Labor & Employment Practice News
••••  January 2014  
Select events and news from the world of organized labor
Organizing | Strikes & Labor Disputes | Major Contract Settlements & Negotiations | Administrative, Court & Other Decisions | Legislation & Politics | Crime, Corruption & Other Misdeeds
Organizing
In compliance with a Wisconsin Supreme Court Order upholding the state law requiring public sector unions to annually win support from 51 percent of eligible bargaining unit members to certify their representation authorities, the Wisconsin Employment Relations Commission (WERC) conducted union certification elections to determine whether unions operating in hundreds of school districts across the state will maintain representative authority over the thousands of school district employees employed in those districts. Employees rejected over 70 of 408 school district unions in the elections, which involved 408 collective bargaining units associated with the state’s school districts. AFSCME Local 60 Council 40, including support staff in the Sun Prairie School District, was the largest union to be decertified. Twenty-two actual teachers unions were decertified. Under Act 10, public sector unions can only bargain for wage increases within the margin of inflation.
 
 
Nonprofit groups called “worker centers” have begun aggressively partnering with unions, targeting non-union employees, pressuring companies to change working conditions and even leading work stoppages as a prelude to forming a union. These “union front organizers,” (UFOs), do not follow the same rules and regulations as unions, even while some lay the groundwork for unionization. According to the Workforce Freedom Initiative, a division of the U.S. Chamber of Commerce, the worker center movement “is gaining both momentum and sophistication and may help organized labor find entry into facilities where workers have previously declined to embrace unions.” According to Urban Habitat, there were fewer than five worker centers nationwide in 1992. By 2007, that number had increased to at least 160 in 80 locations across the country. In recent months, U.S. Representative John Kline (R-MN), chair of the U.S. House Committee on Education and the Workforce, and US Representative David P. “Phil” Roe (R-TN), chair of the Health, Employment, Labor, and Pensions Subcommittee, have been asking federal agencies to carefully review the activities of several worker centers and determine whether they have filing obligations under the Labor-Management Reporting and Disclosure Act.
 
 
Graduate students at New York University and the Polytechnic Institute of NYU voted for representation by two United Auto Workers (UAW) locals, and for a second time became the only graduate employees at a private university in the U.S. with collective bargaining rights. Of the 1,247 graduates and research and teaching assistants eligible to vote in the election, 620 voted for the union and 10 voted against representation. The election was held under a voluntary agreement reached between the parties in November in which the university agreed to remain neutral, refrain from influencing the election, and bargain in good faith for a contract following certification of a majority vote.
 
 
UNITE HERE Local 23 will represent about 220 Restaurant Associates, one of the contractors and a subsidiary of Compass Group North American, food-service workers at various Smithsonian Institution museums. UNITE HERE led protests and walkouts earlier this year demanding that the U.S. government require its private contractors to pay their employees a living wage.
Strikes & Labor Disputes
Valley Hospital and Deaconess Medical Center in Spokane, Wash. locked out members of the Service Employees International Union (SEIU) Local 1199NW, including nurses, technicians, and hospital support workers, one day after approximately a 24-hour strike over stalled contract negotiations. The lockout came after the hospital hired replacement workers for 72 hours in order to keep the hospital open. Striking members who were not replaced were expected to report for work the day after the strike, while striking members who were replaced were expected to report at the end of the replacement’s 72-hour engagement. The approximately 1,100 members of the local have called for the increase of staffing levels.
 
 
150 members of the Utility Workers Union of America Local 180 in central Pennsylvania, representing line, substation, clerks, and meter services employees, were locked out by Pennsylvania Electric Co. (Penelec), a subsidiary of FirstEngery Corp. According to Penelec, the lockout was the result of the union’s failure to respond to the company’s “last, best, and final” contract offer. After 12 negotiating sessions, Penelec offered wage increases totaling 8 percent over a three-year term, increases in shift premiums and meal allowances, a new job classification system, and proposed the creation of a two-tier pension system. The company also stated that it planned to eliminate retiree health care coverage company-wide, effective January 1, 2014.
 
