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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

• The Association of Flight Attendants-Communication Workers of America has filed a petition seeking an election to represent 900 flight attendants at Frontier Airlines, which was recently purchased by Republic Airways Holdings. This latest petition is the union’s fifth attempt to obtain representative status on behalf of Frontier’s flight attendants. An election will be scheduled following verification by the National Mediation Board that enough signed union representation cards have been collected.
  

• The International Brotherhood of Teamsters filed a petition with the National Mediation Board seeking to represent 8,000 fleet service workers at Continental Airlines. A majority of the fleet workers, which include baggage handlers and ramp workers, signed authorization cards enabling a representation election. To obtain representation, a majority of all eligible workers must vote in favor of union representation. Continental’s fleet service workers have rejected five union representation efforts in the past 13 years. The Teamsters, which already represent Continental’s aircraft mechanics, expect the representation election to occur in 2009.
  

• Employees at two California health care facilities voted for representation by the National Union of Healthcare Workers. Employees at Sequoias Portola Valley voted 40-20 for the union, and employees at Hospital Housekeeping Systems voted 35-7 for representation. The NUHW was founded in January by former officers of United Healthcare Workers West and has since filed more than 100 petitions for election. The Service Employees International Union – parent of the local United Healthcare Workers West, who removed the elected officials now heading up the NUHW – filed unfair labor practice charges in all of the cases, initially delaying the elections. (See below for additional details.)
  

• The NLRB certified the Covington Paperworkers Union to represent approximately 900 workers at MeadWestvaco’s paper mill in Covington, Virginia. The election, which was a runoff election between the Paperworkers union and incumbent United Steelworkers Local 8-675, was the third representation election in two years. The Steelworkers did not challenge the results but intend to maintain a presence at the mill by inviting workers to maintain associate memberships in the Steelworkers union.
  

• Two bargaining units at Norwood Hospital in Norwood, Massachusetts, consisting of approximately 600 employees, elected the SEIU to be their representative. This is the third successful campaign by the SEIU at a hospital operated by Caritas Christi Health Care since Caritas agreed in January to maintain a “cooperative” relationship with SEIU and allow uncontested elections among all workers except doctors, nurses, and administrators.
  

• The International Brotherhood of Teamsters neared its goal of unionizing 12,600 freight drivers and dockworkers at UPS Freight (f/k/a Overnite Transportation, and now a subsidiary of UPS). Thus far, 12,550 employees have joined the union and now work under the terms of the national UPS Freight agreement, under a card signing and neutrality agreement that UPS agreed to. Most recently, workers in two locals in Maryland and Kansas unanimously ratified their first contract, covering 44 workers in total. The contracts provide for wage and benefit terms similar to the national UPS Freight agreement, which itself was reached in March 2008 and covers approximately 9,900 workers. Under the new contracts, truck drivers will receive a retroactive general wage increase of $4.35 over the life of the three and a half year contract. Road drivers will receive a mileage rate increase of 11 cents per mile. All workers will receive health care coverage under UPS’s self-insured plan, with fixed monthly premium contributions required, and receive benefits from a company-managed pension plan with no employee contributions required. Currently, 12,600 UPS Freight workers out of 15,000 total are eligible to sign authorization cards, and the union anticipates that the remaining 50 or so workers will do so.
  

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B. Strikes & Labor Disputes

• Union members at five Chicago Starwood hotels voted overwhelmingly on October 28 to authorize UNITE HERE Local 1 to call a strike if progress on contract settlement is not made soon.
  

• San Francisco hotel workers represented by UNITE HERE Local 2 also voted to authorize a strike against city hotels. The union, which represents 9,000 workers at 31 city-based hotels have been engaged in contract talks since August. Unlike prior negotiations where the downtown hotels bargained together as an association, the largest hotel operators are separately negotiating with Local 2. Central to the negotiations is the issue of affordable health care. Workers’ health care premiums are currently paid for in full by the employers, but all of the hotels now propose limiting their health care fund contributions, shifting some of the costs to workers. Wages, workload, and retirement also remain contested issues.
  

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C. Major Contract Settlements & Negotiations

• An analysis of 677 contracts negotiated in the first three quarters of 2009 found smaller wage increases for workers compared to contracts negotiated a year ago during the same period. The average increases for the 2009 contracts (covering more than 786,000 workers) was 2.5 percent for the first year and 2.7 percent for the second and third years, whereas the average wage increases in 2008 contracts was 3.7 percent for the first year and 3.4 percent for the second and third years. Twenty percent of all 2009 contracts to-date called for a wage freeze. While the decrease since last year spans all industries, the greatest difference was found in construction contracts – construction contracts in 2009 provided an average first year wage increase of only 1.6 percent, compared with 5.2 percent in 2008, and a median first year wage increase of zero percent, compared with a 4.7 percent median increase in 2008. The 2009 contracts to-date also saw benefit changes. Of those contracts providing for insurance changes, 64 percent included cost-controlling measures for health care, while a minority of contracts provided pension benefits increases or called for new or revised 401(k) plans.
  

