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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
   
   

A. Organizing

• Food service employees of Host International Inc. at Tampa Airport voted for union representation by Workers United, an affiliate of Service Employees International Union. The employees had previously chosen UNITE HERE to represent them in a card check on March 18, 2009.  At the time, the Southern Regional Joint Board was in the process of disaffiliating to form a new union, Workers United.  UNITE HERE alleged that the July election of Workers United constituted a jurisdiction raid.
  

• The International Association of Machinists asked the National Mediation Board to declare that Delta Air Lines Inc. and Northwest Airlines Corp. are operating as a single carrier for purposes of representation, resulting from their October 2008 merger.  The filing with the NMB is the first step toward resolving representation questions affecting roughly 12,500 fleet service employees, flight simulator technicians, and plant protection workers.  IAM represents roughly 5,000 workers in the three job classifications at Northwest Airlines, while 7,500 Delta Air Lines workers in these classifications are not unionized. The NMB could order an election among the affected employees to resolve the issue if authorization cards submitted by the IAM show a sufficient level of support.  No timetable exists for an NMB determination about the single carrier issue.  Similarly, in late July, the Association of Flight Attendants-Communications Workers of America petitioned the NMB to declare that the merger resulted in a single carrier for the combined carriers' approximately 21,000 flight attendants.  The NMB has not yet ruled on the AFA-CWA request.  IAM also represents Northwest's 7,000 passenger service employees, stock clerks, and office and clerical workers.  IAM plans to file for single carrier declaration for Delta workers in these classifications in the near future.
  

• Employees of NeilMed Pharmaceuticals voted for union representation by Teamsters Joint Council 7. The Teamsters now represent 120 warehouse, production, and transportation workers at NeilMed's Sonoma County, California facility.

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B. Strikes & Labor Disputes

• Members of Service Employees International Union Local 1000 voted to authorize job actions including a strike in response to furloughs of California state employees ordered by Gov. Arnold Schwarzenegger (R), and the California legislature's failure to approve a contract that has been pending since February. SEIU Local 1000 represents roughly 95,000 California state employees. Faced with a growing state deficit, the governor and lawmakers approved a new budget plan for the current fiscal year that imposes three furlough days a month on state workers in order to save money.
  

• Teamster represented Amerijet International pilots went on strike against the airline on August 27, following expiration of a 30-day cooling-off period. The Teamsters are trying to negotiate a first contract with Amerijet covering 60 pilots at the Ft. Lauderdale, Florida based cargo airline since the pilots unionized in 2004. The National Mediation Board has been mediating the negotiations for the past two years as the parties reached an impasse. Under the Railway Labor Act, the end of the cooling-off period releases both parties from negotiations to engaged in self-help activities, including strikes and lockouts.
  

• Bemis Company production workers represented by Workers United Local 1426 rejected the Company's contract proposal and went on strike. A key issue between the parties is the Company's proposal requiring that the employees and their spouses participate in mandatory health risk assessments in order to remain eligible for continued health care coverage.
  

• The Office and Professional Employees International Union is threatening to strike the Teamsters unless collective bargaining negotiations are settled soon. OPEIU represents staff employees at the International Brotherhood of Teamsters headquarters in Washington, D.C.

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C. Major Contract Settlements & Negotiations

• Members of the IAM ratified a national five-year contract with United Parcel Service covering 3,200 mechanics and maintenance workers based at 33 UPS locations nationwide. The agreement provides for annual wage increases of 75 cents per hour in each of the first two years, 85 cents per hour in the third year, and 95 cents per hour in the fourth year. A wage increase in the fifth year would be based on the national standard wage increase UPS negotiates with the Teamsters, which represents the bulk of UPS' workforce. The contract also requires increased employer pension contributions.
  

• Teamster represented employees of YRC Worldwide, Inc. ratified substantial modifications to the terms of their current labor agreement, the National Master Freight Agreement. The concessions include wage cuts of five percent, suspension of pension contributions for 18-months, and reductions in employer contributions to health and welfare benefits. The concessions take effect immediately and will expire March 31, 2013, with the current NMFA term. YRC Worldwide Inc. expects to save approximately $45-$50 million per month over the remaining 44-month term of the contract.
  

• Members of the Communications Workers of America ratified a three-year labor agreement with AT&T Inc. covering 18,500 core wireline workers in the company's Midwest Region (the former Ameritech) in Illinois, Indiana, Ohio, Michigan, and Wisconsin. This contract is the first contract among six regions at bargaining tables across the country. The new contract provides for annual hourly wage increases of three percent retroactive to April 5, a three percent increase in the second year, and a 2.75 percent increase in the third year. For the first time, employees will pay premiums for their health care benefits. Pension bands under the defined benefit plan will increase two percent in each year of the contract plus cost-of-living increases in the third contract year. Mirroring the agreement in the Midwest Region, Communications Workers of America District 9 and AT&T Inc. reached a tentative agreement in AT&T's West Region covering roughly 23,000 core wireline employees in California and Nevada. A ratification vote on the tentative agreement is expected to be complete by early September. AT&T and CWA contract negotiations are continuing for workers in the Southeast Region, Southwest Region, and East Region.
  

