Beijing
Charlotte
Chicago
Geneva
Hong Kong
London
Los Angeles
Moscow
New York
Newark
Paris
San Francisco
Shanghai
Washington, D.C.

www.winston.com

In This Issue

1. ORGANIZING
   
   
2. STRIKES & LABOR DISPUTES
   
   
3. MAJOR CONTRACT SETTLEMENTS & NEGOTIATIONS
   
   
4. ADMINISTRATIVE & COURT DECISIONS
   
   
5. LEGISLATION & POLITICS
   
   
6. CRIME & CORRUPTION
   
   
7. MISCELLANEOUS
   
   

1. Organizing

• Under a proposed rule federal contractors would no longer be allowed to claim reimbursement from the federal government for expenditures used to persuade employees to unionize or not to unionize. Under the proposed rule, which would implement an Executive Order issued by President Obama in January 2009, costs related to maintaining satisfactory labor-management relations would still be eligible for reimbursement. Comments on the proposed rule are due June 14.
  

• The National Mediation Board decided that the International Brotherhood of Teamsters should be the representative of 2,000 flight attendants employed by Republic Airways or its subsidiaries. The NMB’s decision stems from a determination that all Republic Airways Holdings subsidiaries were part of a single transportation system for representation purposes. The Teamsters previously represented 1,575 flight attendants and Republic Airlines and two of its subsidiaries, and now will also represent flight attendants at four other subsidiaries, including Midwest Airlines. In a related action a representation election will be conducted for 900 flight attendants at Frontier Airlines – a Republic subsidiary the NMB deemed separate from its others – which will offer the choice of representation by the IBT, the Association of Flight Attendants, or no union.

• The United Steelworkers-Canada will undertake its first-ever national organizing campaign. Ken Neumann said the union has organized about 12,000 workers in the past three years, but he vows to do more to reverse a decrease in private-sector union density. Steelworkers International President Leo Gerard said that the union also will continue its efforts to expand global alliances with other unions in Canada and worldwide, and pointed to its alliance with Great Britain’s Unite the Union as an example.

• The Brussels-based International Trade Union Confederation unveiled a series of online tools including videos, social networking, and websites designed to encourage unions to recruit and organize young people. Other publications of the Youth Campaign aim to show that by joining unions, young workers can influence issues they are concerned about on a global level and improve their own working conditions. AFL-CIO Secretary-Treasurer Liz Shuler previously announced a long-term initiative to develop the leadership skills of young union members and allow the federation to appeal to young workers who are not in unions.

[Top]

2. Strikes & Labor Disputes

• Members of UNITE HERE Local 2 struck Hilton Hotel Union Square in San Francisco for three days to protest the company’s failure to settle a new labor contract. Negotiations began in summer 2009. UNITE HERE has been calling for consumer boycotts of six other San Francisco hotels over contract disputes, and claims that the boycotts have caused $7 million of business to move from the hotels to others that are not being boycotted.

• Service Employees International Union Local 32BJ called off a strike against New York City apartment buildings when it reached a tentative four-year contract with the Realty Advisory Board. The contract, which covers 30,000 lobby attendants, concierges, maintenance workers and other building workers, provides for a 10 percent wage increase over term, continuation of fully employer-paid family health coverage, and secure pension benefits.

• Ending a month long strike, the Pennsylvania Association of Staff Nurses and Allied Professionals ratified a pair of four-year contracts covering 1,500 nurses and professional and technical workers at Temple University Hospital in Philadelphia. The members walked out over various contract proposals made in March, including a “gag clause” that the union said would have prohibited nurses from talking negatively about the hospital and advocating on behalf of patients. The clause was removed from the final contract, which provides for wage increases of about 7.5 percent over the term..

[Top]

3. Major Contract Settlements & Negotiations

• The Teamsters and ABF Freight System Inc. reached a tentative agreement to modify its labor contract, including a 15 percent reduction in gross wages and planned wage and mileage increases, until 2013. The agreement was reached after an independent financial adviser verified that the company was losing money, which the company estimated at $10 million per month in 2010. The modification would cover 7,000 drivers and dockworkers, 1,000 of whom are on recall. Health, welfare and pension contributions would be unaffected.

