Unionized Employers, Particularly Those that are Newly Organized, Must Know When it is Necessary to Bargain over Layoffs/Closings/Other Business Actions

Recently, the U.S. Court of Appeals in Chicago enforced a decision by the National Labor Relations Board (NLRB) which had found AutoNation, Inc. unlawfully laid off some of its unionized technicians in Florida.  What made the company’s actions unlawful (besides the fact that the employees had recently joined a union) was that the layoffs were done without first bargaining with the employees’ union. The company claimed that dire economic circumstances during the Great Recession, made the layoffs inevitable and, thus, negotiating with the union would have been a waste of time.  The NLRB disagreed, finding that AutoNation was required to negotiate with the International Association of Machinists (IAM) before it could lay off any employees. Because the layoffs were found to be unlawful and the court has now enforced the Board’s findings, the next step will be for the NLRB to fashion a standard “make whole” remedy for the laid off workers. Ultimately, back pay for the employees may be huge since the case is many years old due to the fact that prior rulings of the NLRB were invalidated as a result of the Supreme Court’s ruling in Noel Canning, which found that President Obama’s interim appointments were unlawful.

This case serves as a reminder to employers with unions: negotiating a contract, or “collective bargaining agreement” (CBA) may not be the only occasion where union negotiations are mandated by federal labor law. This may be so even where management has reserved decision-making authority in a CBA (e.g. a well written management’s rights clause providing that management has discretion to decide layoffs, etc.).  Depending on the circumstances, there still may be an obligation to negotiate “effects” of some decisions if not the decisions themselves.  The stakes can be quite high.  Failing to negotiate with a union where required by law, can result in an employer being ordered to pay back pay or in some instances, to reopen a closed facility.

For guidance on issues of “effects bargaining,” “decision bargaining,” and other union negotiation issues, contact Attorney James Sherman at (952) 746-1700 or email jasherman@wesselssherman.com. 

Legal Brouhaha between the U.S. Soccer Federation and the Union for the Women’s National Soccer Team, Illustrates the Importance of “Dotting I’s and Crossing T’s” in Collective Bargaining

In a lawsuit filed in federal court in Chicago on February 3, 2016, the United States Soccer Federation is seeking a “declaratory judgment” that its collective bargaining agreement (CBA) with the Women’s National Soccer Team Players Association, remains in effect through the end of 2016. The Players Association, the union representing the U.S. Women’s Soccer Team, is alleged in the lawsuit to have declared that the CBA either already expired prior to 2016, or was terminable at will.  The union therefore contends that the players are free to go on strike at any time of their choosing.  Women’s team players have made no secret of their dissatisfaction with the fact that they are paid less than players on the men’s national team, despite the fact that the women are past Olympic and recent World Cup Champions, whereas the men have failed to advance in world competition.  No doubt the players’ union intends to leverage its demands for improved wages and other terms for the women’s national soccer team players, under threat of a strike.  The federation’s lawsuit seeks to enforce a CBA it contends bans the union from striking in 2016.

The U.S. Women’s Soccer Team are the 2015 World Cup champions and are expected to qualify for and play in the 2016 Summer Olympics, in Brazil. Additionally, the national team serves as the backbone of the newly formed National Women’s Soccer League (NWSL).  Not only does it allocate its nationally known players such as team captain Carli Lloyd, Alex Morgan and Hope Solo to play in the new professional league, the national team also pays their salaries. A players’ strike in 2016 would be devastating to the national team as well as to women’s professional soccer in America.  With so much as stake, how is it that there is any uncertainty as to the expiration date of the CBA governing the terms and conditions of the U.S. Women’s National Soccer Team?  An examination of the recently filed lawsuit and the parties’ contentions, holds important lessons for employers and unions alike, regardless of their industry.

