Showing posts with label Union. Show all posts
Showing posts with label Union. Show all posts

Monday, July 18, 2016

Construction Industry Double-Breasting

If You Try To Set This Up Yourself, Without Legal Counsel – Watch Out!

July 2016
Richard H. Wessels, Esq.

Here at Wessels Sherman we have seen an uptick recently in legal challenges by unions to construction industry double-breasting schemes. By using the word “schemes”, I don’t mean it in the bad sense at all. There is nothing improper or illegal about double-breasting. Unions hate it, but it’s not illegal. In the simplest terms, double-breasting means having a union entity and a non-union entity.

The fundamental principle is that in order to withstand a legal challenge, the two entities must indeed have separation. This is where it gets tricky. No single factor is determinative, it is like weights on a balance scale. There are many factors that can be evaluated and among these are ownership, interrelationship of operations, management, handling of labor relations, interchange of employees, and then a whole variety of factors such as geographic separation, bookkeeping, personnel policies, use of equipment, telephone, business cards, and advertising to mention just some. Again, no single factor is determinative, but some of these factors such as interchange of employees are definitely more important than others. You have big potential problems if the same workers have hours in both the union and non-union companies.

What makes this area even more confusing is that much depends on how you are challenged. Challenges can come from a union trust fund audit, NLRB charge, grievance alleging a labor contract violation, or a demand for recognition. We have definitely seen increased activity in this area, particularly as union pension funds are desperately looking for more money. A good potential source of money for these union trust funds is to allege that the non-union entity is not properly double-breasted and trust fund payments going back many years should have been made under the union contract with the union entity. In other words, “same book with a different cover”. You can see the problem here, and if you have any concerns, give us a call so that we can help you with risk evaluation and setting up better evidence if you are challenged.

Questions? Contact Richard Wessels at (630) 377-1554 or by email at riwessels@wesselssherman.com



Wednesday, June 15, 2016

Should Illinois Employers Even Worry at All About Unions in 2016?

June, 2016
By Richard H. Wessels


The statistics show a clear pattern. Union strength is on the decline. Percentages in the private sector reveal that unions have gone from a mid-1950s high-water mark of 35% of the private sector workforce to about 6% today. That’s a big drop.

The number of union organizing petitions continue to fall, although the pro-union NLRB is trying to prop unions up with quickie election rules. Elections now are held within 27 days on average rather than 42 days after a petition which was the average before the new rules. This makes it easier for unions to win the few elections that are held these days.

For a whole host of reasons, unions are finding it difficult to generate much interest. It is likely that this decline is irreversible and fundamental. There has been a shift in our U.S. economy from heavy industry to service sector and governmental involvement has made unions less essential, or at least has addressed concerns that formerly led workers toward unions. Now, the answer to the lead question. Yes, you still have to worry, although perhaps not as much.

At our full day client seminar which was hosted by our Wisconsin office this year (May 13), I presented a talk on “Top Ten Tips for Staying Union Free.” It was pretty familiar stuff, mostly centered on good communication and good supervision.

My final point at the Wisconsin seminar I suggest is worth considering. It is my battle-tested standard and simple three step plan:
  1. Someone in your organization understands and is responsible for Wessels Sherman’s ABC’s of Staying Union Free; 
  2. Your front-line supervisors are trained on the issue of union organizing and they are not afraid of it;
  3. You have a simple one-page union-free action plan.
 I will email you (free of charge) all you need to know about this three step approach for staying union free. Contact me at (630) 377-1554 or email me at riwessels@wesselssherman.com.

Thursday, February 12, 2015

February 2015: Ask Your Labor Lawyer

February 2015
By Richard H. Wessels, Esq.



Question:  We are selling a facility where some of the employees are covered by a union contract. What are our obligations to the union?

Answer:  We really would have to sit down to carefully go over details. The best we can do here is cover general principles only. Perhaps more than any other area of labor law, slight changes in the fact pattern could dramatically change the legal consequences and thus the strategy to be used.

In today's rapidly changing business environment, close attention must be paid to labor relations implications. We are seeing any number of scenarios wherein one employer replaces another. Typically this can be the result of a merger, acquisition, sale of assets, third party outsourcing, etc.

Here are the fundamental principles.

1.               Obligations of the predecessor employer. The issues here would involve whether or not "decision bargaining" is required and also the issues of "effects bargaining." The particular facts of the situation are exceedingly important. For example, is the change occurring during the collective bargaining agreement or after contract expiration? Specific contract language could have substantial impact. "Decision bargaining" is often necessary, especially if labor costs are a factor. "Effects bargaining" involves such issues as severance pay, etc. and is almost always required. Keep in mind that only "bargaining" is required, not agreement.

