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- ORGANIZING
- STRIKES & LABOR DISPUTES
- MAJOR CONTRACT SETTLEMENTS & NEGOTIATIONS
- ADMINISTRATIVE & COURT DECISIONS
- LEGISLATION & POLITICS
- CRIME & CORRUPTION
- MISCELLANEOUS
A. Organizing
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At the United Food and Commercial Workers (UFCW) convention held August 18 - 22 in Montreal, Canada, delegates pledged to increase the current 1.3 million membership to 3 million in the next ten years. To achieve this goal, the delegates adopted several constitutional amendments and resolutions designed to implement the “unity agenda,” a plan for “uniting workers in core industries, uniting members at the bargaining table, and uniting the union in a common, collective course of action.” Funding of the “unity agenda” required an increase in the per capita tax of $3.00 per month over the next five years. The increase is necessary, said UFCW Secretary-Treasurer Mark Perrone, in order to deal with large, global employers.
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On August 1, United Healthcare Workers-West (UHW)—an affiliate of the Service Employees International Union (SEIU)—filed a petition for election with the NLRB seeking to represent certain employees at Stanford Hospitals & Clinics and the Lucile Packard Children’s Hospital. The move came two days after the Stanford Hospitals & Clinics and Lucile Packard Children’s Hospital at Stanford both announced the withdrawal of recognition for the UHW. SEIU Local 715 had previously represented approximately 1,450 service and maintenance workers, nursing assistants, secretaries, laboratory workers, food service workers, and housekeepers at the two hospitals. In 2006, the SEIU reorganized its California based locals, and five locals (including Local 715) were merged to form a new local, Local 521, which, in turn, transferred the private sector health care workers such as those at the two Stanford hospitals to the UHW. The hospitals withdrew recognition of UHW, on the grounds that the employees had not consented to the change in bargaining agent.
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B. Strikes & Labor Disputes
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On August 27 United Steelworkers (USW) members employed by Luxembourg-based steel company ArcelorMittal authorized the union to call a strike. The parties have been in negotiations for a new agreement since April. The union reports that still unresolved are issues relating to economic, employment, and retirement security, retiree health care, funding of voluntary employees’ beneficiary association (VEBA) trust fund, and capital investment in company facilities. The current contract, which covers 14,000 workers in 14 plants in 8 states, expired September 1.
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C. Major Contract Settlements & Negotiations
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United Parcel Service, Inc. (UPS) settled the last open contract dispute with the International Brotherhood of Teamsters (IBT), which represents about 250,000 drivers, handlers, and warehouse workers nationwide. UPS reached the five-year agreement covering approximately 11,000 workers with Chicago-based Local 705 on July 31 hours before the previous agreement was to expire. The agreement runs from August 1, 2008 through July 31, 2013. Meanwhile, IBT members also voted to ratify the first contract with UPS Freight covering approximately 1,000 truck drivers and dockworkers at 50 U.S. terminals. The IBT has organized 10,000 UPS Freight workers at U.S. terminals since January. The current agreement is nearly identical in terms of wage and benefit terms to the contract reached in March covering 9,900 drivers and dockworkers at 136 terminals.
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International Association of Machinists (IAM) Local 733 and Local 2328 ratified a new contract with employer Hawker Beechcraft Corporation on August 28, affecting 4,700 Local 733-represented employees in Wichita, Kansas and 500 Local 2328-represented employees in Salina, Kansas. The new three-year deal ends a four week strike and was approved by 77% of voting members. The agreement provides for annual wage increases of four percent, holds health-care premiums at their current levels for the life of the contract, and increases pension benefits from $44 to $51 per month per year of service.
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Members of UFCW Local 791 overwhelmingly voted to ratify two, five-year contracts with Shaw’s Supermarkets, Inc. The employees—cover clerks, meat cutters and department heads—work in New England. The new agreements, which were reached following nearly three months of negotiations, provide for wage increases in each contract year, maintenance of a defined benefit pension plan, and increased employer and employee contributions to health care plans.
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In what was termed a “breakthrough agreement,” the Communications Workers of America (CWA) and the IBT announced August 10 that they had reached tentative agreement with Verizon Communications Inc. on a new three-year contract affecting 65,000 employees in Northeast and Mid-Atlantic states. The new agreement increases wages 10.5% over term, continues employer-paid health benefits, increases pensions, creates new union jobs, caps Verizon’s contribution to the cost of retiree health care beginning in 2012, and shifts retiree health care for new hires to a defined contribution formula.
