment issues. He has represented employers in contract negotiations with virtually every major union in the U.S. and Canada. Throughout his career he has focused on representing health care and higher education institutions, as well as manufacturing companies and service organizations.

Mike’s practice also includes serving as outside general counsel for a number of his clients. He also serves as a member of the Board of Directors or in other corporate positions for many clients. Nothing gives Mike greater satisfaction as a lawyer than to become known as a trusted advisor to those clients.

Mike currently serves as a member of the firm’s Management Committee that is charged with the responsibility of focusing on the strategic planning and overseeing the day-to-day administration of the firm. He has been recognized at the highest ranking, Band 1, in the area of Labor and Employment by Chambers USA: America’s Guide to Leading Lawyers in Business and designated Best Lawyers’ “2018 Lawyer of the Year” in Labor Law—Management in Cleveland. Mike is continuously named to The Best Lawyers in America and the Ohio Super Lawyers lists.

Photo of Ryan T. Smith Ryan T. Smith

Ryan focuses his practice on employment litigation and labor relations. He represents management in state and federal courts and before administrative agencies in a wide range of matters, including employment discrimination, retaliation, and harassment, wage and hour disputes, including class and collective actions…

Ryan focuses his practice on employment litigation and labor relations. He represents management in state and federal courts and before administrative agencies in a wide range of matters, including employment discrimination, retaliation, and harassment, wage and hour disputes, including class and collective actions, and breaches of non-competition and other types of employment agreements. Ryan also represents employers in traditional labor matters, at arbitrations and before the National Labor Relations Board.

When not representing employers in active disputes, Ryan counsels them on key employment decisions such as wage and hour compliance, leave administration, and terminations, and on various aspects of the collective bargaining relationship. He also drafts employment agreements and policy manuals.