- STRIKES & LABOR DISPUTES
- MAJOR CONTRACT SETTLEMENTS & NEGOTIATIONS
- ADMINISTRATIVE & COURT DECISIONS
- LEGISLATION & POLITICS
- CRIME & CORRUPTION
Two health care unions, the National Nurses Organizing Committee-Texas (“NNOC”) and Service Employees International Union (“SEIU”), launched an effort to organize more than 3,000 registered nurses and hospital workers at four Texas hospitals owned by Nashville-based HCA, Inc. NNOC was successful in organizing nurses at Valley Regional Medical Center in Brownsville, Texas, raising the number to nearly 1,900 registered nurses who NNOC has added to its rolls in the last month.
- Meanwhile, service, technical, and maintenance employees at Valley Regional Medical Center in Brownsville, Texas, voted against representation by the SEIU.
- Speaking at UAW’s Quadrennial Constitutional Convention, newly elected United Auto Workers President Bob King promised to rebuild UAW strength by organizing the unorganized, fighting for labor law reform and the Employee Free Choice Act, and seeking social and economic justice. U.S. Labor Secretary Hilda Solis also spoke at the UAW convention, and she praised the UAW’s activist agenda on behalf of the Obama administration.
- The National Union of Healthcare Workers (“NUHW”) has launched an effort seeking an election to replace the SEIU as the union for 45,000 technical, service, and clerical workers at Kaiser Permanente facilities throughout California.
- National Labor Relations Board Regional Directors are preparing to unblock and reactivate nearly 40 election petitions filed by the Union of Healthcare Employees in its efforts to oust an incumbent local of the Service Employees International Union at health care facilities throughout California. SEIU and its local—United Healthcare Workers-West—must withdraw their charges, which have been blocking the elections.
- Strikes & Labor Disputes
- Seven local unions representing more than 1,000 workers conducted a three-day strike against the American Red Cross, which the unions characterized as an unfair labor practice strike. The parties have been in negotiations for a year, and the unions have accused the Red Cross of engaging in surface bargaining and making unilateral changes to the terms and conditions of employment.
- Boeing Co. and United Auto Workers Local 148 settled a 58-month contract covering 1,700 employees, ending a month-long strike. United Auto Workers Local 148 ratified a 58-month contract with Boeing Co. ending a nearly one-month strike. Under the new contract, beginning in January 2014, employee contributions for health care premiums will increase from 12 percent to 13 percent, and deductibles and co-pays will also increase. Workers will receive a $4,000 lump-sum signing bonus, followed by wage increases of 3 percent in each of the second through fifth years. The pension multiplier will only apply to current employees but will increase to $81 per month per year of service for retirements from the current multiplier of $70 per month per year of service. The tentative agreement includes improvements in pension benefits and medical costs. According to Boeing, provisions of a voluntary layoff benefit program would be maintained in the tentative agreement.
- San Francisco hotel workers represented by UNITE HERE Local 2 voted to authorize a three-day strike at the Hyatt Regency to protest nearly 10 months without a collective bargaining agreement. The limited-term walkout affects about 400 Local 2 represented Hyatt employees and is timed for the eve of Hyatt Hotels Corp.’s first shareholders’ meeting. In Chicago, Local 1 announced that its members and city religious leaders will conduct protest rallies and demonstrations at the shareholder meeting.
- A California judge issued a temporary restraining order barring more than 10,000 registered nurses at the University of California campus medical centers and clinics from participating in a one-day strike. The court determined that the strike would violate California law controlling collective bargaining in higher education institutions.
- Striking members of Local 395 of the International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers in Northwest Indiana reached a one-year tentative agreement with contractors represented by the Northwest Indiana Contractors Association. The agreement provides an increase of $2.63 per hour to members in total compensation, but only a small percentage of the increase will come in higher wages. While the strike has ended, some ironworkers are honoring a separate strike called by Local 142 of the International Brotherhood of Teamsters.
- The Air Line Pilots Association and Spirit Airlines reached a tentative five-year deal ending a week-long pilots’ strike. The tentative agreement includes an 18 percent pay raise for co-pilots in year one of the contract with further increases in the third year. By the contract’s third year, co-pilots would be making close to $80 per hour, an amount comparable to their counterparts at JetBlue Airways and AirTran Airways. The agreement also addresses retirement benefits, work rules, job security, and capped increases in health care costs at 7 percent annually.
- Major Contract Settlements & Negotiations
- The United Steelworkers ratified a new four-year master contract with Alcoa Inc. The agreement covers some 6,000 workers at 10 U.S. manufacturing plants in eight states, and it provides for lump-sum payments in the first two years instead of general wage increases, a $2 per hour increase in the pension multiplier, and provisions requiring workers to pay substantially more for health insurance. The union successfully resisted efforts by the company to implement a two-tier system in which new hires would receive more than $1.50 an hour less in compensation.