• Members of International Brotherhood of Teamsters Local 601 ratified a five-year contract with Diamond Walnut Growers, Inc., covering 900 workers at the company’s plant in Stockton, Calif. The contract — the second since the IBT ended a 14-year strike in 2005 — includes an annual 2.15 percent wage increase each year for full-time employees and a 2.5 percent increase for seasonal employees. It also caps increases on worker contributions to health insurances premiums and converts the company’s defined-benefit plan to a 401(K) plan.

• Mechanics, inspectors, cleaners, and other service employees of Hawaiian Airlines ratified a four-year contract with the International Association of Machinists. The agreement, which covers 600 workers, includes an immediate 5 percent wage hike, 3 percent wage increases in the second and third years, and a 4 percent increase in the fourth year. In addition, other wages and benefits that had been cut during the airline’s bankruptcy in 2005 will be restored.

• Members of Workers United Local 168C ratified a new collective bargaining agreement with Hugo Boss AG, under which the men’s clothing manufacturing plant will remain open for at least three years. The agreement calls for full-time employment for fewer than all the plant’s current 375 employees in exchange for defined benefits, paid holidays, and a piece work system paying $10 or more per hour. The agreement was reached after Hugo Boss announced in late 2009 that it would close the plant, near Cleveland. The union, affiliated with the Service Employees International Union, filed unfair labor practice charges in January 2010, and the National Labor Relations Board told the parties in March that it had found merit in the union’s allegations and would issue a complaint against Hugo Boss. The parties then went back to the bargaining table and reached an agreement.

• Members of Utility Workers Local 269 ratified a three-year contract with Covanta SEMASS, a Massachusetts-based energy company, that provides approximately $17,000 in bonus and wage increases to each of the 140 workers withheld during an earlier round of negotiations. An NLRB administrative law judge had ruled that SEMASS and its parent, Covanta Holding Corp., had violated the National Labor Relations Act by withholding the bonuses and wage increases because the workers voted for union representation. The contract also provides for a 3 percent wage increase for 2009, an 8.1 percent bonus based on 2008 wages and overtime, a 4.85 percent bonus based on 2009 wages and overtime, and 2.7-2.8 percent wage increases for each year between 2010 and 2013.

• Amtrak and four of its unions representing approximately 40 percent of Amtrak’s unionized work force reached identical labor contracts covering about 6,900 electricians, machinists, carmen, coach cleaners, clerks, and telegraphers. The four unions are the Transportation Communications Union; the Joint Council of Carmen, Coach Cleaners, and Helpers, which includes the Transport Workers Union and TCU; the International Brotherhood of Electrical Workers; and the International Association of Machinists. Details of the five-year contracts are being withheld pending ratification.

• Members of the Illinois Nurses Association ratified a four-year contract with the University of Chicago Medical Center, covering approximately 1,300 registered nurses. The contract increases wages 13 percent over the term, adds a new wage progression step in the second year, and increases employee health insurance contributions 10 percent per year. Separately, the nurses will vote this month on whether to continue representation by the INA or switch to the National Nurses United as their bargaining representative.

• Members of the Service Employees International Union ratified a three-year contract with Cedars-Sinai Medical Center in Los Angeles. The contract provides 1,600 licensed vocational nurses, certified nurse assistants, and other caregivers a $1.40 wage increase per hour over term, as well as 2 percent merit increases in each of the three years. Language barring subcontracting and maintaining employer-sponsored health insurance was also maintained.

• Members of United Food and Commercial Workers Local 7 voted overwhelmingly to ratify a three-year contract with JBS Swift packinghouse in Greeley, Colo., covering about 2,300 workers. The contract includes wage increases of 40 cents per hour retroactive to November 2009, and 30 cents per hour each year in the remaining three years. It also lowers health care premiums for workers with fewer than four dependents.

• Communications Workers of America and AT&T Mobility reached tentative agreement on a four-year contract covering 10,000 workers in the Southeast. If ratified the contract would increase wages 10 percent over term and result in numerous work rule changes, such as adding three new job titles and increasing on-call pay and maximum allowable severance pay. Health care coverage is addressed in a separate agreement, and was not part of the negotiations.