• The International Brotherhood of Electrical Workers reached a tentative three-year agreement with AT&T Inc. covering 10,000 workers in the AT&T's core wireline business. The tentative agreement mirrors the agreements already settled between AT&T and the CWA. Under the IBEW-AT&T tentative agreement, hourly wages will increase 8.75 percent over term, pension benefits would increase two percent in each year of the agreement, and employees for the first time will be required to contribute towards health care premiums. The tentative agreement cover 8,650 workers in Illinois and northwestern Indiana represented by IBEW Local 21. The rest of the workers covered by the agreement are represented by 16 IBEW locals in New England, New Jersey, Pennsylvania, California, and the Northwest.
  

• Members of UNITE HERE ratified a national contract for roughly 2,100 workers employed by Delaware North Companies Travel Hospitality Services at food concessions and restaurants in 15 airports around the country. On August 7, the same day the contract was ratified, Workers United filed a petition with the National Labor Relations Board seeking an election among the same group of workers to determine which union represents them. Workers United disaffiliated from UNITE HERE in March and then immediately affiliated with the Service Employees International Union. Workers United contends that an election is needed to allow workers an opportunity to vote on which union they want to represent them. UNITE HERE contends that the ratified contract acts as a bar to an election and the petition should be dismissed. The new contract between Delaware North Companies and UNITE HERE is retroactive to November 1, 2008, when the prior contract expired. It includes an "Employee Bill of Rights for Respect" and also provides that employees will not pay any increases in the cost of health insurance for the contract term. Wages are not part of the national contract negotiations as wages are negotiated locally in supplemental agreements at each of the 15 airport locations. The new contract is set to expire July 31, 2010.
  

• IAM represented workers at Mercury Marine in Fond du Lac, Wisconsin rejected a contract proposal covering 850 manufacturing workers. As a consequence, the company will proceed with its plan to shift all the work from that facility to the company's manufacturing facility in Oklahoma.
  

• Members of the International Union of Electronic Workers-Communications Workers of America approved a midcontract amendment to the national collective bargaining agreement with General Electric Co. at GE Transportation Operations and Global Research Center in Schenectady, New York. As a consequence, GE will locate a new $100 million battery manufacturing plant on the Schenectady campus. The contract amendments guarantee a moratorium on plant closing and any transfer of jobs, plus no permanent reductions in force through June 19, 2011. However, the annual plant shutdown in summer 2010 is extended from the usual two weeks to nine weeks. The terms of the agreement also call for a freeze on wage increases and cost-of-living adjustments for about 1,200 workers and a new two-tier wage rate for new hires. GE is also offering a voluntary early retirement incentive program for hourly employees. The amendments apply only to those workers at the Schenectady facilities. Similar amendments were accepted by IUE-CWA members at GE's Consumer and Industrial Appliance Park in Louisville, Kentucky in June.
  

• Collective bargaining data compiled by BNA for all settlements reported through August 24 showed that the average first-year wage increase was 2.5 percent, compared with 3.6 percent reported in the comparable period of 2008. The median first-year wage increase was 2.8 percent, compared with 3.3 percent in 2008, and the weighted average was 3.4 percent, the same as that reported a year ago.
  

• According to the Human Resources and Skills Development Canada, major collective bargaining agreements reached in Canada during the second quarter of 2009 produced average base rate wage increases of 2.6 percent, larger than the 2.4 percent average in the first quarter. This figure, however, remained significantly smaller than the averages of 3.3 percent in the fourth quarter of 2008 and 4.1 percent in third quarter 2008.

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D. Administrative & Court Decisions

• The California appellate court ruled that a Los Angeles city ordinance that required the purchasers of large grocery stores to employ the prior owner's employees for 90 days was preempted by the California Retail Food Code and the National Labor Relations Act. The Los Angeles City Council had adopted the Grocery Worker Retention Ordinance in December 2005 to ensure health and safety standards in grocery establishments. Writing for the appeals court panel, Justice Sandy R. Kriegler found that the Grocery Worker Retention Ordinance was preempted by the state retail food code because the city law regulates the same field of conduct that is fully occupied by state law. Additionally, Judge Kriegler found that the city law was preempted by the NLRA because the ordinance invaded a zone reserved to market freedom and altered the bargaining process established under federal law. Cal. Grocers Ass'n v. Los Angeles, Cal. Ct. App., No. B206750, 7/30/09.
  

