Winston & Strawn LLP: Labor News February 2008

In This Issue

The National Mediation Board (NMB) set dates and balloting procedures for a representation election of 9,300 active and furloughed United Airlines aircraft mechanics. The Aircraft Mechanics Fraternal Association currently serves as the mechanics’ bargaining representative, however, the International Brotherhood of Teamsters (IBT) has campaigned for two years to represent employees at United. In a letter to IBT representatives, UAL Corp., and the AMFA, the NMB announced a four-week voting period. Voting commenced February 26 and will conclude March 31.

The Association of Flight Attendants (AFA)-CWA filed an election petition with the NMB on February 14 as part of its campaign to organize the 12,000 Delta Air Lines flight attendants. The AFA-CWA claims that “a solid majority” of the airline’s flight attendants have signed authorization cards. This is the second attempt by the AFA-CWA to organize Delta’s flight attendants. In 2002, only 29 percent of the 5,520 ballots cast were in favor of union representation.

The American Federation of State, County, and Municipal Employees (AFSCME) won the right to represent nearly 17,000 child care providers outside New York City when child care providers across New York State voted for representation in a mail ballot election. The bargaining unit consists of license-exempt, in-home providers outside of New York City. The organizing campaign immediately followed issuance of an executive order signed in May 2007 by New York Gov. Eliot Spitzer granting an estimated 50,000 child care providers, who receive payments directly or indirectly through state, city, or local government funding, the right to organize and bargain collectively.

Passenger service and ramp workers of Piedmont Airlines, a subsidiary of U.S. Airways, rejected representation by the Communications Workers of America (CWA). Of 2,574 eligible employees, 1,228 cast ballots for CWA, 60 votes short of the majority required under the Railway Labor Act.

The NMB authorized a representation election by U.S. Airways pilots on whether to replace the Air Line Pilots Association (ALPA) with the US Airline Pilots Association (USAPA). The NMB scheduled balloting to begin March 20 and end April 17. The USAPA was formed in 2007 after an arbitrator, chosen by locals of America West and U.S. Airways, issued an award merging two seniority lists in a way that placed many younger America West pilots on active duty ahead of about 1,000 more experienced U.S. Airways pilots who had been furloughed.

The Federal Trade Commission criticized the State of Ohio’s efforts in unionizing independent home health care providers saying that establishing collective bargaining would endorse anti-competitive conduct by permitting competing providers to agree on the prices they would accept for their services. Under an Ohio executive order issued last July by Governor Strickland, collective bargaining would be established for independent home health care providers and the state would recognize one representative as the exclusive collective bargaining representative for all independent home health care workers.

Four thousand home care providers in Maryland voted in favor of representation by AFSCME in a mail ballot election.

Service Employees International Union (SEIU) Local 121RN survived an Natinal Labor Relatons Board (NLRB) decertification election among registered nurses at Pomona Valley Hospital Medical Center in Pomona, California. Local 121RN had been in the process of negotiating a second contract when a group of nurses filed a decertification petition with the NLRB on December 12, 2007.

The NLRB announced that it will display an American flag at all representation elections conducted by the agency. NLRB General Counsel Ronald Meisburg said that the flag will “lend dignity to the election process and communicate to all participants that they are involved in an official activity of the Government of the United States.”

Members of United Auto Workers (UAW) Local 2069 struck a Volvo truck plant in New River Valley, Virginia on February 1 when their collective bargaining agreement expired and negotiations broke off.

There were 21 new lockouts or strikes involving 1,000 workers 2007, compared to the 20 that were initiated in 2006, according to the Bureau of Labor Statistics. Major work stoppages idled more than twice as many employees in 2007 compared to the previous year, but total worktime lost as a result fell by half. The largest work stoppage in terms of lost workdays in 2007 was the nationwide strike by members of the Writers Guild of America against the Alliance of Motion Picture and Television Producers which resulted in 409,500 lost workdays in 2007.

The UAW struck five manufacturing facilities of American Axle & Manufacturing Holdings Inc. after their collective bargaining agreement expired and contract negotiations broke off. The UAW is fighting American Axle’s proposals for wage reductions and elimination of future retiree health care.

General Motors Corp. and the UAW reached an agreement on a comprehensive special attrition program of early retirement and buyout packages for the company’s 74,000 hourly employees represented by the UAW. Retirement eligible workers are being offered pension enhancements of $45,000 for production workers and $62,500 for skilled trades workers. For workers not eligible for retirement, GM is offering a variety of pension and buyout incentives including early retirement options with full benefits or cash buyouts for workers who voluntarily quit and sever all ties to the company.

Members of the IBT have ratified the National Master Freight Agreement, which provides a general wage increase of $2.20 per hour over term for full-time employees. The five-year National Master Freight Agreement covers 70,000 employees working for New Penn Motor Express; Roadway Express Inc.; USF Holland; and Yellow Transportation. ABF Freight System Inc., has also indicated that it will accept the NMFA pattern by adopting agreements with similar terms.

