- STRIKES & LABOR DISPUTES
- MAJOR CONTRACT SETTLEMENTS & NEGOTIATIONS
- ADMINISTRATIVE & COURT DECISIONS
- LEGISLATION & POLITICS
- CRIME & CORRUPTION
- Elizabeth Bunn was named organizing director of the AFL-CIO. Bunn served as the secretary-treasurer of the UAW since 2002, is a member of the AFL-CIO Executive Council, and directs the UAW’s Technical, Office and Professional Department. Bunn will replace Stewart Acuff.
- The National Labor Relations Board ordered representation elections to proceed among health care workers in California, allowing 6,800 workers at 31 facilities to choose between the United Healthcare Workers-West (UHW) local of the Service Employees International Union (SEIU) and the National Union of Healthcare Workers (NUHW). The elections had been delayed for more than a year as the result of unfair labor practice charges brought by SEIU and UHW against NUHW. Former UHW officers formed NUHW in early 2009. Despite the NLRB order, more than 30 other elections remain blocked by unfair labor practice allegations involving these unions.
- A series of organizing boot camps run by the Teamsters drew large crowds. At one boot camp held in Covina, Calif., more than 600 union members attended. In 2009, 1,200 Teamsters attended 22 organizing boot camps.
- Both the National Treasury Employees Union (NTEU) and the American Federation of Government Employees (AFGE) filed petitions with the Federal Labor Relations Authority (FLRA) seeking an election to be chosen as exclusive union representatives for 40,000 Transportation Security Administration (TSA) airport screeners. Although the FLRA maintains that federal airport screeners do not have collective bargaining rights, NTEU and the AFGE filed the petitions in order to be on the election ballot if the FLRA reverses its decision.
- The National Mediation Board ("Board") ruled that Frontier Airlines is a separate carrier from other subsidiaries of Republic Airways Holdings, Inc., and as a result, a union representation election may be held for Frontier’s 900 unrepresented flight attendants. The Association of Flight Attendants (AFA) had petitioned the Board to allow the election at Frontier, while the Teamsters opposed the election. Frontier Airlines was acquired by Republic Airways Holdings in 2009; Teamsters currently represent flight attendants at Republic Airlines while the AFA represents employees at two Republic Airways Holdings subsidiaries. A date has not yet been set for the Frontier election.
- Strikes & Labor Disputes
- The Transport Workers Union asked the National Mediation Board to release it from federal mediation with American Airlines. The union, which represents 28,000 workers at American Airlines and American Eagle, has been in contract talks with American for four years. Notification to American’s parent company of the request for release will trigger a comment period for both parties, and subsequently a determination by the National Mediation Board. If either party rejects an offer of arbitration, a 30-day cooling-off period begins, after which the union will be granted self-help barring presidential intervention.
- Major Contract Settlements & Negotiations
- According to a BNA analysis of all collective bargaining settlements from Jan. 1 to March 22, 2010, first-year wage increases in settlements declined from the corresponding period in 2009, both overall and in various categories such as manufacturing. The overall average first-year wage increase declined to 1.6 percent, compared to 2.9 percent during the corresponding time period of 2009. Excluding construction and state or local government contracts, the average increase was 2 percent, still less than the 2.9 percent reported in 2009. When factoring in lump-sum payments, the 2010 overall average first-year increase was 1.8 percent, compared with 3.1 percent in the corresponding period in 2009.
- A wage freeze aimed at preserving health benefits was a major component of a three-year contract approved by United Food and Commercial Workers members employed at grocery stores in the Minneapolis area, including Cub Foods, Byerly’s, and Lunds. The wage freeze allows the employers to continue to fully pay for health benefits and to address an unfunded pension liability of more than $60 million. The contract also reduces workers’ paid vacations and pension benefits, and will allow the pension fund to be considered healthy by 2020. In addition, the contract grants the employers more flexibility on work rules.
- Since November, Northern California health care workers ratified six contracts covering 1,530 workers at Sutter health care facilities. The workers are represented by SEIU-UHW, which continues to negotiate three additional contracts at other area health facilities. The six ratified contracts include wage increases of between 9 and 15.5 percent over three years, prohibitions on subcontracting, and maintained health benefits.
- Communications Workers of America District 3 members approved a three-year contract with AT&T Southeast Region which includes 8.75 percent wage increases and 6 percent pension benefit increases over the term, job security provisions, and direct payments of success sharing plan amounts. The contract, which covers 35,000 workers, also requires employees to begin making monthly contributions to health insurance premiums in 2011. The workers had rejected a tentative agreement in January.