• The U.S. Court of Appeals for the Ninth Circuit affirmed a National Labor Relations Board order finding that the Service Employees International Union had effectively spurred its members' concerted actions in refusing to work overtime at the California Pacific Medical Center. At issue in the dispute was 29 U.S.C. § 158(g), which applies only to hospitals and requires a union to give 10-day notice for any concerted refusal to work. In May 2006, CPMC proposed a change to the way it processed linens in a manner the union said was inconsistent with a collective bargaining agreement provision prohibiting subcontracting work. While a provision in the collective bargaining agreement gave individuals the right to decline overtime, the union responded to CPMC's proposal with a petition calling for a weeklong refusal to do overtime. This resulted in a number of overtime slots that went unfilled. SEIU, United Healthcare Workers-West v. National Labor Relations Board, 9th Cir., No. 07-73028, 8/3/09.
  

• An NLRB Administrative Law Judge ruled that the United Steelworkers did not violate federal labor law by requiring nonmembers covered by a union security clause to annually renew their objection to paying agency fees for nonrepresentational expenses. United Steelworkers (Cequent Towing Prods.), NLRB ALJ West, No. 25-CB-8891, 8/6/09.
  

• The U.S. District Court for the District of Massachusetts ruled that an arbitrator acted contrary to federal labor law and public policy when he ordered, over the employer's objection, that the parties resolve all future disputes over economic terms through interest arbitration. The court determined that interest arbitration is a non-mandatory subject of bargaining, and that national labor policy would be substantially impaired by permitting an arbitrator to impose an interest arbitration provision over the objection of either party. Globe Newspaper Co. v. Int'l Ass'n of Machinists Local 264, D. Mass., No. 08-cv-11945, 8/5/09.
  

• The U.S. District Court for the District of Columbia ruled that the Allied Pilots Association's plan to discourage pilots from volunteering for optional flights for which American Airlines Inc. needed coverage constituted economic self-help that would likely disrupt the airline's business during collective bargaining negotiations in violation of the RLA. In July 2008, while collective bargaining negotiations were ongoing, American told the union of the possibility that it might furlough up to 200 pilots beginning in October 2008. The APA filed suit seeking a declaratory judgment that the RLA permitted it to encourage its members to exercise their individual rights under the bargaining agreement and not volunteer for the open time shifts. The union claimed this was for the permissible purpose of forcing American to recall some of the 1,900 pilots still on furlough. American argued that the union's proposed actions would disrupt its business and amount to economic self-help during a major dispute, with the possibility of a strike or with an improper purpose in violation of RLA Section 2 and 6. The court agreed, finding that American would likely face significant costs that could put impermissible economic pressure on it during contract negotiations. Allied Pilots Ass'n v. American Airlines Inc., D.D.C., No. 08-1335, 8/17/09.

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E. Legislation & Politics

• The Labor Department's Office of Labor-Management Standards proposed requirements for federal contractors and subcontractors to notify their employees of their rights under the National Labor Relations Act in the August 3, 2009 Federal Register. The proposed rule would require contractors to agree to conspicuously post a notice informing their employees of their rights under federal labor laws. Comments on the proposed rule, which may be found at 29 C.F.R. § 471 subchapter D, must be received within 30 days of its publication.
  

• In November 2010, Arizona voters will decide whether to approve a ballot initiative that would preempt a congressional proposal that would require the National Labor Relations Board to certify a union as the bargaining agent of employees if a majority of employees sign valid authorization cards. State Sen. Jonathan Paton (R) of Tucson, Arizona stated that the initiative would amend the state constitution and mandate the right to vote in secret on designations or authorizations for employee representation.
  

• Sen. Arlen Specter (D-Pa.), a key senator in the Employee Free Choice Act debate, stated that he would support a cloture vote on a "modified version" of the proposed EFCA. A successful cloture vote of 60 votes would allow the debate to begin on the Senate floor. Sen. Specter did not describe what a "modified version" of the EFCA would look like.
  

• The Teamsters, United Parcel Service, and FedEx are running campaigns over a provision in the Federal Aviation Administration reauthorization act passed by the House of Representatives in May that would amend the Railway Labor Act to remove coverage of "express carriers" from RLA jurisdiction, and would thus make it easier for unions to organize FedEx workers who are not directly involved in air transportation. The removal of the "express carrier" language, which FedEx opposes, would shift coverage of collective bargaining for ground delivery and other non-aviation FedEx Express employees to the National Labor Relations Act. Both UPS and the Teamsters are behind the effort. The Teamsters represent most UPS workers, while most of FedEx's workers are not unionized. Organizing under the RLA is seen as more difficult by unions because a bargaining unit consists of a nationwide workforce, while under the NLRA, the bargaining unit can be a group of workers located in one geographic area or a certain category of employees. FedEx has labeled the proposed legislation a "brown bailout" for UPS, and has noted that FedEx Express is the only part of the company that is currently under the RLA. Workers at FedEx Ground, FedEx Freight, and FedEx Office are covered by the NLRA.
  

