Not So Fast
January 11, 2012
By Larry Cary, Partner, Cary Kane LLP
Before a Union Demands Termination of an Employee for Non-payment of Dues, It Should Consult Its Attorney. This December, a union learned the hard way to take care when it exercises its legal rights regarding members who fail to pay their dues on time.
Unions rarely demand that an employer discharge an employee for failing to timely pay his union dues, even when there is a lawful union security clause in the collective bargaining agreement that would make that demand perfectly lawful. More often than not, members have dues deducted from their pay and forwarded to the union. But there are instances where members insist on directly paying their dues and sometimes they get in arrears.
The National Labor Relations Board reminds unions of the necessary formalities that must be followed if the union wishes to avoid a significant back pay liability in a recent decision, IUOE Local 39, 357 NLRB No. 140 (December 15, 2011). In this case, the union was still liable for months of the employee’s lost wages and benefits even though almost immediately after the employee’s termination the union told the employer that the employee had now paid his dues and the union had no objection to his reemployment.
Kenneth Peterson worked for the Mark Hopkins International Hotel from December 2009 through March 1, 2011. The CBA lawfully provided that employees had to pay union dues as a condition of employment. Peterson paid his dues by making lump sum payments to the union covering multiple months. Six months later, in June 2010, Peterson was told by his supervisor that he was delinquent and Peterson again made a lump sum payment covering several future months. In August 2010 he telephoned the union to tell it that he had moved. On February 18, 2011, the union mailed Peterson a dues statement at his former address, which showed he owed $164.30 and was 31 to 60 days in arrears. The post office returned this letter to the union. The union then resent it to Peterson’s new address where he opened it on March 1, 2011, literally just after being terminated by the Hotel for non-payment of dues pursuant to the union’s demand. Peterson immediately paid all that he owed the union and was reinstated to his membership. Peterson then went to his supervisor, showed proof of his good standing and requested reinstatement. The union confirmed his good standing and that the union had no objection to his reinstatement. Unfortunately, for Peterson and the union, the supervisor refused to reinstate him because the Hotel was not filling the vacancy.
The Labor Board held that the union was liable for Peterson’s back pay and lost benefits from the date of his discharge until the Hotel reinstates him or when he finds equivalent employment. In so doing, the NLRB articulated the minimum that must be done by a union to avoid liability. Before the employer terminates the employee, the union must give “reasonable [written] notice [to the employee] of the delinquency, including a statement of the precise amount and months for which dues were owed, as well as an explanation of the method used in computing such amount. The union must provide a reasonable amount of time for the delinquent member to make a payment. The union is further obligated to notify the employee whose discharge it seeks that failure to make the required payment will lead to termination.” Moreover, the union cannot insulate itself from liability for failing to timely give such notice to the employee by relying on a policy that says members must notify the union in writing of a change of address.
Because a union should also consider its constitution and other legal issues before demanding that an employer discharge an employee for failing to pay his dues, to avoid potential liability a union should consult with its counsel beforehand to confirm that it is correctly handling the matter.
Larry Cary has practiced law for more than 25 years. He is a partner in Cary Kane, LLP, which represents unions, employees and union affiliated pension and welfare benefit plans.