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Today’s Labor Updates, March 19, 2018

Some Workers Want Union Vote at South Carolina Boeing Plant.

The National Labor Relations Board is considering whether some employees at Boeing’s plant in South Carolina can vote to join the International Association of Machinists union.

March 14, 2018, at 8:36 a.m.

CHARLESTON, S.C. (AP) — The National Labor Relations Board is considering whether some employees at Boeing’s plant in South Carolina can vote to join the International Association of Machinists union.

Local media outlets reported attorneys for Boeing and the union opened their case Tuesday in Charleston.

At issue is whether 178 flight readiness technicians and inspectors at Boeing’s plant in North Charleston can vote on whether to join the union.

Boeing says that group is too hard to set different rules for and any union vote should include all 3,000 production employees. The larger group rejected unionization by a three to one margin last year.

No decision is expected for several weeks. The union says the smaller group has different duties and should be allowed to vote separately.

Union deals are making a mess of things

Woefully inefficient work plagues subways, public housing and development

By Greg David

The subways are crumbling. One of the reasons, as The New York Times reported in December, is excessive union staffing on Metropolitan Transportation Authority projects—far out of line with those anywhere else in the world.

Public housing is falling apart too. Last week Politico shined a spotlight on how onerous union work rules and practices (such as paid time off for holiday shopping) have been a major factor in the Housing Authority’s inability to make a dent in its massive repair backlog.

Private development is also costlier in New York than elsewhere. As Crain’s cover story “Hudson Barbs” detailed last week, The Related Cos. has filed a lawsuit against the coordinating body for the construction unions and its powerful leader, Gary LaBarbera, filled with examples of how unions inflated costs at Related’s Hudson Yards project by ignoring promises on staffing levels and ensuring that their members actually put in a full day’s work.

All three make up the latest chapter in the long struggle in New York between developers and labor unions over what the former regard as absurd costs driven partly by high wages but even more by excessive benefits and union-friendly work rules.

At the heart of the current tug-of-war are project labor agreements in which unions promise concessions on such contract terms as pay and work rules to lower costs, and builders agree to exclusively use union labor. As far back as 2011, a Regional Plan Association report said PLAs were yielding little to no savings. But in 2013, with construction yet to recover from the recession, unions said they would follow through on promises in PLAs, and a series of developers agreed to them. Public agencies decided to try the same approach.

Today developers and public agencies are fed up. MTA Chairman Joe Lhota admitted in the Times story that his agency had failed to hold its contractors and unions accountable. The Citizens Budget Commission has asked the Housing Authority to explain whether it has saved any money under a PLA it signed in 2015 that expires in June. While the authority hasn’t responded, Politico’s story revealed that Chairwoman Shola Olatoye has been trying to get it changed for some time.

The unions see PLAs as the best chance to preserve their dwindling market share because they prohibit builders and agencies from driving down costs by pitting contractors who employ union members against contractors who don’t. Nonunion contractors now dominate construction markets ranging from affordable housing to hotels. The Related lawsuit is all about the unions’ effort to force the developer into a PLA for the next phase of Hudson Yards. It’s the same at the Housing Authority, where unions are trying to add a requirement that the agency use PLAs to state legislation that would let the city use cost-cutting design-build bidding.

LaBarbera dismisses the claims in the Related lawsuit, and unions insist that PLAs work. The transit mess, the Housing Authority crisis and the Hudson Yards abuses are evidence that they don’t—and that PLAs are all about preserving union power.

It’s the latest chapter in the long struggle between developers and organized labor over what builders consider the absurd costs of union wages, benefits and work rules

Supreme Court Again Rejects Sixth Circuit Finding of Lifetime Retiree Medical Benefits

March 15, 2018

Three years ago, in M&G Polymers USA, LLC v. Tackett, the Supreme Court unanimously vacated a ruling by the Sixth Circuit Court of Appeals that a collective bargaining agreement (CBA) vested retirees with lifetime medical benefits. On Feb. 20, 2018, the Supreme Court unanimously reversed a decision by the same court in another retiree medical case, CNH Industrial N.V. v. Reese.  The Supreme Court held as a matter of law that “the only reasonable interpretation of the 1998 agreement is that the health care benefits expired when the collective-bargaining agreement expired in May 2004.”