The Writers Guild of America (WGA) Negotiating Committee recommended the terms of a proposed contract with studios and networks to the WGA West Board and WGA East Council on February 10, and both bodies voted unanimously to recommend it. Members of the WGA voted by a 92 percent majority to end their 100-day strike against the major studios and networks on February 12. The WGA announced that the contract was ratified on February 26. The new contract establishes new rules and rates of compensation and residuals for members’ work written for, used, or re-used on new forms of media. The new contract will run from February 13, 2008, through May 1, 2011.

Major collective bargaining agreements reached in Canada during 2007 produced average base-rate wage increases of 3.3 percent, up from the 2.5 percent average in 2006, according to Human Resources and Social Development Canada.

Data compiled by BNA in 2007 showed that lump-sum payment provisions were part of 12 percent of all non-construction collective bargaining agreements, compared with 11 percent in 2006 and 14 percent in 2005, and below the peak of 36 percent reported in 1988. The analysis is based on a database of 842 collective bargaining agreements covering more than 1.9 million workers. Construction contracts were excluded as none contained lump-sum pay provisions. Additionally, holiday, vacation, and other such bonuses were not included in the analysis.

Collective bargaining data compiled by BNA through February 25 for all settlements show that the average first-year wage increase was 3.8 percent, compared with 3.6 percent in the comparable period of 2007. The median first-year increase for settlements reported to date in 2008 was 3 percent, the same increase as that reported in 2007, and the weighted average was 5.1 percent, compared with 1.6 percent in the same period a year earlier.

The Teamsters and DHL reached a tentative agreement on a nationwide master contract to cover the majority of DHL’s Teamster-represented employees. The tentative contract was modeled after the National Master Freight Agreement, but details of the agreement will not be released until after local leaders are briefed on the settlement. The tentative agreement would cover about 8,000 Teamsters-represented truck drivers, freight handlers, warehouse workers, and call center representatives at dozens of locations across the country.

Members of the UAW voted by a 98 percent majority to approve a new contract with Chrysler Financial Services Americas LLC. The four-year contract, which covers 350 workers, substitutes annual lump-sum bonuses for general wage increases.

The U.S. District Court for the Northern District of Ohio ruled that UAW Local 12 was liable for sexual harassment under Title VII of the 1964 Civil Rights Act and Ohio law for the actions of a union steward, Richard Lott, who harassed a female employee at a Daimler Chrysler Jeep plant in Toledo, Ohio. UAW Local 12 was also found liable for breach of its fiduciary duty of fair representation, as the union had actual knowledge that Lott had harassed plaintiff and arranged for her to lose her job temporarily after she broke off a two-year relationship with him. Sanders v. United Auto Workers Local 12.

The Illinois Appellate Court held that the Chicago Regional Council of Carpenters’ use of a humorous poem directed at the target of a labor dispute cannot be considered an actionable defamatory event. In so ruling, the Appeals Court reversed a $2.35 million jury verdict in favor of J. Maki Construction Company. J. Maki had alleged that the Chicago Regional Council’s use of the term “crappy” in a poem printed on handbills and passed out at picket sites constituted defamation per se and suggested incompetence in the company’s professional abilities. The court found that statements containing no factual assertions are protected under the First Amendment and as such cannot be viewed as a basis for a defamation action. J. Maki Constr. Co. v. Chicago Reg’l Council of Carpenters.

The U.S. Supreme Court agreed to hear a case that could have far-reaching consequences for the scope of labor arbitrations. The Court will consider the issue whether an arbitration clause contained in a collective bargaining agreement, freely negotiated by a union and an employer, which clearly and unmistakably waives the union members’ right to a judicial forum for their statutory discrimination claims, is enforceable. The U.S. Court of Appeals for the Second Circuit held that “mandatory arbitration clauses in collective bargaining agreements are unenforceable to the extent they waive the rights of covered workers to a judicial forum for federal statutory causes of action.”

The NLRB is considering a proposed rule that would create a new type of “consent” election procedure under which a union and an employer could jointly file a petition for a Board-conducted election that would be held on an agreed-upon date within 28 days. The notice of proposed rulemaking published February 26 provides that interested parties have 30 days to file comments about the proposal or to suggest alternatives. 14 Penn Plaza LLC v. Pyet.

An administrative law judge (ALJ) directed the NLRB to conduct a new secret ballot election among 134 security guards employed at the Tropicana Casino & Resort in Atlantic City, New Jersey. (Adamar of N.J. Inc. v. Int’l Union, Security, Police & Fire Profs., NLRB ALJ, No. 4-RC-21334, 2/13/08). ALJ Paul Buxbaum found objectionable conduct prior to the election when the security guards’ supervisor engaged in repeated “close and intimidating surveillance” of the union’s handbilling and solicitation activities using radio communications.