• The United Auto Workers union reached a tentative agreement with Ford Motor Co. for additional modifications to their 2007 contract, aimed at improving Ford’s domestic competitiveness in the short and long term by, among other things, extending the same concessions that the UAW made earlier to GM and Chrysler. In a blow to UAW President Ron Gettelfinger and UAW leadership, who had urged ratification, however, on October 31 it was reported that the membership soundly rejected the proposal. No new talks are planned, and Ford must now wait until 2011, when the current contract with union members expires, to implement any formal changes.
  

• Meanwhile, the Canadian Auto Workers, ratified a three year agreement with Ford that will provide the same wage, cost-of-living, and benefits concessions negotiated with General Motors and Chrysler in exchange for Ford’s commitment to maintain its current level of production in Canada. Ford had threatened to close its Canadian operations completely if CAW members did not agree to concessions that were at least equivalent to those given to GM and Chrysler. Under the tentative agreement, CAW workers are subject to a freeze on wages and cost-of-living increases, and also received decreased bonuses and benefits, and elimination of a special paid allowance program – terms identical to the GM and Chrysler agreements. However, unlike the other agreements, Ford did not agree to create a health care trust fund to provide benefits to retirees, citing a “cash crunch.” Additionally, the agreement does not prevent Ford from closing its St. Thomas, Ontario assembly plant, scheduled to close in September 2011.
  

• Members of the International Brotherhood of Electrial Workers ratified a 3-year nationwide contract with AT&T, Inc. covering 10,000 workers. The contract provides for annual wage increases of about three percent each year, as well as increases to their defined pension benefit plan by two percent per year plus a cost of living increase. New hires will receive benefits through a cash balance pension plan, a 401(k) savings plan, and post-employment health care. However, workers will now be required – for the first time – to contribute to health care premiums for non-preventive care. AT&T agreed to fund new health reimbursement accounts (HRAs) for current employees, and payments from the company’s employee reward program will be made to the HRAs. New hires are not eligible for an HRA.
  

• AT&T also settled a tentative four-year contract with the Communications Workers of America, covering 27,000 workers at AT&T Southwest. The tentative agreement provides for an 11.5 percent increase in wages and an eight percent increase in pension bands over the term of the contract. For the first time ever, however, beginning with the second year of the contract, employees will pay premiums for health coverage, with increased payments and co-pays each year of the contract.
  

• Deere & Co. and members of the United Auto Workers reached a six-year master factory labor contract covering 9,500 workers in 15 facilities. The contract includes a commitment by Deere to not close any of its plants during the life of the agreement. Additionally, the contract provides for wage increases and pension improvement, and a $3,500 signing bonus.
  

• Members of the United Steelworkers ratified a four-year contract with Bridgestone Americas Tire Operations. Employees will continue to receive cost of living adjustments, and health care benefits remained largely as before, with small increases in copayments and premiums. The contract does not provide for any general wage increases.
  

• International Association of Machinists represented workers at Bombardier Aerospace in Wichita, Kansas, ratified a three-year contract providing for a two percent wage increase in the first year, and a three percent percent wage increase in the second and third years. Workers will also receive increased pension benefits, and health insurance premiums will increase starting the third year of the contract.
  

• Ball bearings manufacturer Timken Co. settled a four-year agreement with the United Steelworks, covering 2,300 hourly workers in Canton, Ohio. The details of the agreement are not being released pending ratification.
  

• SEIU members in Pittsburgh, Pa. ratified a three-year contract with the Allegheny General Hospital, covering 1,390 registered nurses at the hospital. The contract provides for three percent across-the-board pay increases each year, raising wages by a total of nine percent over the life of the contract, but the nurses will pay increased health premiums.
  

• Boeing settled a five-year agreement with the United Aerospace Workers Local 1069, covering 1,789 workers at a Boeing facility near Philadelphia. The new contract provides for annual wage increases of three percent in the first year, two percent in the second year, three percent in the third and fourth years, and four percent in the final year of the contract. Workers will also see a 14 percent increase in pension benefits, and health care benefits were not changed.
  

• Members of United Steelworkers Local 2635-06 ratified a four-year contract with AmeriServ Financial Bank covering 55 percent of the bank workforce. The contract provides an across-the-board wage increases amounting to an 8.5 percent wage increase over term. Employee health care premiums will increase, and co-pays and deductibles were increased, as well.
  

