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In this issue:

News and Analysis

The Good, the Bad and the Ugly

NEWS & ANALYSIS

EFCA update. – It now appears certain that the bill proposing the Employee Free Choice Act will not have enough votes to clear the Senate. Supporters of the EFCA continue to work behind the scenes for a compromise that will eliminate the concerns of at least 12 Democrats who will not support the bill in its current form. Sen. Tom Harkin, D-Ia., the lead sponsor of the EFCA, has said that any alternative would have to include three core items: the ability of workers to choose between majority sign-up and secret ballot elections; a first contract “date certain” for unionized workers, and meaningful penalties for labor law violations. However, the compromise version will almost certainly drop the contentious card-signing provision in favor of a speedier union election process – probably mandating elections within 21 days of the filing of the petition with the National Labor Relations Board. Another compromise relates to negotiations of first contracts. The bill currently calls for arbitrators to set contract terms if a first contract is not negotiated within 120 days of union certification. Under one suggested compromise, mediators – not arbitrators – will help both sides negotiate the first contract. Sen. Harkin has indicated he wants to bring the bill up in July, but he may wait for the resolution of the Minnesota Senate seat and the return of Sens. Edward M. Kennedy, D-Mass., and Robert C. Byrd, D-W. Va., both of whom are recuperating from illness.

Whatever the timing and possible compromise, President Barack Obama has reiterated his support for any legislation that makes it easier for workers to gain union representation. President Obama has acknowledged that there are not enough votes in the Senate to pass the EFCA as written, but he wants to find a way to preserve the core idea of the legislation – “to make it easier for people who want to form a union to at least get a vote and have an even playing field.”

Two-member rulings continue. – Despite the decision of the U.S. Court of Appeals for the District of Columbia holding that the two-member NLRB lacks authority to issue rulings, the two-member Board has announced it will continue issuing decisions and orders and has filed a petition for rehearing en banc of Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB. Board Chair Wilma Liebman and Member Schaumber have issued approximately 400 rulings since they became a two-member Board in January 2008, and the parties in many of these cases have already accepted the rulings in unfair labor practice cases. Rulings in representation cases cannot be taken directly to an appeals court. Currently, there are about 110 open cases that could potentially be challenged, and parties in approximately 40 cases have already challenged the two-member Board’s authority. When he heard that the Board plans to go forward with issuing decisions, Constangy attorney Cliff Nelson, who represents Laurel Baye, called the decision to go forward “arrogant” as it will create more issues, uncertainty and expense for employers across the country. According to Nelson, the D.C. Circuit’s decision could open a Pandora’s box of Board decisions subject to challenge, “and that’s why I’m fairly shocked that the Board is saying it’s going to go ahead and continue to issue two-member decisions.” Meanwhile, the U.S. Court of Appeals for the Second Circuit has very recently declined to follow Laurel Baye in Snell Island SNF, LLC v. NLRB, another case in which Constangy represented the employer. Will this issue be going to the Supreme Court? Stay tuned!

Arbitration of statutory discrimination claims? Not so fast! – The Supreme Court recently held in 14 Penn Plaza v. Pyett, that where a collective bargaining agreement “clearly and unmistakably” requires employees to arbitrate grievances involving claims under Title VII, the ADA, the ADEA, and state and municipal human rights laws, employees can be compelled to arbitrate their claims rather than file a lawsuit in federal district court. But, “not so fast,” says the U.S. District Court for the Southern District of New York in Kravar v. Triangle Services, Inc. In Kravar, the employee filed a grievance with her local union, contending that she had been denied a day-shift job based on her national origin and disability. Before she filed suit, she testified, a union representative told her that the local would probably dismiss her complaint, and the grievance form filled out by the union representative failed to describe which, if any, claim the employee wanted to arbitrate. The local never requested arbitration of her Title VII (national origin) or Americans with Disabilities Act claims. After the employee sued the employer, the employer moved for summary judgment and to compel arbitration. The court denied the motion to compel arbitration, noting that in Pyett, the Supreme Court reserved judgment on whether arbitration of statutory discrimination claims can be compelled if the labor agreement allows a union to block the arbitration of an employee’s claim. In Kravar, the court concluded that an individual union member did not have an unfettered right to demand arbitration of a discrimination claim. Under the labor agreement the individual was required to present the claim to the union, which decided whether to demand arbitration. The Kravar court emphasized that Pyett does not permit a “substantive waiver” of an individual’s discrimination claim. And, under this labor agreement, such a waiver would be accomplished because the union, not the employee, controlled whether her discrimination claim could go to arbitration.

Read the entire contract! – In United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied-Industrial & Service Workers Int’l. Union v. Continental Tire N.A., the parties’ labor agreement and an agreement governing pension and insurance benefits expired on April 30, 2006, in the midst of layoffs affecting more than 900 bargaining unit employees. On May 1, 2006, after reaching impasse, the company implemented the terms of its final contract renewal proposals, which did not provide for arbitration. On August 9, the Union filed two grievances alleging that the company did not provide extended health benefits as required by the expired agreement. After the company refused to arbitrate the grievances, the Union filed a Section 301 suit to compel arbitration. On appeal of the district court’s holding that the grievances were arbitrable, the company argued that the expired labor agreement did not provide for arbitration of the grievances and, in any event, the agreement was no longer in force when the grievances were filed. In affirming the district court’s holding, the circuit court agreed with the company that the obligation to arbitrate is strictly contractual, but pointed to provisions in the expired contracts which showed that the parties had agreed that the right to arbitrate insurance disputes survived the expiration of the agreements. The agreement governing pension and insurance benefits stated that the contract’s grievance procedure would be used to resolve disputes about “whether the Company has provided the insurance benefits hereinabove described” and then stated, “Termination of the Labor Agreement shall not invalidate the use of the grievance procedure for the purposes of this Section.” While the company argued that the term “benefits hereinabove described” did not cover the Union’s claim since the obligation to provide extended health benefits fell below that term, the court followed the Supreme Court’s admonition in Litton Fine Printing Div. v. NLRB, that even in cases of post-expiration arbitration, “doubts should be resolved in favor of coverage.”