2.               Effect of "successors and assigns" clauses. Despite the frequently clear wording of successorship clauses, the case law is that such clauses do not bind a successor employer. The simple reason is that there is no privity of contract. However, a successorship clause could have impact on the duties of the predecessor employer. For example, there have been cases based on specific contract language wherein a union has successfully enjoined sales or transfers of a business. Further, today’s pro-union NLRB has been over-turning earlier case law, so we need to be careful. 

3.               Is the new employer a "successor at law?" There are several variations on this theme. Of course, if the transaction is a stock deal, the new employer merely steps into the shoes of the predecessor employer and would inherit the contract. If it is another form of transaction, however, the general principle is that a successor inherits not the contract but only the obligation to "bargain in good faith." The Board and the reviewing courts have focused on the following inquiries in determining whether there is a successorship:

·   Continuity of the workforce
·   Continuity of identity of the business enterprise
·   Continuity of the appropriate bargaining unit.

By far, the most important factor is continuity of the workforce. Must reading for anyone developing a strategy of this type is the U.S. Supreme Court's decision in Fall River Dyeing & Finishing Corp. v. NLRB, 482 US 27 (1987).

4.               A successor can set initial terms and conditions. The general rule is that if there is a successorship (usually majority status is the key issue here), the new employer can set initial terms and conditions. There are exceptions to this such as the "perfectly clear" principle, but in the majority of situations, it is appropriate for the successor to set initial terms and conditions. In other words, it would not be bound by the precise terms of the underlying collective bargaining agreement. If there is a successorship, the company's obligation after setting initial terms and conditions would be to "bargain in good faith" with the union in an effort to reach a collective bargaining agreement.

5.               Practical considerations. In a high percentage of the situations, where the new employer is continuing the enterprise with essentially the same workforce, that new employer will find it in its best interest to continue the relationship in an uninterrupted manner. Sometimes this will involve no more than assuming the existing agreement. Often an employer will engage in discussions with the union to negotiate changes. Many times this occurs prior to the completion of the transaction and, on occasion, this has been a condition upon which the entire transaction is based. It has been our experience that a new employer that is willing to continue uninterrupted the relationship with the union will find it relatively easy to achieve a new agreement with the union which might well contain substantial changes from the prior agreement.

Again, keep in mind that this commentary covers general principles only. Slight changes in the fact pattern could substantially change the recommended strategy.



Questions? Call Attorney Dick Wessels of Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email him at riwessels@wesselssherman.com.

Readers are invited to submit their labor law questions for possible use in this column. Just email your questions to Dick Wessels at riwessels@wesselssherman.com. Your identity (and your company's identity) will not be revealed if your question is selected by Dick Wessels for this column.
"Ask Your Labor Lawyer" is our very popular column written by Dick Wessels who is Founder and Senior Shareholder of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. Dick handles a wide variety of labor and employment law cases. His primary focus is dealing with labor unions, either on behalf of union-free companies or where unions already have representation rights. Dick has handled cases involving nearly all international unions for companies throughout the United States.

Wednesday, February 26, 2014

Public Hearings on Proposed "Ambush Election" Rules

This morning the NLRB announced that public hearings on the proposed “Ambush Election” rules will be held at the NLRB offices in Washington on April 10 and April 11, 2014. You can access this announcement at http://content.govdelivery.com/accounts/USNLRB/bulletins/a7afaa?reqfrom=share.

Friday, January 31, 2014

College Football Players Union

This union organizing effort is a publicity stunt and the NLRB petition must be dismissed because scholarship athletes are not employees....MAYBE, MAYBE NOT.


Members of the football team at Northwestern University (85 scholarship athletes) are seeking to become the first labor union specific to college athletes, in an attempt to gain greater legal and financial rights. In an effort to gain these rights, the newly-created College Athletes Players Association, backed by the United Steelworkers, filed an election petition with Region 13 of the National Labor Relations Board (NLRB) in Chicago. The Chicago Regional Office is scheduled to hold a hearing beginning February 7 to determine whether the student-athletes are "employees" under the National Labor Relations Act (NLRA), and thus eligible to form a union. Wessels Sherman received this petition in response to our Freedom of Information Act request [click here to view the petition]. Regardless of whether college athletes are treated fairly under the current system, the NLRA only governs the employment relationship, so unionization may not be the proper avenue to seek improvements of the college athlete experience.

Other Related Cases

While this is the first time the NLRB will have to determine whether student-athletes are employees, other somewhat related cases concerning workers who do not fit into the traditional definition of "employees" may shed some light on how the NLRB will approach the issue.

The NLRB has gone back and forth regarding whether graduate student assistants are "employees," most recently determining in 2004 that they are primarily students, and therefore not statutory employees. In reaching this decision, the NLRB noted that "there is a significant risk, and indeed a strong likelihood, that the collective-bargaining process will be detrimental to the educational process." Although the NLRB announced in 2012 that it would reconsider the issue, the case was settled before the NLRB ruled on the issue.