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The recent nominations of Robert J. Battista, Dennis P. Walsh, and Gerald Morales to the NLRB are in limbo due to opposition by Democrats and unions. Democrats, many critical of Battista’s rulings while chairman of the NLRB, could delay confirmation of President Bush’s nominees until after the Presidential elections, after which the new President could nominate their own NLRB candidates. AFL-CIO President John Sweeney alleges that the NLRB under President Bush “has abandoned its statutory mission to protect workers’ rights to form unions and promote collective bargaining.” Senator Edward M. Kennedy (D-MA) and Senator Claire McCaskill (D-MO) also blasted the nominations.

The National Federation of Federal Employees endorsed Senator Hillary Clinton for President.

The Service Employees International Union endorsed Senator Barack Obama for President.

The Change to Win labor federation endorsed Senator Barack Obama for President. Four of the Change to Win unions–UNITE HERE, United Food and Commercial Workers, Service Employees International Union, and the International Brotherhood of Teamsters–had previously announced their support for Obama. The United Farm Workers, another Change to Win union, endorsed Senator Hillary Clinton in January.

The Utility Workers Union of America endorsed Senator Obama.

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An unsealed indictment in the U.S. District Court for the Eastern District of New York named 62 defendants and charged various racketeering acts by the Gambino crime family, including murder, extortion, embezzlement, loan sharking, gambling, and money laundering. According to the indictment, in one of the alleged schemes, contractors stole from the benefit funds of International Brotherhood of Teamsters Local 282 by underreporting working hours and thus evading benefit contribution requirements. Additionally, the indictment charged that officials of two locals of the Laborers’ International Union collaborated with other defendants on a variety of corruption schemes. United States v. Agate.

Defendant, Michael “Mickey” Annucci, was convicted by a federal jury on charges related to his role in a scheme to defraud union benefit funds in the U.S. District Court for the Southern District of New York. Annucci, a former shop steward for the Carpenters and Joiners of America Local 157 had omitted more than 22,000 hours from his shop steward report for a Manhattan job site of L&D Installers Inc., prosecutors charged. The under-reporting enabled the employer to cheat the benefit funds of contributions owed and carpenters on the job were paid lower wages and lost credit toward pension, vacation, and retirement benefits, prosecutors said.

Kyle Batts, a former secretary-treasurer for the International Brotherhood of Electrical Workers Local 738, pled guilty to embezzling more than $40,000 from the union over a three-year period by using a union credit card to buy personal goods and services for himself.

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The AFL-CIO filed a lawsuit in federal court challenging the Department of Labor's (DOL) new financial reporting requirements, alleging the DOL lacks the authority to impose the rules and that the new requirements are arbitrary and capricious. At issue are changes to the LM-30 reporting requirements that require unions and certain union officials to report loans or payments from companies doing business with the union, including banks and credit unions. AFL-CIO v. Chao.

The AFL-CIO granted a direct charter to the American Federation of Television & Radio Artists (AFTRA). AFTRA became the 56th union affiliated with the AFL-CIO. Additionally, AFTRA announced that its national board approved a resolution that “sets the stage” for the union to negotiate contracts separately from the Screen Actors Guild.

Sal Roselli, president of the 150,000 member United Healthcare Workers West, one of the largest locals of the Service Employees International Union (SEIU), resigned from the union’s executive committee citing an overly zealous focus on growth at any cost, as well as undemocratic practices imposed upon the local by the international organization and its president. Dave Regan, another executive committee member stated that some presidents of other SEIU locals are angry that Roselli is putting his personal agenda above the common agenda of the union. Roselli plans to remain the president of United Health Care Workers West.

Eleven of 15 Philadelphia-based building trades unions disclosed statistics on membership demographics and agreed to take steps to recruit more women and racial and ethnic minorities, under resolutions approved by the Philadelphia City Council. The Council’s action removed a hurdle that had prevented the city, state, and Pennsylvania Convention Center Authority from moving forward with a proposal for a $700 million expansion of the downtown convention center.

NLRB officials issued two guideline memos to Regional office personnel concerning the investigation and litigation of “salting” cases under standards recently adopted by the NLRB. General Counsel Ronald Meisburg’s memo addressed the board’s decision in Toering Elec. Co., 351 N.L.R.B. No. 18, (2007), that a salt applying for a job is not entitled to protection against discrimination based on union affiliation or activity unless the salt is “genuinely interested” in an employment relationship with the hiring employer. Meisburg explained that Board personnel have the burden to show that the salt made a bona fide application for employment and that he or she had a genuine interest in becoming employed by the employer. The second memo, issued by Associate General Counsel Richard Siegel addressed the board’s decision in Oil Capitol Sheet Metal Inc., 349 N.L.R.B. No. 118 (2007), that it will no longer apply a rebuttable presumption that a salt who was not hired because of his or her union activity would have continued to work indefinitely for the employer and is entitled to back pay for the period from the date of discrimination until the employer makes a valid hiring offer. The board held that the general counsel must prove that the salt, if hired, would have worked for the employer for the period claimed.

Douglas Fraser, former president of the UAW, died on February 23, 2008, at the age of 91. Fraser served as UAW president from 1977 to 1983.

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