 
The latest round of Fast Food Forward single-day fast food worker walkouts spread to more than 100 cities, as activists continue to demand wages of at least $15 per hour. The nationwide demonstration, the ninth since November 29, 2012, took place at restaurants including McDonald’s, Burger King, Wendy’s, and Subway and purportedly involved thousands of striking workers. The national organizing campaign, consisting of local and national labor, community, and religious organizers, has allied with the SEIU, which provides financial and strategic support. Organizers, such as Jobs with Justice, claim that the campaign’s goals are to increase minimum wages and to spark the economy. On December 5, protests again erupted at fast-food restaurants in New York City and across the country. At the forefront of the protests was New York’s Restaurant Opportunities Center (ROC). ROC launched in New York in 2002, and is now one of hundreds of worker centers nationwide, including SEIU-backed groups with names like Fast Food Forward and Fight for 15. ROC itself has expanded to more than 30 cities, with reported plans for a new, SEIU-funded chapter in Seattle. Employers, however, claim that the campaign is a public relations stunt organized by national labor groups, that the majority of demonstrators are outside, paid volunteers, and that an increase of minimum wage to $15 per hour would result in hiring freezes or cuts.
 
 
Lawrence & Memorial Hospital ended its lockout of 800 nurses and technicians who are represented by the American Federation of Teachers, locals 5049 and 5051, though the parties are still at a bargaining impasse. The Hospital implemented the lock out following a four-day strike by union members.
 
 
Current and former employees of Taylor Farms conducted a one-day strike near the company’s produce processing plant in Tracy, Calif., to draw attention to alleged unfair labor practices that organizers claim are interfering with workers’ rights to organize. The strike lasted 15 hours and drew about 200 participants. There are 900 union-eligible workers at the Taylor Farms produce processing plant in Tracy and they primarily work on an assembly line bagging lettuce and other vegetables.
Major Contract Settlements & Negotiations
Members of the California Nurses Association ratified a four-year collective bargaining agreement with the University of California (UC), which will cover more than 11,700 nurses who work in UC medical and student health facilities. The agreement calls for a 4 percent across-the-board salary increases each January for the next four years, plus additional step increases each July through 2017. Under the agreement, UC will continue to pay “the vast majority of health insurance premium costs” for the nurses, and nurses will participate in a slightly modified version of UC’s new pension system, contributing eight percent of pay starting in January 2014 and nine percent of pay starting in July 2014 toward the UC Retirement Plan. Nurses also continue to be eligible for retiree health benefits. In addition, the agreement includes a “no strikes” provision that prohibits nurses from striking during the life of the contract.
 
 
Members of the Chicago Newspaper Guild Local 34071 ratified a three-year collective bargaining agreement extension with the Sun Times Media Group, covering 125 reporters and columnists employed across the company’s newspapers, including the Chicago Sun-Times. The agreement provides for a 2 percent wage increase effective July 1, 2016. The agreement also provides for eight weeks of pay upon layoff, with any employee laid off out of reverse order of seniority entitled to an additional week of pay for every six months of service up to an additional five weeks. The agreement was reached after 15 months of negotiations and expires December 31, 2016.
 
 
Members of the International Association of Machinists (IAM) ratified a three-year collective bargaining agreement with Pratt & Whitney, covering 2,800 employees at two Connecticut sites. The agreement, which union leadership did not support, provides for annual wage increases of 2.5 percent per year, an 11 percent increase in employer contributions to employees’ pension plans, a 9 percent increase in employer contributions to the employees’ 401(k) plans, two lump-sum bonuses of $2,000 and $1,000 respectively, and, until 2015, a freeze of employee out-of-pocket costs for medical benefits. Union leadership recommended rejecting the tentative agreement due to the employer’s plan to outsource certain work to a third-party provider, which will affect around 140 employees.
 
 
Representatives of United Food and Commercial Workers (UFCW) Locals 400 and 27, Giant Food LLC and Safeway Inc. reached a tentative agreement on a new contract that covers about 18,000 employees in Maryland, Northern Virginia, and the District of Columbia. Local 400 represents 17,000 workers at Giant and Safeway in the metropolitan Washington region, and Local 27 represents the remaining workers in the Baltimore area. The two locals have been bargaining jointly with Giant and Safeway since early September on four separate contracts that traditionally have contained the same economic terms. Members of two locals ratified the contracts that for the first time will require workers to pay 20 percent or more in coinsurance tied to their health benefit plans. Workers will also have to pay a $75 payment for emergency room visits if they are not admitted to the medical facility, weekly health care premiums and a spousal surcharge. The new contracts expire in October 2016.
 
