Wilkes Telephone Membership Corp.

National Labor Relations Board - Board Decisions

Jul 21, 2000

331 N.L.R.B. 823 (N.L.R.B. 2000)

WILKES TELEPHONE MEMBERSHIP CORP. 823
Wilkes Telephone Membership Corporation and In-
ternational Brotherhood of Electrical Workers,
AFL–CIO, Local Union 1537. Cases 11–CA–
16165 and 11–CA–17122
July 21, 2000
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
HURTGEN AND BRAME
On June 13, 1997, Administrative Law Judge William
N. Cates issued the attached decision. The General Coun-
sel filed exceptions, a supporting brief, and an answering
brief. The Charging Party Union filed exceptions with
supporting arguments and citations of authority, an an-
swering brief, and a reply brief. The Respondent filed
cross-exceptions, a supporting brief, an answering brief,
and a reply brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record in
light of the exceptions, cross-exceptions, and briefs and
has decided to affirm the judge’s rulings, findings,1 and
conclusions as modified and to adopt the recommended
Order as modified.2
The judge found that the Respondent did not violate
Section 8(a)(5) and (1) of the Act by unilaterally ceasing
to deduct union dues pursuant to the checkoff provision of
the parties’ collective-bargaining agreement after the con-
tract expired. The judge found that the contract provided
for checkoff only during the term of the agreement, and he
recommended that the complaint be dismissed on that ba-
sis. He also noted that the Board, with court approval, has
consistently held that union-security and checkoff provi-
sions are creatures of contract and remain in force only for
the life of the collective-bargaining agreement. See, e.g.,
Bethlehem Steel, 136 NLRB 1500, 1502 (1962), remanded
on other grounds sub nom. Marine & Shipbuilding Work-
ers v. NLRB, 320 F.2d 615 (3d Cir. 1963), cert. denied 375
U.S. 984 (1964).3 The judge rejected the General Coun-
sel’s contention that a checkoff clause that does not im-
plement a union-security provision, such as the checkoff
clause at issue here,4 is an employment term that survives
the expiration of the contract and cannot be changed with-
out bargaining with the Union. In their exceptions, the
General Counsel and the Union reiterate this contention.

1 In its cross-exceptions, the Respondent argues that the judge erred
in finding that it is not exempt from the Board’s jurisdiction as a politi-
cal subdivision of the State of North Carolina. Because we agree with
the judge that the Respondent did not violate the Act, we find it unnec-
essary to address the jurisdictional issue.
The Respondent also contends that the judge inaccurately charac-
terized the complaint as alleging that it unlawfully ceased to checkoff
union dues when the parties’ collective-bargaining agreement expired
in August 1994. Although the Respondent admits that conduct, it notes
that the complaint actually alleges that the Respondent discontinued
dues checkoff about April 24, 1996. We correct the judge’s error. The
Respondent further contends that there is no record evidence to support
the actual complaint allegation. Because we shall dismiss the com-
plaint on other grounds, we find it unnecessary to address that conten-
tion.
2 The Respondent has requested that the Board reinstate the settle-
ment agreement in Case 11–CA–16165. The Regional Director ap-
proved that agreement on February 16, 1996, but revoked his approval
on September 27, 1996, following the filing of the charge in Case 11–
CA–17122. We deny the Respondent’s request to reinstate the agree-
ment, which is not contained in the record before us. However, in view
of our dismissal of the complaint, we shall remand this proceeding to
the Regional Director for further consideration with regard to the set-
tlement agreement.
In Hacienda Resort Hotel & Casino, 331 NLRB No. 89
(2000), the Board rejected the identical argument. It held,
in accordance with established precedent, that checkoff
arrangements expire automatically, as a matter of law, on
contract expiration, even in the absence of a union-security
provision.5 For the reasons discussed in Hacienda Resort
Hotel, we find that the parties’ dues checkoff arrangement
expired with their contract as a matter of law, and we
therefore affirm the judge’s finding that the Respondent
did not violate the Act by unilaterally ceasing to check off
dues after the contract expired.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
IT IS FURTHER ORDERED that this proceeding be
remanded to the Regional Director for further considera-
tion with regard to the settlement agreement in Case 11–
CA–16165.

Rosetta B. Lane, Esq., for the General Counsel.
W. Britton Smith Jr., Esq. and Thomas E. Schroeder, Esq. (Smith,
Schroeder, Thomas, and Means), of Charlotte, North Caro-
lina, for the Company.
E. Han Massey, International Rep., of Monroe, North Carolina,
for the Union.

