• Direct Deposit Is a Mandatory Subject of Bargaining
  • June 23, 2009
  • Law Firm: Hinshaw & Culbertson LLP - Chicago Office
  • The collective bargaining agreement (CBA) between a newspaper and a union provided for dues checkoff, a process through which union dues are paid by the employer with money deducted from employees’ paychecks. Upon the expiration of the CBA, the newspaper discontinued the dues checkoff process, an act permissible under federal labor law. The newspaper also allowed its employees to use direct deposit to pay loans and make deposits into multiple accounts, such as savings accounts. As a result, a union officer collected direct deposit forms from the membership requesting that union dues be paid through direct deposit. The newspaper allowed for one direct deposit of union dues before discontinuing the process, claiming that the process essentially reinstated dues checkoff. The union subsequently filed an unfair labor practice charge with the National Labor Relations Board (NLRB), asserting that the newspaper could not unilaterally discontinue the use of direct deposit because it was a mandatory subject of bargaining. The NLRB ruled that once the newspaper agreed to directly deposit union dues, it created a new agreement concerning the terms and conditions of employment that could not be unilaterally terminated. On appeal to the United States Court of Appeals for the District of Columbia Circuit, the newspaper argued that direct deposit was simply the reinstitution of dues checkoff and, because the CBA had expired, it was legally entitled to unilaterally terminate the practice. The D.C. Circuit rejected this argument, holding that when the newspaper originally eliminated the dues checkoff process, it could not be “reinstituted” under the old CBA. Rather, it could only be resumed pursuant to a new agreement, which is what the subsequent allowance of direct deposit to pay union dues was. As a result, the new agreement could not be unilaterally terminated. Employers should be aware that the terms and conditions of employment can be created even in the absence of a formal CBA.

    Tribune Publishing Co. v. NLRB, Nos. 07-1455, 07-1506 (D.C. Cir. Apr. 28, 2009)