- According to statistics published by BNA analyzing collective bargaining data through June 14 for all settlements reported in 2010, the average first-year wage increase was 1.6 percent, compared with 2.8 reported in the comparable period of 2009. The median first-year increase for settlements reported was 1.8 percent, compared with 3 percent in 2009, and the weighted average was 1.6 percent compared with 4 percent. When construction and state and local government contracts were excluded, the all-settlements average increase was 2 percent, compared with 2.9 percent in 2009; the median was 2 percent, compared with 3 percent; and the weighted average was 1.7 percent, compared with 2.7 percent. The average increase for manufacturing agreements was 1.2 percent, compared with 2 percent in 2009, and the median was 2 percent, compared with 2.5 percent. When lump-sum payments were factored into wage calculations, the all-settlements average first-year increase to date in 2010 was 1.8 percent, compared with 3 percent in the comparable period of 2009.
- Members of Chocolate Workers Local 463 overwhelming voted to accept a seven-year contract with Hershey Co. despite the expected loss of almost 400 jobs. The 95 percent turnout and lopsided vote was attributed to a fear that rejection would have resulted in a new facility being built outside Hershey, Pa. Under the terms of the agreement, up to 600 full-time hourly workers can opt for severance in exchange for leaving voluntarily, while the contract provides for a 3.25 percent across-the-board wage increase.
- United Food and Commercial Workers Local 876 ratified a three-year contract with Kroger Co. that provides wage increases in all job classifications and a $1,500 ratification bonus for some 12,000 workers at 118 grocery stores in Michigan, and weekly health insurance contributions will increase.
- International Association of Machinists Local Lodge 837 ratified a new four and one-half-year contract with the Boeing Co. despite opposition by the union’s bargaining team. The company agreed to place a cap of $275 per prescription on the amount of employee copayments for drugs purchased at a retail pharmacy. Additionally, Boeing agreed to withdraw its proposal to end health coverage for dependents of workers who were on medical leave longer than six months. The union’s bargaining committee had recommended the members reject the contract because the company’s final offer included a proposal to change the pension benefit for employees hired after Jan. 1, 2012 from a defined benefit plan to a voluntary contribution plan with a company contribution.
- International Association of Machinist Local Lodge 839 adopted by default a proposed 10-year agreement with Spirit AeroSystems Inc. Fifty-seven percent of voting members of the union rejected the proposed agreement, but because fewer than two-thirds of the IAM membership voted to strike, the agreement is adopted by default under the IAM Constitution. The agreement covers 6,000 workers and includes modest wage increases over the 10 year term, incentive pay opportunities, and an enhanced cost-of-living adjusted formula. In addition, health care costs will not increase until 2013 and pension benefits will expand each year.
- Members of the Graphic Communications Conference of the International Brotherhood of Teamsters Local 406 ratified a three-year collective bargaining agreement with Newsday. 1,100 employees of the daily newspaper agreed to wage cuts of 5 to 10 percent. Other changes include elimination of a good attendance bonus for press room employees who do not call in sick for an entire year and a three percent reduction in the proportion of union to nonunion workers in editorial. Newsday agreed to add a one-time contribution of 1 percent of salary Jan. 1, 2013 to the employees’ 401(k) accounts.
- Administrative & Court Decisions
- The U.S. Supreme Court decided that the National Labor Relations Board had no authority to act with only two members. Therefore, nearly 600 decisions issued by the two-member board may be revisited. In a 5-4 ruling, the majority found that the five-member NLRB must have at least three sitting members to issue a decision, reversing the Seventh Circuit’s May 2009 opinion that held the then-two-member board valid. The majority found that the delegation clause in the statute when read with the language requiring the board to have three members “at all times” required that the delegee group maintain a membership of three in order for the delegation to remain valid. The recess appointments of Craig Becker and Mark Pearce brought the board above a three-member quorum, but those recess appointments are set to expire in 2011. While it is unclear how much of a backlog will result at the NLRB from the Supreme Court’s ruling, it is likely that many cases will not be revisited because the parties have complied with the board’s order or have settled the matters. New Process Steel LP v. NLRB, U.S., No. 08-1457.
- In a 7-2 decision, the Supreme Court found that the court—not arbitrators—must hear disputes over the formation of collective bargaining agreements. The Court held that the dispute between the Granite Rock Co. and International Brotherhood of Teamsters Local 287 over the ratification of a new collective bargaining agreement was a matter for the district court to resolve, since it went to whether the parties consented to a deal and formed the contract. Although the Supreme Court reiterated the presumption favoring arbitration, it specified that it has only applied the presumption in cases where a court has found the parties intended to arbitrate under a validly formed contract. The Court also held that Granite Rock may not bring a federal tort claim against the Teamsters under the Labor Management Relations Act, but left the company with a number of alternatives, including a claim under state tort law, a claim before the National Labor Relations Board, or a claim against Teamsters as the alter ego of the local chapter. Granite Rock Co. v. International Brotherhood of Teamsters et al., U.S., 08-1214.