- By unanimous vote, members of SEIU Local 26 ratified a contract with the Minneapolis-St. Paul Contract Cleaners Association and Marsden Building Maintenance. The 34 month contract covers 4,000 janitors. The workers will receive increased wages, broader health coverage at lower cost, and increased work hours. The workers perform janitorial services in the Minneapolis-St. Paul International Airport and most of the area’s commercial office buildings.
- United Food and Commercial Workers members at five New England locations ratified new three-year contracts with Stop & Shop Supermarket Co. The contracts, which cover 36,000 workers at 240 stores, include five pay increases and ratification bonuses, and increased company contributions to pension plans. Beginning in the second year, employees will be required to contribute increased health payments.
- United Steelworkers members ratified a three-year contract which covers 2,400 Appalachian Regional Healthcare employees at nine hospitals and 11 clinics in West Virginia and Kentucky. Negotiations began in January, and almost 90 percent of the employees voted in favor of the agreement. The contract includes a 4.75 percent wage increase over three years; a $250 ratification bonus; and additional vacation days for long-term employees. It also continues the health care coverage provided under the previous contract, with some increases in premiums and deductibles, and preserves pension benefits.
- Members of UAW Local 2244 ratified a severance agreement with New United Motor Manufacturing, Inc., prior to the closing of a car assembly plant in Fremont, Calif. The NUMMI plant employed 5,440 workers, including 4,550 represented by the UAW, and was a joint venture between Toyota and GM. The plant closed on April 1, after GM’s decision to drop its Pontiac line at the plant. The agreement, which was approved by 90 percent of union members, provides a base severance of $21,175 to each worker, with supplemental payments based on years of service and attendance. The pension fund for 5,800 NUMMI workers and retirees will be taken over by the Pension Benefit Guaranty Corporation.
- Members of the Communications Workers of America and the International Brotherhood of Electrical workers voted to accept changes to their current contract with FairPoint Communications. The decision, which affects 2,600 unionized workers in Maine, New Hampshire, and Vermont is intended to help FairPoint emerge from bankruptcy and is subject to court approval. The changes include an extension of current collective bargaining agreements and cost-of-living provisions to August 2014, instead of expiring in August 2013 as planned; creation of a committee that will allow the unions to give input on running the company more profitably; and implementation of 401(k) matching in FairPoint stock. The unions blamed the bankruptcy on FairPoint’s acquisition of Verizon’s telecommunications operations in the tristate area.
- Teamsters members ratified an agreement with Costco Wholesale Corp. covering 3,500 workers in New Jersey, New York, Maryland, and Virginia. The three-year contract includes wage increases of $1.50 per hour and bonuses between $5,000 and $8,000. The contract is similar to one ratified by California Costco employees in February. However, the California contract allows employee participation in a pension plan, while the East Coast workers instead receive an extra profit-sharing contribution to the 401(k) plan. Teamsters representatives stated that the union would continue to pursue improved pension benefits for the East Coast employees.
- Dow Jones and Co. and the negotiating committee of the Independent Association of Publishers’ Employees reached a tentative four-year agreement. If ratified, the agreement would cover 1,700 employees and would include a first-year wage freeze but subsequent pay raises, lower health care premiums, and expanded employer 401(k) contributions. In addition, the contract would increase shift differentials and standby pay, would allow overtime pay for working at home, and would preserve cost-of-living increases. The union board will vote on the tentative contract April 10.
- United Healthcare Workers West members ratified agreements with Antelope Valley Hospital in Lancaster, Calif., and retirement community O’Connor Woods in Stockton, Calif. The contract with Antelope Valley covers 1,050 employees for 39 months and includes six staggered 1 percent wage increases as well as step increases of between 2 and 2.5 percent. The contract with O’Connor Woods covers 200 workers and includes a signing bonus of up to $400, two staggered wage increases of 40 cents per hour, double time for working certain holidays, and improved health insurance options. Ratification of the O’Connor Woods contract ended a lengthy dispute which was ongoing since workers first voted for UHW representation in October 2005, and which included three attempts to decertify the union. UHW is a local of SEIU.
