Winston & Strawn LLP: Labor News February 2009

In This Issue

JetBlue Airways pilots rejected union representation, the National Mediation Board reported Feb. 3. Under NMB procedures, a majority of employees who are eligible to vote must vote in favor of union representation, making abstentions the equivalent of a vote against representation. As only 33 percent of JetBlue’s pilots voted for representation by the JetBlue Pilots Association, the bid for unionization lacked the required support and was defeated.

The National Union of Healthcare Workers (NUHW) filed a representation petition on Feb. 5, calling for an election to certify the union as the bargaining agent for 14,000 workers at 32 Catholic Healthcare West hospitals in California. Since its formation in late January, the union has also filed more than 60 similar petitions to represent an additional 10,000 workers at hospitals and nursing homes throughout California. NUHW formed Jan. 28 after SEIU president Andy Stern placed the 150,000-member United Healthcare Workers West local under trusteeship and removed its elected leaders.

The NUHW filed a representation petition Feb. 23, seeking to represent 50 environmental services workers at Providence Tarzana Medical Center in Los Angeles. The union also filed a petition to represent workers at Lakewood Regional Medical Center in Los Angeles on the same day.

The National Mediation Board approved a request by the Aircraft Mechanics Fraternal Association to revoke its certification to represent mechanics for Northwest Airlines, which merged with Delta Air Lines in October 2008. The union requested that its certification be revoked after failing to obtain signed authorization cards from 35 percent of the combined workforce, a prerequisite to petitioning for a representation election at the merged carrier.

The NUHW filed petitions with the NLRB seeking to represent 50,000 Kaiser Permanente employees, and replace the SEIU, which currently represents these employees. The NUHW also requested that Kaiser Permanente agree to certification by card check authorization, that the company cease bargaining with the SEIU, that it place union dues in an escrow account until the representation dispute is resolved, and that it allow the NUHW equal access to employees in covered facilities.

The Canadian Auto Workers union announced that it will engage in mid-term contract negotiations with General Motors, Ford, and Chrysler to bargain over possible concessions related to the three companies’ labor costs at plants in Canada.

New Process Gear Inc., an auto supply manufacturing plant in Syracuse, N.Y., announced that it would begin winding down operations after members of UAW Local 624 voted to reject proposed concessions. The proposed agreement would have altered work rules and reduced seven days of leave per year immediately, and would have cut wages if financial goals were not met by July.

The Society of Professional Engineering Employees in Aerospace Local 2001 announced Feb. 5 that its members had voted 209-28 to reject the latest contract proposal from Boeing Co., after the union had urged the membership to reject the offer. The union stated that the offer included 3 percent wage-increase pools each year, but did not guarantee wage increases to individual workers, and reduced health benefits and pension benefits for new workers.

On Feb. 6, the Communications Workers of America announced that its membership voted to authorize the CWA president to call a strike if the union was unable to reach a collective bargaining agreement with AT&T Mobility. The parties began negotiating a new contract on Jan. 22 to replace the four-year contract covering some 20,000 workers in 36 states, which was set to expire at midnight Feb. 7. The union has not initiated a strike to date.

On Feb. 12, 630 Teamsters representing truck drivers in Washington, Oregon, and Idaho made an unconditional offer to return to work for Oak Harbor Freight Lines, Inc. and end a four-month strike. The truck drivers walked out on Sept. 22, alleging that Oak Harbor had committed unfair labor practices during contract negotiations with the IBT.

The Bureau of Labor Statistics announced Feb. 11 that major lockouts and strikes idled 72,000 employees in 2008, down from 189,000 in 2007. However, these strikes and lockouts resulted in nearly 2 million lost work days in 2008, up from 1.3 million lost days in 2007.

The Aircraft Mechanics Fraternal Association ratified a new four-year contract with Southwest Airlines. The agreement, which covers 1,500 Southwest mechanics, provides for a 10 percent wage increase over term, a 3 percent ratification bonus, and a 1 percent annual productivity bonus.