DECISION
STATEMENT OF THE CASE
WILLIAM N. CATES, Administrative Law Judge. I heard
this case in trial in Winston-Salem, North Carolina, on April 28,
1997. This is a refusal to bargain in good-faith case prosecuted
by the National Labor Relations Board’s (the Board) General
Counsel (the Government) acting through the Regional Director
for Region 11 of the Board following an investigation by Region
11’s staff. The Regional Director for Region 11 of the Board
issued an order consolidating cases, consolidated complaint, and
notice of hearing (the complaint), on September 30, 1996, against
Wilkes Telephone Membership Corporation (the Company)
based on unfair labor practice charges filed on August 11, 1994,
3 Although he apparently did not base his decision explicitly on this
ground, the judge stated that he “would find, if necessary, that the
Company prevails on [that] defense.”
4 North Carolina is a “right-to-work” state, in which union-security
provisions are unlawful. See Sec. 14(b) of the Act.
5 See Tampa Sheet Metal Co., 288 NLRB 322, 326 fn. 15 (1988)
(checkoff expired with contract in “right-to-work” state).
Although it did not base its decision in Hacienda Resort Hotel on
the language of the checkoff provisions, the Board noted that the con-
tract provisions in that case, like those at issue here, tied the checkoff
arrangements to the duration of the contracts.
331 NLRB No. 98
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 824
in Case 11–CA–16165 and July 24, 1996, in Case 11–CA–17122
by Local Union 1537, International Brotherhood of Electrical
Workers, AFL–CIO, (Union).
Specifically, the complaint alleges the Company on or about
April 24, 1996, refused and continues to refuse to bargain with
the Union as the exclusive collective-bargaining representative of
all employees in an appropriate unit by unilaterally and without
notification to or bargaining with the Union discontinuing dues
checkoff thereby violating Section 8(a)(5) and (1) of the National
Labor Relations Act, (the Act).1
In its timely filed answer to the complaint the Company denies
violating the Act in any manner alleged in the complaint.
The Company asserts the Board should not exercise jurisdic-
tion over it because it is a political subdivision of the State of
North Carolina.
I have studied the whole record,2 the parties briefs, and the au-
thorities they rely on. Based on more detailed findings and
analysis below, I will conclude the Board has and should exercise
jurisdiction over the Company, however, and I will dismiss the
allegation the Company violated the Act by ceasing to deduct
union dues at the expiration of the contract.
FINDINGS OF FACT
I. THE FACTS
The facts outlined here are admitted, stipulated to, and/or not
in dispute.
The Company is a North Carolina corporation, incorporated
under chapter 117 of the North Carolina General Statutes, Elec-
trification. The Company generates revenue in excess of
$250,000 from its activities. The Company provides telephone
service to approximately 9006 subscriber/members located in
four areas of Wilkes County, North Carolina, known as the
Champion, Lomax, Boomer, and Clingman Exchanges. The
Company is the only provider of central office telephone service
in the assigned territory of Wilkes County. Other areas of Wilkes
County are provided telephone service by Yadkin Valley Tele-
phone Membership Corporation3 and Centel/Sprint, Inc.,4 an
investor-owned company. The service areas of the Company do
not correspond to any legislatively established boundaries.
The State of North Carolina provides for the creation and regu-
lation of telephone membership corporations through the State
Rural Electrification Authority (NCREA). In North Carolina, a
telephone membership corporation (TMC) cannot be created
unless NCREA conducts certain investigations concerning the
need for telephone service and subsequently authorizes the for-
mation of the TMC in accordance with chapter 117.
The purposes of NCREA are set forth in chapter 117 of the
North Carolina general statutes. In the main, NCREA is charged
with securing adequate electrical and telephone service for the
rural districts of the state where such service is not now being
rendered. In addition, NCREA files loan applications on behalf
of telephone membership corporations with the United States
Rural Utilities Service Administration an agency of the United

1 The allegation set forth in par. 13(b) of the complaint was with-
drawn by the Government at trial.
2 The Government’s unopposed motion to correct Exh. 1 to Jt. Exh.
1 is granted. The Government’s motion is made a part of the record as
Ct. Exh. 1.
3 Yadkin Valley TMC has approximately 100 subscriber/members
on the fringe of Wilkes County.
4 Centel/Sprint, Inc., has approximately 17,000 customers in Wilkes
County, servicing primarily in the cities of Wilkesboro and North
Wilkesboro, North Carolina.
States Department of Agriculture. Rural Utilities Service (RUS),
formerly Rural Electrification Administration (REA), provides
loans to telephone membership corporations. NCREA assists
telephone membership corporations in developing loan applica-
tions and work plans. NCREA approves those applications and
work plans before making application to RUS for financial assis-
tance in constructing the telephone membership corporation’s
system and system improvements. The NCREA also processes,
reviews, and mediates member/subscriber complaints concerning
the service provided by the telephone membership corporation to
its member/subscribers.
Section 117-13 of the North Carolina General Statutes pro-
vides that each corporation formed under this article shall have a
board of directors, in which management of the affairs of the
corporation is vested. The directors of the corporation, other than
those named in its certificate of incorporation, shall be elected
annually by the members entitled to vote, but if the bylaws so
provide the directors may be elected on a staggered-term basis,
provided, that the total number of directors on a board shall be so
divided that not less than one third of them, or as nearly thereto
as their division for that purpose will permit, shall be elected
annually, and no term shall be longer than for 3 years; and pro-
vided further that, except as may be necessary in inaugurating
such a plan, all directors shall be elected for terms of equal dura-
tion. The directors shall be entitled to receive for their services
only such compensation as is provided in the bylaws. The board
shall elect annually from its own number a president and a secre-
tary. The directors must be members of the corporation. Pursu-
ant to statute, the board can adopt and amend bylaws for the
management and regulation of the affairs of the corporation, but
the certificate of incorporation may reserve to the members of the
corporation the power to amend the bylaws, the board can ap-
point agents and employees and fix their compensation and the
compensation of the officers of the corporation; the board can
execute instruments; the board can delegate to one or more of the
directors or to the agents and employees of a corporation such
powers and duties as it may deem proper; and the board can
make its own rules and regulations as to its procedures.
The business and affairs of the Company is managed by a
board of 10 directors, herein referred to as the directors. The
directors serve 3-year staggered terms, and they are not compen-
sated. The directors are elected by members of the Company and
from among those members of the Company who are natural
persons. A director must be a member of the Company, and a
bona fide resident of the exchange he/she is to represent. A direc-
tor cannot be employed or financially interested in a competing
enterprise. The board of directors meets at regular monthly meet-
ings. The minutes of these meetings are not open to the general
public. The president of the Company, or three of the board of
directors, can call a special meeting of the board. Special meet-
ings of the members of the Company can be called by resolution
of the board, or on written request signed by any five directors,
by the president, or by not less than 500 members or 10 percent
of the members. The board will hold an annual meeting of the
members of the Company to pass on reports for the previous
audit year, elect board members, and transact other business as
may come before the meeting.
Telephone rates are set by the Company’s board of directors
and are subject to the provisions of chapter 117. Investor-owned
and commercial telephone companies are subject to rate regula-
tion by the North Carolina Public Utilities Commission, under
the provisions of G.S. 62-3, et seq.
WILKES TELEPHONE MEMBERSHIP CORP. 825
The Company is governed by the bylaws of Wilkes Telephone
Membership Corporation, herein referred to as bylaws.5 The
bylaws provide that any person, firm, association, corporation, or
body politic or subdivision thereof may become a member of the
Company by making application, purchasing service, complying
with the articles of incorporation, the bylaws, and any rules and
regulations adopted by the board, paying a membership fee, and
granting a right of way to the Company for poles, braces, lines,
and cables.
A landlord may pay the membership fee for tenants and thus,
become a member of the Company. The landlord is entitled to
vote on all matters which members of the Company may vote
and is liable for any charges for telephone service which may be
assessed against the tenant. The tenant would not be a member.
A husband and wife may apply for a joint membership of the
Company, and the presence of either or both at a meeting is re-
garded as the presence of one member; the vote of either sepa-
rately or both jointly is one joint vote, a proxy signed by either or
both is a joint proxy, notice to either is notice to both, expulsion
of either shall terminate the joint membership; and withdrawal of
either terminates the joint membership. Either, but not both, may
be elected or appointed as an officer or director.
An employee of the Company cannot be a member, but the
employee can receive service under the terms and conditions
adopted by the board.6
Any member of the Company may withdraw from member-
ship upon compliance with such uniform terms and conditions as
the board may prescribe. The board of the Company may, by
vote of not less than two-thirds of all members of the board, vote
to expel any member of the Company who fails to comply with
any of the provisions of the articles of incorporation, bylaws, or
rules and regulations adopted by the board. An expelled member
may be reinstated by vote of the board or by vote of the members
at an annual or special meeting.
Membership of a subscriber/member of the Company who for
a period of 30 days after service is available, has not permitted
the installation of service or of a member who has ceased to pur-
chase service from the Company may be canceled by resolution
of the board.
Each member of the Company is entitled to one vote and all
questions shall be decided by a vote of a majority of the members
voting thereon in person or by proxy. Any members of the Com-
pany, including associations, corporations, business trusts, or
bodies politic may vote by proxy if the proxy is registered with
the secretary before the third business day prior to the meeting or
any adjournment thereof. No member of the Company can hold
more than one membership which carries a voting right. No
member of the Company is responsible for the debts or liabilities
of the Company.
A nominating committee appointed by the board nominates
members of the Company for election to its board of directors.
Fifty or more members of the Company who are residents of a
particular exchange acting together may make additional nomina-
tions for the director. Any member of the Company may request
removal of a director for malfeasance by filing a petition seeking
the removal along with a petition signed by at least 10 percent of
the members or 500, whichever is less, with the secretary. The
question of removal will be voted on by the members at a meet-