• Members of the United Auto Workers ratified a three-year contract with Daimler Trucks North America LLC covering 1,640 workers at three Freightliner truck and parts manufacturing plants in North Carolina. The agreements freeze wages over term, impose employee health premium contributions for the first time, and guarantee increased production at the plants. Since 2007 thousands of workers at the U.S. plants have been laid off as demand for the medium- and heavy-weight trucks they produce slumped and Daimler has shifted production to Mexico.

• Pinnacle Airlines and the United Steelworkers reached tentative agreement on a five-year contract that includes annual wage increases for 950 ramp workers, baggage handlers, and gate agents. Specific details are being withheld pending completion of the ratification vote. Pinnacle operates regional flights for Delta Air Lines as Delta Connection, with major hubs in Atlanta, Detroit, Minneapolis, and Memphis.

• First-year wage increases for contracts negotiated in the first quarter of 2010 were 1.6 percent on average, down from 2.9 percent for the first quarter of 2009. The average second-year increase was 1.9 percent, compared with 2.9 percent in first-quarter 2009, and the third-year average increase was 2.3 percent compared with 2.8 percent. Overall 33 percent of contracts reported to date in 2010 called for wage increases between 2-4 percent, 33 percent call for a wage freeze, 25 percent called for increases of less than 2 percent, and 8 percent called for wage increases of more than 4 percent.

• Major collective bargaining agreements in Canada reached an average base-rate wage increase of 4.3 percent in February, up sharply from the 2.6 percent average in January and 1.8 percent average in December 2009. The increase was due in large part to settlements in the Alberta education sector. Overall public sector agreements reached in February produced an average wage increase of 4.8 percent. Private sector agreements reached in February produced an average wage increase of 1.1 percent, down from 2.1 percent in January and 1.8 percent for 2009 as a whole.
  

[Top]

4. Administrative & Court Decisions

• Church Homes Inc., a nursing home operator in Hartford, Conn., agreed to pay 133 current and former employees $2.55 million in back pay, interest and pension credits whom it illegally replaced during a 1999 strike. The company began secretly hiring replacement workers one month into the economic strike that began after it and SEIU failed to agree on a new bargaining contract. The National Labor Relations Board initially ruled in favor of the company in 2004, but the U.S. Court of Appeals for the Second Circuit reversed the ruling. On remand the Board ruled that Church illegally failed to reinstate all the strikers.

• The National Labor Relations Board determined that a proposed bargaining unit of Sleepy’s Inc. sales employees at 32 stores in Connecticut was inappropriate for purposes of a representation election under the Board’s so-called community-of-interest standard. The Board found that employees at stores outside the unit proposed by the United Food and Commercial Workers perform the same work, use the same skills, and enjoy identical terms and conditions of employment as employees in the proposed unit, and therefore remanded the case to determine whether the unit should include additional Sleepy’s workers.

• A federal jury in San Francisco found former leaders of United Healthcare Workers-West owe the Service Employees International Union $1.5 million for breaching their fiduciary duties and violating union constitutions. The jury found that 16 defendants, including UHW president Sal Rosselli, breached their fiduciary duties and spent UHW and SEIU resources planning a disaffiliation from SEIU and the formation of a rival union after the SEIU International decided to put 65,000 home care workers into a separate local instead of keeping the workers in UHW. The individual defendants were liable for amounts ranging from $36,600 to $77,850.

• The National Right to Work Legal Defense Foundation filed a class action lawsuit against the state of Illinois, seeking to invalidate a state law and two executive orders allowing unionization of home-based health aides. The lawsuit, filed in federal district court in Chicago, alleges that the law and executive orders violate approximately 20,000 providers’ First Amendment rights to free association, free speech, and to petition the government for redress of grievances. The suit also seeks injunctive relief on behalf of 4,000 home health aides associated with a home-based support program for mentally disabled adults administered by the state Department of Human Services. Those workers are not currently unionized, but have been the target of a representation drive by the Service Employees International Union and the American Federation of State, County and Municipal Employees.