American Federation of State, County and Municipal Employees Local 3299 ratified a five-year agreement with the University of California that would cover 8,500 university service workers, which includes a 16 percent wage increase over term and limits on health care cost increases.

The United Food and Commercial Workers announced that its membership had ratified new collective bargaining agreements with Smithfield Foods at the company’s meatpacking plants in Mason City, Iowa and Crete, Neb. The contracts raise wages by at least $1.40 per hour over term, enhance health care benefits, and improve the company’s pension plans.

Alaska Airlines and the Association of Flight Attendants-Communications Workers of America announced Feb. 11 that they reached a tentative two-year extension of a collective bargaining agreement covering 2,830 flight attendants. If ratified, the agreement would increase wages 1.5 percent each of the next two years, would not change any work rules or health insurance premiums, and would extend the collective bargaining agreement through April 30, 2012. The ratification process is expected to be complete by mid-March.

The United Steelworkers and Royal Dutch Shell PLC reached a tentative three-year agreement Feb. 3, which would set national minimum standards of wages, benefits, and working conditions for all Steelworkers working for major oil companies. The agreement, which covers 24,000 workers at Shell, BP, Exxon Mobil, Chevron, Amoco, ConocoPhillips, and 38 other independent refineries, includes nine percent wage increases over term, a $2,500 ratification bonus, and continues the employer’s 80 percent contribution toward health insurance premiums.

The Service Employee International Union and Addus HealthCare agreed to extend their 2005 labor agreement covering 8,000 workers through July 31, 2010. The national agreement addresses non-economic issues, such as a neutrality agreement, organizing, basic rights, and work rules, while local agreements will address wages, benefits, and other local issues.

Members of the Teamsters Local 1150 ratified a new five-year contract with Sikorsky Aircraft Corp., covering 5,100 workers at the company’s plants in Stratford, Bridgeport and Shelton, Conn. and West Palm Beach, Fla. The new contract provides for wage increases of 18.5 percent over term, two ratification bonuses totaling $5,000, prescription cost savings, semiannual cost-of-living adjustments, and annual increases to the employer match for the 401(k) plan.

The United Auto Workers and Ford Motor Co. reached a tentative agreement Feb. 23 that would modify the voluntary employee beneficiary association trust provision to fund hourly retirees’ health care benefits, allowing Ford to use Ford common stock to fund up to half of the trust. The agreement would modify the collective bargaining agreement reached in 2007, and is subject to approval by the union and a federal court. The change parallels concessions that GM and Chrysler received from the UAW in December as part of restructuring efforts, as required by the Treasury Department as a condition of $17.4 billion in federal loans.

Collective bargaining data compiled by BNA through Feb. 23 for all settlements showed that the average first-year wage increase was 2.9 percent, compared with 3.8 percent in the comparable period of 2008. The median first-year wage increase for contracts reported to date in 2009 was 3 percent, the same as that reported in 2008, and the weighted average was 3.8 percent, compared with 5.1 percent.

In a “man-bites-dog” story, the Federal Labor Relations Authority ruled that the NLRB committed an unfair labor practice by refusing to bargain with the union that had been certified as the bargaining representative of the agency’s employees in a nationwide consolidated unit. NLRB general counsel Ronald Meisburg announced the board’s intention to obtain judicial review of the FLRA’s determination of the applicable bargaining unit. (NLRB, 63 F.L.R.A. No. 41).

The U.S. Supreme Court ruled Feb. 24 that Idaho’s Voluntary Contributions Act did not run afoul of the First Amendment by banning local government employers from making payroll deductions for political activities. Several public employee unions had challenged the IVCA, arguing that it restricted their political speech. The majority held that the law did not restrict political speech, but merely declined to promote political speech by allowing checkoffs for political activities. (Ysursa v. Pocatello Educ. Ass’n, U.S., No. 07-869).