5 The bylaws may be altered, amended, or repealed by the vote of a
majority of the members of the board at any regular or special meeting.
6 Approximately 15 employees receive telephone service through the
Company.
ing of members. A vacancy on the board other than by removal
by the membership is filled by vote of the majority of the remain-
ing directors for the unexpired term of the vacant position.
The officers of the Company, here referred to as officers, are
Edward Church, president; Charles Absher, vice-president; Thad
Darnell, secretary; and Jarvie Mathis, treasurer. The officers are
elected annually from the members of the board. The president is
the principal executive officer of the Company and presides at all
meetings of the members and the board, signs documents on
behalf of the Company, and performs other duties incident to the
office of president. The board of the Company has appointed
Clifton H. Guffey, as the general manager and CEO. Guffey is
not a member of the Company. The powers, duties, and compen-
sation of officers and agents of the Company are fixed by the
board. The powers, duties, and compensation of employees are
set by the board in conjunction with the general manager.
Pursuant to North Carolina General Statutes, chapter 117, the
Company can sue and be sued, and can hold and dispose of prop-
erty, real and personal, tangible, and intangible. The Company
does not, however, have the power of eminent domain. NCREA,
in accordance with the North Carolina General Statute, chapter
117, sections 117-2 and 117-18, exercises the power of eminent
domain for the benefit of the Company.
The State of North Carolina, by statute, declares that a tele-
phone membership corporation organized under chapter 117 is a
public agency and it shall have within its limits for which it was
formed the same rights as any other political subdivision of the
State, and all property owned by the telephone membership cor-
poration and used exclusively for the purpose of the corporation
shall be held in the same manner and subject to the same taxes
and assessments as property owned by any county or municipal-
ity of the State so long as the property is owned by the telephone
membership corporation and is used for the purposes for which
the corporation was formed.
NCREA works directly with the general manager of the Com-
pany in regard to monitoring legislative matters, budgets of the
Company, subscriber/member complaints and questions, and
relations with the Federal RUS relating to obtaining loans.
NCREA makes loan applications to RUS on behalf of the Com-
pany NCREA must investigate and approve loan applications and
the work plans. After NCREA obtains approval for a loan appli-
cation for the Company, RUS must approve the contractor that
the Company selects to perform its system improvements. Most
major construction projects are bid out to independent contractor
construction firms. RUS, through its field representative, opens
the bids and selects the contractor, normally on the low bid. The
RUS field representative must then inspect the contractor’s work,
approve same, and authorize payment. RUS loans the Company
money for the purposes of the construction and addition to its
telephone system and has authority over the Company only as
long as there are current loans outstanding.
The Company has an outstanding loan balance from RUS in
the amount of $11,205,154.56 as of December 31, 1994. The
remaining term left on those outstanding notes is approximately
25 years. The Company may seek additional loans from RUS for
future construction. RUS has both an accountant and field engi-
neer in North Carolina. The accountant and field engineer are
responsible for reviewing the Company’s work plan and con-
struction budget, assisting in the development of same, and rec-
ommending changes in the work plan. Unless the field engineer
and accountant are in agreement with the Company’s proposed
work plan, the same will not be approved for the purposes of
securing a loan. The RUS field engineer and accountant work
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 826
closely with NCREA in regard to loan applications by the Com-
pany.
The Company files monthly and annual financial reports with
the NCREA and RUS. These records are available to the public.
The records of the Company are not open to the public otherwise,
except for any filings that may occur before the North Carolina
Public Utilities Commission. The Company, in accordance with
the North Carolina General Statute, chapter 117, article 1, section
117-3.1, is subject to a regulatory fee.
NCREA has no involvement in the terms and conditions of
employment of the employees of the Company.
The Company is exempt from Federal income taxes as an in-
strumentality of the State of North Carolina under IRC § 115
[income of states, municipalities, etc.]. The Company is exempt
from Federal excise tax, State income tax, and does not pay State
sales tax. The Company is exempt from local ad valorem taxes.
The Company vehicles are tagged with permanent State tags.
Under North Carolina General Statute, section 117-34, any
telephone corporation created under article 4 may be dissolved by
filing a certificate of dissolution. Such corporation shall continue
for the purpose of paying, satisfying and discharging any existing
liabilities or obligations and collecting or liquidating its assets,
and doing all other acts required to adjust and wind up its busi-
ness and affairs, and may sue and be sued in its corporate name.
Any assets remaining after all liabilities or obligations of the
corporation have been satisfied or discharged shall pass to and
become the property of the State.
The Union is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
The Union was certified by the Board as the collective-
bargaining representative of all inside and outside plant depart-
ment employees employed at the Company’s Wilkesboro, North
Carolina facility, excluding office clerical employees, guards,
watchmen, and supervisors as defined in the Act. There are cur-
rently 16 employees in the above described unit. The Company
employees, a total of approximately 35 employees are at its
Wilkes County, North Carolina facility.7
After certification, the Union and the Company entered into
successive collective-bargaining agreements, the most recent of
which expired in August 1994.
As noted elsewhere, the Union filed a charge in Case 11–CA–
15961 on April 12, 1994. The Regional Director for Region 11,
by letter dated May 25, 1994, dismissed the charge for lack of
jurisdiction in accord with NLRB v. Natural Gas Utility District
of Hawkins County, 402 U.S. 600 (1971), and Fayette Electrical
Cooperative, 308 NLRB 1071 (1992)8 (Fayette I). The Union
subsequently requested that the charge be withdrawn and the
Regional Director for Region 11, by letter dated July 5, 1994,
revoked the dismissal and approved the Union’s withdrawal re-
quest.
By letter dated June 14, 1994, the Company notified the Union
that “in as much as the Board no longer asserts jurisdiction over
telephone cooperatives, this letter will also serve as notice that
the Cooperative does not intend to negotiate a new agreement.”
The Union filed a charge against the Company in Case 11–
CA–16165 alleging repudiation of a bargaining obligation. The