- Average base wage increases achieved in Canadian collective bargaining agreements in January 2010 were up sharply from those in the fourth quarter of 2009. An analysis of 13 contracts covering 16,380 employees showed average base wage increases of 2.6 percent, as compared to 1.8 percent in December 2009, 2.0 percent in November 2009, and 2.2 percent in October 2009. This 2.6 percent increase was larger than the 1.9 percent adjustment in the Consumer Price Index. Private sector contracts reached in January 2010 had average annual wage increases of 2.1 percent, while public sector contracts in the same month averaged 2.8 percent. Sectors with the highest increases in January 2010 were transportation; education, health, and social services; and public administration
- Administrative & Court Decisions
- A jury trial pitting SEIU against its former officials who formed a rival union, the National Union of Healthcare Workers, began in San Francisco on March 23. SEIU sued NUHW under the Labor Management Relations Act, the Labor-Management Reporting and Disclosure Act, and the Employee Retirement Income Security Act, alleging that NUHW stole membership data and breached SEIU’s constitution. The lawsuit arose from events in January 2009, when SEIU placed its UHW local into trusteeship and ousted its leaders. In protest to the trusteeship, the UHW leaders barricaded themselves inside the office; those leaders formed NUHW the next day. Prior to the trial, the U.S. Court of Appeals for the Ninth Circuit found that during the barricade, those officers had destroyed or removed records in violation of the union’s constitution. The court upheld a temporary restraining order which required NUHW to preserve any UHW property in its possession and return all nonelectronic UHW documents. The San Francisco trial is expected to last two weeks.
- The U.S. Court of Appeals for the Seventh Circuit affirmed a jury verdict in favor of a former union president who brought suit under the Labor-Management Reporting and Disclosure Act (LMRDA). Mark Serafinn, who served three terms as president of Teamsters Local 722 until he was defeated in 2001, won a $105,000 jury verdict on his claim that the union brought internal disciplinary charges against him after he accused his opponent of cronyism and other misconduct. The Seventh Circuit rejected the union’s argument that the “mixed motive” theory of liability is available in cases arising under the LMRDA. However, the court also affirmed the grant of summary judgment to the Teamsters Joint Council 65, finding that Serafinn had failed to show that the council engaged in unlawful retaliation.
- An arbitrator found that Detroit-based American Axle & Manufacturing Holding’s off-shoring of certain work to Mexico violated its 2008 contract with the United Auto Workers. The ruling ordered American Axle to determine the number of workers affected by the outsourcing and make them whole by paying lost wages and benefits. The arbitrator held that the 2008 contract, which ended an 87-day strike, clearly required American Axle to produce specified products at American plants. Prior to the strike, UAW Local 235 represented 1,985 workers at American Axle’s Detroit plant; after the strike, American Axle reduced the workforce to 300 employees and Local 235 dissolved.
- A federal judge declined to order a NLRB Regional office to seek injunctive relief against a union that had placed a rat balloon and a banner outside an Ohio hospital. The judge found that St. Elizabeth’s Hospital had failed to state a claim under the NLRA, and as a result the court lacked jurisdiction. The union, Sheet Metal Workers Local 33, had sought to represent 15 workers employed at a business owned by a hospital manager; when the manager denied the union’s request, the union placed a rat balloon and a banner criticizing the manager outside the hospital. The hospital argued that these actions violated a section of the NLRA that prohibits unions from engaging in activity against a second employer, with whom the union does not have a labor dispute, to pressure the primary employer to recognize the union.
- A union pension fund sued directors of Goldman Sachs, alleging that the firm’s allocation of nearly half its revenue to management compensation constitutes corporate waste. The International Brotherhood of Electrical Workers Local 98 Pension Fund’s shareholder derivative suit is seeking an injunction prohibiting Goldman Sachs from spending more than 47 percent of 2009 net revenues on compensation, and a declaratory judgment that its directors breached their fiduciary duties. Similar shareholder derivative suits against Goldman Sachs are pending in New York and Delaware, and Goldman’s board has received several demand letters from shareholders asking Goldman to investigate and reform its compensation system. Goldman stated that it believes the union’s suit to be meritless.
- A federal judge in Chicago enforced an arbitration award requiring the Illinois Central Railroad to reinstate a conductor who was convicted of embezzling $63,000 in union funds and served 16 months in federal prison. William Miller, who worked for Illinois Central as a machinist and was a member of International Association of Machinists Local 498, embezzled the funds while serving as secretary-treasurer of the local between 1998 and 2000. When Miller pleaded guilty in 2005, he was working as a conductor and was represented by the United Transportation Union, which successfully pursued an arbitration claim on his behalf seeking reinstatement and back pay. The federal court enforced the arbitration award ordering reinstatement; however, the court rejected the award of back pay for the time that Miller was incarcerated, finding that Miller was not “available to work” and therefore back pay would constitute a windfall.