The NLRB has also determined that unpaid volunteers are not employees within the meaning of the NLRA. The NLRB stated that "the relationship between the Employer and unpaid staff is not that of employer and employees contemplated by the Act. Unpaid staff do not depend upon the Employer, even in part for their livelihood or for the improvement of their economic standards. They do not work for hire and thus the Act's concern with balancing the bargaining power between employer and employees does not extend to them."

The NLRB determines on a case-by-case basis whether disabled workers in a sheltered workshop are employees. The relevant inquiry is whether the primary purpose of the workshop is rehabilitation-in which case the workers are not employees-or industrial-in which the workers are employees.

Finally, although not in the context of the NLRA, at least one court has determined that a football player from TCU who suffered a paralyzing injury was not an employee eligible for workers' compensation under Texas law, despite the fact that his room, board, and tuition were paid, in addition to a small allowance for incidentals. The court noted that both parties intended the player to attend the university as a student, not as an employee.

Predictions

Because we do not believe that student-athletes can reasonably be found to be employees under the NLRA, we believe that Region 13 of the NLRB in Chicago will dismiss this petition. However, this decision would likely be reviewed by the NLRB in Washington, D.C., and with its current makeup, what it is likely to do is more difficult to predict. We anticipate a lengthy hearing at Region 13 with Northwestern presenting testimony from the A.D., university administrators, coaches, and NCAA officials. Mountains of evidence will be presented showing no employment contract, no pay check, no withholding, no tax returns filed, no direction and control over student activities and the same direction and control in football activities over both scholarship and non-scholarship players.

The current, extremely labor-friendly, NLRB has had no qualms extending its reach in unprecedented ways. For example, in the controversial D.R. Horton decision, the NLRB declared that arbitration agreements that prevent employees from bringing class action lawsuits, violate the NLRA. The NLRB has also begun carefully scrutinizing non-union employers' social media policies and other handbook provisions to determine whether these provisions interfere with employees' rights under the NLRA. Finally, the recent Specialty Healthcare case has opened the door to "micro units." Although those cases did not concern the definition of employees, they illustrate other ways that the NLRB has recently asserted its authority in new ways.

Other Considerations

The football players in question attend Northwestern University, which is a private school. However, the majority of the universities with a strong emphasis on college sports are public, and thus outside of the reach of the NLRB; each state has its own distinct labor laws governing state employees. This could present a huge problem for the unionization of student-athletes on a larger scale.

Written by: Richard H. Wessels, Esq

Monday, June 3, 2013

Union’s Tacky/Stinky Strike Tactic Survives Federal Court Challenge

A federal court in Illinois recently dismissed a Chicago hotel’s complaint against UNITE HERE, Local 1.  The Congress Plaza Hotel and Convention Center claimed in its suit that the union engaged in unlawful “secondary boycotting” as part of its strike against the hotel.  The union was accused of trying to cause business groups not to hold their conventions at the struck hotel.  In what can only be characterized as a stinker of a strike tactic, the complaint alleged that UNITE HERE, Local 1 delivered a heart-shaped package, filled with cow manure, to a group of scientists who had scheduled their convention to take place at the struck hotel. 

Section 8(b)(4)(ii)(B) of the National Labor Relations Act prohibits unions from exerting pressure on secondary businesses with the objective of causing them not to do business with a “primary” employer (one with whom the union has a labor dispute).  The allegations of this case seemed to fit the bill for such a claim. After all, if the scientists “got the drift” of the message behind the union’s lovely “gift,” it certainly appeared the union was unhappy with their choice of the location for their convention.  Unfortunately, the court never decided whether the union’s creative but raunchy “cow pie” package crossed the line because it ruled the hotel failed to bring suit within the applicable statute of limitations. 

Labor unions generally have little clout during a labor dispute.  To be sure, employees may lawfully withhold their services in an attempt to get their way at the bargaining table; i.e. go on strike.  But employers willing to withstand a strike are within their legal rights to hire replacement workers and continue operating, as was the case in this particular matter.  Faced with this kind of dilemma unions sometimes resort to “creative” measures such as the secondary pressure aimed at customers as alleged in this case.  Other cases with which our attorneys have been involved in the past include a union using giant inflatable rat; public campaigns through social and other media; and, on occasion, acts of violence.  Knowing how and, as this case demonstrates, when to react to such union tactics is part of management’s careful strike preparation plan in anticipation of any potential labor dispute.


For knowledgeable advice and assistance with advance planning for possible labor disputes or dealing with union pressure tactics, seek the advice of an experienced labor lawyer.  Contact: James B. Sherman at (952) 746-1700, or email jasherman@wesselssherman.com.