• National United Healthcare Workers-West members ratified three-year contracts with five Daughters of Charity Hospitals in California. The contracts provide 18 months of retroactive pay to 2,500 employees, plus immediate wage increases of 3 percent or a match to wages paid by Kaiser Permanent for comparable work, whichever is greater. Further wage increases totaling 7.5 percent over the next two years will follow. The contracts also maintain full employer-paid health care options for all current employees.
  

• Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers ratified a three-year master contract with Kellogg Co., covering 1,450 production and maintenance workers at four cereal processing plants. The terms preserve employer-paid health care, and provides workers with a $3,000 signing bonus and a $1.89 cost-of-living adjustment, but there is no general wage increase.
  

• Spirit AeroSystems, Inc. reached a four-year agreement with the Society of Professional Engineering Employees, providing for a 3 percent bonus in 2010, and guaranteed minimum increases of 1 percent over the next two years, plus possible additional increases to match government market wages.
  

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D. Administrative & Court Decisions

• The NLRB ruled on a “novel issue” in contested elections for representation sought by NUHW and opposed by former parent union SEIU. SEIU alleged that Clinton Reilly Holdings – a real estate investment firm – unlawfully dominated the NUHW by “making in-kind and financial contributions” to the union through a third party fund. The NLRA prohibits employer-dominated labor organizations. At issue was whether the novel suggestion that the NLRB should hold a representation petition in abeyance pending investigation of an unfair labor practice charge filed by a union other than the petitioner, against an employer other than the employer whose employees are being sought. The Board held that this “novel theory of law” should not delay processing a representation petition. Instead, the NLRB held that the better practice is to process the petition and defer the determination of whether a union is unlawfully dominated until the question is fully litigated in the unfair labor proceeding. If, after this proceeding, the union is ultimately deemed not to be a labor organization, the Board can then revoke its certification. (Sequoias Portola Valley, 345 N.L.R.B. No. 74, Aug. 31, 2009.)
  

• The Second Circuit held that a building management company that ended a subcontract with a janitorial services company, but hired most of its union-represented employees at that location, must arbitrate whether and to what extent it is bound by the substantive terms of the bargaining contract. The court held that although the management company, Meridian Management Corp., is not automatically bound by the terms of the contract, the “unique facts of this case” require arbitration. Critical to this conclusion was the fact that the subcontractor’s workers were essentially working for Meridian Management both during and after their employment with the subcontractor. Meridian had initially subcontracted out its janitorial work, but then terminated the subcontract later that year and performed the work itself, hiring a majority of the subcontractor’s workers to do so. Thus, the subcontractor was “simply the middleman” and Meridian knowingly and voluntarily hired workers covered by a bargaining agreement – entering into a direct employment relationship with most of the workers, with nothing else changing. Consistent with Supreme Court precedent, the Second Circuit held that arbitration would most efficiently resolve the question of the successor employer’s bargaining obligations. This precedent emphasizes: (1) the central role of collective bargaining and arbitration in furthering national labor policy, and (2) the need to balance the interest of the employees represented by the incumbent union and the successor employer. The court therefore held that while a successor is not automatically obligated by the substantive terms of a contract (including the arbitration provision), arbitration is the most efficient and fair means to settle disputes between the parties, especially where there is a “substantial continuity of identity of the work force” and the dispute arises out of the successor’s refusal to honor a particular term of the bargaining contract. The dissent asserted that the majority confused a successor employer’s duty to recognize and bargain with a labor union, with “the much more limited circumstances in which that employer is bound to arbitrate with a union under a [CBA] to which it has not agreed.” (Local 348-S, UFCW v. Meridian Mgmt. Corp., 2d Cir., No. 07-0080, Oct. 2, 2009.)
  

• The AFL-CIO is undertaking a national mobilization effort pushing for the public health option, as the legislation makes its way through the Senate. More than 100 representatives from AFL-CIO unions from almost 30 states went to Capitol Hill in early October to deliver approximately 42,000 handwritten letters calling for the public option, and the organization also undertook a national call-in day making 20,000 calls to senators. The AFL-CIO has warned Democratic lawmakers that it will challenge those who do not support a public option.
  

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E. Legislation & Politics

• A proposed Labor Department notice regarding employee rights under the NLRA is being criticized as unbalanced and inaccurate. The new notice, which is strongly supported by the AFL-CIO, informs workers of their rights to join a union, but does not inform workers of their equal right to refrain from this activity. DOL issued the rule to implement Executive Order 13946, which requires nonexempt federal departments and agencies to include in their contracts provisions a requirement that contractors and subcontractors post notice informing employees of their rights under federal labor laws. Further, the proposed notice has eight paragraphs of examples of unlawful employer activity, it has only one paragraph of unlawful union conduct, and it fails to inform employees of their Beck rights not to join a union and to pay agency fees only for representational expenditures.
  