 
Members of 1199 SEIU, United Health Care Workers East, ratified a three-year master contract with Steward Health Care. The contract covers 5,000 non-professional employees at eight hospitals in the eastern part of Massachusetts, including clerical, technical, and service and maintenance workers. The contract provides across-the-board wage increases of 2 percent in each year. In addition to the wage increases, the contract guarantees “quality, affordable health insurance coverage” for the employees, as well as a number of improved job security provisions. The hospitals covered by the agreement include St. Elizabeth’s Medical Center in Brighton; Good Samaritan Medical Center in Brockton; Carney Hospital in Dorchester; Quincy Medical Center, Norwood Hospital, and Holy Family Hospital in Methuen; Merrimack Valley Hospital in Haverhill; and Morton Hospital in Taunton.
 
 
Members of the International Brotherhood of Teamsters (IBT) Local 1150 ratified a new four-year contract with Sikorsky Aircraft Corp. that provides wage increases of 10 percent over term, a $4,000 ratification bonus and up to 20 percent more in employer pension contributions. The contract covers 4,500 Sikorsky Aircraft employees. The majority of employees work at the company’s facilities in Stratford, Bridgeport, and Shelton, Conn. About 750 of the employees in the bargaining unit work in West Palm Beach, Fla.
 
 
The Bay Area Rapid Transit system (BART) and the Amalgamated Transit Union (ATU) Local 1555 and SEIU Local 1021 appear close to ratifying a final four-year collective bargaining agreement that could end nine months of labor strife. Members of the ATU, which represents 945 station agents and train operators, approved the tentative agreement in early January and members of the SEIU Local 1021, which represents 1,430 mechanics, custodians, and clerical workers, will vote on the pact on January 13. BART directors voted 8-1 to approve the tentative agreement. The agreement also provides that upon ratification the parties will meet to resolve all current unfair labor practices litigation now pending before the Alameda Superior Court. Under the agreement, a section of the ratified contract that called for workers to receive six weeks of paid FMLA leave, which the district board contended was inadvertently included in the contract that union members approved, now is omitted. The parties reached agreement on a number of modifications to the ratified agreement that include: expansion of paid bereavement leave to grandchildren and stepparents of a spouse or eligible domestic partner; flexibility on how leave, both paid and unpaid, may be taken for FMLA; construction of break rooms; changes in the way lump-sum bonuses based on ridership may be paid; and overtime adjustments involving training schedules.
 
 
UNITE HERE and HEI Hotels & Resorts reached a “partnership” agreement to improve labor relations and generate growth. Under the agreement, UNITE HERE will end its corporate campaign against HEI and its hotels, investors, clients, guests, partners, and representatives. HEI owns and operates 42 hotels across the country with brands that include Westin, Sheraton, Le Meridien, Aloft, Marriott, Renaissance, Residence Inn, Spring Hill Suites, Hilton, Embassy Suites, and Hyatt.
 
 
Members of United Food and Commercial Workers (UFCW) Local 1500 in New York ratified two separate but similar 14-month contracts covering a combined 8,000 workers at Stop & Shop and King Kullen. Only 15 percent of eligible voters participated in the ratification vote. The new terms require a 20 percent employee premium contribution, with employers covering the remaining 80 percent of the medical plan. Under the predecessor labor agreement, the companies covered 100 percent of health insurance premiums.
 
 
The National Labor College (College) in Silver Spring, Md., which announced final plans to close at the end of April, recently settled an agreement with the two unions representing employees at the College, to provide severance benefits. The Washington-Baltimore Newspaper Guild (WBNG), an affiliate of the Communications Workers of America, represents the faculty and other professional workers, and the Office and Professional Employees International Union Local 2, represents the administrative staff.
 
 
A presidential emergency board (PEB) recommended that the Long Island Rail Road Co. (LIRR) and seven unions representing its employees resolve a three-year contract dispute with an agreement far more similar to the unions’ desired terms than that of management. The PEB agreed with the unions’ demand for an unchanged employee contribution to the retirement pension. The PEB also said it favored wage increases totaling 17 percent in six years. The PEB did not endorse the unions’ proposal to retain a 100 percent employer contribution to health care premiums, but it disagreed with the MTA’s demand that retired LIRR workers begin to pay for a portion of their health costs. The PEB concluded that employees should pay health insurance contributions as a percentage of pay. Anthony Simon, a general chairperson at the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), the largest of LIRR’s unions, stated that all unions on LIRR would accept the PEB’s recommendations. An MTA spokesman, called the PEB’s findings “unacceptable.” The non-binding PEB recommendations activate a 120-day period for the parties to resume negotiations, as provided by the Railway Labor Act.
 