The National Labor Relations Board ruled Jan. 30 that Narricot Industries LP violated the National Labor Relations Act by withdrawing recognition from a local of the Carpenters and Joiners of America. The board affirmed the administrative law judge’s decision that the company was not justified in withdrawing recognition based on an employee decertification petition because that petition was started with the support of the company. The board further agreed with the judge that the appropriate remedy was an order compelling the company to bargain with the union local. (Narricot Indus. LP, 363 N.L.R.B. No. 82)

In a 2-1 opinion, the Court of Appeals for the District of Columbia Circuit overturned an NLRB decision Jan. 30 and held that employees who left work without permission to attend a bargaining session on the effects of a plant closing were not engaged in activity protected by the NLRA. The court held that Northeast Beverage Corp., had a legitimate reasons for suspending and eventually firing these employees. The court reasoned that this walkout was not related to an ongoing labor dispute and that the employees had no compelling reason to attend the bargaining session. (Northeast Beverage Corp. v. NLRB, D.C. Cir., No. 07-1206)

On Jan. 30, the NLRB found that the International Union of Operating Engineers acted within its rights in fining and expelling a member who had solicited other unions to enter into collective bargaining agreements with Hydro Excavating LLC for work that the Operating Engineers believed to be within its traditional jurisdiction. The board reversed an administrative law judge’s decision, who found that the union discipline indirectly coerced Hydro in its selection of company representatives for collective bargaining, grievance processing, and related activities, in violation of Section 8(b)(1)(B) of the National Labor Relations Act. The board concluded that as the expelled member had not entered into collective bargaining agreements with the prospective unions, but rather merely solicited information, his activities were not covered by Section 8(b)(1)(B). (Local 324, Int’l Union of Operating Eng’rs (Hyrdo Excavating LLC), 353 N.L.R.B. No. 85)

On Feb. 3, Interstate Bakeries Corp. emerged from Chapter 11 bankruptcy proceedings, after reaching modified labor agreements with the more than 400 union locals who represent the company’s workforce. A federal bankruptcy court approved the IBC’s proposed reorganization plan Dec. 5 after International Brotherhood of Teamsters members and Bakery, Confectionery, Tobacco Workers locals ratified modified labor agreements in November and early December, respectively. These modifications were a condition of the plan funding commitments. (In re Interstate Bakeries Corp., Bankr. W.D. Mo., No. 04-45814-JWM)

The New Jersey Supreme Court ruled Feb. 5 that a local ordinance in Lawrence Township, N.J. violated the First Amendment right to free speech and was overbroad in a case where the township applied the ordinance to prohibit a union from displaying a large balloon in the shape of a rat as part of a labor protest. The decision overturned the conviction of an assistant business manager for IBEW Local 269, who displayed the rat when protesting the use of non-union labor at a construction site. (State v. DeAngelo, N.J., No. A-73-07)

On Feb. 12, a federal judge held that an employee who returned to work following the settlement of an unfair labor practice charge could not count lost time resulting from the disputed termination toward the eligibility requirements of the Family Medical Leave Act. The judge ruled that as the case was settled and the legality of the employer’s action was never resolved, the employee could not count the period of layoff as “hours of service” under the FMLA. (Shaw v. Total Image Specialists Inc., S.D. Ohio, No. 2:07-cv-00717)

On Feb. 17, the National Labor Relations Board overturned the results of a representation election for dealers at the Trump Marina Hotel and Casino in Atlantic City, N.J. The board concluded that the employer had improperly interrogated and threatened workers about union support and issued disciplinary warnings and suspensions to employees because of union activities, and that this conduct impacted the outcome of the May 11, 2007 election, in which the dealers voted 183-175 against representation by the United Auto Workers. (Trump Marina Assocs., 353 N.L.R.B. No. 93)

On Feb. 4, union and allied groups presented Congress with a petition, signed by 1.5 million workers, urging Congress to pass the Employee Free Choice Act. The groups gathered near the U.S. Capitol as part of a rally organized by Change to Win, the AFL-CIO, and American Rights at Work. Following that, on Feb. 17, national labor leaders, workers, and elected officials held a press conference and rally to urge Congress to pass the Employee Free Choice Act.