THE GOOD, THE BAD AND THE UGLY

Union win rate rises in 2008. – In 2008, the union win rate for representation elections rose to 66.8 percent. That is the highest win rate in 25 years and the highest since 1955, when unions won 67.6 percent of the elections in which they participated. Also in 2008, unions organized 70,511 workers through NLRB elections, up from 58,260 in 2007. Those statistics do not reflect the full extent of union organizing because many unions now organize through neutrality and card-check recognition agreements and other methods. Of the 10 most active unions, the Teamsters again led all other unions by participating in 394 elections in 2008. The SEIU ranked a distant second by participating in 157 elections and winning 72 percent of them.

Raynor finally outta HERE. – About two weeks after being suspended from UNITE HERE! by its president John Wilhelm, Bruce Raynor, former president of UNITE HERE!, announced that he was resigning from his position with the union he helped form only five years ago. One day later, Raynor became president of the newly formed Workers United union. Workers United was formed in March by former members of UNITE HERE! and subsequently became affiliated with the Service Employees International Union. Raynor claims he was forced out of office by the “same people that ruined the merger” of the two unions. He also lamented the distraction that the rift is causing. According to Raynor, “while UNITE HERE! staff are busy attacking Workers United and SEIU, members suffer, contracts don’t get bargained, grievances don’t get filed and organizing campaigns are stalled.” Raynor also pledged to continue to push for a settlement to resolve the many issues left by the dissolution of the merger and reiterated his commitment to negotiating an end to the merger up to and including binding arbitration.

“Am I here or at Dad’s this weekend?” – Most employers are enjoying the UNITE HERE! divorce, but there are always innocent victims – in this case, employers who have expiring contracts with UNITE HERE! and don’t know which faction of the dissolved union continues to represent their employees. One employer caught in the crossfire is Royal Laundry of California. Royal Laundry employees have been represented by Local 75 for more than 15 years. Before the merger of UNITE and HERE in 2004, Local 75 was part of UNITE. On March 7, 2009, the joint board with which Local 75 is affiliated voted to disaffiliate in favor of disaffiliation from UNITE HERE!. The joint board’s regional manager then informed Royal Laundry in writing that “we are the same organization which you have recognized and with which you dealt in the past” and said that the joint board and the Local would continue as the bargaining representative for employees, and would collect dues, handle grievances and negotiations, and use the same shop stewards. Meanwhile, UNITE HERE! had earlier notified Royal Laundry to dispute the disaffiliation from the union.

The most recent labor agreement between the employer and UNITE HERE! had expired on December 1, 2008, and the parties had not reached a tentative agreement before the Local’s disaffiliation from UNITE HERE!. Despite the joint board’s letter assuring Royal Laundry of continuity, the company cancelled the next bargaining session and subsequently filed a petition with the NLRB asking for an election, alleging that it had reason to believe that UNITE HERE! no longer represented a majority of the employees. The NLRB dismissed the employer’s petition. In his decision, the Regional Director noted that “while the fracture between UNITE and HERE may constitute a schism, occurring as it did at the highest level of the International, that is of no matter given the decisions by Local 75 and [the joint board], at a much lower level of the hierarchy, to disaffiliate from UNITE HERE! and to become an ’independent union’.” Because there was substantial continuity between the pre-affiliation and post-affiliation union, nothing has happened to the union that would lead one reasonably to think that the employees of Royal Laundry no longer support it. Therefore, there was no question concerning representation.

Wedding plans? – As reported in our last edition, talks have begun within a National Labor Coordinating Committee to unify the AFL-CIO, Change to Win, and the National Education Association into a single organization. According to published reports, the talks are making progress, but “there is still work to do” on the terms of a unification agreement to be in place by the end of the summer. While two alternate structural proposals are being discussed, no details about either proposal have been provided.

In the meantime, the International Association of Machinists and Aerospace Workers Union has convened a separate meeting with a half-dozen union presidents and staff from 23 unions, representing three-fifths of the AFL-CIO, to discuss ways to strengthen the federation. Specific proposals being considered include an AFL-CIO constitutional amendment that would provide a mechanism for the labor movement to engage in the boycott of a candidate, campaign committee, or political party that fails to support an objective of the labor movement; a constitutional amendment requiring a monthly budget report to the Executive Council that tracks actual union income and expenses; and the creation of four executive vice presidents, each administering departments and programs assigned by the president. A set of “draft blueprints” will be presented for adoption at the AFL-CIO convention in September.

It appears that the AFL-CIO convention will have an abundance of proposals for changing its organization. This has been attempted before – to no avail as the union ranks grow smaller and smaller.

Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A “Go To” Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by publications such as Chambers USA, Super Lawyers, and Top One Hundred Labor Attorneys in the United States. More than 100 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Georgia, Florida, South Carolina, North Carolina, Tennessee, Alabama, Virginia, Massachusetts, Missouri, Illinois, Wisconsin, Texas and California. For more information, visit www.constangy.com.

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