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7th Circuit Court Invalidates Wisconsin’s 30-Day Dues Deduction Revocation Law

On September 13, 2018, the 7th Circuit Court of Appeals issued a decision in International Association of Machinists District 10 and Local Lodge 873 v. Allen, holding Wisconsin could not shorten the one-year irrevocable period for dues-checkoff authorizations imposed by federal law. This decision affirms an earlier United States District Court decision out of the Western District of Wisconsin. This now means Wisconsin private-sector union employees throughout the state can no longer revoke their dues-checkoff authorizations upon 30 days’ notice but must follow the terms for revocation contained in their authorizations, which can be irrevocable for up to one year under federal law.

In the private sector, an employee may execute a dues-checkoff authorization for his/her union dues. A dues-checkoff authorization is an agreement between an employer and an employee under which the employer withholds union dues and fees from the employee’s paycheck and provides said funds to the union. Many of these dues-checkoff authorizations contain a clause providing that, once signed by the employee, it may not be revoked for a period of time, up to one year.

The federal Taft-Hartley Act permits the employer and the union to bargain over the terms of the dues-checkoff authorization, including the period of irrevocability. However, the Taft-Hartley Act imposes three restrictions on dues-checkoff authorizations: (1) they must be individual for each employee; (2) they must be in writing; and (3) they must be irrevocable for no longer than one year.

In 2015, Wisconsin’s Act 1 made Wisconsin a “right-to-work” state. Act 1 prohibits employers from requiring union membership as a condition of employment and prohibits employers from requiring employees to pay union dues or fees. In addition, Wisconsin’s Act 1 provides that dues-checkoff authorizations may only be irrevocable for 30 days or less. Thus, Act 1 includes a provision shortening the irrevocable period of dues-checkoff authorizations from one year under federal law, to 30 days under Wisconsin law.

However, the 7th Circuit Court of Appeals held the provision of Act 1 is preempted by federal law (the Taft-Hartley Act), meaning Wisconsin could not shorten the one-year irrevocable period imposed by federal law.

International Association of Machinists involved a dispute at the John Deere plant in Wisconsin. Lisa Aplin, an assembler, signed a dues-checkoff authorization in November 2002. The authorization stated it was irrevocable for a period of one year and automatically renewed every year unless Aplin opted out during the annual 15-day opt-out period.

In July of 2015, after passage of Wisconsin’s Act 1, Aplin sent a letter to John Deere and the union revoking her dues-checkoff authorization with 30 days’ notice, relying on Wisconsin’s Act 1. The union stated Aplin could not revoke the authorization because she missed the 15-day opt-out period. Aplin then filed a complaint with the Wisconsin Department of Workforce Development (DWD) claiming John Deere violated state law by refusing to permit her revocation with 30 days’ notice and by continuing to withhold union dues from her paycheck. The DWD ordered John Deere to honor the revocation and reimburse Aplin the $65.60 per month deducted from her paycheck for union dues. The union sued the DWD, claiming federal law preempted Wisconsin law and, thus, invalidated the 30-day irrevocable rule under Wisconsin Act 1.

The 7th Circuit Court of Appeals agreed with the union and held the revocation period of Wisconsin Act 1 was preempted by the federal Taft-Hartley Act and, as such, the shorter period under Wisconsin law was invalid. In doing so, the 7th Circuit relied heavily on a 1971 Supreme Court case, Sea Pak v. Industrial, Technical, & Professional Employees, Division of National Maritime Union, AFL-CIO.

The 7th Circuit determined that, by implementing the one-year irrevocability limit through the Taft-Hartley Act, Congress indicated its intent to have the final say on the duration of dues-checkoff authorizations. In addition, the 7th Circuit held the Taft-Hartley Act leaves it to private actors – and not the State – to decide how long the dues-checkoff authorization should last, as long as the authorization is individual, in writing, and not irrevocable for longer than one year. As such, the provision of Wisconsin’s Act 1 restricting the irrevocable period for dues-checkoff authorizations to 30-days was invalidated.

While the 7th Circuit decision will be controlling in Wisconsin for now, an appeal to the United States Supreme Court is quite possible. Wisconsin is not the first state to enact legislation regarding the irrevocability period, and the 7th Circuit Court of Appeals is not the only court to invalidate such a provision, relying upon the 1971 Supreme Court case. However, while we wait to see whether the United States Supreme Court weighs in on the issue, the rule in Wisconsin is now clear based on the 7th Circuit Court of Appeals’ decision. As a result of the 7th Circuit’s decision, if an employee has entered into a dues-checkoff authorization that is irrevocable for a period of one year or less, it remains irrevocable for that entire period. Employees are no longer able to revoke these dues-checkoff authorizations with 30 days’ notice, unless expressly provided for in the authorization.

Employers must be mindful of this ruling when bargaining with the union regarding dues-checkoff. Since 2015, Wisconsin has been a right-to-work state, meaning employees may drop union membership at any time. Therefore, if, during union negotiations, the employer agrees to deduct dues from employee paychecks, the company must insist the authorization signed by the employee may be revoked on short notice to avoid employees revoking union memberships but still being required to have dues deducted. Otherwise, union dues must continue to be deducted from employee paychecks until the period of irrevocability has expired, which can be up to one year of when the authorization is given.

If you have any questions regarding contract language related to dues-checkoff authorizations or assistance in bargaining over this issue, please contact Joel Aziere at jaziere@buelowvetter.com or 262-364-0250, or your Buelow Vetter attorney.

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