Labor Blog

SF Hotels Refuse to End Lockout

Mayor Gavin Newsom is condemning the hotels currently locking out their workers in San Francisco. He has proposed a three-month cooling off period, which the union has accepted but the hotels have rejected:

"This lockout is going to hurt the city, feed the perception that San Francisco is not open for business,'' said Newsom. "The business owners are making a bad business decision, not only for themselves but for the entire city. They are hurting San Francisco, and they are hurting their ability to succeed.''

On Monday, Newsom applied pressure to the hotels by saying he would bring no city business to the 14 hotels -- which are joined for the purpose of negotiating labor agreements with their union workers -- and he reiterated that Tuesday.

"Why would I ever sponsor a city event in 14 hotels that are attacking, from my perspective, the city and the values of the city? I would never do that,'' he said. "And I encourage others to pause and reflect. Why would we go to these hotels when we have other good hotels that are not locking out their employees and want to negotiate this (labor contract) in good faith?''

The hotels have been rejecting a two-year contract, a top priority for the union who want to begin 10-city joint negotiations in 2006 with major multinational hotel firms. The hotels claim this would lead to strikes and be"destabilizing to the San Francisco economy.'' Of course, it's hard to make that argument to the public with a straight face as th hotels prepetuate more disruption of the local economy through their lockout of workers.

The hotels are committing public relations suicide. So here's a reminder of the hotels to boycott if you happen to be going to San Francisco: Argent, Crowne Plaza, Fairmont, Four Seasons, Grand Hyatt, Hilton, Holiday Inn Civic Center, Holiday Inn Express and Suites Fisherman's Wharf, Holiday Inn at Fisherman's Wharf, Palace, Hyatt Regency, Mark Hopkins, Omni and St. Francis.

Pro-Corporate Bankruptcy Courts

When people talk about the damage conservatives do to the courts, they are usually thinking of undermining civil liberties or civil rights. But the pro-corporate leanings of specialty courts like bankruptcy means that workers lose out as well.

As the Daily Labor Report article below details, airline workers are being forced into desperate concessionary bargaining because they know if a bankruptcy court makes the decision, they will be shafted even worse:

Arthur Luby, who represented members of the Transport Workers Union during recent concession bargaining with US Airways, said courts have allowed companies to abandon their collective bargaining agreements in more than 90 percent of bankruptcy proceedings across various industries he has reviewed.

Luby was speaking at a legal seminar organized by the American Law Institute and the American Bar Association on airline and railroad labor law. . .

Luby said labor attorneys and union officials who are used to dealing in a system that encourages arbitration and compromise under the Railway Labor Act must understand that bankruptcy judges more often than not side with the companies.

Bankruptcy courts have become the favorite venue for union-busting in a range of industries.

BNA Daily Labor Report
Tuesday, October 26, 2004 Page A-6

Airlines: Negotiated Settlements Called Preferable
To Court-Imposed Cuts at Bankrupt Firms

Arthur Luby, who represented members of the Transport Workers Union during recent concession bargaining with US Airways, said courts have allowed companies to abandon their collective bargaining agreements in more than 90 percent of bankruptcy proceedings across various industries he has reviewed.

Luby was speaking at a legal seminar organized by the American Law Institute and the American Bar Association on airline and railroad labor law.

Workers at companies facing bankruptcy reorganizations are better off negotiating concessions through collective bargaining rather than waiting for a court to impose cuts in pay and benefits that are likely to be far worse, labor attorneys told a legal seminar Oct. 22.

Luby said labor attorneys and union officials who are used to dealing in a system that encourages arbitration and compromise under the Railway Labor Act must understand that bankruptcy judges more often than not side with the companies.

"They have to understand they're dealing in a different world, and the consequences of not understanding that are that you lose your contract," said Luby, who is with O'Donnell, Schwartz & Anderson in Washington, D.C.

Under Section 1113 of the U.S. Bankruptcy Code, companies that enter bankruptcy proceedings can ask a court to set aside an existing collective bargaining agreement and authorize reductions in pay and benefits. However, the debtor company must first make a proposal to the union, provide the bargaining agent with company financial information, and meet with the union and bargain in good faith.

