Winston & Strawn LLP: Labor News June 2008

In This Issue

The union win rate in elections conducted by the National Labor Relations Board (NLRB) decreased from 61.4 percent in 2006 to 60.1 percent in 2007. Prior to 2007, unions had improved their win rate for 10 consecutive years. The number of elections conducted by the NLRB decreased from 1,657 in 2006 to 1,502 in 2007.

The International Brotherhood of Teamsters (IBT) won the right to represent over 1,000 First Student Inc. school bus drivers, mechanics, aides, and lot workers based in Jacksonville, Florida. IBT now represents approximately 16,000 of First Student's 35,000 employees.

Hourly employees in Foxwoods Resort Casino's race book department voted against union representation by the United Auto Workers (UAW). The race book department consists of 38 employees, and is the third unit of Foxwoods employees to participate in an NLRB election in the last year. In May, a 310 person maintenance unit rejected representation by the International Union of Operating Engineers, while last November, a 3,000 person unit of dealers voted in favor of representation by the UAW. All three elections were conducted by the NLRB, but the Mashantucket Pequot Tribal Nations, which owns the casino, is in the process of challenging NLRB jurisdiction over its casino.

Colorado state employees voted in favor of being represented by Colorado WINS, a partnership of the state's three largest government employee unions. Colorado WINS will represent 20,860 state employees working in five groups: administrative and support services, enforcement and protective services, health care services, labor trades and crafts, and physical science and engineering.

Technical and professional employees of Spirit AeroSystems in Wichita, Kan. voted for continued representation by the Society of Professional Engineering Employees in Aerospace Local 2001, thus defeating a decertification effort. Of 2,427 eligible voters, 1,073 voted in favor of continued representation by SPEEA, while 895 voted for no union representation. The election was the third decertification election that SPEEA Local 2001 has won in the last five years.

The Newspaper Guild – Communications Workers of America Local 39521 won a NLRB sponsored election for 237 journalists employed by MediaNews Group in California's East Bay region. The journalists voted 104-92 in favor of unionizing.

The Canadian Auto Workers union blockaded the roadway to General Motors of Canada Ltd.'s (GM) headquarters in Oshawa, Ontario, for almost two weeks. The workers were protesting GM's decision to stop production at its Oshawa truck plant. The blockade began on June 4 and ended on June 16 after GM obtained an injunction limiting union picketing in front of its headquarters.

Members of the Service Employees International Union picketed outside of Foley & Lardner LLP's Los Angeles office to protest the firms representation of St. Joseph Health System. The protesters claim that Foley has harassed and intimidated pro-union hospital employees.

Performance Transportation Services (PTS) announced that it was closing its remaining operations at 24 trucking facilities as a consequence of a Teamsters strike. The IBT strike began after PTS announced a temporary 15 percent reduction in wages for IBT-represented employees. The wage reduction was authorized by a federal judge overseeing PTS's Chapter 11 reorganization plan.

In Atlantic City, N.J, 5,000 casino workers and members of labor unions gathered to pressure four casinos into negotiating first contracts with the UAW. The group was joined by several prominent politicians including Gov. John Corzine (D) and Sen. Robert Menendez (D-N.J). Since March 2007, the UAW has won representation of more than 5,000 casino dealers working at the four casinos, but UAW has been unable to negotiate first contracts.

ISS, a worldwide facility services firm with 440,000 employees, reached an agreement with UNI Global Union which will give unions greater access to ISS's workers. Union organizers will have access to ISS employees through onsite meetings and new-employee orientation meetings. Union representatives will not have access to employee lists and personal contact information.

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American Axle & Manufacturing Holdings Inc. announced plans to reduce its workforce from 3,650 to 2,000 hourly workers. The announcement came the day after the company reached a concessionary agreement with its employees, members of UAW, to end an 87-day strike. The agreement reduces average labor costs from $73 per hour to the range of $30 to $45 per hour. The agreement also allows workers to accept buy-out plans to leave the company for payments averaging $90,000 to $95,000.