• The U.S. District Court for the District of Columbia denied a motion by the U.S. Airline Pilots Association for a preliminary injunction that would have required the appointment of a temporary trustee to take over the duties of the Pension Benefit Guaranty Corporation for U.S. Airways Inc.’s terminated pension plan. USAPA alleged that the PBGC had failed to conduct a “reasonable investigation” of the Plan’s financial affairs or take “any meaningful steps” to determine whether the former Plan trustees breached their fiduciary duties. It conceded, however, that any recovery would go to PBGC, not the Plan participants, since the PBGC assumed liability for the $510 million shortfall the Plan was facing when it was terminated.

• An NLRB administrative law judge ruled that a Rhode Island company that had purchased a camouflage cloth-printing business violated the National Labor Relations Act by creating a labor-management committee in lieu of recognizing and bargaining with the union that had represented the workers under the previous ownership. Bradford Printing and Finishing LLC conceded it was the successor employer, but argued it had a right to withdraw recognition because most of the workers signed a petition stating they no longer wanted union representation and the labor-management committee was not an employer-dominated labor union. The judge disagreed and recommended that the Board require the company to recognize and bargain with the New England Joint Board of UNITE HERE, which had previously represented the workers..
  

[Top]

5. Legislation & Politics

• Former union attorneys Craig Becker (D) and Mark G. Pearce (D) were sworn in as members of the National Labor Relations Board, ending 27 months of the Board having only two of five positions filled. Because President Obama appointed Becker and Pearce during a Congressional recess, their terms will expire at the end of the Senate’s 2011 session unless they are confirmed. Obama declined to recess-appoint his third nominee, Brian E. Hayes (R). Becker was associate general counsel for the Service Employees International Union from 1990-2004 and has been an AFL-CIO staff counsel since 2004. Pearce was a partner with a union-side law firm in Buffalo, N.Y. At a conference Board Member Wilma Liebman (D) said the Board is unlikely to make “radical” policy changes with the two recess appointments, but said the Board has an opportunity to apply the law “in a way that reinvigorates collective bargaining,” particularly in light of the economic downturn.

• Federally-registered political action committees sponsored by labor unions had the largest increase in financial activity of all PACs in 2009 compared with 2007. The Federal Election Commission reported that labor PACs reported a 12 percent gain in total receipts ($128.9 million), a 22.5 percent increase in disbursements ($95.7 million spent and $26.3 million donated to candidates), and a 1.2 percent increase in contributions from 2007. Although corporate PACs experienced decreases in receipts and disbursements for the same period, they still outspent labor PACs, taking in $152.6 million in receipts, disbursing $131.2 million, and contributing $72.1 million to candidates.

• A final rule published in the Federal Register encourages federal agencies to consider the use of a project labor agreement on a case-by-case basis on large-scale construction projects where the total cost to the government is $25 million or more. The rule, which implements a February 2009 executive order signed by President Obama, encourages agency planners to consider using PLAs early in the acquisition process, identifies a number of factors agencies may consider in deciding whether to use a PLA, and states that an agency may specify in a solicitation the terms and conditions of the PLA as appropriate and require the successful offeror to become a party to the PLA as a condition of receiving a contract award. Industry groups threatened to challenge the rule.

• The President of the AFL-CIO’s Building and Construction Trades Department said at the federation’s annual legislative conference that it would continue pushing a labor-oriented agenda even after the passage of health care reform. Mark Ayres pointed to the need for the Obama administration to act on project labor agreements, job creation programs, benefit protections, worker misclassification, and Davis-Bacon Act prevailing wage standards. Vice President Joe Biden told conference attendees the administration supports PLAs, protections against worker misclassification, and prevailing wage standards.

• A coalition of labor unions and grass-roots and faith-based organization announced demonstrations and other actions targeting Wall Street investment banks in a campaign to start putting the country’s economic recovery “ahead of their oversized profits and platinum bonuses.” The group, which includes the Service Employees International Union and the AFL-CIO, will conduct protest actions outside big banks, attend the Wells Fargo and Bank of America shareholder meetings, and conduct field meetings with Treasury Department officials aimed at holding banks accountable for loan modifications.

• The AFL-CIO said it is not “backing away” from efforts to secure Congressional passage of the Employee Free Choice Act, though the bill as currently written is stalled in the Senate. Fred Azcarate, director of the AFL-CIO’s Voice@Work Campaign, said at a town hall meeting that the federation is exploring other options for getting the provisions enacted, including possibly using administrative measures to enact portions of the bill. President Obama, a self-described “pro-union guy,” has said the administration is taking administrative steps to ensure people “get the fair chance to organize.”