7 There are eight other TMCs in existence in North Carolina. None
of those eight have collective-bargaining relationships with any union.
8 The jurisdictional status of Fayette Electric Cooperative, was
relitigated in Fayette Electric Cooperative, 316 NLRB 1118 (1995)
(Fayette II), where the Board asserted jurisdiction over the employer
based on a different record.
Regional Director for Region 11 dismissed the charge for lack of
jurisdiction in accord with Fayette I. The Union appealed the
dismissal. While the dismissal was pending the Board issued its
decision in Concordia Electric Cooperative, 315 NLRB 752
(1994), which overruled significant portions of Fayette I. The
Office of Appeals returned the charge to the Regional Director
for Region 11 for reconsideration of the jurisdictional issue.
Applying Concordia Electric Cooperative, supra, the Regional
Director for Region 11 determined that the Board did have juris-
diction and that the Company violated Section 8(a)(1) and (5) of
the Act by withdrawing recognition from the Union. A complaint
and notice of hearing issued on March 30, 1995, asserting juris-
diction and alleging a violation of Section 8(a)(1) and (5) of the
Act.
By letter dated August 18, 1980, the Equal Employment Op-
portunity commission (EEOC), pursuant to its regulations, re-
scinded a notice of right to sue to a complainant against the
Company because the EEOC’s procedural regulations give it the
authority to issue a notice of right to sue only when the charge to
which the request relates is filed against a respondent other than a
government, governmental agency, or political subdivision. The
EEOC letter stated that documentary evidence gathered after the
issuance of the claimant’s right to sue letter indicated the Com-
pany is a political subdivision.
II. THE QUESTION OF JURISDICTION
The first question presented is whether the Company, a tele-
phone cooperative, is exempt from the Board’s jurisdiction as a
political subdivision.
Section 2(2) of the Act exempts, from the Board’s jurisdiction,
intra alia, “. . . any state or politician subdivision thereof . . . .”
The Board, in Concordia Electric Cooperative supra; Fayette
Electrical Cooperative, supra (Fayette I); and Fayette Electrical
Cooperative, supra (Fayette II), and citing NLRB v. Natural Gas
Utility District of Hawkins County, 402 U.S. at 604–605, stated
that for an entity to be exempt from the Board’s jurisdiction as a
political subdivision, it must either: (1) have been created directly
by a state, so as to constitute an arm or department of the Gov-
ernment; or (2) be administered by individuals who are responsi-
ble to public officials or to the general electorate. The Court in
Hawkins County held “[f]ederal rather than state, law governs the
determination, under § 2(2), whether an entity created under state
law is a ‘political subdivision’ of the State and therefore not an
‘employer’ subject to the Act.” The Court in Hawkins County
held “it is the actual operations and characteristics” of an em-
ployer that must be examined to determine whether or not an
employer is a “political subdivision” within the meaning of the
Act. The Court in Hawkins County noted:

The term “political subdivision” is not defined in the Act
and the Act’s legislative history does not disclose that Con-
gress explicitedly considered its meaning.

The Court in Hawkins County went on to observe:

The legislative history does reveal, however, that Congress
enacted the § 2(2) exemption to exempt from Board cogni-
zance the labor relations of federal, state, and municipal
governments, since governmental employees did not usually
enjoy the right to strike.