Collective bargaining data compiled by BNA for the first five months of 2008 shows that settlements attained an average first-year wage increase of 3.5 percent. Comparable data for 2007 showed an average increase of 3.6 percent. The median first-year increase for settlements in 2008 was 3.2 percent, compared with 3.1 percent in the first five months of 2007.

Human Resources and Social Development Canada reported that private sector Canadian collective bargaining agreements yielded an average annual wage increase of 2.1 percent in April 2008.

The Chicago and Northeast Illinois District Council of Carpenters and the Metropolitan Pier and Exposition Authority (MPEA) in Chicago reached a new, two-year labor agreement. The MPEA operates McCormick Place convention center which employs over 1,000 carpenters to assemble and dismantle trade show and convention exhibits. Under the new agreement, the union expanded by four hours the period for which carpenters can be paid straight time wages on weekdays and shortened by four hours the period for which overtime rates must be paid on Saturdays.

A group of auto transport companies and the IBT have reached a tentative three-year agreement covering 9,000 drivers, mechanics, and office workers nationwide. Details of the agreement have not been released. If ratified by union members, the agreement would replace the parties' contract that expired June 1.

Delta Air Lines reached a tentative collective bargaining agreement with units of the Air Line Pilots Association (ALPA) that represents pilots of Delta and Northwest Airlines. The two units of the ALPA had previously refused to agree on a joint agreement, and under the tentative agreement the two groups will establish a single pilot seniority list and harmonize their pay rates. If ratified by both airlines' pilot groups, the joint agreement will take effect when the Delta-Northwest Airlines merger is completed later this year.

General Dynamics/NAASCO settled a new agreement with the Shipyard Workers Union which represents 2,300 workers at the company's shipyard near San Diego. The agreement provides journeymen workers a $800 signing bonus and pays trainees a $400 bonus in early July. Journeymen workers include welders, riggers, painters, carpenters, transportation workers, and steelworkers. The agreement also provides journeymen workers with a 70 cent hourly wage increase on October 1 of each of the next five years.

Super One Foods and three small grocery stores settled a three-year agreement with members of United Food and Commercial Workers Local 1116, which represents 1,400 employees at 16 grocery stores in northern Minnesota and northwestern Wisconsin. The agreement provides a wage increase of 90 cents per hour for top-rated clerks over the length of the contract. Wages will increase 30 cents per hour each year. The agreement also provides a $1.05 per hour wage increase for top-rated meatcutters over the contract’s term. Meatcutter wages will increase 35 cents per hour in each year of the contract.

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The U.S. Supreme Court held that the National Labor Relations Act preempts a California law prohibiting employers that receive program funds in excess of $10,000 or any amount of state grants from using them to "to assist, promote, or deter union organizing." Justice Stevens wrote for the majority that the law "regulate[s] within 'a zone protected and reserved for market freedom.'" Chamber of Commerce of the United States v. Brown.

The U.S. District Court for the Eastern District of Virginia refused to dismiss a RICO complaint by Smithfield Foods Inc. against the United Food and Commercial Workers Union (UFCW). The complaint alleges that UFCW engaged in extortion and misconduct in an attempt to force the meatpacking plant to grant union recognition after unsuccessful efforts to win representative status through an NLRB election. Specifically, the complaint alleges that the UFCW interfered with business relationships, distributed false and disparaging financial information, and organized protests and boycotts. The court found that the complaint adequately alleged a pattern of racketeering to support RICO claims. Smithfield Foods Inc. v. United Food & Commercial Workers Int'l Union.

The NLRB rejected Trump Plaza Hotel and Casino's objections to an election appointing the UAW the bargaining representative of approximately 530 card dealers at the casino in Atlantic City, N.J. Trump Plaza alleged that the election was influenced by a press conference held by two state officials six days before the vote in which the officials stated that they had reviewed authorization cards signed by Trump Plaza dealers and that a majority of the dealers had authorized the UAW to represent them. Trump Plaza Assocs. d/b/a Trump Plaza Hotel & Casino.