- The U.S. District Court for the District of Columbia upheld the National Mediation Board’s final rule revising representation election procedures for airline and railroad workers. Under the new rule, the outcome of a union representation election will be determined by a majority of the votes cast in an election by the workers in a craft or class, a significant change from the prevailing rule that required the union to obtain an absolute majority of the workers in a class or craft in order to secure representational rights. After the final rule takes effect, unions are expected to file applications with the NMB for representation election, at Delta Airlines, one of the carriers challenging the rule. Air Transport Ass’n v. Nat’l Mediation Bd., D.D.C. No. 10-cv-00804.
- The South Dakota Circuit Court determined that the Attorney General did not exceed his authority and upheld his explanation for a proposed constitutional amendment that would guarantee South Dakotans’ right to a secret ballot both in general and union representative elections. As Amendment K on the election ballot, the measure asks voters to decide if they want to prevent others from knowing their vote with a secret ballot. Sen. David Knudson, the resolution’s sponsor, testified that the measure is inspired by the proposed federal Employee Free Choice Act and would make card-check recognition easier for labor unions to obtain. The South Dakota State Federation of Labor argued that the attorney general did not meet his statutory obligation because the amendment does not address potential state liability. The Federation has asked the South Dakota Supreme Court to review the ruling on an expedited basis because the election is only months away. South Dakota Fed’n of Labot v. Jackley, S.D. Cir. Ct., No. CIV-10-192.
- The Seventh Circuit upheld a $5.1 million damages award for a roofing contractor after the Chicago Regional Council of Carpenter violated the “most favored nations (MFN)” clause in a collective bargaining agreement. The contractor filed a grievance arguing that the carpenters union was insisting that Prate pay its employees hourly wages specified in the agreement, while the labor organized permitted other contractors to use more favorable “piecework rates.” The arbitrator found that the union had selectively enforced the agreement. The district court affirmed but reduced the award from $9.4 to $5.1 million. The Seventh Circuit affirmed all aspects of the district court’s decision by rejecting to review the merits of the arbitrator’s decision and upholding the reduced award. Prate Installations Inc. v. Chicago Reg’l Council of Carpenters, 7th Cir., No. 09-2453 & 09-2517.
- The Ninth Circuit overturned a district court decision and jury verdict which held that the US Airline Pilots Association breached its duty of fair representation to a group of former America West Airlines pilots at US Airways by abandoning an arbitrated seniority list in favor of a date-of-hire list. The Ninth Circuit determined that the pilots’ claim is not ripe for adjudication because the harm alleged by the pilots is speculative. The seniority list that is integrated in the collective bargaining agreement has not been negotiated or ratified for the combined pilots’ workforce at US Airways, which merged with America West in 2005. The court ruled the issues are not fit for judicial review until the airline responds to the union’s proposal, the parties complete negotiations, and the membership ratifies the CBA. Addington v. US Airline Pilots Ass’n, 9th Cir., No. cv-09-16564.
- Based on a prior board’s decision in Brown University and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW AFL-CIO, No. 1-RC-21368, 342 NLRB No. 42 (July 13, 2004) that teaching and research assistants have a predominately academic relationship with their school and do not have the right under federal labor law to collectively bargain, the National Labor Relations Board Regional Director dismissed a petition filed by a local of the United Auto Workers seeking a representative election for some 1,800 graduate teaching and research assistants at New York University. The UAW is appealing this issue to the NLRB, and it seeks to persuade the new Obama Board majority to reverse its 2004 decision in Brown.
- The National Labor Relations Board concluded that resident physicians at St. Barnabas Hospital in New York are “employees” within the meaning of federal labor law and have the right to unionize. The NLRB majority noted the significant differences between teaching assistants and the residents, namely that the residents work long hours, earn salaries, and are entitled to vacation and health benefits. St. Barnabas Hospital and Committee of Interns and Residents, Local 1957, SEIU, Case No. 2-RC-233356.
- National Labor Relations Board member Craig Becker denied all but one motion filed by parties represented by the National Right to Work Legal Defense Foundation which sought his recusal in 13 cases based on his prior service as associate general counsel to the Service Employees International Union and staff counsel for the AFL-CIO. For a two-year period, Becker pledged to recuse himself from all cases which SEIU is a party, but not from all cases in which local unions affiliated with SEIU are parties. SEIU, Nurses Alliance, Local 121RN (Pomona Valley Hosp. Med. Ctr.), 355 N.L.R.B. No. 40.
