Continuing a trend towards reversal of case precedent, the NLRB has issued two decisions important to companies with union contracts. In Valley Hospital Medical Center, the Board considered whether an employer has the right to stop making dues deductions from employee paychecks after a collective bargaining agreement with the union expires. Dues deductions in collective bargaining agreements are common. Unions bargain aggressively for them because these provisions require the employer to automatically deduct union dues from employee paychecks and submit them directly to the union.
This relieves the union of the burden to collect dues directly from employees. But, what happens when a collective bargaining agreement expires and before a new agreement is negotiated? Under previous NLRB precedent, the practice of deducting dues was considered a term and condition of employment which could not be changed by the employer at contract expiration unless bargaining reached impasse. Therefore, under old NLRB law, when a collective bargaining agreement expired and while bargaining for a new contract continued, the employer was required to continue making dues deductions. The decision in Valley Hospital Medical Center reverses that precedent. Now, when a collective bargaining agreement expires, an employer is free to stop deducting union dues. This can be an important shift in bargaining leverage. Unions will have a strong incentive to reach an agreement prior to contract expiration to avoid the burden of having to commence collecting dues on its own after contract expiration.
In another reversal of precedent, the NLRB made it more difficult for employees and unions to pursue unfair labor practice charges to the NLRB if the same arguments were made through arbitration under a union labor contract. The case involved UPS. A former teamster-represented employee filed an unfair labor practice charge with the NLRB challenging his termination by the company, even though his grievance under the labor contract also challenging his termination had been rejected in the contractual arbitration process. The NLRB dismissed his charge and held that the arbitration decision should be deferred to.
The UPS decision reverses a 2014 NLRB decision which made it less likely that arbitration decisions would be deferred to. That case involved Babcock and Wilcox Construction and imposed a burden on the party asking for deferral to prove that it would be proper. The UPS decision reverses Babcock and Wilcox and returns the previous NLRB approach. Deferral will be presumed the right thing to do as long as the arbitration procedure was fair and regular, arbitration was clearly agreed to by the parties, the arbitrator considered the same issues and arguments being made in the unfair labor practice charge and the arbitration decision is not “repugnant” to the National Labor Relations A
ct, meaning that it is not somehow plainly contrary to the basic protections in federal labor law.
The bottom line for employers with union-represented employees is a greater comfort level that employees will be unable to pursue claims in two separate forums – arbitration and to the NLRB.