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Members of the Air Line Pilots Association of Delta Air Lines and Northwest Air Lines have ratified a joint contract to take effect upon the completion of the Delta-Northwest merger, which is expected to occur later this year assuming approval by Delta and Northwest shareholders and federal regulatory agencies. The agreement increases contributions to pilot pensions and brings pay rates for the two groups of pilots closer together.
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United States Steel Corp. and the Steelworkers announced August 12 that they reached a tentative agreement covering approximately 16,000 workers at domestic flat-rolled and iron ore mining facilities in eight states. The agreement came after four months of bargaining but before the September 1 expiration date of the current contract. Details of the new agreement are not yet available. The union, however, stated that it would provide “very significant wage, substantial bonus, and pension increases, and improve benefit programs for active employees and retirees as well as reduce health care premiums for retirees.”
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The Teamsters voted to reject a National Master Automobile Transporters Agreement and all of its supplements, despite the fact that Teamster leaders endorsed the deal and urged a positive ratification vote. The tentative three-year master contract would have covered 9,500 employees at 14 companies. The union now plans to talk to its members and local union leaders to “discuss the issues behind this defeat,” Teamsters Carhaul Division Director Fred Zuckerman said in an August 13 statement.
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Yale-New Haven Hospital and the New England Health Care Employees 1199, SEIU, reached an agreement requiring the hospital to pay $2 million to settle a decade-long dispute involving the representation of 1,750 nursing assistants, clerical staff, and housekeeping workers. An October 2007 arbitration award required the hospital to pay $2.23 million to the workers and an additional $2.3 million to the union as reimbursement for organizing expenses wasted after the NLRB blocked an election following unfair labor practices by the hospital. The hospital had previously paid the $2.23 million to the workers but resisted the payment to the union.
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Members of the USW at four Packaging Corporation of America paper mills in Georgia, Tennessee, Michigan, and Wisconsin have ratified a five-year “global” contract. The master agreement, which covers approximately 1,200 workers, covers “global security and economic” issues but allows other issues to be negotiated locally upon the expiration of local agreements. The expiration dates of the local agreements range from 2008 through 2010. Wages are set to increase 2.5% in the first and second year, 2.75% in the third and 3% in the fourth and fifth years of the contract; the pension factor will go up $6 to $46.62 over term and employees will pay 20% of health care premiums (currently, employee premium for family coverage will be $289/month).
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The CWA and Qwest Communications International Inc. agreed to a three-year tentative agreement covering 20,000 telecommunications workers in 13 states. The agreement, which calls for an 8.75% increase in wages over the term of the contract and higher health care costs for employees and retirees, is nearly identical to one reached between Qwest and the International Brotherhood of Electrical Workers (IBEW) covering 200 workers in Montana. The ratification vote will be held in early September.
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Tentative three-year agreements have been reached between the California Nurses Association (“CNA”) and two California hospitals. The agreement with Alta Bates-Summit hospitals in Oakland and Berkeley, California provides for a 17% wage increase over the life of the contract, which, in conjunction with a 5% raise received earlier this year, would result in a net 22% increase in pay by the end of the contract for the 1900 registered nurses represented by the union. Meanwhile, the tentative agreement with Marin General Hospital in Greenbrae, California would yield a 19.5% pay increase over the three-year contract and a $2,500 prorated bonus for each of the 500 members of the bargaining unit. The agreements were reached with the help of a federal mediator.
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According to BNA, through August 25, the average first-year wage increase was 3.6%, which is identical to the increase reported for the same period in 2007. To date, the median first-year increase for settlements is 3.3%, up 0.1% from the comparable period in 2007. Meanwhile, the Human Resources and Social Development Canada reported August 15 that average base-rate wages were increased 2.4% in major Canadian collective bargaining agreements reached during the second quarter of 2008. That number is significantly lower than the 3.4% average in the first quarter of the year. The second-quarter data was based on 65 collective bargaining agreements covering 138,140 workers.