• The Chicago City Council refused to endorse a controversial ordinance proposed by UNITE HERE Local 1, which would have required hotels, travel agents, and online reservation providers to inform consumers about ongoing labor disputes. Specifically, consumers would have to be informed – prior to final booking – of any work stoppage involving 20 or more hospitality employees, ongoing for more than 15 days. UNITE HERE had been pushing the measure in an effort to exert some force on its contract negotiations with approximately 30 Chicago hotels, employing 6,000 workers. The Council deferred ultimate resolution of the ordinance, sending the proposal to the Finance Committee for further study. Hospitality and other business associations have argued that the proposal is preempted by the NLRA because it unfairly tipping the balance of power between employers and striking unions by making picketing – a key economic weapon of unions – even more powerful.
  

• The AFL-CIO is seeking to undo longstanding rules under the Railway Labor Act, which governs labor relations in the air and rail industries. Under rules in place for more than 70 years, in order for a union to win representation rights, a majority of airline or rail workers who are eligible to vote must vote in favor of the union. The National Mediation Board has approved this “majority rule” since 1934, and the Supreme Court has twice upheld the majority rule. The AFL-CIO seeks a “minority rule,” requiring that a union need only obtain a majority of those employees who actually vote, as apposed to an absolute majority of the work group. The AFL-CIO’s minority rule proposal would make it substantially easier to unionize the typically large work forces in airlines and railways.
  

• Construction unions are seeking to broaden the scope of federal project labor agreements (“PLAs”) that would be required under President Obama’s proposed Executive Order 13502. The Executive Order encourages federal agencies to consider requiring the use of PLAs on large-scale federally funded construction projects, making such determinations on a project-by-project basis. The Executive Order is intended to revoke Bush administration executive orders that prohibited making PLAs a bid specification on federal construction contracts. The expanded use of PLAs would increase costs and discriminate against nonunion contractors.
  

• The DOL is rescinding a final rule on union annual financial reports promulgated by the Bush administration on January, 21, 2009. The rule revised Form LM-2 – the forms large unions use for their annual financial reports – to require additional information about compensation of union officers and employees and information about parties that buy or sell union assets. The rule also enabled the labor secretary to revoke the authorization of a small union to file a more simple Form LM-3 if the union is delinquent or deficient in its filings. The Obama administration delayed the effective date of the rule and has now rescinded it, citing the need to balance union reporting and disclosure against the union autonomy and freedom from undue burden.
  

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F. Crime & Corruption

• The former manager of the pension and health and welfare funds of International Association of Machinists District 9 in St. Louis was sentenced to 27 months in prison for embezzlement.  Harry Keil pleaded guilty to one felony count of embezzlement and also one count of mail fraud, admitting that he embezzled $341,000 from the funds he managed by creating false invoices. 
  

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G. Miscellaneous

• Boeing announced that North Charleston, S.C. will be the location for a second assembly line for its 787 Dreamliner, after South Carolina lawmakers approved a bill generating hundreds of millions of dollars in economic development incentives. The incentive package created under the new legislation allows South Carolina to issue up to $170 million of economic development bonds, enabling Boeing to construct the plant with lower interest rates. Additionally, the bill exempts Boeing from paying tax on fuel used in test flights and flights between facilities, and also exempts the facility’s construction materials from sales tax. To be eligible for the incentives, Boeing must create 3,800 full-time jobs at a single manufacturing facility and must invest at least $750 million over seven years. Boeing’s workforce in South Carolina – a right-to-work state – will be nonunion; workers at the North Charleston plant voted in September to decertify the International Association of Machinists as their representative. The president of the IAM local claims that Boeing “betrayed” the union’s loyalty by walking away from discussions concerning the location of the new facility.
  

• The NLRB has produced a video portraying a representation case from beginning to end. The video, which is available in both English and Spanish, is intended to “support the Agency’s current efforts to increase the public’s awareness of the National Labor Relations Act.” The video chronologically presents an organizing campaign, the filing of a petition for representation, and an election, and includes general descriptions of the pre-election and post-election processes. All regional and filed offices of the NLRB will receive copies of the video to further distribute, and the NLRB will also post the video on its web site.
  

• The NLRB has announced that Arthur Amchan has been selected to serve as the new associate chief administrative law judge leading the Washington, D.C. office of the Board’s Division of Judges. Amchan has served as an NLRB judge for 13 years, and served as an ALJ with the Social Security Administration and the Federal Mine Safety and Health Review Commission prior to joining the Board.
  

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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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