For a printer-friendly copy of this Executive Labor Summary, click here.

In this issue:

News and Analysis

The Good, the Bad and the Ugly

News and Analysis

Unions Claim Credit for Obama Win – and Expect Big Payback. – Immediately after the victory of labor-backed Senator Barack Obama, both the AFL-CIO and Change To Win federations praised the win as the beginning of a new era in workers’ rights. AFL-CIO President John Sweeney called the Obama victory in the presidential race and the Democratic majorities in the House and Senate a working families’ mandate for “broad-based economic change.” Change To Win Chairman Anna Burger said the election marked the “beginning of a new era for working Americans.” UNITE HERE General President Bruce Raynor stated that Obama’s “insight and leadership drive a policy agenda that supports those working people who have formed a union as well as those who have not yet formed a union.”

Critical to Obama’s success, union officials said, was the extensive union member mobilization effort costing close to $400 million. Even though the Senate will not quite have the “filibuster-proof” 60 Democrats, unions say they will not be deterred from pushing for passage of the Employee Free Choice Act in the first 100 days of the Obama administration. The EFCA would amend the NLRA to give employees the option to form a union merely by signing authorization cards, provide for mediation and binding arbitration if parties fail to reach a first contract within 120 days, and establish tougher mandatory penalties for unfair labor practices by employers during organizing campaigns or first-term contract bargaining.

Even if the EFCA should not pass in the Senate, many experts believe that union organizing efforts will be bolstered by compromise legislation that would reduce the time for holding union elections from the current 42 days down to 20 days, or even less. Other less controversial but significant legislation on the unions’ agenda includes eliminating the employer’s right to permanently replace strikers, redefining who is a “supervisor” under the NLRA, and providing tax credits to employers that commit to remain neutral in the face of union organizing activity.

Washington political commenters predict that after the nation’s economic crisis is addressed, lawmakers will direct their attention to organized labor’s demands for election payback.

UFCW Is “In” at Smithfield, Shortly After RICO Suit Settled. – On December 12, 2008, the NLRB announced that the United Food and Commercial Workers Union won an election at Smithfield Foods’ pork processing plant in Tar Heel, North Carolina. The UFCW has been seeking to represent the Tar Heel workers for more than 15 years.

In January 2005, the NLRB found that Smithfield had committed a number of unfair labor practices in connection with two attempts by the UFCW to organize during the 1990’s. The NLRB decision was enforced by the U.S. Court of Appeals for the District of Columbia Circuit.

Meanwhile, Smithfield filed suit against the UFCW, alleging that the Union’s tactics violated the federal Racketeer Influenced and Corrupt Organizations Act, and caused it to suffer $900 million in damages. In October 2008, just before trial was scheduled to begin, that lawsuit was settled. As part of the settlement, Smithfield agreed to a “fair election process” at the Tar Heel plant. In return, the UFCW agreed to end its public campaign against Smithfield in which the Union employed a variety of tactics, including product boycotts, to pressure the company to agree to a card-check recognition process.

Union Win Rate in NLRB Elections Increases Substantially. – Unions won 67 percent of NLRB elections held in the first half of 2008. That’s up from 59 percent during the corresponding period in 2007. Unions affiliated with the AFL-CIO won the most elections, but Change To Win affiliates organized more workers – more than 18,000, up from 11,000 in 2007. Among individual unions, the Teamsters organized the most workers, followed by the SEIU and the International Association of Machinists and Aerospace Workers. The services sector, including health care, led all other industries with 319 elections. Unions won 75 percent of those elections.

Teamsters to Lose 8,000 Jobs. – DHL Express delivery service has announced massive job cuts resulting from discontinuing its domestic-only service. About 8,000 of the 14,500 employees of that DHL division are represented by the Teamsters. Over the past five years, DHL has struggled to penetrate the U.S. domestic ground market, but operational missteps and the failing economy have contributed to about $8 billion in losses since 2003.

Boeing Deal With Machinists Ends Long, Costly Strike. – Boeing Corporation and the IAM have entered into a new contract, ending a 52-day strike that cost the company an estimated $100 million a day. Striking workers lost their usual health care benefits after one month on strike and were receiving only $150 per week in strike pay from the IAM. The new contract gives the machinists their first general wage increase in four years, with 15 percent over the four-year contract period, and lump sum payments of $8,000. According to Boeing, the contract addresses the union’s job security concerns while allowing the company to retain flexibility to run the business. The company gave up the right to allow vendors to perform work on materials delivered inside its factories and will limit supplier activity to delivery only.

Teamsters and BCT Vote to Modify Contracts With Bankrupt Interstate Bakeries. – Members of the Teamsters and the Bakery, Confectionary, Tobacco Workers and Grain Millers unions have voted to approve agreements that would modify their local contracts with bankrupt Interstate Bakeries. The agreements, covering more than 17,000 workers, will initially reduce hourly wages by $10 a week and weekly base pay by $100 for commission employees. Both reductions will be eased if the company meets preset earning levels in coming years. Employees will also pay more for prescription drugs and for premium contributions. In return, IBC will agree to neutrality and protection of jurisdiction, and the employees will receive 7 percent of IBC’s equity under the Union’s Equity Sharing Plan as well as a profit-sharing plan.


What a Racket! – The New York Court of Appeals, New York’s highest court, recently ruled that Local 32BJ of the Service Employees International Union was properly enjoined from announcing its presence outside the Empire State Building with a “banging racket” of drumming on metal pots and tin cans. In conjunction with its efforts to organize the building’s security service, on 18 separate days union members appeared outside entrances to the building and distributed leaflets. When the union appeared at the building, one or more members drummed on a plastic container, metal pot or tin can. The banging noise was repeated several times for periods of 25 to 45 minutes or more. The security service filed unfair labor practice charges, which were dismissed by the NLRB, who ruled that the activity was protected handbilling or leafleting and that the drumming was not sufficient to transform the leafleting into unlawful conduct.

However, the building’s managing agent and several tenants had filed a nuisance action in state court. The state court issued a temporary restraining order and preliminary injunction, prohibiting the union from making noise outside the building. The court rejected the union’s argument that unless union members made noise on New York’s busy streets they would be greeted with apathy like menu distributors and their leaflets would be thrown into garbage bins or litter the streets. The court commented that “noise pollution” can cause stress and psychological harm to some individuals and concluded the injunction was appropriate and would not interfere with the right of the union to publicize the dispute. The court made it clear that the injunction was limited to restricting the banging and did not prohibit leafleting or impose any “sounds of silence.” The union appealed this ruling, and a lower appeals court vacated the injunction, finding that the state cause of action was preempted by federal labor law.

The building management and tenants then appealed to the high court, which agreed with the trial court. The court rejected the union’s preemption argument, finding that Congress did not intend to preempt states from protecting citizens against obnoxious conduct and that loud drumming was not an integral part of the legislative scheme under the NLRA.

So There! – As we reported in our Fall edition, an arbitrator imposed a collective bargaining agreement on a Wal-Mart Canadian Corporation store after the parties failed to reach a first contract within 120 days. The contract imposed a 33% increase in the employees’ wages in the first year. According to a Wal-Mart spokesperson, the wages paid before the imposed agreement were competitive with industry standards as well as union wages at similar retail operations in the area. Because the arbitrator-mandated wage levels, together with the additional administrative and management costs associated with the contract, made the operation uncompetitive, Wal-Mart shut it down.

Back to Page