• Health and safety officials for the AFL-CIO and the United Steelworkers of America praised the new Severe Violator Enforcement Program unveiled by the U.S. Occupational Safety and Health Administration, but added that they still want legislation passed to give OSHA more enforcement power. The SVEP is designed to bring more severe penalties and inspections on employers who demonstrate indifference to their OSH obligations by committing willful, repeated or failure-to-abate violations.

• The State Employees Association of North Carolina, an affiliate of the Service Employees International Union, is seeking to form an alternative political party in the state that seeks to represent the interests of working families after three Democratic representatives voted against the recent health-care reform legislation. To put forward candidates in the 2010 elections, the new political party, called North Carolina First, must provide 86,000 signatures by June 1. The union, which has about 55,000 members who are current and former state employees, has been knocking on doors in Raleigh and Charlotte.
  

[Top]

6. Crime & Corruption

• The International Association of Machinists was held not liable for conspiracy to assault members of the rival Transport Workers Union. A U.S. District Court in Pennsylvania found that the TWU had failed to show by “clear proof” that the International had participated in, authorized, or ratified a conspiracy by some IAM Local 1776 members to physically assault TWU organizers as the two unions competed to represent airline workers following the merger of US Airways and America West. The court, however, declined to grant summary judgment to IAM Local 1776 on the civil conspiracy claim, noting that the Local’s president had pled guilty to conspiracy and simple assault in connection with the incident, in which IAM organizers allegedly assaulted TWU organizers with metal chairs, bottles, and fists.

• In St. Louis former Secretary-Treasurer of Communications Workers of America Local 86823 Sherrell Mitchell was sentenced to five years of probation for embezzling $110,139 from the union over a seven-year period. She was also sentenced to six months of home detention and 200 hours of community service, and ordered to pay full restitution. Mitchell admitted she wrote unauthorized checks to herself and withdrew cash from the union’s account, spending most of it at a local casino.

• A former business representative and treasurer of the International Union of Operating Engineers Local 17 pleaded guilty to one felony count of racketeering conspiracy. Gerald H. Franz admitted to committing acts of bodily harm, destruction of property, workplace sabotage, and violations of the Racketeer Influenced and Corrupt Organizations Act in connection with the use of fear and intimidation to obtain wages, benefits and jobs from a Buffalo construction company. Franz, who faces a maximum sentence of 20 years and a $250,000 fine, is one of 12 members of Local 17 to be indicted in connection with the conspiracy.

• Wayne Mitchell, the former president of the Mailers Union, a/k/a Communications Workers of America Local 14170, pleaded guilty to charges of embezzling more than $200,000 from his local in unauthorized salary and expenses. After Mitchell stepped down from his post in June 2008, he was replaced by Larry DeAngelis, who pleaded guilty in a separate embezzlement scheme. Mitchell will be sentenced Sept. 8, and DeAngelis will be sentenced July 28. The union represents workers at the New York Times, New York Post, the Daily News, and other newspapers.
  

[Top]

7. Miscellaneous

• The Voluntary Employee Benefit Association for Ford Motor Co.’s retirees expects to receive approximately $1.78 billion from the sale of warrants to purchase Ford common stock. In what was called the largest warrant auction in history, the VEBA announced the auction to purchase Ford shares for $5 per warrant on a day when shares were trading at $13.57 per share. The VEBA will receive all proceeds from the sale.

• Service Employees International Union Executive Vice President Mary Kay Henry will likely be elected May 8 to replace Andy Stern as president of the union. Stern’s surprising retirement announcement set off a contest between Henry and SEIU Secretary-Treasurer Anna Burger, who withdrew her name from consideration after Henry secured the endorsement of four of seven executive vice presidents.

• Leaders of the 50,000-member Association of Flight Attendants elected Veda Shook, an 18-year Alaska Airlines flight attendant and the union’s current vice president, to a four-year term as president. Also elected were Sara Nelson as vice president and Kevin Creighan, who was reelected as the union’s secretary-treasurer. Shook will replace Patricia Friend, who served four terms as the union’s president, when Friend retires in 2011.

[Top]

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