 
The SEIU-United Healthcare Workers West states that it will withdraw California ballot initiatives aimed at reducing health care costs if hospitals agree to negotiate with the union. Filed last month in California, the ballot initiatives if successful would, among other things ban hospitals from charging more than 25 percent above the actual cost of care and barring not-for-profit hospital executives from being compensated at more than $450,000.
 
 
An analysis of data compiled by Bloomberg BNA in all of 2013 showed that the average first-year wage increase for all settlements was 2.1 percent, compared with 1.6 percent reported in 2012. The median first-year wage increase for settlements reported in 2013 was 2 percent, the same increase as that reported in 2012, and the weighted average was 1.9 percent, compared with 2 percent. When lump-sum payments were factored into wage calculations, the all-settlements average first-year increase in 2013 was 2.4 percent, compared with 2 percent reported in 2012. Median and weighted average increases were 2 percent and 2.9 percent, respectively, the same increases reported in 2012. The all-settlements (excluding construction and state and local government) average increase was 3.3 percent, compared with 2.9 percent in 2012; the median was 2.5 percent, the same as that reported a year ago; and the weighted average was 3.4 percent, compared with 3.3 percent.
 
 
According to Labour Canada, major collective bargaining agreements involving 500 employees or more reached in Canada during October 2013 produced average base rate wage increases of 1.8 percent, less than the 1.9 percent average in the third quarter, but significantly greater than the 1.3 percent average for 2013 to date and above the 1.7 percent average for 2012 as a whole. The October figure was based on 18 collective agreements covering 29,030 employees, with durations averaging 522 months. On a sectoral basis, the top three greatest wage growth sectors in October was seen in finance and professional services (3.4 percent), followed by primary industries (2.3 percent), and wholesale and retail trade (2.1 percent).
Administrative, Court & Other Decisions
In the closely watched collective and class action waiver arbitration case D.R. Horton v. NLRB, the United States Court of Appeals for the Fifth Circuit rejected the National Labor Relations Board’s (NLRB) ruling that class or collective action waivers in arbitration agreements are unenforceable. The NLRB ruled that D.R. Horton’s arbitration agreement with its employees violated the National Labor Relations Act (NLRA) because the agreement prohibited employees from filing joint, class, or collective claims. On appeal, the Fifth Circuit disagreed, finding that the NLRB did not give proper weight to the Federal Arbitration Act (FAA), which was enacted to prevent courts from treating arbitration agreements less favorably than other contracts. D.R. Horton v. NLRB.
 
 
The United States Court of Appeals for the Tenth Circuit upheld an arbitration award reinstating a helicopter pilot who was fired after allowing an uncertified pilot-in- training to attempt an authorized helicopter landing resulting in $250,000 in damages, in favor of the Office and Professional Employees International Union Local 109, which represented the fired pilot. Emphasizing the narrow scope of judicial review of arbitration awards, the court found that the arbitrator’s award reducing the discipline to an unpaid suspension drew its essence from the collective bargaining agreement. In so holding, the court rejected the employer’s argument that requiring the reinstatement of the pilot after likely violating the federal aviation regulations and the company’s general operations manual. Air Methods Corp. v. Office & Prof’l Emps.
 
 
An NLRB Administrative Law Judge (ALJ) ruled that a realty company’s mandatory employment documents for new and current employees, including an arbitration agreement precluding individuals from pursuing collective and class litigation, violated the NLRA under the Board’s D.R. Horton opinion. The ALJ determined that the opt-out provision in the agreement, which allowed employees to entirely opt-out of the waiver relating to the right to bring a class or collective action, did not render the waiver enforceable. The ALJ reasoned that opt-out provision unlawfully burdened employees by requiring them to prospectively trade away their statutory right to engage in collective or class actions that may arise in the future. Gerardo Haro Guadarrama v. Nijjar Realty, Inc.
 
 
The U.S. Supreme Court ruled that it should not have agreed to consider Unite Here Local 355’s appeal of an Eleventh Circuit ruling that organizing assistance offered by an employer to a union can be a thing of value that falls under the proscription–in Section 302(a)(2) of the Labor Management Relations Act–on an employer giving “money or other thing of value” to a labor group that represents or is seeking to represent its workers. The neutrality deal Mulhall took issue with–between Local 355 and Mardi Gras Gaming–involved the employer promising to remain neutral on organizing, allowing union representatives access to its premises, and providing a list of employees. The union, meanwhile, promised to spend $100,000 to help pass a gambling ballot initiative and guaranteed that it would not initiate strikes. The Supreme Court’s decision not to decide the case leaves a circuit split on this issue. Unite Here Local 355 v. Mulhall.
 