- Legislation & Politics
- In an address to the AFL-CIO Executive Council, Vice President Joe Biden reassured union leaders of the Obama administration’s support of organized labor. Biden promised that the administration would "restore" the National Labor Relations Board and enact the proposed Employee Free Choice Act, and stated that economic programs will begin creating 100,000 jobs a month by the spring, including those in new industries such as renewable energy, high speed rail, wind turbines, and nuclear power plants.
- President Obama appointed SEIU president Andy Stern to serve on the newly created National Commission on Fiscal Responsibility and Reform ("Commission"). The Commission will have 18 members and is charged with making recommendations to Congress on reducing the deficit. Stern pledged to represent ordinary working Americans and work to restore financial discipline. Several groups criticized Stern’s appointment, arguing that union leaders enjoyed disproportionate influence with the Obama administration.
- Allison Beck was named a deputy director of the Federal Mediation and Conciliation Service. Beck retired as general counsel of the International Association of Machinists in December 2009, and previously served as an appellate court attorney for the National Labor Relations Board and a legislative aide for the Senate Committee on Labor and Public Welfare’s Special Subcommittee on Human Resources. She will be responsible for FMCS’ national and international programs.
- The South Dakota state legislature voted to amend the South Dakota constitution to include a provision guaranteeing the right to vote by secret ballot in any election for public office, referendum, or authorization of employee representation. South Dakota voters will decide whether to approve the amendment in November. The amendment is a response to the proposed federal Employee Free Choice Act ("EFCA"), which would amend the National Labor Relations Act to allow employees to obtain union representation by a majority signing of union authorization cards, instead of majority election vote. The EFCA is currently stalled in Congress.
- The AFL-CIO carried out a two-week campaign designed to create support for a jobs program. The campaign included more than 200 events, such as rallies and demonstrations, and targeted Wall Street investment banks, including Bank of America, Goldman Sachs, and JP Morgan Chase. AFL-CIO president Richard Trumka stated that the campaign is intended to pressure banks into paying their fair share to restore jobs, as well as to stop fighting financial reform and start lending to communities and small businesses. AFL-CIO community affiliate Working America is also organizing a campaign protesting the Wall Street bailouts.
- In a speech at the legislative conference of the International Association of Fire Fighters, Secretary of Labor Hilda Solis and Representative Chris Van Hollen (D-Md.) discussed the American Recovery and Reinvestment Act as well as their support for firefighters’ collective bargaining rights. Solis emphasized her support for unions and told the firefighters that “[y]ou have a friend” in the Department of Labor. Van Hollen stated that Democrats were working for passage of the Public Safety Employer-Employee Cooperation Act, H.R. 413, which would ensure that firefighters and other state and local public safety officers had collective bargaining rights.
- President Obama filled 15 posts through recess appointments, including appointing Democrats Craig Becker and Mark Pearce to the National Labor Relations Board. The NLRB is designed to have five members, but it has been operating with only two since early 2008. The recess appointments will expire at the end of the 2011 congressional session. Becker was an SEIU associate general counsel, an AFL-CIO staff counsel, and a law professor, and Pearce was a partner with a union side law firm, Creighton, Pearce, Johnsen & Giroux in Buffalo, N.Y. All 41 Republican senators had signed a letter to the president urging him not to make recess appointments, while 132 House Democrats signed a letter supporting the recess appointments of Becker and Pearce.
- Crime & Corruption
- Edward W. Rodzwicz, former national president of the Brotherhood of Locomotive Engineers and Trainmen, a division of the Teamsters, pleaded guilty in Missouri federal court to two felonies related to bribery. According to the U.S. Attorney’s Office, after a BLET committee recommended the removal of a certain attorney from its list of designated legal counsel for injury cases, Rodzwicz solicited and accepted two bribes from the attorney in return for Rodzwicz’s efforts to keep the attorney on the list. Rodzwicz will be sentenced on June 3, and faces up to 10 years of imprisonment for bribery in connection with a federally funded program, and up to five years of imprisonment for interstate travel to carry on unlawful activity.
- A staff report released by Republican members of the House Oversight and Government Reform Committee alleged financial misconduct and illegal ties between SEIU and ACORN, a nonprofit social justice organization. The report accused ACORN of engaging in a “shell game of corporate financing” involving money transfers from organizations receiving federal money to ACORN to be used in partisan political activities. The report also claimed that ACORN received $5.6 million from SEIU over the past six years. SEIU strongly denied the allegations of improper or illegal conduct.