Concordia Electric supra sets forth Board law and controlling
guidance on whether cooperatives, such as the one here, is ex-
empt from its jurisdiction as a political subdivision.
WILKES TELEPHONE MEMBERSHIP CORP. 827
A detailed review of the facts and holding in Concordia Elec-
tric, supra, is helpful. Concordia Electric is a nonprofit Louisi-
ana corporation engaged in the distribution and sale of electrical
energy to certain customers in Ferriday, Jonesville, and Jena,
Louisiana, as well as certain surrounding rural areas. Concordia
Electric was incorporated pursuant to the Louisiana Electrical
Cooperative Law (LA. R.S. 12:401, et seq.) which provides, intra
alia, only those persons receiving electrical power from a coop-
erative and the cooperative’s incorporators may be members of
the cooperative. Louisiana law creating Concordia Electric pro-
vides that “any natural person, firm, association, corporation,
business trust, partnership, federal agencies, state or political
subdivision, or agency thereof, or any body politic” may be a
member of an electric cooperative. Concordia Electric, in its
bylaws states that any person, firm, corporation, or body politic
may become a member by paying a $5 membership fee, agreeing
to purchase its electrical power from the cooperative, and to
abide by Concordia Electric’s articles of incorporation bylaws,
rules, and regulations. Concordia Electric’s bylaws further pro-
vide that no such person, firm, corporation, or body politic may
hold more than one membership and that a husband and wife
may hold a joint membership. Concordia Electric (at the perti-
nent time) had approximately 8250 members including members
who are natural persons of voting age in the service area, married
couples, and entities such as churches, corporations, and busi-
nesses.
The Board noted Concordia Electric is governed by a board of
directors elected by mail ballot and that each member is entitled
to cast one vote for the election of each of the directors who serve
for 3-year staggered terms and may be removed during their term
by a vote of the membership or a petition signed by at least 10
percent of the members. Concordia Electric’s directors do not
receive any compensation for their services although they may be
reimbursed for expenses incurred while attending functions or
meetings on Concordia Electric’s behalf. The directors in Con-
cordia Electric must be members in good standing and bona fide
residents of the area served by Concordia Electric and may not
hold or be a candidate for a paid elective public office.
The Board further noted that Concordia Electric is subject to
regulation by the Louisiana Public Service Commission with
respect to rates and service. The Louisiana Public Service Com-
mission also investigates complaints concerning poor service,
incorrect billing, and related matters. Private investor-owned
utilities in the State of Louisiana are subject to Louisiana Public
Service Commission while utilities owned or operated by a po-
litical subdivision of the State of Louisiana are expressly ex-
empted from the Louisiana Public Service Commission’s regula-
tory jurisdiction by the Louisiana Constitution (La. Const. art. 4,
sec. 21(c)).
The Board noted that Louisiana Law grants electrical coopera-
tives and investor-owned utilities the power of eminent domain
over private property.9
The Board in Concordia Electric, supra, noted that as a result
of outstanding loans from the Federal Rural Electrification Ad-
ministration, Concordia Electric was subject to certain operating
and accounting restrictions by the federal rural electrification
administration as a condition of receiving the loans. The Board
also noted that once any outstanding loans are repaid, the Federal
Rural Electrification Administration’s authority over Concordia

9 The Board, in Concordia Electric, supra, concluded that there was
no evidence or contention that Concordia Electric had the authority to
condemn public property.
Electric ceases. The Board noted that Concordia Electric is ex-
empt from Federal income and excise taxes but that Concordia
Electric was subject to State sales and property taxes as well as a
Louisiana Public Service Commission levied inspection and
supervision fee. The Board also noted that Concordia Electric is
exempt from state income taxation except that Concordia Elec-
tric must pay an annual fee of $10 for each 100 persons to whom
it supplies electrical service within the State of Louisiana.
The Board in Concordia Electric, supra, noted that meetings
of Concordia Electric, as well as most meetings of its board of
directors are open to all members. The Board went on to note,
however, that Concordia Electric may, and has, excluded non-
members from such meetings. The Board noted that Concordia
Electric periodically files certain financial information concern-
ing its operations with the Federal Rural Electrification Admini-
stration as well as the Louisiana Public Service Commission.
The Board noted that such filings generally are subject to disclo-
sure by those agencies to the public on request. The Board con-
cluded in Concordia Electric, supra, that there was no evidence
or contention that Concordia Electric’s records are otherwise
open for inspection by the public.
Within the framework of the above factual description10 the
Board concluded Concordia Electric was subject to its jurisdic-
tion.
First, I note the Board found no evidence (or contention) in
Concordia Electric, supra, that Concordia Electric was created
directly by the Government of the State of Louisiana or that its
board of directors was responsible to any public official of the
state. In the case before me, it is likewise clear the Company was
not directly created by the State of North Carolina, nor is its
board of directors responsible to any public official.
As in Concordia Electric, supra, I must determine whether the
Company herein is administered by officials who are responsible
to the general electorate. The Board in Concordia Electric, supra,
stated:

[W]e will find an entity “responsible to the general elector-
ate” only if the composition of the group of electors eligible
to vote for the entity’s governing body is sufficiently com-
parable to the electorate for general political elections in the
State that the entity in question may be said to be subject to
a similar type and degree of popular political control.