In the US Airways case, three small groups of TWU-represented workers negotiated consensual cost-cutting agreements with the company, as did the Air Line Pilots Association. The carrier still is trying to reach agreements with other unions.

Daniel Katz, an attorney with Katz & Ranzman in Washington, D.C., who is representing the Communications Workers of America in the US Airways bankruptcy case, also cautioned unions against letting a bankruptcy judge decide the level of pay and benefits.

Even though bankruptcy law was amended in 1984--adding Section 1113 to prevent companies from unilaterally discarding collective bargaining agreements--workers are at a disadvantage when a company enters bankruptcy court, he said.

"It's not a place that's friendly for unions or workers," Katz told the seminar.

Courts Focus on Companies

Bankruptcy judges are more focused on the financial details of a company rather than its workers, although Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia, who is overseeing the US Airways case, showed a great deal of empathy for employees, Katz said.
"By training and the nature of their business, bankruptcy judges essentially view their mission as looking after these failed businesses," he said. "From that perspective, it's a tough place for a union or employee advocate. From that standpoint, there are good reasons why a union would want to settle matters outside the court."

CWA has not agreed to concessions--Katz said the company proposals were "just too onerous for the union to agree to"--although talks are continuing.

US Airways on Oct. 15 obtained approval from Mitchell to impose a temporary 21 percent pay cut and reductions in benefits for all union-represented workers who had not agreed to long-term concessions (200 DLR AA-1, 10/18/04).

Management attorney John J. Gallagher, with Paul, Hastings, Janofsky & Walker in Washington, D.C., pointed out that courts have set standards that debtor companies must meet in obtaining relief from collective bargaining agreements, although courts are not entirely in agreement on those standards.

The U.S. Court of Appeals for the Third Circuit has determined that a debtor firm only could obtain relief that is necessary to avoid liquidation, while other circuits have ruled that companies are entitled to relief that will make them a viable competitor in the industry.

Section 1113 "is not an opportunity for a carrier to cherry pick every provision of a collective bargaining agreement it doesn't like--to say, 'I'm in bankruptcy and I can make an effort to get rid of them,' " Gallagher said.

Trend Is to Negotiate

Katz and other attorneys said in the airline industry the trend has been for carriers and workers to negotiate agreements outside court. Unions are likely to negotiate a better deal, and the carrier has an incentive to avoid the negative publicity generated by public court hearings, as was the case with US Airways, according to Katz.

Gallagher said he is aware of only two cases in the airline industry where carriers have had courts impose contract concessions under Section 1113. In addition to the recent US Airways decision, United Airlines obtained relief from collective bargaining agreements following its 2002 bankruptcy filing, he said.

Regarding the spate of airline bankruptcy filings in recent years, labor and management attorneys disputed the cause of those filings.

Tom A. Jerman, with O'Melveny and Myers in Washington, D.C., said they are a by-product of a new competitive era in the industry. Low-cost carriers have gained a larger market share in the past decade, and the Internet has made airline pricing schemes more transparent, making the industry even more competitive, according to Jerman.

"It is the result of market forces that really are beyond the control of any carrier," he said.

However, labor attorney William Wilder, with Baptiste & Wilder in Washington, D.C., disputed that assertion. Wilder said the problems were "more a result of unimaginative, uncreative management."

He singled out US Airways, which in the 1990s, he said, "had a regime that thought what an effective carrier consisted of was changing its livery colors and changing its name and that's about it, but nonetheless doesn't stop making demands of labor under the guise of this is the reality with which we now have to deal."

Bankruptcy Court Kills

That will be the result of this court decision in Kentucky voiding the health care of miners working for a company owned by Horizon Natural Resources:

After 31 years, Carl Leake retired last year from the Cannelton mine near here with what he thought was a rock-solid promise of health insurance for life under his union contract. And a vital promise it was: this summer, his wife was found to have breast cancer and her treatment has cost more than $200,000.

But last month, a federal bankruptcy judge in Kentucky authorized Cannelton's owner, Horizon Natural Resources, to terminate its collective bargaining agreements with the United Mine Workers of America. And just like that, Mr. Leake's guaranteed health insurance was gone.

