Local Joint Executive Board of Las Vegas v. National Labor Relations Board
United States Court of Appeals for the Ninth Circuit
27 August 2008
No. 07-73979 NLRB No. 28-CA-13274

Check-off Agreement Continues Even after CBA Expires

This case is a petition for review filed by the Local Joint Executive Board of Las Vegas, Culinary Workers Union Local 226 and Bartenders Union Local 165 (Union) before the US Court of Appeals. Apparently, the National Labor Relations Board (NLRB) dismissed the Union’s consolidated complaints against Hacienda Resort Hotel and Casino and Sahara Hotel and Casino (Employers) for unilaterally terminating dues-checkoff before bargaining to agreement or impasse.

It appears that the employers and the union had collective-bargaining relationships for more than thirty years. The collective-bargaining agreements contained, among other things that “The Check-off Agreement and system heretofore entered into and established by the Employer and the Union for the check-off of Union dues by voluntary authorization, as set forth in Exhibit 2, attached to and made part of this Agreement, shall be continued in effect for the term of this Agreement.”

The employers and the union agreed that during the term of the Agreement, the employers will deduct each month union membership dues from the pay of those employees who have authorized such deductions in writings as provided in the Check-off Agreement.

When the Agreements expired, the employers continued with the dues-checkoff arrangement for more than a year. However, after sometime, the employers suddenly ceased giving effect to the dues-checkoff after notice to the Union and thereafter redirected the amount to the employees as part of their regular wages.

Complaints alleging unfair labor practice consisting of unilateral termination of dues-checkoff without bargaining to impasse were filed. But the administrative law judge dismissed the complaints. The decision was based on the wordings of the dues-checkoff provision specifically the statement that the dues-checkoff would “continue in effect for the term of this agreement.”

Upon review by the NLRB, the dismissal was affirmed. The NLRB agreed with the ALJ but adopted a different rationale in their ruling. It held that the employers’ unilateral termination of due-checkoff did not constitute an unfair labor practice because dues-checkoff was not subject to the Katz prohibition against unilateral change.

On the first time the case was appealed, Court of Appeals said that it “could not discern the Board’s rationale for excluding dues-checkoff from the unilateral change doctrine in the absence of a union security provision because the Board’s findings creates substantial ambiguity in the rationale underlying Bethlehem Steel’s holding regarding dues-checkoff. The case was then remanded to the Board.

Four years later, the Board re-affirmed the dismissal, hence, the subject matter of this case before the court.

In resolving the issue once before it again, the US Court of Appeals held that as a matter of plain interpretation, the contractual language that an obligation will “terminate” on expiration of an agreement is simply not equivalent to contractual language that an obligation “shall be continued” “during” the agreement. The latter says nothing about what happens after the agreement expires.

Also, Board decisions explicitly reject such elision. In a series of cases, the Board has established that a clear and unmistakable waiver of the obligation to continue providing benefits requires explicit contract language authorizing an employer to terminate its obligations.

Ultimately, the Court concluded that the Union “did not clearly and unmistakably waive its claim to protection from the unilateral change following the expiration of the Agreement.” The Court, therefore, grants the petition for review, vacates the decision of the Board and again remand the case to it.