The Board in Concordia Electric, supra, concluded the coop-
erative’s membership was not coextensive with residency in the
geographical area served and that persons residing in the geo-
graphical territory served by Concordia Electric were not mem-
bers of Concordia Electric. The Board in Concordia Electric,
supra, noted that members in Concordia Electric may include
persons who did not reside for voting purposes in the geographic
territory served by Concordia Electric and may even include
individuals who do no reside for voting purposes in the State of
Louisiana. The Board further noted that a single household may
have more than one voting age resident, yet only have one mem-
bership in Concordia Electric. The Board also noted Concordia
Electric’s membership included entities such as corporations,
associations, Federal and State agencies which cannot be said to
be residents of the geographic area and not entitled to vote in any
State or Federal elections in Louisiana. The same factors are
present in the instant case such as to compel the conclusion the
Company’s administrators are not “responsible to the general
10 The factual description has been taken from the Board’s Decision,
for the most part, without quotations.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 828
electorate” and thus the Company herein is not exempt from the
Board’s jurisdiction. Stated differently the administering body of
the Company is made up of a board of directors elected by its
members; however, the members are not synonymous with the
“general electorate” as defined by the Board in Concordia Elec-
tric, supra. Members are not synonymous with the “general elec-
torate” in the instant case: for example, a single household may
have more than one voting age resident, yet only one member-
ship; landlords who are members may even live in a different
county, State, or country and employees may live within the
service area and yet not be eligible to be members.
Furthermore, the Company herein functions in a manner al-
most identical to Concordia Electric and numerous factors con-
sidered by the Board in Concordia Electric, supra, are present in
the instant case. Similarities for example, include the fact the
Company herein is a North Carolina corporation incorporated
under the general statutes of the State of North Carolina and is
engaged in providing central office telephone service in a specifi-
cally assigned territory of Wilkes County, North Carolina. As
was the case in Concordia Electric, supra, only persons, firms,
associations, corporations, body politics, or subdivisions who
apply for membership, purchase service, comply with the articles
of incorporation and bylaws and rules and regulations adopted by
the Company, may be members of the Company. As was the case
in Concordia Electric, supra, a landlord may pay the membership
fee for tenants and become a member and a husband and wife
may apply for joint membership. The Company herein, as was
the case in Concordia Electric, supra, has a board of directors
who serve 3-year staggered terms and are elected by members of
the Company from its members who are natural persons. As in
Concordia Electric, supra, directors of the Company may be
removed by a vote of membership based upon a petition signed
by a specified percent of the members and all directors must be
members of the Company and bona fide residents of the ex-
change in the Company that he/she is to represent and may not be
employed by or have a financial interest in any competing enter-
prise.
Unlike the situation in Concordia Electric, 315 NLRB 752
(1994), the Company here does not have the power of eminent
domain. This lack of the power of eminent domain strongly sug-
gests the Company here is not a political subdivision of the State
of North Carolina.
The Company here, as was the case in Concordia Electric, su-
pra, has outstanding loans from the Rural Utilities Service (for-
merly Rural Electrification Administration) and is subject to
certain accounting restrictions but once the loans are repaid, the
Rural Utilities Service’s authority over the Company expires.
The Company is exempt from State and Federal income tax,
Federal excise tax, and is only subject to North Carolina sales tax
and a regulatory fee.
All the above factors, analyzed in light of the Board’s teach-
ings in Concordia Electric, supra, clearly establishes the Com-
pany herein was not created directly by the State of North Caro-
lina so as to constitute an entity of the State, nor is it administered
by individuals who are responsible to public officials of the State
or the general electorate.11
Accordingly, I find the Company is not exempt from, but
rather subject to, the jurisdiction of the Board.

11 I find of no controlling significance that the vehicles utilized by the
Company are tagged with permanent state tags; or that the Federal EEOC
has declined to assert jurisdiction over the Company.
The Company’s argument the Board should not assert jurisdic-
tion over it because the Board’s analysis is irrational and fails to
effectuate the purposes of the Act12 is best directed to the Board.
I am required to apply Board law.
III. DISCONTINUING DUES CHECKOFF
Having concluded the Board has jurisdiction over the Com-
pany here, I shall now turn to whether the Company’s unilaterally
discontinuing dues checkoff violated the Act.
It is alleged at paragraph 13(a) of the complaint that commenc-
ing on or about April 24, 1996, and at all times thereafter the
Company refused and continues to refuse to bargain with the
Union in that the Company unilaterally and without notification
to or bargaining with the Union discontinued dues checkoff.
The Company admits it ceased dues deductions after the expi-
ration of the parties collective-bargaining agreement which ex-
pired on August 16, 1994. The Company asserts it did so because
there was no existing collective-bargaining agreement authoriz-
ing or mandating it to continue dues deductions.
By letter dated June 26, 1995, the Union requested the rein-
statement of dues deductions. The Company notified the Union
in writing, by its counsel, that it was “premature to reinstate dues
deduction” such as had existed in the expired contract.
Article XIV of this most recently expired collective-bargaining
agreement states:

DUES CHECK-OFF
14:01 During the term of this agreement, the Company
agrees to deduct Union dues and initiation fees on a
monthly basis for each employee covered by this
Agreement who signs and submits to the Company
an individual authorization for payroll deduction in
the form attached as Appendix “B.” Such authori-
zation shall be irrevocable for a period of one (1)
year from the date of the authorization or until the
termination of this agreement, whichever occurs
first. Any employee who has authorized the deduc-
tion of Union dues from his wages may revoke such
authorization by giving the Company and the Union
notice in writing of his desire to do so at least ten 10
days prior the termination dates of his authorization.

14:02 Such deduction will be paid to the Union against the
receipt thereof in the name of the Financial Secre-
tary of the Union. The Financial Secretary of the
Union agrees to furnish to the Company notice of
the amount to be uniformly deducted for Union
dues and initiation fees pursuant hereto and the Un-
ion official authorized to receive such deduction.