- William Dugan, the former president of Chicago’s International Union of Operating Engineers Local 150, pleaded guilty to a misdemeanor violation of the Labor-Management Relations Act. Dugan admitted that he violated the prohibition on receiving items of value worth less than $1,000 from a contractor by soliciting and accepting concrete buffalo feeders from a firm, which employed workers represented by Local 150. Other illegal schemes described in the plea agreement include Dugan’s demand that another firm, which employed Local 150 workers, provide him with a vehicle at substantially below market rate; Dugan’s conversion of union assets for his personal use; and Dugan’s materially false statements made to the Department of Labor on the union’s LM-30 form. Under the plea agreement, the government recommended that Dugan be imprisoned for 12 months and pay $10,800 in restitution to Local 150. In 2007, union members brought a civil suit against Dugan, alleging involvement in an illegal salary kickback scheme and misappropriation of the union’s resource; that case settled in 2009.
- The Teamsters placed Local 107 into a partial trusteeship after the Independent Review Board found that its officers had continued a practice of influencing work assignments in the movie and trade show industries. The IRB, a court-supervised panel which fights corruption within the Teamsters Union, conducted an investigation which found that the local violated its own written referral rules when certain members were referred to work in both the movie and trade show industries, while other unemployed members with better qualifications and experience were not referred. Local 107 is based in Philadelphia and has 2,429 members in various industries; however, only the local’s activities in the movie and trade show industries have been placed under trusteeship. Local 107 was previously under trusteeship from 1996 until 2000.
- United Auto Workers members filed a complaint with the Department of Labor, alleging nepotism by top union officials. In particular, the complaint stated that UAW Vice President Cal Rapson hired his friends and relatives to the staff of the UAW-GM Human Resources Center without regard for seniority and without posting the position openings in GM plants; 10 such employees with close personal ties to Rapson were listed in the complaint. The complaint also mentioned the union’s “flower funds” to which members are asked to donate monthly for the purchase of flowers and funeral wreaths. Critics have alleged that the funds are in fact used to pay for re-election campaigns and convention parties. Finally, the complaint described internal disagreements over a proposed contract calling for concessions by the union’s staff; after the staff voted down the concessions three times, UAW President Ron Gettelfinger threatened to impose the contract over the objections of the staff representatives.
- The AFL-CIO reported a net gain of approximately 140,000 new members in 2009, bringing the 2009 average membership of all unions affiliated with the AFL-CIO to 8,510,395. Unions with the highest 2009 net growth included the American Federation of State, County, and Municipal Employees and the American Federation of Teachers, while unions with the lowest 2009 net growth included the United Auto Workers and the United Steelworkers.
- The AFL-CIO Executive Council approved the creation of a low-fee index fund intended to result in significant savings for union pension funds. The fund’s trustee, ASB & Chevy Chase, will charge a fee of 1.5 basis points. The fund will allow participation in the AFL-CIO Capital Stewardship program, and pension funds will be able to control investments as shareholders in companies. At the same meeting, the Executive Council heard plans from the union’s secretary-treasurer to implement a young worker program.
- The United Auto Workers lost 75,846 members in 2009, reducing total membership to 355,191. The drop in membership was largely due to turmoil in the auto industry, which employs the largest number of UAW workers. UAW membership peaked in 1979 with 1,527,858 members, but has declined every year since 2004.
- A report issued by the Cato Institute found that public sector unions are more influential than those in the private sector, with 39 percent of state and local employees belonging to unions in 2009. As a result, government employees make up more than half of all union members in the country. State laws govern public sector bargaining, with 26 states allowing collective bargaining for all government employees, 12 states allowing collective bargaining for some government employees, and 12 states lacking public sector bargaining. Chris Edwards, the author of the report and the director of tax policy studies at the Cato Institute, advocates abolition of public sector collective bargaining, arguing that unions hamper government decision-making on budgets.
If you have questions about items that appeared in this bulletin, or would like to learn more about any of these topics, please contact William Miossi at (202) 282-5708 or (312) 558-6109, or one of the other Labor & Employment Relations partners listed here:
Attorney advertising materials.
These materials have been prepared by Winston & Strawn LLP for informational purposes only and are not legal advice. Receipt of this information does not create an attorney-client relationship. No reproduction or redistribution without written permission of Winston & Strawn LLP.
Along with this briefing, a library of all the Winston & Strawn LLP briefings published to date can be accessed by visiting the Publications Library section of Winston & Strawn's Web site (www.winston.com).
Copyright © 2010