Could a Kentucky school district deduct membership dues unless an employee opted out?

Plain-English summary

Kentucky's Attorney General concluded in 2013 that a school board could use an opt-out arrangement for employee membership-dues deductions when requested by a group of employees. The opinion called this a reverse dues checkoff: deductions would occur unless an employee declined.

The answer had a condition. Every affected employee had to be clearly told of the choice and given a knowing, voluntary opportunity to opt out in writing. The AG relied on the school salary-deduction statute and a federal appellate decision that had considered a reverse checkoff. It did not approve an arrangement that hid the choice or denied a written opt-out.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did every employee have to sign an initial opt-in for dues deductions?

The AG said a reverse checkoff could be used under the statute it analyzed. Its approval depended on a clear opportunity for each affected employee to knowingly and voluntarily opt out in writing.

Could a school board deduct dues without telling employees how to decline?

No. The opinion explicitly required that employees be clearly presented with their rights and an express written opt-out opportunity.

What statute did the AG rely on?

The opinion read KRS 161.158(2) as authorizing school boards to provide salary deductions, including membership dues, when an employee or group of employees requested them.

Background and statutory framework

Fayette County's superintendent asked about a statewide membership organization's proposal to enroll eligible new employees and deduct dues unless they opted out. The AG quoted KRS 161.158(2)(a) on deductions requested by employees or groups of employees. It also discussed Kentucky Educators Public Affairs Council v. Kentucky Registry of Election Finance and its analysis of a reverse checkoff, then insisted on a knowing and voluntary written choice for the employees covered by the policy.

Citations and references

Statute: KRS 161.158(2); KRS 161.158(2)(a).

Cases: Clevinger v. Board of Educ. of Pike County, 789 S.W.2d 5, 8-9 (Ky. 1990); Kentucky Educators Public Affairs Council v. Kentucky Registry of Election Finance, 677 F.2d 1125 (6th Cir. 1982).

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Pages/Opinions.aspx
• Original Word document: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG13-009.doc

Original opinion text

OAG 13-009

July 26, 2013

Subject: Whether a board of education may use an opt-out policy for deducting membership dues

Requested by: Tom Shelton

Fayette County Superintendent

Written by: Matt James

Syllabus: A board of education may use an opt-out policy for deducting membership dues.

Statutes construed: KRS 161.158

Opinion of the Attorney General

Tom Shelton, Fayette County Superintendent, has requested an opinion of this office concerning whether a board of education may use an opt-out policy for deducting membership dues. We advise that a board of education may use an opt-out policy for deducting membership dues, when requested by a group of employees.

Mr. Shelton informs us that a statewide membership organization with an annual dues obligation has asked him to implement a waiver process whereby new employees who are eligible for membership automatically become members of the association and trigger appropriate payroll deductions, unless they opt out. This procedure is known as a “reverse dues checkoff.” Dues checkoffs are an established industry practice:

local unions and district councils may assess dues and set up a checkoff system to collect them . . . This arrangement is common practice in industry . . . If a union member does not participate in the checkoff system, the member must pay dues and assessments personally. Hence, the obligations of union members to pay dues is not a duty owed to the employer, but arises out of the relationship among the members as a condition of union membership. The dues checkoff system is only a means employed by the union to collect dues from the employee. The employer's role as collection agent for the union is established in the collective bargaining agreement, which is the source of its obligation to collect dues and remit them to union authorities.

United Broth. of Carpenters and Joiners of America, Dresden Local No. 267 v. Ohio Carpenters Health and Welfare, 926 F.2d 550, 557 (6th Cir. 1991). “To be valid, a deduction requires the authorization of each individual employee in writing.” 20 Williston on Contracts § 55:41. “Employees have the right to refrain from executing a checkoff authorization.” 48A Am. Jur. 2d Labor and Labor Relations § 1527. In a standard dues checkoff, the employee expressly provides written authorization to the employer to automatically make the payroll deductions. In a reverse dues checkoff, the employee authorizes the deduction unless the employee expressly opts out. At issue is whether a board of education may adopt such a reverse dues checkoff.

KRS 161.158(2)(a) provides in relevant part:

Each district board of education shall adopt policies or regulations which will provide for: 1. Deductions from salaries of its employees or groups of employees whenever a request is presented to the board by said employees or groups thereof . . . The deductions may be made for, but are not limited to, membership dues, tax-sheltered annuities, and group insurance premiums.

KRS 161.158(2)(a)(1) requires each board of education to adopt policies that provide for salary deductions whenever a request is brought by an employee or group of employees, and these deductions may include membership dues. Thus a board of education is authorized by KRS 161.158(2) to adopt dues checkoff procedures. Clevinger v. Board of Educ. of Pike County, 789 S.W.2d 5, 8-9 (Ky. 1990).

In Kentucky Educators Public Affairs Council v. Kentucky Registry of Election Finance, 677 F.2d 1125 (6th Cir. 1982), the Sixth Circuit dealt with the issue of reverse dues checkoffs:

Kentucky law authorizes local school systems to deduct KEA dues and other membership dues from salary checks. The deduction can be made only upon request of an employee or group of employees. This payroll deduction plan, called Automatic Payment Authorization, (hereinafter, “APA”) has long been in use in Kentucky. Since 1975, KEPAC has used a “reverse check-off” system in conjunction with KEA's payroll deduction of dues to obtain contributions. Under the reverse check-off system used by KEPAC, all KEA members executing APA forms have contributions, along with dues payments, insurance premiums, and retirement fund contributions, deducted from their salary checks unless the KEA member affirmatively checks off that she or he declines to contribute to KEPAC . . . If a KEA member does not initially check off his or her designation to contribute to KEPAC, an automatic contribution is made. If the member does check off, and yet, subsequently decides not to participate, the member can stop the deduction and can also obtain a refund of past contributions.

Id. at 1127-28. The Sixth Circuit affirmed the District Court’s decision that the reverse dues checkoff procedure was permissible and not coercive. Id. at 1134; It also expressly considered KRS 161.158(2). Id. at 1130. See also Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1249 (6th Cir. 1997) (“’reverse check-off’ could not be deemed to violate the Kentucky statute absent evidence of coercion of union members”). Accordingly, we follow Kentucky Educators and advise that a reverse dues checkoff procedure is permissible.

We do pause to note that at a minimum, for a reverse dues checkoff to be permissible, employees must be clearly presented with their rights and given an express opportunity to opt out in writing. “It is well settled that the dues checkoff provisions are intended to be an area of voluntary choice for the employee.” Armco, Inc. v. N.L.R.B., 832 F.2d 357, 364 (6th Cir. 1987). “[F]or a rejection to be voluntary, a worker must have a substantial understanding of the nature of the action and its consequences.” Blackstone Mining Co. v. Travelers Ins. Co., 351 S.W.3d 193, 199 (Ky. 2010). In Kentucky Educators, the employees were expressly presented with an opportunity in writing to opt out of the automatic deduction. In contrast, in Jackson Purchase Rural Elec. Co-op. Ass'n v. Local Union 816, Intern. Broth. of Elec. Workers., 646 F.2d 264 (6th Cir. 1981), the court found that a dues checkoff procedure without written authorization by the employees violated the Labor Management Relations Act. Id. at 266. Thus while a reverse dues checkoff is permissible, all employees subject to it must be clearly presented with an opportunity to knowingly and voluntarily opt out in writing.

In summary, we advise that a reverse dues checkoff procedure is permissible under KRS 161.158(2), provided that employees are presented with a knowing and voluntary opportunity to opt out in writing.

JACK CONWAY

ATTORNEY GENERAL

Matt James

Assistant Attorney General