Miscellaneous

Can you imagine an issue that Speaker of the House John Boehner and the President of the UFCW agree on? Well, we may have found it and you’d be surprised what it is - Obamacare!

There’s an interesting article today in The Hill reporting on how several unions – the United Food and Commercial Workers International Union, UNITE HERE, the Teamsters and the United Union of Roofers, Waterproofers and Allied Workers – are all now complaining about how the Affordable Care Act is being rolled out.

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We rarely see reported decisions on the common construction wage, so William Wressell v. R.L. Turner Corporation caught our eye. In this case, the Indiana Court of Appeals this month ruled that summary judgment was inappropriately entered for an employer on an employee’s claim that he was paid under the wrong job classification.

Two items are of some note in the opinion. First, the trial court had struck from the summary judgment record eight paragraphs from the affidavit of a field auditor with the Indiana Department of Labor finding those paragraphs to be irrelevant and full of legal conclusions. In those paragraphs, the field auditor set forth the audit guidelines used by Indiana’s DOL as well as items which cannot be included in the fringe benefit calculation under the Indiana common construction wage.

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The dues spigot from Michigan’s home health care workers that had been pouring money into SEIU’s coffers since 2006 has been officially shut off, according to the Director of the Michigan Department of Community Health. Director James Haverman confirmed to the Mackinac Center for Public Policy that SEIU has ended its status as bargaining representative for Michigan’s home health care workers after their contract expired in February.

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The Seventh Circuit in its recent decision in Central States Southeast and Southwest Area Pension Fund v. Messina Products LLC reversed a District Court decision that two individual owners of a defunct trucking company had no personal liability for a $3.1 million in withdrawal liability to the Central States Fund. The District Court had determined that the individual owners were not “trades or businesses” under 29 U.S.C. 1301(b)(1) and therefore could not be liable as the "employer" when the trucking company they owned ceased operations causing a “complete withdrawal” from the beleaguered Central States Fund.

The Seventh Circuit disagreed and reversed. In passing the Multi-Employer Pension Protection Act, Congress decided that all “trades or businesses” under “common control” with the withdrawing employer are treated as a single entity for the purpose of collecting withdrawal liability. Because the Act does not define the phrase “trades or businesses,” the Seventh Circuit had previously decided that it would apply the Supreme Court's test from Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987), that a “trade or business” must engage in activity (1) for the primary purpose of income or profit, and (2) with continuity and regularity.

The owners of the trucking company, according to the opinion, owned the property on which the trucking company was operated as well as an adjacent property which was used for ingress and egress. The judges noted, among other items in a very detailed analysis of the relationship between the individual owners and the company, that there were no signed property leases and that prior to 2005, the company stopped paying rent to the owners.

Messina Products is a must read for anyone dealing with issues involving individual liability for withdrawal liability under the MPPAA particularly where there are leasebacks of real estate owned by company owners.

The case is not finished with this opinion, however. Because the District Court granted judgment on the basis that the individual owners were not engaged in a “trade or business,” it did not reach the second part of the liability test as to whether the individual owners are under common control with the obligated company. In addition, the court also noted that Messina Trucking, the withdrawing employer, initiated arbitration under 29 USC 1401(a)(1) to challenge the merits of the withdrawal liability. So, there is more to come on this one.

As measured by the Bureau of Labor Statistics, the percentage of workers who are union members declined in 2012 for the fifth year in a row. The BLS annual report found that 11.3 percent of wage and salary workers were members of a union in 2012, down from 11.8 percent in 2011. The total number of workers belonging to a union also declined, down to 14.4 million from 14.8 million. As reported by the Washington Post, current union membership is the lowest since the 1930s.

Notably, states that have seen significant labor law fights in the last year were among those who saw the greatest decline in union membership. Indiana, which enacted Right to Work legislation in 2012, saw its union numbers decline from 11.3 percent to 9.1 percent. Similarly, Michigan, which also passed Right to Work as well as limiting public sector collective bargaining last year, saw its union membership decline from 17.5 percent to 16.6 percent. Wisconsin’s union membership rate fell to 11.2 percent from 13.3 percent, a decline that may have been affected by Wisconsin’s limits on public bargaining passed in 2011.

The full BLS report is available on the Department of Labor’s website here.

The Seventh Circuit on Friday upheld Wisconsin’s controversial Act 10 limiting collective bargaining rights for most of the state’s public employees. Wisconsin Governor Scott Walker and the Republican-held Wisconsin legislature had passed the law in February of 2011, despite significant protests by Wisconsin Democrats and union leaders. Union leaders challenged the law in federal court, claiming that it was unconstitutional, and the Western District of Wisconsin overturned some provisions of the law and upheld others in a ruling in March 2012. On Jan. 18, the Seventh Circuit reversed portions of the district court’s ruling and upheld the law in its entirety, dismissing all of the union’s arguments.

This decision is another blow to union-backed court fights, which have been unsuccessful in challenging state laws limiting collective bargaining rights in other states as well. As we posted yesterday, union constitutional challenges to Indiana’s Right to Work law were also dismissed in federal court last week.

The Wisconsin case is Wisconsin Education Association et al. v. Scott Walker et al., Seventh Circuit Case No. 12-1854.  Friday’s opinion is available on the Court’s website here.