"I figure we could lose everything if we have to pay her bills," Mr. Leake, 61, said.

Mr. Leake is one of nearly 3,800 union coal miners and their dependents in West Virginia, Kentucky, Illinois and Indiana whose company-financed health insurance vanished with a swipe of Judge William S. Howard's pen last month. The union has pledged to cover their health insurance for six months. But beyond that, many workers are facing a future with no insurance or monthly premiums they can barely afford.

This is a classic abuse of the bankruptcy court, voiding beneifts for workers and killing union agreements, so companies can keep operating non-union.

The judge's argument for its action might seem compelling:

Judge Howard agreed. In a ruling in August, he said "unrefuted evidence" showed that Horizon's mines could not be sold as long as its expensive obligations to union retirees remained in place. He asserted that elimination of the benefits, while painful, was in the public interest because it would preserve nonunion jobs at about two dozen other mines that might have closed in a liquidation.

But the reality is that this supposed benefit for a few workers-- now doomed to low-wage, non-union jobs-- will set a precedent for worsening the lives for even more workers and retirees in the industry:

Bankruptcy experts said the Horizon case was likely to encourage other coal companies to try to shed expensive union agreements through Chapter 11 filings.

There is a political aspect to this decision. The union blames the Bush administration for blocking reform of the abusive bankruptcy system used by companies to undermine union agreements.

The case has become a campaign issue in West Virginia, with the mine workers union - which has endorsed Senator John Kerry - asserting that the Bush administration has opposed measures that would protect retiree benefits. . . A union meeting at a high school here on Thursday night underscored [the worker anger]. Most of the workers in the crowd were retired or in their 40's or 50's. The meeting, called to draw attention to the Horizon bankruptcy, turned into a raucous Democratic rally, with hundreds of union supporters stamping their feet and chanting "Kerry."

In 2000, miner worries about the Kyoto treaty helped tip West Virginia to Bush. Whether the return to worries about anti-union decisions is enough to tip West Virginia back to Kerry, it would be interesting if this year's election ended up being decided in this small bankruptcy court.

Thousand Worker March?

For the last year, labor movement gatherings have been visited by one or another tedious advocate of the Million Worker March, an event which would invariably be touted in oppositional terms to the AFL-CIO, and to the labor movement's focus on defeating Bush this fall. This last weekend, a million workers, minus about nine hundred ninety five thousand who stayed home to work on the Kerry campaign, gathered in Washington DC...

to listen to the usual speeches from a rather small circle of friends with a rather limited rhetorical repetroire. It seems that the small political sects, mostly Trotskyist in hue, which were promoting the Million Worker March were barely able to get their own membership and peripheries to Washington DC.

This is not, of course, a new story: it happens all the time. What is unusual is when one of those sects manages to hijack a major movement, such as the Workers World Party has done at various points to the movement against the war in Iraq. But because the same folks will be back in the gatherings next month, with an equally quixotic and divisive proposal, it bears noting that those who never fail to speak in the name of the rank and file perform so poorly when it comes to organizing and mobilizing the rank and file.

Shocker: LA Times Reports on Obscenity of Executive Pay

In a rare, rare, mainstream media look at the insanity of executive pay, the LA Times on Sunday published a scathing article on what they -- not I -- termed "The Rise of The Corporate Plutocrats." Excerpt below the fold -- but read the whole thing. This stuff may not be news to the readers of this blog, but I'm guessing that the majority of the Times' readership was genuinely surprised by the excess permeating even the lower levels of upper management.

Not so long ago, use of a company jet was a rare privilege reserved for top corporate officials—the chief executives, presidents and chairmen whose skyrocketing pay has been well-documented in recent years. (A generation ago, the average chief executive at a big corporation made about 40 times what the average worker did; today it's nearly 400 times as much, says vice dean of faculty Kevin J. Murphy of USC's Marshall School of Business.)

