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Labor Relations News Update October 27, 2014

Today’s Labor Updates:

Venezuela Cancels Plan to Sell US Oil Refiner Citgo

Expect NLRB Whirlwind before Schiffer Leaves

Workers in Europe reject austerity


Venezuela Cancels Plan to Sell US Oil Refiner Citgo

Earlier This Year Officials Indicated They Were Looking To Sell Citgo For Up To $10 billion

By Kejal Vyas

Updated Oct. 26, 2014 1:49 p.m. ET

CARACAS—Venezuela has scrapped plans to sell U.S. refining unit Citgo, the country’s finance minister said in an interview published Sunday by a local newspaper, offering the government’s clearest statement yet on the potential divestiture.

Amid severe dollar shortages and economic woes that have roiled this oil-rich country and sparked fears of a default on external debt, officials indicated earlier this year that they were looking to sell Citgo for as much as $10 billion.

But President Nicolás Maduro last month puzzled analysts when he said that Venezuela plans were to “fortify our investment” into the Houston-based refiner, which is wholly owned by state energy giant Petróleos de Venezuela SA.

“The sale of Citgo is discarded and the president already asserted it,” Finance Minister Rodolfo Marco told local daily El Universal in response to a list of questions on the country’s economic situation.

 When asked whether banks hired by the government will continue looking for buyers, Mr. Marco responded, “Venezuela continues with Citgo and will continue making the investments in the refineries.”

A spokesman at the Finance Ministry didn’t respond to a call seeking comment.

Plans to sell Citgo, which operates three oil refineries with total processing capacity of more than 750,000 barrels a day, came as Venezuela faces cash-flow problems that have forced it to cut back on imports by nearly a third over the last two years. Chronic shortages of some food and basic goods, along with an inflation rate topping 60%, have eroded Mr. Maduro’s popularity to a new low of 30%, according to a recent poll by the Caracas consultancy Datanalisis.

At the same time, the country is heavily in debt with a host of private companies that service its economy, ranging from airlines to medicine importers to oil-field service providers. As a result, many have scaled back on operations. The World Bank expects Venezuela’s economy to contract by nearly 3% this year, making it the region’s worst performer.

The recent drop in the price of oil, which Venezuela depends on for 96% of its hard-currency income, has added another layer of concern over the South American nation’s ability to pay its overseas bondholders. The worries have pushed yields on Venezuela’s sovereign debt above 19%, far more than any other country in the developing world, according to J.P. Morgan’s Emerging Market Bond Index Global.

Analysts at the risk consultancy Eurasia Group recently warned that a sale of Citgo would leave fewer assets for investors to target in the case of a default. The refining network could also be eyed by some two dozen companies that have cases pending against Venezuela in front of the World Bank’s international arbitration court, where they are seeking billions of dollars in compensation for assets nationalized by the leftist government.

But in Sunday’s interview, Minister Marco looked to quell market fears, and assured that the government had enough resources to honor its debt payments this year, citing the recent cancellation of $1.5 billion in maturing bonds.

“The idea that Venezuela will default falls with this guarantee of payment and we invite investors to believe in Venezuela and to invest in Venezuelan securities,” he said.

Economists say falling oil prices may force Venezuela to take politically costly moves to correct its economic imbalances. They include simplifying a cumbersome and restrictive set of currency controls, cutting public spending and even increasing gasoline prices, which at a mere six cents per gallon are the world’s most heavily subsidized, and cost the state more than $12 billion a year.

Mr. Marco didn’t offer details on the government’s adjustment plans, but said that “the foreign-exchange, fiscal and gasoline issues are not closed. They are issues that we’re working on and it is President Maduro who decides.”

Write to Kejal Vyas at


Expect NLRB Whirlwind before Schiffer Leaves 

By Howard M. Bloom and Phil Rosen on October 24, 2014

Hold on for the National Labor Relations Board’s version of the popular Disneyland attraction, Mr. Toad’s Wild Ride.

With NLRB Member Nancy Schiffer’s term ending on December 16, 2014, expect a flurry of important NLRB activity similar to that which attended the expiration of former-NLRB Member Brian Hayes’ term on December 16, 2012.

Among the matters  awaiting  Board decision are many contentious cases, including Northwestern University (Case 13-RC-121359) (whether scholarship student-athletes are employees under the NLRA); Browning-Ferris Industries (Case 32-RC-109684), (where the standard for “joint employer” status is in question); Pacific Lutheran University (Case 19-RC-102521), (whether a religiously-affiliated university is subject to the Board’s jurisdiction and whether certain university faculty members seeking to be represented by a union are employees covered by the National Labor Relations Act or excluded managerial employees); and Purple Communications, Inc. (Cases 21-CA-095151; 21-RC-091531; and 21-RC-091584) (whether  a new standard for employee use of employer electronic communications systems (including email) should be adopted).  In addition, the Board still must finalize its “quickie” election rules, which will make it easier for unions to successfully organize employees, and review the 300+ decisions invalidated by the U.S. Supreme Court’s Noel Canning decision.