 
The NLRB, along with the U.S. Chamber of Commerce, the Coalition for a Democratic Workplace, dropped its appeal of a May 2012 decision finding the NLRB rule aimed at streamlining union elections was invalid because it was enacted without a lawful quorum of Board Memebers. Chamber of Commerce et al v. NLRB.
 
 
An NLRB ALJ ruled that the Atlanta, Ga. based Laurus Technical Institute’s policy prohibiting its employees from gossiping violated the NLRA because it was too broad and may serve to unlawfully discourage employees from discussing or complaining about terms and conditions of employment. The no-gossip policy forbade, among other things, discussing another person’s personal life when the person is not present, talking about a person’s professional life without his supervisor present, and creating or sharing rumors. The ALJ also determined that the school’s termination of admissions representative Joslyn Henderson, in part because she breached the policy, was unlawful. The school contended that it had actually fired Henderson for a lawful reason—because she solicited co-workers to work for a competitor company. However, the judge concluded that this too was protected by the NLRA because it occurred in the context of Henderson discussing job security with her co-workers after an overhaul of the admissions department, during which their supervisor was fired. Laurus Technical Institute.
 
 
The National Association of Manufacturers (NAM) filed a lawsuit against the U.S. Department of Labor (DOL) in the U.S. District Court for the District of Columbia, challenging a rule requiring federal contractors to post notices informing employees of their right to unionize under federal labor law. NAM alleges that the poster requirement rule is framed in such a way as to unfairly promote unionization and violates a contractors’ First Amendment rights by compelling speech, and that the Procurement Act does not give the DOL the authority to mandate that contractors post the notice required by the rule. The lawsuit maintains that the DOL’s rule is preempted by Section 8(c) of the NLRA, which permits an employer to express any views as long as the expression contains no threats of reprisal or force or promise of benefit. The penalty for violating the rule is cancellation or suspension of current federal contracts and subcontracts and debarment from future contracts. A similar rule promulgated by the NLRB, which would have required all employers under the board’s jurisdiction to post a similar notice, was found by the Fourth Circuit to run afoul of Section 8(c). National Association of Manufacturers et al. v. Perez et al.
 
 
A federal district court judge for the U.S. District Court for the District of Connecticut found nursing home operator HealthBridge Management LLC in contempt for its actions related to the operation of five facilities in Connecticut and ordered the firm to reinstate wages, benefits, and working conditions at five nursing homes, as well as back pay and interest. The judge later granted a temporary stay. The judge found that the firm has failed to comply with an injunction issued by the court in December 2012 pursuant to Section 10(j) of the NLRA. The actions come in a case involving more than 600 workers represented by New England Health Care Employees Union District 1199, SEIU, who began a strike at HealthBridge nursing homes in Connecticut in July 2012 to protest the company’s unilateral implementation of wage and benefit changes at the facilities following 17 months of unsuccessful contract negotiations. HealthBridge is appealing. Kreisberg v. Health Bridge Mgmt.
Legislation & Politics
DOL has delayed the release of its expanded persuader reporting rules for employers and labor relations consultants under the Labor-Management Reporting and Disclosure Act (LMRDA) to March 2014. The LMRDA requires employers and consultants to report any arrangement to directly or indirectly persuade employees regarding the right to organize or bargain collectively. The statute contains an exception from the disclosure and reporting requirements for consultants giving or agreeing to give advice to an employer. Since 1962, the DOL has interpreted the “advice exception” to permit employers and consultants to avoid reporting when the consultants have no direct contact with employees and provide written or oral advice to an employer who has the discretion to accept or reject the submitted material. The proposed DOL regulations set to limit the “advice exception” by defining reportable “persuader activities” as “all actions, conduct, or communications that have a direct or indirect object to persuade employees,” regardless of whether there is direct contact by the consultant with employees or whether an employer is free to accept or reject materials provided. The proposed regulations, which will impose expansive reporting requirements on employers and their labor relations consultants, has drawn criticism from the American Bar Association and management, who have expressed concern that the new regulations will require the disclosure of confidential client information and will result in law firms ceasing to provide traditional labor law counseling.
Crime, Corruption & Other Misdeeds
Federck C. Petro, the former president of the American Federation of Government Employees Local 2094, was ordered by a U.S. district court judge to serve six months house arrest followed by three years of probation for stealing union members’ dues. From February 2006 to July 2008, Petro was accused of writing approximately 187 checks to himself from the local’s bank account, totaling around $112,000.
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