Increasingly, however, those plush leather seats are being occupied by vice presidents, general managers and other second- and third-tier execs. The spreading around of private jet rides is among the more obvious emblems of a profound development in corporate America over the last 20 years: the enormous swelling in pay and privileges for a burgeoning stratum of executives, and their concomitant distancing from the people who work under them. Today, it's not just the boss, but those second, third or fifth in command who pull down seven-figure salaries, own multiple homes and stay in hotels where rooms cost more than most mortgage payments.

Mehdi Eftekari, general manager of the Beverly Hills Four Seasons Hotel, can tell you all about it. He estimates that some 80% of his clientele are corporate officials whose companies pay for their $700- to $3,000-a-night suites. The most modest come with a DVD player, a giant flat-screen TV, a living room with a wet bar and televisions in each of the two bathrooms. Frequent guests can store extra clothes or toiletries at the hotel to lighten their luggage. A staff VIP liaison tracks their personal preferences, so that when they arrive, their rooms are stocked with favorite drinks, snacks and magazines, as well as bathrobes monogrammed with their initials. The hotel even makes sure the bed is equipped with their preferred pillows.

Twenty years ago, you would have been hard-pressed to find a chief financial officer or head of marketing with access to such a lavish expense account. The typical salaries for such corporate sub-chieftains barely cracked six figures.

Those days are history. A survey last year of multibillion-dollar corporations by Pearl Meyer & Partners, an executive compensation consulting firm, found them paying CFOs more than $3 million a year; top legal officers, $2.2 million; and human resources executives—human resources executives!—$1.6 million. And those are just the averages. BusinessWeek recently listed 10 executives with jobs below the rank of CEO who last year pulled upward of $29 million each.

We're not talking about corporate criminals of the Enron or WorldCom type—corrupt executives who pocket outrageous sums by scamming the system or ripping off investors. Nor are these the entrepreneurs whose inspirations and nerve started the company, or the investors who risked their capital to fund it. These people aren't even the top boss, who is under the most pressure, the one with whom the buck stops. They're hired hands—company employees just like the people they oversee. Their salaries are set by legal and transparent means in accordance with prevailing industry standards. It's just that those standards have gone completely off the rails. Never mind the imperial CEO; we have entered the era of the executive plutocracy.

MineWorkers: Bush bad for Miners

West Virginia could be a crucial state, where Kerry seems to be running behind, but a serious turnout campaign could turn things around, and the Mineworkers union is challenging Bush's on coal issues, that worked in his advantage last election. Here is the statement from the President of the United Mine Workers Union:

Much has been written lately in the coalfields about what a John Kerry presidency would mean for the coal industry, with some conservative pundits predicting much doom and gloom. There appears to be an attempt to scare coal miners into believing that Kerry's election would mean the end of coal mining. As a coal miner-and the president of the union that represents coal miners-I strongly disagree. Yes, John Kerry cares about our environment, as we all should. The air we breath and the water we drink are precious resources that deserve protection. But John Kerry also understands that coal is an important part of our energy mix. He advocates policies that promise a brighter future for coal by encouraging the development and deployment of new technologies that will help coal retain its place in U.S. energy policy. . .

Let's compare Kerry's plan to the Bush record. When he ran for president in 2000, President Bush told coal miners he would spend $2 billion over 10 years for clean coal technology, or $200 million per year. In his first two years he requested $150 million, lowered it to $130 million last year, and this year dropped it to $50 million. In a period when he promised to spend $800 million, he asked for only $480 million, far short of his campaign promise. President Bush also proposed to cut the fossil energy budget this year by about a third, including a cut of nearly $145 million for coal. These federal research dollars are not just arcane accounting figures; they represent the future of the coal industry and the security of coal miners' jobs. . .

Some in the coalfields argue that President Bush is friendlier to coal and deserves the support of coal miners. They ignore the fact that the Bush Administration issued proposed mercury regulations a few months ago that would devastate the eastern coalfields and potentially cause thousands of coal miners to lose their jobs. The Bush mercury plan essentially gives a free ride to western coal while setting limits for eastern coal that cannot be met by existing technology. The result would be more fuel switching from eastern to western coal, with devastating results for coalfield communities. . .

When coal miners go into the voting booth in November, I believe they will cast their vote for John Kerry because they know they will fare better under his leadership than they have under George Bush.