President Obama signed an executive order Feb. 6 that allows federal agencies to require federal contractors on construction projects worth $25 million or more to use project labor agreements, mandating that the contractor pay prevailing union wages. The executive order revokes a Bush-era ban on requiring project labor agreements as part of bidding for government construction contracts and restores a Clinton administration rule.

The AFL-CIO and Change to Win filed a complaint with the IRS seeking to revoke the tax-exempt status of the Center for Union Facts and the Marcus Foundation. The complaint alleges that in the period leading up to the 2008 election, these organizations engaged in partisan political activity by asking for contributions for Republican Senate candidates who opposed the Employee Free Choice Act.

On Feb. 20, the Labor Department’s Office of Labor-Management Standards announced that it is delaying the effective date of a new rule that would require unions to disclose additional information concerning compensation received by officers and employees of large unions, parties buying or selling union assets, and specified types of receipts. The rule, which revises Form LM-2, was set to take effect Feb. 20, but is now scheduled to take effect Apr. 21 to allow for additional comment on the merits of rescinding or retaining the rule.

Congressional Republicans introduced the Secret Ballot Protection Act Feb. 25, in response to the Employee Free Choice Act. The bill would amend the National Labor Relations Act to ensure that a secret ballot election conducted by the National Labor Relations Board would precede union recognition by an employer, making it an unfair labor practice for an employer to recognize a union in the absence of such a secret ballot election.

[Top]

A federal judge sentenced Kenneth Campbell, former business manager of International Union of Operating Engineers Local 825, to serve 46 months in prison, to pay a $40,000 fine, and to pay more than $240,000 in restitution to union benefit funds and the union itself. Campbell pleaded guilty in October 2008 to stealing from the union and accepting cash from contractors at several construction sites while serving as the business manager for the union.

A federal judge in Ohio sentenced Thomas Leonard, the former recording secretary for Laborers International Union Local 500, to one year of probation, citing his admission of responsibility, lack of a criminal record, and the fact that he reimbursed the union for misspent funds as mitigating factors. Leonard pleaded guilty to embezzling union funds in October 2008.

On Feb. 6, 14 vice presidents of UNITE HERE filed a lawsuit seeking to end the 2004 merger between UNITE and HERE and a declaration that the constitution of UNITE HERE is unenforceable because the merger has failed its essential purpose. The plaintiffs seek to enable the joint boards to disaffiliate from UNITE HERE with their property and assets intact in proportion to the assets brought into the merger. The UNITE HERE general executive board rejected a resolution proposing that the merger be dissolved on Feb. 9. The general president of UNITE HERE, Bruce Raynor, had filed a related suit Jan. 22 against John Wilhelm, the executive with whom Raynor shares equal authority. Raynor’s suit alleges that Wilhelm and a supporting faction within the union are attempting to take control of UNITE HERE and have exceeded the union’s constitutional authority.

On Feb. 17, the Newspaper and Mail Deliverers’ Union, which represents 1,500 newspaper deliverers, voted to affiliate with the International Brotherhood of Teamsters.

The United American Nurses, the California Nurses Association, and the Massachusetts Nurses Association announced that they reached an agreement in principle to collectively form a national nurses union. The combined membership of the new United American Nurses-National Nurses Organizing Committee would represent more than 150,000 registered nurses and would focus on organizing nurses nationwide.

If you have questions about items that appeared in this bulletin, or would like to learn more about any of these topics, please contact William Miossi at (202) 282-5708 or (312) 558-6109, or one of the other labor & employment relations partners listed here:

Attorney advertising materials.

These materials have been prepared by Winston & Strawn LLP for informational purposes only and are not legal advice. Receipt of this information does not create an attorney-client relationship. No reproduction or redistribution without written permission of Winston & Strawn LLP.

Along with this briefing, a library of all the Winston & Strawn LLP briefings published to date can be accessed by visiting the Publications Library section of Winston & Strawn's Web site (www.winston.com).

Copyright © 2009