- The Pennsylvania Department of Labor and Industry held that 1,500 union-represented nurses and professional workers at Temple University Hospital in Philadelphia are eligible for unemployment benefits for the 28 days of their April work stoppage because the stoppage constituted a lockout by the employer, rather than a strike. The department found that because Temple unilaterally changed the tuition reimbursement policy in March 2009, it was the party that first altered the status quo and thus was responsible for the work stoppage for purposes of determining eligibility for jobless benefits.
- Legislation & Politics
- Brian Hayes and Mark Pearce were confirmed by the Senate to a full term on the National Labor Relations Board, giving the agency a full slate of board members for the first time in two years. Craig Becker, a recess appointment made by President Obama in March, still has not been formally confirmed. Becker’s confirmation has been fiercely opposed due to his past work as associate general counsel for the AFL-CIO and the Service Employees International Union. Unless Becker is confirmed by the Senate, his term will expire in 2011.
- National Labor Relations Board General Counsel Ronald Meisburg stepped down on June 20, 2010. Meisburg has served as general counsel since January 2006 under a recess appointment by former President George W. Bush and was confirmed by the Senate in August 2006. President Barack Obama appointed National Labor Relations Board attorney Lafe Solomon as acting General Counsel.
- Alaska Gov. Sean Parnell signed a new state law (S.B. 284) that requires corporations and unions to disclose their independent campaign expenditures in state election campaigns to the Alaska Public Offices Commission. The law was drafted in response to the U.S. Supreme Court’s decision striking down restrictions on corporate or union funding for independent expenditures in election campaigns. Under Alaska’s new law, corporations and unions must identify themselves, and their major contributors, in any advertisements conducted as part of independent campaigns.
- Senator Tom Harkin spoke to 1,400 delegates at the United Auto Workers Quadrennial Constitutional Convention pledging to push for the passage of the Employee Free Choice Act – one of labor’s top priorities.
- AFL-CIO President Richard Trumka urged Senators to support a provision in the House-passed Federal Aviation Administration legislation designed specifically to make it easier for unions to organize Federal Express workers who are not directly involved in air transportation.
- NLRB General Counsel Ronald Meisburg issued a guideline memorandum with instruction for regional offices on investigating unfair labor practice charges involving individual arbitration agreements that ban class or collective claims. Section 7 of the NLRB “guarantees employees the right to engage in concerted activities for the purpose of mutual aid and protection.” However, the Supreme Court in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 55 FEP Cases 1116 (1991) decided “that an employer can require an employee, as a condition of employment, to channel his or her individual non-NLRA employment claims into a private arbitral forum for resolution.”
- Under a directive issued by the DOL’s Office of Federal Contract Compliance Programs (OFCCP), the agency’s field investigators will check contractors’ adherence to President Obama’s Executive Order 13496 as part of their regular compliance reviews to ensure contractors are meeting their non-discrimination and affirmative action obligations. OFCCP’s role will be to physically inspect contractor establishments to verify the presence of the required workplace notices and to examine those employers’ contracts and purchase orders to make sure they contain the requisite employee rights language. Additionally, prior to an on-site visit, OFCCP personnel will request a minimum of three contracts, subcontracts, or purchase order to ensure that the requisite workers’ rights language is included.
- Crime & Corruption
- A federal judge appointed Dennis Walsh to oversee the operations of the New York City District Counsel of the Carpenters and Joiners of America and its benefit funds resulting from racketeering charges against union officials in a 14-year bribery scheme. Walsh will have the power to investigate and remedy wrongdoing, and implement systemic and structural reforms. United States v. Dist. Council of New York City and Vicinity of the United Bhd. Of Carpenters and Joiners of Am., S.D.N.Y., No. 90 Civ. 5722 (CSH).
- The National Labor Relations Board launched “NLRB Mobile” a Web-based mobile application that delivers recent cases, decisions, news, updates, and other information about the NLRB.
- Delegates to the United Auto Workers’ 35th Constitutional Convention elected Bob King as the union’s next president. The union was forced to hold a roll-call vote after King was challenged by Gary Walkowicz. King, 63, is eligible to serve just one term under the union’s retirement policy. King has served two four-year terms as the leader in UAW’s national organizing department. Since 2006, King has been the union’s vice president for relations with Ford Motor Co. UAW delegates elected UAW Region 4 Director Dennis Williams as secretary-treasure. Delegates also elected Joseph Ashton and Cindy Estrada, as vice presidents, to positions vacated through the election of King and retirement of Vice President Cal Rapson. Vice president nominees run for general positions, and upon election, the union president makes their specific assignments.
- Labor leaders dropped their opposition to Wal-Mart Stores Inc.’s plan for expansion within the city of Chicago after Wal-Mart agreed to use unionized labor to construct the new store.
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).
© 2010 Winston & Strawn LLP