And the MineWorkers have a lot of retirees worried about health care, another strength for Kerry. So we'll see what West Virginia actually does this election.

Scenes from Hotel Contract Fight

See More Than 1000 Rally in Support of Los Angeles and
San Francisco Hotel Workers from the Los Angeles Coalition to Support Hotel Workers.

George Will on Bush Anti-Labor Agenda

George Will has a column where he's blunt about Bush's plan to hurt labor in his second term. Tops on the agenda is slashing pay for government workers through privatization:

Bush is pressing to put hundreds of thousands of federal jobs up for competition with the private sector. Grover Norquist of Americans for Tax Reform says: "The people who cut the Pentagon lawn are government employees. Why?" People listed in the phone book will do it cheaper. How many of the 15 million state and local government jobs could be privatized, with how many billions of dollars in savings?

It's nice to see Will laying out GOP views on the economy: the lower the wages the better.

When the Judge is Partisan

When you have a legal complaint against your employer, how would you feel if the judge also worked for your employer in other capacities?

That the situation faced by many employees who are forced into mandatory arbitration for their individual employment suits. Unions often have arbitration clauses, but they use arbitrators who are full-time and independent. This is often untrue with individual arbitration, where the employer picks the arbitrators used. (See the full BNA article below):

On the other hand, employment arbitrators, who handle disputes between employers and nonunion employees often are lawyers and others who also advocate for either employees or management. . . conflict-of-interest appearance problems are raised when arbitrators perform training for companies for which they arbitrate cases. . .the practice has some similarities to the problems of the defunct accounting firm Arthur Andersen, which audited corporations while also consulting for them.

Mandatory private arbitration is an evil that should be abolished. If an employer and an employee agree that a particular problem be submitted for mediation, more power to them, but an employee should always have the right to a jury trial if they want one. For too many employees, the supposed right to jury trial is disappearing into the maw of those mandatory arbitration agreements, often before arbitrators who are institutionally biased towards the employer.

---

BNA LABOR REPORT No. 192
Tuesday, October 5, 2004 Page A-7

Arbitration Growth in Employment Arbitrations
Raising Ethical Questions, Problems

SACRAMENTO--Ethical questions are being raised as companies increase their use of employment arbitration, according to speakers at a Sept. 30 session of the Association for Conflict Resolution's annual meeting.
David Weinberg, a San Francisco area commissioner for the Federal Mediation and Conciliation Service, pointed to problems when an employment arbitrator also has other roles. Traditional labor contract arbitrators tend to be full-time neutrals, said Weinberg, who once administered arbitrations for the American Arbitration Association. On the other hand, employment arbitrators, who handle disputes between employers and nonunion employees often are lawyers and others who also advocate for either employees or management, he said.

Weinberg, noting that his views do not necessarily reflect those of the FMCS, said he believes that neutrals in the employment field should not be advocates.

Also, he said conflict-of-interest appearance problems are raised when arbitrators perform training for companies for which they arbitrate cases. "The system smells funny," he said. Weinberg said the practice has some similarities to the problems of the defunct accounting firm Arthur Andersen, which audited corporations while also consulting for them. There was an "appearance of a conflict of interest, if not a direct one," he said.

Fredric Dichter, a Wisconsin arbitrator, said the employment due process protocol developed by an American Bar Association committee in cooperation with the AAA and FMCS, sets forth guidelines and procedures for use in employer arbitration and mediation programs that ensure fairness.

The protocol mandates that the employee be allowed to have representation, although whether the employee pays for counsel costs and other costs is open to question. The protocol also requires that some form of discovery be allowed, Dichter said.

Dichter observed that "appearances can be everything." He said whenever he receives an appointment to an employment arbitration, the first thing he asks is what process the company used in developing its program.

He said he also tries to find out how he was picked. If only the employer picks the arbitrator, and the employee does not want that person, the arbitrator should withdraw, Dichter said.

American Arbitration Association Revising Rules

Eric Tuchmann, AAA general counsel, emphasized the importance of adhering to the protocol. He noted that employers generally want to do the right thing if the AAA finds that their program does not adhere to the protocol and AAA rules.
Tuchmann said that the AAA plans to revise its employment arbitration rules, including arbitrator disclosure requirements, which he predicted "will not lessen."