In the six days preceding Member Hayes’s departure, the Board issued at least seven notable decisions – WKYC-TV, Inc., 359 NLRB No. 30 (2012) (overruling 50 years of precedent to hold that a dues deduction provision in a collective bargaining agreement survived the expiration of that agreement); Supply Technologies, LLC, 359 NLRB No. 38 (2012) (finding a non-union employer’s mandatory grievance-arbitration program unlawfully restricted employees’ access to the NLRB); Hispanics United of Buffalo, Inc., 359 NLRB No. 37 (2012) (holding  an employer  violated the NLRA by discharging five employees because of their Facebook posts); Hawaii Tribune-Herald, 359 NLRB No. 39 (2012) (defining a “witness statement”  that is exempt from disclosure to a union under Anheuser-Busch, 237 NLRB 982 (1978)); Alan Ritchey, Inc., 359 NLRB No. 40 (2012) (ruling employers must bargain with  a union representative   over discretionary discipline administered to unit employees that occurs after the union is certified, but before a first collective bargaining agreement is reached); Piedmont Gardens, 359 NLRB No. 46 (2012) (overruling Anheuser-Busch and finding an employer must give the union that represents its employees witness and other statements); and Latino Express, 359 NLRB No. 44 (2012) (interpreting the NLRA’s remedial “scheme” to require a respondent (charged party) to reimburse a victim of discrimination for any additional federal and state income taxes the victim may owe as a consequence of receiving a lump-sum backpay award covering more than one calendar year).

Most commentators, including this one, believe the NLRB will issue decisions that favor employees and unions in all of the pending matters, continuing the Board’s decidedly pro-labor leanings.

Buckle your seat belts.


Workers in Europe reject austerity

By G. Dunkel on October 25, 2014

The grumbling about austerity in Europe, ordained and enforced by Germany, grew louder this week at a meeting of Western Europe’s political leadership in Milan, Italy.

Most of the large countries there, other than Germany, were openly worried about falling into a deflationary trap that could wipe out their very weak recovery from the 2008 financial crisis, turn their growth into decline and send unemployment into double digits.

While the political leaderships of the big countries in Western Europe want a more expansive economic policy, they are happy to have the wages of their workers under strict control.

Workers in both England, which is not in the eurozone, and Germany, which most definitely is, struck this past week for economic justice, that is, the raises that are their due.


For the first time in 30 years, 400,000 workers of the National Health Service walked out for four hours on Oct. 13. They then carried out a “work-to-rule” job action for the rest of the week.

The NHS provides medical and hospital care to the people of the United Kingdom of Great Britain, that being England, Wales, Scotland and Northern Ireland. Workers — those needed to handle medical emergencies — were allowed to cross the picket lines.

UNISON, one of the nine unions which jointly called the strike in England, explained the anger that led to the walkout on its website: “For the first time in the history of the independent pay review body, the government has chosen to ignore its recommendation of 1 percent pay rise for all NHS staff.” (

Over one-third of all NHS workers don’t make enough to support their families and their pay hasn’t been keeping up with inflation for the past five years.

Workers in Scotland got the raise that the pay review board recommended and those at the bottom of the pay scales got a bit more to bring them over the living-wage level. Consequently, there was no strike in Scotland.

For the rest of the United Kingdom, further actions are being planned if the government maintains its position.


There were major strikes on the German railroad, run by a state-owned company called Deutsche Bahn, on both Sept. 1 and Oct. 7. The strikes were called by the German train drivers union (the GDL) to get a 5 percent raise and reduce the workweek for train operators from 39 to 37 hours.

Another strike Oct. 14-15, for the most part shut DB down. Reports say that only one-in-three long-distance trains ran and almost all the regional trains were disrupted. (The Local, Oct. 15)

The most recent strike was prompted by the government’s and DB’s effort to “force” the GDL “into an agreement with the rail operator’s own in-house union, the EVG, a move which would see the GDL lose its independence to Deutsche Bahn and the EVG,” according to a statement by the GDL. (, Oct. 15)

The EVG claims a membership of 250,000 and joined in the criticism of the strikes. GDL has a membership of 20,000 and is trying to represent 17,000 DB workers in customer service and other nonoperational functions.

The pilots in Lufthansa’s low-cost subsidiary, Germanwings, struck for 12 hours on Oct. 14 against attacks on early retirement plans.

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