The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a lawsuit filed by the United Transportation Union claiming that a tracking rights agreement transferring work from one railroad company to another without bargaining with the union violated the Railway Labor Act. The court held that the dispute is governed by the Interstate Commerce Act which is intended to improve the efficiency of railroad transportation, and not the Railway Labor Act. United Transp. Union v. Burlington N. Santa Fe R.R. Co.

The U.S. Department of Labor issued an interpretive letter holding that fiduciaries of pension plans may not "increase expenses, sacrifice investment returns, or reduce the security of plan benefits in order to promote or oppose union organizing goals or collective bargaining objectives." Such use of pension plan assets would violate the Employee Retirement Income Security Act.

The U.S. District Court for the Northern District of Ohio issued a preliminary injunction prohibiting the merger between the United Transportation Union (UTU) and the Sheet Metal Workers International Association from going forward until UTU members hold a vote on a new constitution. Michael v. United Transp. Union.

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The following unions lined up behind Obama for President, adding their endorsements to the scores of unions that are already on record for the Senator from Illinois:

National Treasury Employees Union, which represents approximately 150,000 federal employees in 31 agencies.
The National Air Traffic Controllers Association, which represents 17,500 FAA employees.
The United Auto Workers.
The United American Nurses, which represents approximately 45,000 nurses.
The Laborers' International Union, which has 500,000 members.
The Painters and Allied Trades union, which represents more than 140,000 workers.
The executive board of the American Federation of State, County and Municipal Employees. The union represents 1.4 million workers.
The governing board of the AFL-CIO Building and Construction Trades Department. The governing board is composed of the presidents of 13 affiliated unions.
The AFL-CIO, representing 56 affiliated unions.
The Communications Workers of America, which represents approximately 700,000 workers.
The AFL-CIO, representing 56 affiliated unions.

The Service Employees International Union passed a portion of its "justice for all" plan which calls for the mobilization of members to help elect pro-worker politicians.

UFCW Local 7 in Colorado announced that it has withdrawn two of its four labor-related ballot initiatives. The UFCW dropped the proposals in an effort to negotiate an agreement with business interests in the state, which are pursuing a right-to-work initiative. If passed, the right-to-work initiative would prohibit collective bargaining agreements from requiring a workplace to be an all-union work environment.

Oregon Taxpayers United is planning on sponsoring two Oregon ballot initiatives in the November 4 election. One ballot initiative would ban public sector unions from using money collected through payroll deductions to support political candidates or to lobby elected officials. The second initiative would provide pay raises to public school teachers based on classroom performance and not on seniority. Public sector unions and the Oregon Education Association plan to fight both initiatives.

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The Teamsters placed Chicago based Local 714 under the control of a trustee because of Local 714's continued contacts with allegedly corrupt former union members. An Independent Review Board previously recommended placing Local 714 under the control of a trustee because of the local's continued contact with William Hogan and James Hogan. The Independent Review Board stressed that the Hogans had failed to perform their duties and that they had fostered a climate of favoritism and nepotism.

John DaBronzo, a former business agent of the International Association of Heat and Frost Insulators and Asbestos Workers Local 89, pleaded guilty to a federal indictment charging him with embezzling $830,000 from the union. One count of the indictment charged him with embezzling $396,455 from the checking account of the local's Joint Apprenticeship and Training Committee Fund. A second count charged him with embezzling $433,308 in remittance checks from employers.

The American Maritime Officers elected incumbent Thomas J. Bethel union president. The election was monitored by the Labor Department because of allegations of fraud in the organization's 2006 election. Michael McKay was elected president in the organization's 2006 election, but resigned a short time later after being convicted on federal racketeering and mail fraud charges.

Salvatore "Hot Dogs" Battaglia, the former president of the Amalgamated Transit Union Local 1181, was sentenced to 57 months in prison. Battaglia pleaded guilty to racketeering charges that he extorted the owners of three New York City School bus companies.

The three vacancies on the NLRB have not led to an increase in pending cases. The boards two members issued 128 decisions in the first five months of 2008, compared to 157 during the same period in 2007. The intake of new cases decreased from 198 during the first five months of 2007 to 151 during the first five months of this year. This decrease caused the board's case load to decrease from 191 cases on January 1, 2008 to 186 cases on May 31, 2008.

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