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D. Administration & Court Decisions
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United Air Lines, Inc. (UAL) filed suit against the Air Line Pilots Association International (ALPA), the union representing United pilots, alleging that ALPA encouraged pilots to abuse sick leave and refuse voluntary assignments in an effort to force the Company to re-open contract negotiations. These actions, UAL asserted in the complaint filed July 30, 2008, amounted to a violation of the Railway Labor Act and caused the cancellation of 329 flights—inconveniencing 36,000 travelers—in a ten day period. UAL seeks declaratory and injunctive relief. On August 8, United announced it had reached a “stand still agreement” with ALPA in which both parties agreed to avoid actions that may lead to disruption of flight schedules. A preliminary injunction hearing was set for August 27. United Air Lines Inc. v. Air Line Pilots Ass’n, No. 08 CV 4317 (N.D. Ill.).
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The First Circuit ruled that a union could not avail itself of the statutory labor exception to the antitrust laws in order to save its Market Recovery Program (“MRP”), a subsidy program developed by the union and intended to offset advantages enjoyed by non-union contractors. Five non-union steel erector companies in New England sued the International Association of Bridge, Structural Ornamental & Reinforcing Iron Workers, Local 7 (Local 7) over the MRP. Local 7 argued that labor costs for those steel erector companies that have signed bargaining contracts put the companies at a disadvantage versus non-union companies in competing for subcontracts. The MRP was created to offset the advantages and was funded with deductions taken by union contractors from union member paychecks. In November 1993, the union and the Building Trades Employers’ Association of Boston and Eastern Massachusetts (BTEA) agreed to include a formula for making the payroll deductions in their labor contract. In 2004, the non-union companies sued, arguing that the MRP was a tool used by the union and union companies to underbid non-union companies. The district court granted summary judgment to Local 7 but the First Circuit reversed, finding it was “a thin fiction to pretend that the [MRP] does not represent a combination between labor and non-labor groups,” and therefore, the union could not avail itself of the statutory labor exemption from antitrust laws. The Court of Appeals remanded for the district court to determine the applicability of nonstatutory labor exemptions. Am. Steel Erectors Inc. v. Local 7, Int’l Ass’n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, No. 07-1832 (1st Cir. Aug. 1, 2008).
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A New York district court held that ALPA did not discriminate against pilots at or near retirement age when it agreed to terminate a defined benefit plan in favor of a defined contribution plan. ALPA agreed to the change with U.S. Airways after the airline emerged from Chapter 11 bankruptcy in 2003. Pilots near retirement brought an age discrimination suit, alleging that the change in pension plans violated the Age Discrimination in Employment Act by permitting younger pilots to accrue greater benefits. The court disagreed, finding that the amended plan provided the same benefits to pilots of all ages and that any difference in the amount of the benefit was the result of the time value of money, not age discrimination. Vaughn v. Air Line Pilots Ass’n, No. 03-CV-4822 (E.D.N.Y July 24, 2008).
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The Supreme Court of Canada has agreed to hear a case against Wal-Mart Stores, Inc. and to decide whether the company closed a store in Quebec after the employees there voted for union representation. The Jonquiere, Quebec store was the first in North America to win union certification. Meanwhile, a Quebec arbitrator awarded UFCW Local 486, which was certified as the store’s bargaining agent by the Quebec Labor Relations Board in 2005, its first collective bargaining agreement in connection with Local 486’s representation of the Gatineau, Quebec Wal-Mart Canada outlet. The decision means that the Gatineau employees are the first Wal-Mart employees in North America to have a union contract. The three-year contract provides for wage increases averaging 30 percent and improves vacation benefits.
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Midwest Generation LLC and the IBEW have agreed that Midwest Generation will pay approximately $15.5 million to IBEW Local 15 in settlement of a dispute surrounding the company’s 2001 lockout of employees. The settlement consists of approximately $10 million in back pay to the 1,015 workers locked out for seven weeks as well as a sum designed to compensate employees for surrendering their right to pursue further legal action. A mediator assisted the parties in reaching the settlement
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The U.S. Court of Appeals for the Eighth Circuit affirmed a district court’s determination that a union official’s free speech rights under the Labor Management Reporting and Disclosure Act (LMRDA) were not abridged when he was removed from his elected position as discipline for non-protected speech. The Transportation Communications International Union’s removed an individual from an elected position as discipline for using profanity to a superior and for threatening an administrative employee to “watch her back.” The district court concluded that Title I of the LMRDA protects only speech or expression related to the general union membership, and the Eighth Circuit agreed, finding the expression “did not relate to anything that involved the interests of the union generally but instead were personal grievances about the way he was being treated. . . . Congress did not intend for such speech to be protected under title I of the LMRDA.” Hylla v. Transp. Commc’ns Int’l Union, No. 07-3573 (8th Cir. Aug. 6, 2008).