 

The U.S. Soccer Federation’s complaint states that activities for the Women’s National Team focus on four (4) year periods, due to the World Cup and Olympics, each of which takes place every 4 years. In 2000 the Players Association was certified as the exclusive bargaining representative for the players on the Women’s National Team.  The most recent collective bargaining agreements covered two such 4-year periods, from January 1, 2005 – December 31, 2012.  Consequently, in the fall of 2012 the parties began negotiations presumably for a new 4-year CBA commencing in January of 2013. 

There appears to have been nothing particularly unusual about the collective bargaining between these parties. Negotiations took place over a 6 month period and included in-person sessions scheduled in various cities around the country, as well as telephone and email discussions between representatives of the Players Association and U.S. Soccer.  However – and this is the source of all the problems now, in 2016 – the parties never reduced the results of their negotiations to a concise and complete, written contract. As a result, the Player’s Association, now under new and seemingly more aggressive union leadership, is disclaiming the existence of a binding CBA in 2016.  U.S. Soccer’s lawsuit alleges that the player’s union is threatening to strike based on its position that there is no CBA to prevent it from doing so.

Lacking any signed contract, the U.S. Soccer Federation’s lawsuit is relying on a number of documents and communications to support its claim that a CBA exists, barring the union from striking and that it remains in effect until December 31, 2016.  Exhibits to the federal complaint include:

• A short, written Memorandum of Understanding (MOU), signed by the union in March of 2013, memorializing an agreement on terms and conditions for players participating in the newly formed professional soccer league, the NWSL. The MOU had a stated term of 4 years.
• An email forwarding the MOU, in which Ruth Uselton, an attorney representing the Players Association in its negotiations, stated: “As we have previously agreed, the general principle we are working under is that items we have not specifically covered in the Memorandum of Understanding would remain the same as under the prior CBA, but with appropriate increases/adjustments/changes.”
• A transcript of sworn testimony from the previous Executive Director of the Players Association from an unrelated hearing, in which he stated that the parties were under a CBA which will expire on December 31, 2016.

It appears the parties had anticipated drafting a stand-alone, written, 4 year contract, as Ms. Uselton’s email went on to state that “[w]e will address the specifics when we get to drafting the new CBA.” Yet for reasons unknown, they never got around to doing so although the lawsuit contends that both parties acted as though they were bound to an agreement during the past 3 years.  As a result, U.S. Soccer now lacks any actual written CBA signed by the union and explicitly providing for an effective date through the end of 2016 (i.e. a clear “duration clause” standard in CBAs).  Now that the union has disavowed any agreement in 2016, management is left to argue that its handful of communications with the union comprise an enforceable agreement of the parties to continue to be bound to the 2005 - 2012 CBAs (including its “no strike” clause), through the end of 2016. Clearly, this is not a good position in which management in any industry wants to find itself.

It may be that the parties never actually achieved an agreement, in which case the U.S. Soccer Federation will lose its lawsuit and may wish it had continued bargaining in 2013 until a clearly written CBA was completed and signed.  On the other hand, if an agreement truly was achieved and the players’ union simply refused to put it in writing, its conduct arguably would have violated Section 8(d) of the National Labor Relations Act.  Federal labor law requires parties to union negotiations to reduce bargained for agreements to a writing signed by the parties. Therefore, the federation could have filed an Unfair Labor Practice, or ULP charge against the union with the NLRB back in 2013. In either case, the apparent failure to deal with things years ago has created a potential catastrophe for the federation and NWSL, should the players go on strike in 2016.

To think that all this uncertainty and litigation could have been avoided by reducing the parties’ 2013 agreement to a clearly written document, with an unambiguous “duration clause” specifying that the CBA remained in effect through December 31, 2016, is a powerful lesson to all who negotiate with unions.  Considering how union contract negotiations frequently involve multiple meetings, over many weeks or months, it is well worth the time to prepare a complete, stand-alone contract with clearly written language, especially on such critical provisions as prohibitions on strikes and the duration of those prohibitions! Unfortunately, it is all too common for parties to protracted union negotiations to cut corners in the end by relying on a short memo, letter of understanding, etc. While there is nothing inherently unlawful or wrong in doing this, management should always exercise great care to ensure that its interests are protected in an enforceable writing. Relying on union complacency is extremely risky, especially where union representatives may come and go.