Appendix “B” to the parties most recent collective-bargaining
agreement follows:

APPENDIX B
I hereby authorize and direct ____________________
to deduct from my pay, union dues in the amount fixed in
accordance with Bylaws of Local Union ____________,
12 The Company’s argument that the Board’s two-factor analysis fails to
effectuate the purposes of the Act is based on its assertion the Board should
not exercise jurisdiction over an entity that is declared by statute to be a
public agency, that is exempt from Federal income taxation as a political
subdivision, and that has been determined by the Federal EEOC to be a
political subdivision.
WILKES TELEPHONE MEMBERSHIP CORP. 829
and the Constitution of the International Brotherhood of
Electrical Workers and pay same to said Local Union in ac-
cordance with the terms of the bargaining agreement be-
tween the Employer and Union.
This authorization shall be irrevocable for a period of
one (1) year from the date hereof or until the termination
date of said Agreement, whichever occurs sooner, and I
agree that this authorization shall be automatically renewed
and irrevocable for successive periods of one (1) year unless
revoked by written notice to you and the Union ten (10)
days prior to the expiration of each one (1) year period, or of
each applicable bargaining agreement between the Em-
ployer and the Union, whichever occurs sooner.

North Carolina is a right-to-work State.
The Government (and the Union) acknowledge that dues
checkoff arrangements that implement union-security require-
ments are considered to be creatures of contract that do not sur-
vive the expiration of a collective-bargaining agreement. The
Government argues the line of cases related to checkoff clauses
which expire with the contract should not apply or be considered
controlling because North Carolina is a right-to-work State.
Stated differently, the Government “asserts that checkoff clauses
that do not implement union security provisions and Section 8
(a)(3) of the Act survive expiration of an agreement.” The Gov-
ernment urges “[i]n the current case, the issue of dues check off
is a mandatory subject of bargaining and thus no changes may be
made by [the Company] regarding the voluntary, unrevoked
checkoffs without bargaining with the Union.” The Government
contends “[s]ince the employees [herein] did not seek to revoke
their authorizations, the authorizations should not be presumed to
have expired with the expiration of the collective bargaining
agreement.” Thus, the Government argues: “[s]ince a checkoff
clause that does not implement a union security requirement is an
8(d) subject which survives the expiration of the parties’ agree-
ments and since [the Company] has failed to bargain to impasse
over the discontinuance of the checkoff provision of the expired
contract, [the Company] violated Section 8(a)(5) of the Act by
stopping its deductions of union dues.”
The Company asserts the law required it to do exactly as it did
and argues the Government is simply attempting to have Board
precedent overruled. The Company urges such should not be
done. The Company also asserts pertinent applicable contract
language permitted it to do exactly as it did.
I find the Company prevails on either or both of its defenses.
The parties’ collective-bargaining agreement, specifically the
checkoff provisions, are crystal clear. The parties’ expired
agreement provides for dues deductions only during the term of
the agreement. The checkoff authorizations form set forth in
appendix B of the parties’ agreement is inextricably intertwined
with the agreement such that such authorizations do not survive
the expiration of the contract. Stated differently, the applicable
expired contract requires checkoff authorizations be in the form
provided in appendix B13 of the contract. The language of the
checkoff authorization form authorizes the Company to deduct
union dues from employees pay only “in accordance with the
terms of the bargaining agreement between the [Company] and
Union.” The contract states in clear and unambiguous language
that the Company agrees to deduct union dues from the pay of
those providing the specified authorization form “[d]uring the

13 Appendix B is set forth elsewhere in full in this Decision and will
not be repeated here.
term of this agreement.” Considering the language of the check-
off authorization and the contract together, I am compelled, by
the clear language of the parties’ agreement, to find that the au-
thorizations of deductions of union dues is only allowed during
the term of the contract. Based on this defense of the Company
alone, I recommend dismissal of the allegation the Company
unilaterally, and without notification to or bargaining with the
Union, discontinued dues checkoff.
I would find, if necessary, the Company prevails on its second
defense.
The Government, as noted throughout this Decision, alleges
the Company violated Section 8(a)(5) and (1) of the Act when it
unilaterally discontinued dues checkoff upon the expiration of the
parties’ most recent agreement. Reduced to a simply statement,
the Government contends a checkoff clause that does not imple-
ment a union-security requirement is an 8(d)14 subject which
survives the expiration of an agreement, and since the Company
herein failed to bargain to impasse over the discontinuance of the
checkoff provision of the expired contract it violated Section
8(a)(5) of the Act when it stopped deducting dues. As correctly
noted by the Government, the Board has held that most terms and
conditions of employment established in a contract survive expi-
ration of the contract and cannot be changed without bargaining
to impasse thereon. The Supreme Court in NLRB v. Katz, 369
U.S. 736 at 743 (1962), held an employer’s unilateral change in
terms and conditions of employment under negotiation violates
Section 8(a)(5) of the Act,15 inasmuch as such constitutes a cir-
cumvention of the duty to negotiate which in turn frustrates the
objectives of Section 8(a)(5) of the Act. The Board has held
there are exceptions to NLRB v. Katz specifically for union shop
as well as for dues checkoff provisions.
The Board noted in Bethlehem Steel,: 136 NLRB 1500, 1502
(1962),

In accord with Board and court decisions, we find that union
security, checkoff, preferential seniority, and a grievance
procedure are matters related to “wages, hours, and other
terms and conditions of employment” within the meaning of
Section 8(d) of the Act and, therefore, are mandatory sub-
jects for collective bargaining.5/
Notwithstanding the fact that union security and check-
off are compulsory subjects of bargaining, and that Respon-
dent acted unilaterally with respect to them, we find nothing
unlawful in Respondent’s action here. The acquisition and
maintenance of union membership cannot be made a condi-
tion of employment except under a contract which conforms
to the proviso to Section 8(a)(3). So long as such a contract
is in force, the parties may, consistent with its union-
security provisions, require union membership as a condi-
tion of employment. However, upon the termination of a
union-security contract, the union-security provisions be-
come inoperative and no justification remains for either
party to the contract thereafter to impose union-security re-
quirements. Consequently, when, upon expiration of its
contracts with the Union, the Respondent refused to con-