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An arbitration concluded that Alaska Airlines violated a labor agreement with the IAM when it laid off 500 baggage handlers and ramp workers in 2005 and outsourced the work to an independent contractor. While the contract permitted the airline to eliminate jobs and outsource the work, that right was conditioned on the contractor charging less than it would cost the airline to perform the work itself. The arbitrator concluded that the contractor’s charges were higher than it would have cost the airline to perform the same work and, accordingly, found the contract had been violated.
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The federal court for the Eastern District of Pennsylvania concluded that a New Jersey roofing contractor could not prevail on a fraud claim against a local union and a contractor’s association, despite an earlier Third Circuit determination that the two defendants had engaged in secret negotiations that harmed the contractor’s interests. The Third Circuit’s 2005 decision had reversed a prior NLRB ruling regarding the timeliness of the contractor’s withdrawal from the contractor’s association, finding that the secret bargaining between Roofers, Waterproofers and Allied Workers Local 30 and the Roofing Contractors Association deprived D.A. Nolt Inc. the opportunity to withdraw from the association before the negotiations began. Despite that holding, however, the district court found that Nolt could not show that either defendant had an intent to induce Nolt to rely on a fraudulent representation. Local Union 30, United Union of Roofers v. D.A. Nolt Inc., No. 01-CV-5344.
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The New York City District Council of Carpenters moved to terminate a 1994 consent decree, but in an August 8 decision, a federal judge for the Southern District of New York denied that motion and instead extended the court’s supervision and appointed an independent investigator for at least one additional year. The consent decree, which settled a civil suit brought by federal prosecutors under the Racketeer Influenced and Corrupt Organizations Act, enjoined union officers, employees, and members from engaging in any racketeering activity, knowingly associating with any member of a criminal group, or interfering with the consent decree’s terms. In addition, the consent decree established an Investigations and Review Officer (IRO) and independent hearing committee to enforce the decree’s terms. While the IRO’s term expired in 1999, the court found that the objectives of the consent decree had not been attained, justifying the extension of the court’s supervision. U.S. v. Dist. Council of New York City & Vicinity of the United Bhd. of Carpenters & Joiners of Am., No. 90 Civ. 5722 (S.D.N.Y. Aug. 8, 2008).
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The Eastern District of Michigan approved on July 31 a settlement agreement reached between General Motors and the United Auto Workers (UAW) that created a VEBA for the funding of retiree health care. The case was initiated by 522,000 GM retirees, spouses, and dependents under both the Labor-Management Relations Act and the Employee Retirement Income Security Act and sought a declaration that retiree health care benefits could not be unilaterally altered or terminated by GM. United Auto. Workers v. Gen. Motors Corp., No. 2:07-CV-14074 (E.D. Mich. July 31, 2008).
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A federal judge in the Southern District of New York granted the NLRB’s petition for an injunction under section 10(j) of the National Labor Relations Act (NLRA) after finding that there was reasonable cause to believe that the Kingsbridge Heights Rehabilitation & Care Center—a nursing home in the Bronx—had committed “particularly flagrant unfair labor practices.” The 1199 SEIU United Health Care Workers East (a Service Employees International Union affiliate) represents 250 to 300 of the nursing home’s workers, who have been on strike since February. The preliminary injunction entered by the court prevents the nursing home from bargaining directly with employees, making individual employment agreements, unilaterally granting employment benefits in order to prevent union activity, threatening discharge if employees strike, encouraging employees to resign from the union, making non-membership in the union an employment condition, videotaping employees engaged in protected activities, refusing to meet and bargain in good faith, refusing to provide the union with information, and unilaterally changing the terms and conditions of employments. Mattina v. Kingsbridge Heights Rehab. & Care Ctr., NO. 08-6550 (S.D.N.Y. Aug. 14, 2008).