So the take-away of this soccer related labor dispute? Get it in writing and get it all in writing!

James Sherman is a management-side labor and employment attorney with over 25 years of experience in this field.  He is licensed to practice law in the states of Minnesota, Wisconsin and Illinois, where the referenced lawsuit is pending.  Mr. Sherman has negotiated contracts with a number of labor unions in a variety of industries, in many states. Contact him by phone (952) 746-1700 or email jasherman@wesselssherman.com. 

Key Victory in Wisconsin Court of Appeals

March 2015

By: Alan E. Seneczko

Wessels Sherman attorney Alan Seneczko recently won a key victory for the City of New Berlin in the Wisconsin Court of Appeals. In a published decision, Monreal v. City of New Berlin, 2014AP458 (Wis. App. 2015), the appellate court reviewed a claim filed by a retired New Berlin police officer who contended that he had a right to deductible-free health insurance for the rest of his life. The officer, who retired on a duty disability in 2010, argued that his future benefits should be established by the health insurance clause in the collective bargaining agreement in effect at the time of his retirement. That clause, “Sec. 5.02, Health Insurance,” detailed the specific benefits provided to officers under the agreement, including reimbursement of their in-network deductibles. After that contract expired, the City implemented a new “high deductible” plan for all of its officers, but Monreal claimed that he was entitled to reimbursement of all of his deductibles, as provided in the old agreement. When the City refused, he filed a complaint in circuit court – and the court agreed!

Arguing on behalf of the City, Seneczko contended that Monreal’s future health insurance benefits were indeed vested in the labor agreement in existence at the time of his retirement – but were governed by Section 5.03 of that agreement, “Insurance for Duty Related Disability Retirees,” which obligated the City to provide health insurance coverage in the future, but contained no commitment to reimburse deductibles. The Court of Appeals agreed, finding that the City had satisfied all of its obligations to Monreal under Section 5.03, and that the specific benefits provided under Section 5.02 were only intended for the duration of the agreement.

Achieving a great result for a great client is what makes this practice so rewarding.

Questions? Please contact WS Attorney Alan E. Seneczko at (262) 560-9696, or email alseneczko@wesselssherman.com.

Labor Unions Win Big in Minnesota

By the narrowest of margins (2 votes) the Minnesota legislature voted to give certain in-home child-care providers and personal care attendants (PCAs) the right to unionize.  This comes at a time when nearby states are curbing organized labor’s clout.  For example, last year Wisconsin eliminated union rights to bargain over wages, etc. in public schools and most other public sector jobs, and Indiana and Michigan passed “Right-To-Work” legislation, where union membership cannot be made a mandatory condition of employment.  By contrast, the new Minnesota law stands to benefit two labor unions that lobbied aggressively for its passage.  The American Federation of State, County and Municipal Employees (AFSCME), is organizing the in-home child-care providers and the Service Employees International Union (SEIU) is seeking to represent the in-home PCAs.  As with most hotly contested political issues, opinions on the impact of this legislation depends on who is talking.

The unions and their supporters say the new law merely allows eligible child-care and personal care attendants the option to vote on whether or not they want a union.  Of course they also claim that union representation will translate into higher pay, greater benefits and training (which they equate with improving quality of care).  Left unanswered is a question all too often ignored in politics these days:  Who will pay for all this, including the dues these unions will undoubtedly charge?  The providers of these critical in-home services will have no choice but to raise their rates and the state, with tax dollars, will have to pick up the tab. 

