🗞️ Kroger Handed $6 Million Dues Bill as NLRB Rules Contract Expiration No Excuse to Stop Collections

In a decision issued May 20, 2026, the National Labor Relations Board ordered Kroger Texas L.P. to compensate United Food and Commercial Workers Local Union No. 455 for more than $6 million in union dues the grocery chain stopped collecting from workers' paychecks after its collective bargaining agreements lapsed. The Board affirmed the July 2023 ruling of Administrative Law Judge Sharon Levinson Steckler, finding that Kroger violated Section 8(a)(5) and (1) of the National Labor Relations Act by unilaterally ceasing dues checkoff without first bargaining to impasse.

The case turns on a long-running and repeatedly reversed line of Board precedent. For more than fifty years following Bethlehem Steel (1962), employers were permitted to stop deducting union dues once a contract expired. That changed in 2015 under Lincoln Lutheran, which held that dues checkoff obligations survived contract expiration. The Board reversed course again in 2019 under Valley Hospital I, restoring employer discretion to cease collections upon expiration. Then, in September 2022, the Board reversed course once more in Valley Hospital II, holding that dues checkoff is part of the workplace status quo that an employer cannot alter unilaterally after a contract lapses, a position that required the employer in that case to pay back dues retroactively.

Kroger acknowledged it stopped deducting dues for store employees across the Houston Division and multiple Louisiana locations beginning with the pay period ending November 30, 2020, several months after its collective bargaining agreements expired in August 2020, relying on the then-governing standard under Valley Hospital I. The company did not resume collections until the parties reached new agreements in April 2022. Kroger argued that retroactive application of Valley Hospital II amounted to manifest injustice, that the prosecution was improperly delayed, that the parties had reached a valid bargaining impasse, and that durational language in the contracts limited its checkoff obligations to the life of the agreements. The Board rejected each argument.

On retroactivity, the Board found that decades of shifting precedent meant Kroger could claim no settled expectation that Valley Hospital I would remain the law. On the laches defense, the Board noted that the delays in bringing the case to hearing were attributable in significant part to Kroger's own request for postponement in October 2021, not to any calculated delay by the General Counsel. On impasse, the Board found that Kroger had never proposed eliminating dues checkoff at the bargaining table, presenting its decision instead as a fait accompli with only two days' notice to the union for the Houston units and no notice at all for the Louisiana units. On the durational language defense, the Board reaffirmed prior precedent holding that general "during the term" contract language does not constitute a clear and unmistakable waiver of notice and bargaining obligations.

Board Member Scott A. Mayer applied the existing precedent but noted reservations about requiring Kroger to pay back dues covering periods when its conduct was lawful under then-existing Board rules, and indicated openness to reconsidering the remedy standard in a future appropriate case. Separately, the Board noted that, absent a three-member majority to revisit Valley Hospital II, the rule remains binding precedent. The order requires Kroger to remit all unpaid dues with compounded daily interest, prohibits the company from seeking to recoup those amounts from employees, and requires the posting of notices at all affected facilities for 60 consecutive days.

Key Points

• The NLRB ruled Kroger Texas L.P. violated federal labor law by stopping union dues deductions beginning with the pay period ending November 30, 2020, following the expiration of collective bargaining agreements covering workers in the Houston Division, Palestine, Texas, and multiple Louisiana locations.
• Back dues owed to UFCW Local 455 are estimated at over $6 million, to be paid with compounded daily interest; Kroger is barred from seeking repayment from employees.
• The case turned on the retroactive application of Valley Hospital II (2022), which reversed Valley Hospital I (2019) and reinstated the rule that dues checkoff obligations survive contract expiration until a new agreement is reached or a genuine bargaining impasse permits unilateral action.
• Kroger's defenses, including laches, impasse, contractual durational language, and due process, were all rejected by the Board.
• Board Member Mayer applied existing precedent for institutional reasons while signaling openness to reconsidering whether imposing back-dues liability for conduct that was lawful under prior Board rules comports with basic standards of equity.
• The ruling reflects a legal standard that has shifted multiple times since 1962, illustrating how dues checkoff obligations for unionized employers can vary with changes in Board composition.

Primary Source Author: Chairman James R. Murphy, Member David M. Prouty, and Member Scott A. Mayer, National Labor Relations Board

Primary Source: Kroger Texas L.P. and United Food and Commercial Workers Local Union No. 455, 374 NLRB No. 113 (May 20, 2026)

Primary Source Link: NLRB Case No. 16-CA-273805

Supplemental Sources

• Valley Hospital Medical Center II, 371 NLRB No. 160 (2022), National Law Review analysis
• Davis Wright Tremaine: History of dues checkoff precedent from Bethlehem Steel to Valley Hospital II
• Bloomberg Law: Kroger Must Repay Dues Under Biden-Era Precedent, NLRB Says
• Supermarket News: NLRB, Kroger Subsidiary Engaged in Unfair Labor Practices
• Employment Law Watch: NLRB Reverses Precedent on Dues Checkoff Obligations