Jeff Z. Klein of the New York Times has a great blog post this morning saying momentum is building for the NHL Players Association (NHLPA) to follow the strategies used by the players’ unions in the NBA and NFL lockouts – decertify the union and file suit as a “trade association” against the league and the owners under the anti-trust laws in an effort to break the lock-out.

Here's a link to Klein's story – Slap Shot: “How the N.H.L. Players’ Union Would Decertify”

The NHL lockout, which has reached Day 73, continues to be one of the biggest labor law stories of the year. And with 2 1/2 months of the season already canceled, you've got to believe that it is becoming less and less likely that we'll see any major league hockey in the 2012-13 season. Already the Winter Classic has been cancelled as has the All-Star weekend originally scheduled for Columbus, Ohio.

The NHL and the Players Association appear to be at a standstill in negotiations. The parties have not met since last week and the latest news is that three mediators from the Federal Mediation and Conciliation Service in Washington have been assigned to the dispute. Negotiators who have used FMCS mediators know that they can be helpful and creative in moving obstacles out-of-the-way during negotiations. But at the end of the day, they have no power or authority to compel the bargaining parties to reach agreement. As result, if the parties can't agree on a resolution to the dispute, the mediators cannot close the deal.

As CBS Sports has reported, some grumbling has started among more veteran players ready to return to the ice. In addition, the NHLPA appears to be considering whether decertification of the union would be an appropriate strategy at this point. You'll remember that the NFL Players Association used the decertification route during their recent lock-out with the NFL.

To pursue this strategy, 30 percent of the players would need to sign a petition seeking decertification of the NHLPA. That petition would be submitted to the NLRB and a decertification election would then be held. Alternatively, the NHLPA could disclaim any interest in representing the players. That strategy, as recently used in the NFL labor dispute, would allow the players to sue the league under the antitrust laws to end the lock-out. What makes it more difficult here is that seven of the NHL's franchises are in Canada and not subject to U.S, law on this issue. However, as noted by Bill Daly of the NHL, such a move would clearly signal the end of hockey for this year. In addition, the decertification strategy creates leverage but doesn't get a deal done.

Here are several news reports with the latest on the NHL labor negotiations.

Washington Times: “NHL lockout 2012: Federal mediation part of the talks”

Sporting News: “NHL Lockout: Don’t get too excited about mediator involvement, experts say”

CBS Sports: “NHL lockout: Your daily hockey fix for Day 73”

As we reported earlier this week, federal government over pays its employees compared to the private sector by anywhere from 15-59% in wages (depending upon how you do the calculations) and by 44% when it comes to benefits.  Using these figures, bringing the $200 billion the government spends on civilian employee compensation in line with the private sector could save the government hundreds of billions of dollars over 10 years -- before cutting any programs or entitlements. 

Now realizing that their largely unnoticed government largess should become a subject of national debate, a group of two dozen unions calling itself the Federal-Postal Coalition is lobbying Congress not to touch their objectively inflated wages and benefits.  The group's pitch to Congress is that "federal and postal employees and their families are hardworking, middle-class Americans who are struggling during these tough times just like other Americans."  

A review of the BLS and CBO figures demonstrates that these unions just have their facts wrong.  No study has shown that federal and postal employees are anything but overpaid compared to their private sector counterparts.  And of course, they ignore the millions of unemployed and underemployed Americans.  Perhaps it's time those of us not represented by public sector unions should start asking the President and Congress why public servants are entitled to be paid more and get more expensive benefits than the public they serve.

Labor disputes are messing with two of America's favorites: Hockey and Twinkies.

Today is Day 62 of the NHL lockout. The Winter Classic and 326 regular season games have already been cancelled. And yesterday NHL Commissioner Gary Bettman proposed a two-week moratorium on further talks. The NHL and NHLPA worked at it over the last two weeks and even met for six consecutive days in New York. Experienced labor negotiators were hopeful not only because the parties were at the table but because neither side was running to the media or holding press conferences. (If you're not there to announce a tentative agreement, a press conference during negotiations is usually a bad sign.) But last Friday's session reportedly ended with a heated exchange, and talks on Sunday were adjourned after an hour.

Eklund, the blogger at Hockeybuzz.com who is usually writing about trades and free agents rumors, has an interesting take on Bettman's moratorium proposal.  Despite being questioned in the national hockey press, Eklund suggests that Bettman might be tossing the ball back to Donald Fehr and basically saying your turn.  The lock-out and negotiations are obviously at a critical point and the season is definitely now at risk.

See other reports at CBS Sports and The Huffington Post. 

The other labor news of the day is that Hostess Brands has just announced this morning that it plans to liquidate the company. The New York Times is reporting that Hostess, which is already in a Chapter 11 bankruptcy proceeding, announced the liquidation after members of the Bakery and Confectionery Workers Union rejected a Company ultimatum to return to work by 5 p.m. Thursday. The strike started on Nov. 9 after a bankruptcy judge approved a contract with concessions for the workers. The Union responded by blaming the closing on “nearly a decade of financial and operational mismanagement” by Hostess. Bloomberg.com reports that the Union also asserted that Hostess has stopped payments to the workers’ pension plan, and sought up to 32 percent cuts in wages and benefits.