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A federal judge in the Northern District of Ohio approved a settlement agreement between Goodyear Tire & Rubber Co. and the USW that includes the creation of a VEBA funded by a one-time $1 billion payment by Goodyear as well as amounts attributable to certain profit-sharing payments and cost-of-living adjustments that had been deferred by active employees and would have been paid during the term of the 2006 agreement. As funded, the VEBA will satisfy Goodyear’s health care obligations to the nearly 30,000 USW-represented retirees. Without the VEBA, more than half of Goodyear’s expenditures for health care go towards the payment of retiree health costs. The agreement including the VEBA settles a 2007 lawsuit brought by two retires and the USW seeking a declaration that Goodyear could not unilaterally alter retiree health benefits. Redington v. Goodyear Tire & Rubber Co., No. 5:07-CV-1999 (N.D. Ohio Aug. 22, 2008).
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The United States Court of Appeals for the Ninth Circuit held that an employer cannot interfere with a union’s free speech rights on an employer’s property, even where the union members exercising those rights are not employed there. Applying the holding to the case on appeal, the Ninth Circuit held that the management company defendant violated the National Labor Relations Act by interfering with union members picketing in the private shopping malls operated by the company. The company had established six rules of conduct that prohibited activities identifying the mall owner or manager by name, banned signs interfering with the malls’ commercial purpose, and restricted expression during “peak traffic days.” These rules violated free speech rights, which in California, extend to speech in privately owned shopping centers. United Bhd. of Carpenters & Joiners of Am. Local 848 v. NLRB, No. 05-75295; NLRB v. Macerich Mgmt Co., Nos. 05-76217, 05-77116 (9th Cir. Aug. 26, 2008).
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A federal court upheld the U.S. Coast Guard’s interpretation of the Jones Act regulations as reasonable, thereby rejecting challenges from several unions—including the Philadelphia Metal Trades Council and the AFL-CIO’s Metal Trades Department—under the Administrative Procedure Act. The 1920 Merchant Marine Act (more commonly known as the Jones Act) requires that vessels be built in the United States if they move (directly or via foreign ports) by water between different points in the country. The U.S. Coast Guard is responsible for certifying that the ship is built in the United States and has promulgated regulations requiring all major components of the hull and superstructure be fabricated in the U.S. and that the vessel be “assembled entirely” here. The union challenge followed the Coast Guard’s determination that under the regulation, a ship yard’s installation of engine room equipment manufactured overseas would not affect certification. The court agreed with the Coast Guard, finding the interpretation reasonable in light of the text, history, and purpose of the Jones Act. Philadelphia Metal Trades Council v. Allen, No. 07-145 (E.D. Penn. Aug. 21, 2008).
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The NLRB reversed a Regional Director and found that a memorandum of understanding (MOU) reached between Coca-Cola Enterprises Inc. and IBT Local 529 did not constitute a contract bar to a decertification petition filed by an employee at an upstate New York facility. Under Board precedent, a bargaining contract bars all decertification petitions or petitions by rival unions for up to three years. In this case, however, the MOU was reached in the fourth year of a five year contract and did not purport to be a new contract, only an addendum to the existing five-year deal. Accordingly, there was nothing barring the decertification petition filed by the employee, and consequently, the Board reinstated the petition. Coca-Cola Enters. Inc., E. Great Lakes Div., 352 N.L.R.B. No. 123 (Aug. 14, 2008).
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E. Legislation & Politics
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Senator Hillary Clinton (D-N.Y.) and Democratic presidential nominee Senator Barack Obama (D-Ill.) spoke at the American Federation of State, County, and Municipal Employee’s 38th international convention. Both senators pledged full support for the Employee Free Choice Act, a measure that would have permitted workers to select union representation based on card-check votes.
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The SEIU recently filed a citizens petition with the Washington legislature to restrict the State Investment Board (SIB), which manages $62 billion in public pension money, from investing in private equity firms. Under the rules proposed by the SEIU, the SIB would have to consider certain “societal criteria” like corporate transparency, employment practices, environmental impact, and other factors reflecting corporate responsibility before investing public pension money with the private equity companies.
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The Professional Aviation Safety Specialists, representing more than 11,000 employees of the Department of Defense and Federal Aviation Administration, has endorsed Sen. Barack Obama President.