Tuchmann said California state disclosure rules require arbitrators to complete a seven-page form and disclose business relationships of family members and even family members of ex-spouses.

He noted that there is an upswing in cases where parties challenge arbitration awards on the grounds that the arbitrator did not make the proper disclosures throughout the nation. Tuchmann said challenges not only concern nondisclosure of purported financial relationships but also prior life experience, which he finds troubling.

For instance, he hypothesized, if arbitrators were discharged from jobs 10 or 20 years before on grounds that might suggest that they were victims of discrimination, do they have to disclose that or should they be disqualified, he asked.

Federal Office of Personnel Management Fights Terrorism Under Every Desk

In an effort to do her part to fight terrorism following 9/11, Kay Coles James, Director of the U.S. Government's Office of Personnel Management (OPM) "was determined to make sure OPM would be without peer in the quality of our personnel security program."

Imagine her surprise and shock when she was told that some OPM employee files could not be located and that some may have been inadvertently destroyed.

What to do, what to do? Why any one of OPM's 3,500 employees could be a terrorist, an evil-doer -- an obedient servant of Osama bin Laden -- waiting to wreak havoc on the Government of the United States by um, well, uh by sowing discontent among this nation's government employees or maybe even selling employees' confidential personnel records to Al Qaeda. After all, OPM is the federal government's human resource agency, responsible for overseeing personnel practices across the government. In other words, the very heart and soul of our federal government.

Using her President as a model, James quickly decided to take action against terrorism (and the lost files) by making sure current OPM employees don't pose security risks. After all, we were attacked!

Employees are being asked to undergo credit checks, have their fingerprints taken, and answer questions about divorces, overseas trips, run-ins with the law and other matters.

"It is causing a lot of anxiety among employees," said Carlos Brathwaite, first vice president at [AFGE] Local 32.

Yeah, I should think so. It's also causing a bit of confusion; OPM employees' jobs don't generally involve sensitive information or national security.

Afraid you'll get fired for being behind in your mortgage payments or having the "wrong" friends or surname? Fear not, Doris Hausser, senior policy adviser to James,

said the employee reactions were understandable, but she added that investigators will be looking at an employee's "total picture" and that "there isn't any one thing that will necessarily put a suitability determination at risk." In instances where investigators turn up information that "could be called derogatory," employees will be given an opportunity to respond and put the information in context, she said.

I'm sure everyone feels much better now.

Talks are continuing between OPM and AFGE.

Stay tuned.

Election Will Decide NLRB Fate

This Labor Research Association article lays out why this election matters institutionally at the NLRB:

Within the next four years, 33 percent of the entire NLRB staff will be eligible for retirement, and one third of those are supervisors. Hiring and training replacements for this large group of NLRB staffers will heavily influence the fairness and quality of the agency's work for decades to come.

The composition of the NLRB over the next four years will also shape the agency’s position on the crucial issue of card-check recognition. The Bush-controlled NLRB has weakened this important vehicle for workers’ representation rights and is planning to review the legality of card-check recognition within the next year.

The 2004 presidential election will also determine the ultimate outcome of the Employee Free Choice Act, a bill co-sponsored by presidential candidate John Kerry that would protect organizing rights. The bill is opposed by Bush.

Cool Initiatve by LA Unions

LA has become a hotbed of union activism, kicking ass and winning fights. The latest episode in this progressive telenovela: a ballot inititaitve to raise corporate taxes to make community college more affordable for all.

At the "first-ever regional labor congress," unions throughout LA voted to put up a 2006 ballot initiative that would increase the LA business utility tax by 1.5%, creating a $59 million/yr fund to give each student a grant of around $1,000 a year for college expenses. The strategy behind the plan:

The campaign could create a labor-student alliance similar to that forged with Latino workers through labor's recent support for immigration reform[]. It also would address employers' needs for more skilled workers.

This is exactly the kind of smart, bold, pragmatic thinking that the U.S. labor movement so desperately needs. Let's hope that folks on the East Coast take notice.