14 Sec. 8(d) of the Act provides in pertinent part “to bargain collec-
tively is the performance of the mutual obligation of employer and the
representative of the employees to meet at reasonable times and confer
in good faith with respect to the wages, hours, and other terms and
conditions of employment.”
15 Sec. 8(a)(5) of the Act states “it shall be an unfair labor practice
for an employer to refuse to bargain collectively with the representa-
tives of his employees, subject to the provisions of Section 9(a).”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 830
tinue to require newly hired employees to join the Union af-
ter 30 days of employment, it was acting in accordance with
the mandate of the Act.
Similar considerations prevail with respect to Respon-
dent’s refusal to continue to check off dues after the end of
the contracts. The checkoff provisions in Respondent’s con-
tracts with the Union implemented the union-security provi-
sions. The Union’s right to such checkoffs in its favor, like
its right to the imposition of union security, was created by
the contracts and became a contractual right which contin-
ued to exist so long as the contracts remained in force. The
very language of the contracts links Respondent’s checkoff
obligation to the Union with the duration of the contracts.
Thus, they read: “. . . The Company will, beginning the
month in which this Agreement is signed and so long as this
Agreement shall remain in effect, deduct from the pay of
such Employee each month . . . his periodic Union dues for
that month.” Consequently, when the contracts terminated,
the Respondent was free of its checkoff obligations to the
Union.

5/ NLRB v. The Proof Company, 242 F.2d 560 (C.A. 7); NLRB
v. Reed & Prince Manufacturing Company, 205 F.2d 131
(C.A. 1); NLRB v. Ross Gear & Tool Company,158 F.2d 607
(C.A. 7); United States Gypsum Company, 94 NLRB 112.

Under the current status of Board law, union-security require-
ments as well as contractually governed checkoff authorizations
are created by contractual agreements and remain in force only so
long as the agreement giving rise thereto remains in force. The
United States Circuit Court of Appeals for the District of Colum-
bia Circuit in Xidex Corp. v. NLRB, 924 F.2d 245 at 254–255
(D.C. Cir. 1991), observed, in a case where the union was at-
tempting to have the Board reversed for failing to order the em-
ployer to pay the union money it would have received had the
dues-checkoff provision of the expired collective-bargaining
agreement remained in effect:

The union next contends that the Board erred in failing
to order the employer to pay to the union the money that the
union would have received had the dues check-off provision
of the expired collective bargaining agreement remained in
effect. This was not error on the Board’s part. Section
8(a)(3) of the NLRA and sections 302(a)(2) and 302(c)(4)
of the Labor Management Relations Act, 29 U.S.C. §§
186(a)(2), 186(c)(4), permit an employer to make payments
to a union only under a dues check-off provision contained
in an effective collective bargaining agreement. Southwest-
ern Steel & Supply, Inc. v. NLRB, 806 F.2d 1111, 1114
(D.C. Cir. 1986). The collective bargaining agreement had
expired and, accordingly, the Board properly refused this
portion of the union’s requested order.

While not central to its decision in Southwestern Steel & Supply,
Inc. v. NLRB, 806 F.2d 1111 at 1114 (D.C. Cir., 1986), the circuit
court observed that “dues-checkoff” was among the narrow class
of exceptional mandatory subjects of bargaining that do not sur-
vive the expiration of a collective-bargaining agreement. The
circuit court further observed “[t]he well-established exceptions
for union-shop and dues checkoff are rooted in Section 8(a)(3) of
the NLRA, 29 U.S.C. Sec. 158(a)(3) and Section 302(c)(4) of the
Labor-Management Relations Act, 29 U.S.C. Sec. 186(c)(4),
which are understood to prohibit such practices unless they are
codified in an existing collective bargaining agreement.”
In the instant case, it appears that not only did the Union’s
right to dues deduction payments expire, but it, as contended by
the Company, became unlawful for the Company to make such
deductions and forward such to the Union.
Factually, based on the parties’ agreement, and legally, I reject
the Government’s contention that principles gleamed from the
above-outlined cases requires a finding that a checkoff clause that
does not implement a union-security requirement is an 8(d) sub-
ject which survives the expiration of the parties’ agreement. Cf.
Standard Oil Co. of California Western Operations, 144 NLRB
520 at 525 (1963).16
I recommend the complaint be dismissed in its entirety.
CONCLUSIONS OF LAW
1. The Company is an employer engaged in commerce and in
an industry affecting commerce within the meaning of Section
2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning of
Section 2(5) of the Act.
3. The Company has not committed any unfair labor practices
of which it is accused in the complaint.
Based on the foregoing findings of fact and conclusions of
law, and on the entire record, I issue the following recom-
mended.17
ORDER
The complaint is dismissed in its entirety.

16 The Government cited two cases in support of its contention the dues-
checkoff arrangements here, survived the expiration of the parties’ contract.
Both cases are distinguishable. First, the Government cited Lowell Corru-
gated Container Corp., 177 NLRB 169 (1969), which involved a company
that withheld union dues for one of two competing unions for a limited
period after the collective-bargaining agreement giving rise thereto had
expired. The Board found no violation by holding an employer may (per-
missibly) honor checkoff authorizations that have not been revoked, abro-
gated, terminated, or canceled notwithstanding that the contract sanctioning
the authorizations has expired. The Board’s holding in Lowell Corrugated
Container Corp. does not require or suggest a finding that it would be an
unfair labor practice for an employer to cease deducting union dues after the
agreement sanctioning such authority has expired. It appears breach of a
contractual arrangement between an employee and an employer in certain
circumstances does not give rise to an unfair labor practice. The second
case relied on by the Government is Frito-Lay, 243 NLRB 137 (1979). In
Frito-Lay, the Board held that employees’ revocation of their dues-checkoff
authorizations made during a contract hiatus were ineffective and the union
and the employer therein did not violate the Act by their failure to honor the
revocations. The Board in Frito-Lay noted that the authorizations the em-
ployees executed in Frito-Lay expressly contemplated the possibility of
periods when no contract would be in effect but that the authorizations could
only be revoked during a narrowly drawn window once per year. Neither of
the two cases require a different conclusion than the one I have arrived at
herein.
17 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided by Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.