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The SEIU warned candidates against breaking promises to organized labor organizations. “Any Democrat—or Republican—who said they were going to support us on health care or free choice and turns against us is going to paint a target” on themselves, warned SEIU president Andy Stern.
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F. Crime & Corruption
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Edna Latimore, the former treasurer of the American Federation of Government Employees Local 900 in St. Louis, pleaded guilty on August 7 to one felony count of making a false statement on a 2006 Department of Labor financial report. The false statement had been an attempt by Latimore to conceal the fact that she had embezzled $77,000 in union funds. Latimore will be sentenced October 30 and faces five years in prison and a maximum fine of $250,000. U.S. v. Latimore, No. 4:08-CR-00483-CAS (E.D. Mo. Aug. 7, 2008).
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The president of the IAM accepted the recommendation of a special panel to continue the trusteeship of Local Lodge S6 in Bath, Maine, which represents 3,400 workers. IAM suspended Local S6’s top four officers in March and imposed a trusteeship following allegations of mismanagement including $27,000 missing “union label” merchandise, lack of documentation for “hundreds of thousands of dollars” spent by the union on lost-time reimbursement, use of union computers for “widespread viewing of pornography,” and untimely processing of grievances. The suspended officers sued the IAM in federal court alleging that the IAM attempted to extinguish dissent and deprive Local S6 of their elected officials in violation of the LMRDA.
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A three-person Independent Review Board (IRB) approved an agreement by Robert “Bobby” Hogan, secretary-treasurer and principal officer of IBT Local 714, to be permanently banned from any affiliation with the Chicago-based local and to relinquish his title and duties as vice president of Teamsters Joint Council 25. The agreement settles disciplinary charges brought by the IRB, which is charged with eliminating corruption in the IBT. During the Great Depression, Hogan’s family founded Local 714, which represents 10,000 metal industry workers, pharmacists, and deputies in the Cook County Sheriff’s Office. The agreement also bans Hogan from having any affiliation with Local 714 but permits him to become a member of other Teamsters locals and run for election and take paid positions with other locals after a two year period has elapsed. The only exception is with respect to Local 727, which represents movie and trade show industry workers formerly represented by Local 714: Hogan must wait five year before seeking office or paid positions with Local 727.
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On August 22, the SEIU took control of the United Long Term Care Workers Local 6434 following allegations that the president of the local had improperly paid hundreds of thousands of dollars to companies owned by his wife and mother-in-law. Based in Los Angeles, Local 6434 is the largest SEIU local in California, representing 190,000 nursing home and home care workers. President Tyrone Freeman took an administrative leave with pay for the duration of the SEIU’s internal audit.
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G. Miscellaneous
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The National Mediation Board (NMB), which administers federal law governing labor relations in the airline and railroad industries, announced that it was revising one of several changes to its procedural manual for representation cases. As revised, the changes (1) require a union seeking to extend its certification to a workforce following a company merger to show that the new union-represented group was “more than a substantial majority” of the merged workforce; and (2) bar unions from using authorization cards signed by non-unionized employees to determine whether the union had the “more than a substantial majority.” Senator Edward Kennedy (D.-Mass.), Rep. James Oberstar (D.-Minn.), and Rep. George Miller (D.-Calif.) urged the Board to withdraw the proposed changes, which the head of the NMB refused to do.
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The AFL-CIO announced that it was extending the Solidarity Charter program for locals associated with disaffiliated unions. The extension is intended to bridge the gap until the national AFL-CIO convention is held in November 2009. The program was created in August 2005 when certain national unions disaffiliated from the AFL-CIO to form the Change to Win federation. The charter permits locals of these disaffiliated unions to affiliate at state and local levels in order to work with the AFL-CIO on common organizing, bargaining, legislative, and political campaigns.
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Gene Upshaw, a Hall of Fame offensive lineman with the Oakland Raiders, died at the age of 63. Upshaw was the executive director of the National Football League Players Association and a member of the AFL-CIO Executive Council since 1985.
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If you have questions about items that appeared in this bulletin, or would like to learn more about any of these topics, please contact William Miossi at (202) 282-5708 or (312) 558-6109, or one of the other Labor & Employment Relations partners listed here:
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