Opponents of this law are left to lick fresh wounds.  They argued, obviously unsuccessfully, that passage of this bill was tantamount to the DFL-controlled Minnesota legislature simply repaying AFSCME and the SEIU for making significant campaign contributions to help elect a DFL majority.  With an estimated 21,000 in-home child-care and personal care attendants now open for organizing, the union dues they would be charged could bring in millions per year in new revenues for these two unions.   Because these union revenues would come, albeit indirectly, from tax payers to cover the necessary price hikes providers must charge, opponents see this new law as diverting public monies to unions as a payback for help in last year’s elections.

Perhaps lost in all the political rhetoric is the fact that this legislation goes beyond simply allowing people a choice.  Anyone who knows how union organizing really works knows that union elections are a far cry from “just letting people vote for or against a union.”  As with any union vote, all the union needs to win are a majority of those who show up to vote.  For example, if only 1,000 of the estimated 21,000 eligible voters actually vote, the unions would need only 501 votes in their favor to win.  What’s more – and few people, including the care providers themselves, realize this – if the unions win, they win representational status for all 21,000 individuals, including those who choose not to vote and those who vote against the union! 

The legislature had to make sweeping changes and redefine relationships across the state to make it possible for these two unions to have a shot at organizing 21,000 new dues-paying members.  Besides changing the legal landscape of well-established laws of union organizing, the new law effectively redefines the covered providers as all being employed by the State of Minnesota.  Yet most in-home care providers work for themselves; that is, they are considered in the eyes of existing law to be so-called “independent contractors” and not employees.  Those that do not work for themselves are employed by hundreds of small employers.  Whereas union organizing has forever sought the union’s status to bargain on behalf of employees, with their employers, the new law groups independent contractors with employees for the purpose of bargaining with the state!  By pure political fiat these diverse groups have been effectively re-designated as employees of the State of Minnesota, all to pave the way for two unions to organize thousands of new members.

Numerous legal challenges to this new law are expected.  If the union-supporting politicians win in court, it begs the question:  Who is next?  If the State of Minnesota can essentially annex entire occupations to make individuals working in those fields employees of the state, what would stop the legislature and governor from going after plumbers, electricians, lawyers, and doctors?  The only requirements seem to be that (1) government monies are flowing their way, and (2) a politically active union wants the ability to organize them.  Unfortunately, today all too often companies in the private sector rely on government monies as government continues to grow as a dominant player in the economy.

One legislator who supported the AFSCME/SEIU bill was asked to respond to the opposition’s claim that people who do not want union representation could be forced into a union by this law.  The legislator glibly replied:  “If they don’t want the union, they can simply choose not to take the government’s money” (state subsidies to pay for child and personal in-home care).  The irony of this is that the new union organizing law was accompanied by tax hikes on many businesses and higher wage earners.  When the government takes more and more of businesses’ money it gets harder and harder for them not to rely for their survival on some of the government’s handouts of that money.  Unfortunately, government handouts come with conditions.  In this case, the conditions appear to have been set by organized labor – allow union organizing or stay away from the government’s money!

Judge Postpones Implementation of Governor Dayton's Executive Order Permitting Daycare Workers to Vote to Unionize

Another Win for Employer Rights - The U.S. Court of Appeals for the District of Columbia Circuit Struck Down the NLRB's "11-by-17" Poster Requirements

In another win for Employer rights, an appeals court on May 7, 2013 struck down a federal rule that would have required millions of businesses to put up posters informing workers of their right to form a union.

The poster rule would have required businesses to display an 11-by-17-inch notice in a prominent location explaining the rights of workers to join a union and bargain collectively to improve wages and working conditions.

The U.S. Court of Appeals for the District of Columbia said the National Labor Relations Board (NLRB) violated employers' free speech rights in trying to force them to display the posters or face charges of committing an unfair labor practice.

This ruling is another victory for Employers. Earlier this year, the same appeals court threw into question hundreds of other NLRB decisions after finding that President Obama's recess appointments to the board were unconstitutional. The Obama administration is appealing that decision to the U.S. Supreme Court. We will need to wait and see if the Obama administration appeals this ruling as well.

NLRB Postpones its Mandatory Notice-Posting Until 1/31/2012