• The Federal Reserve Board of Governors selected Denis Hughes, president of the New York State AFL-CIO, to serve as chairman of the Federal Reserve Bank of New York.
  

• Senate Majority Leader Harry Reid (D-Nev.) told an audience at the Las Vegas Chamber of Commerce that the Employee Free Choice Act will not likely make it up for full consideration before the U.S. Senate this fall. Without a full vote on the bill before midterm 2010 elections, some say the bill's congressional support could continue to erode. Rumors are circulating that up to 10 key senators have privately agreed to drop the EFCA's card-check provision.
  

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F. Crime & Corruption

• Santo "Sandy" Petrocelli pleaded guilty to making payoffs to Brian M. McLaughlin, a former state assemblyman, president of the city Central Labor Council, and business representative for International Brotherhood of Electrical Workers Local 3. In pleading guilty to one count of making an unlawful payment to a labor representative, Petrocelli admitted to having paid off McLaughlin with cash and use of a company car. McLaughlin previously pleaded guilty in March 2009 and in May 2009 was sentenced to 10 years in prison for his role.
  

• Michael Forde, the head of the New York City District Council of the Carpenters and Joiners of America, was charged with a number of offenses tied to an alleged $1 million bribery scheme to allow contractors to avoid payment of contractual wages and benefits. In a 29-count racketeering indictment unsealed in the U.S. District Court for the Southern District of New York, Forde was charged as the lead defendant along with seven other union officials, a benefit fund trustee, and a contractor. The charges include racketeering, conspiracy, wire fraud, deprivation of honest services, unlawful acceptance of payments by a labor representative, and acceptance of a loan to influence operations of an employee benefit plan.
  

• Michael P. Kelly, a former secretary-treasurer of United Transportation Union Local 586, pleaded guilty to embezzling nearly $98,000 from the local's funds. According to the U.S. Attorney's office in Cleveland, Kelly misappropriated the funds by issuing numerous unauthorized checks made out to himself and wrote checks to family members and third-parties for his benefit.
  

• Judge Charles Kocoras of the U.S. District Court for the Northern District of Illinois sentenced Thaddeus Bania, Richard Lopez, and David Rodriguez, three former officials of the International Brotherhood of Teamsters Local 743, for their roles in a conspiracy to fix union elections being challenged by a group of reform candidates in 2004. The government alleged that the defendants feared they would lose control of the local to the "743 New Leadership" candidates and launched a plan to benefit the incumbents. The scheme involved misdirecting official ballot packages, theft of undeliverable ballots, obtaining false replacement ballots, procuring and using counterfeit envelopes, and supplying false addresses to the election officer. Bania, a former comptroller and dues administrator during the election period for Local 743, was sentenced to 40 months in prison; Lopez, a former secretary-treasurer and a former president of Local 743, was sentenced to 24 months in prison; Rodriguez, a former union organizer, was sentenced to 18 months in prison. The officials were also ordered to pay $864,000 in restitution.

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G. Miscellaneous

• United Mine Workers President Cecil E. Roberts and United Mine Workers Secretary-Treasurer Daniel J. Kane received sufficient nominations from UMW local unions to be re-elected to their posts for new five-year terms. According to the UMW constitution, candidates for president, secretary-treasurer, and at-large international vice presidents must receive nominations from at least 20 percent of local unions. Roberts assumed the union presidency in 1995 and was last re-elected to a third term in 2004. Kane was first elected as secretary-treasurer of the union in 2004.
  

• The economic recession resulted in steep asset declines for multiemployer pension plans and has made it increasingly difficult for employers to maintain their contribution obligations to such plans. According to studies by BNA and Segal Co., multiemployer plans have become significantly underfunded across all industries, threatening their long-term viability. At the end of 2008, Congress passed the Worker, Retiree, and Employer Recovery Act, permitting multiemployer plan sponsors to temporarily freeze their plans' certified funding status at their 2008 levels, even if the actuarial certification of the plans' 2009 status shows the plans to be in critical status.
  

• The California Nurses Association/National Nurses Organizing Committee (representing 80,000 registered nurses), the United American Nurses (representing 45,000 registered nurses), and the Massachusetts Nurses Association (representing 23,000 registered nurses) will combine to create National Nurses United representing roughly 150,000 members. Each of the three unions will hold national conventions to ratify the pending merger.

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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:

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