In CNH Industrial, the Supreme Court emphasized that Tackett rejected the “Yard-Man” rule that courts could infer that retiree medical benefits vested for life because they were tied to eligibility for pension benefits and were understood as a form of delayed compensation or reward for past services.

Quoting from Judge Sutton’s dissenting opinion, the Supreme Court called the Sixth Circuit majority’s analysis “Yard-Man re-born, re-built, and re-purposed for new adventures.” The Supreme Court reasoned that the general durational clause in CNH’s CBA applied to all CBA benefits unless otherwise specified.

The Facts in CNH Industrial N.V. v. Reese

CNH’s 1998 CBA provided healthcare benefits to certain “[e]mployees who retire under the … Pension Plan.” The 1998 CBA con­tained a general durational clause stating that it would terminate in May 2004. When the agreement expired in 2004, CNH retirees sued, seeking a declaration that their healthcare benefits vested for life and an injunction pre­venting CNH from changing those benefits. While the CNH lawsuit was pending, the Supreme Court decided Tackett, but the district court nonetheless awarded summary judgment to the retirees.

The Court of Appeals affirmed, noting that the 1998 CBA was “silent” on whether healthcare benefits vested for life. Although the agreement contained a general durational clause, the appellate court found that clause “ambiguous.” The court consulted “extrinsic evidence” and concluded that lifetime medical benefits had vested.

Judge Sutton dissented, con­cluding that the 1998 CBA was unambiguous be­cause “the company never promised to provide healthcare benefits for life, and the agreement contained a durational clause that limited all of the benefits and burdens of the contract (not otherwise extended or shortened) to the six-year term of the agreement.”

Supreme Court Says Benefits Were Not Vested

The Supreme Court granted CNH’s petition for certiorari and reversed the Sixth Circuit in a unanimous per curiam opinion, emphasizing that the lower’s court’s decision did not comply withTackett’s direc­tion to apply ordinary contract principles.

The Supreme Court reasoned that the 1998 CBA was not ambiguous unless it could rea­sonably be read as vesting healthcare benefits for life, and inferences that were rejected in Tackettcould not be used to create “ambiguity.”  The 1998 CBA contained a general durational clause that applied to all benefits, and no CBA language specified that retiree healthcare benefits were subject to a different durational clause. The only reasonable interpretation of the 1998 CBA was that the healthcare benefits expired when the agreement expired.

Takeaways from the Supreme Court’s CNH Decision

The promptness and unanimity of the Supreme Court’s reversal was striking, as was the Supreme Court’s endorsement of Judge Sutton’s dissent. The Supreme Court granted certiorari and reversed the Sixth Circuit in a single order and unanimous per curiam opinion, without the normal requirement of briefs by the parties on the question presented. In doing so, the Supreme Court sent a clear message that the Sixth Circuit’s interpretation of Tackett was wrong, and that Judge Sutton’s dissent correctly states the law.

In just a few weeks after the Supreme Court’s decision, the Sixth Circuit revisited the issue in Cooper v. Honeywell Int’l, Inc., in which the Sixth Circuit invalidated a preliminary injunction preventing Honeywell from terminating retiree medical benefits for a group of retirees at its Michigan-based auto-parts plant while legal proceedings as to the proposed benefit cuts were pending. Applying the “clarity” that emerged from Tackett and CNH Industrial, the Sixth Circuit ruled that, absent a specific indication otherwise, the general durational clause of the CBA at issue foreclosed the retirees’ vesting arguments.

After Tackett and CNH, it is clear that explicit CBA language is needed to vest retiree medical benefits beyond the term of the CBA.  Without such express language, there is no legal basis for “lifetime” retiree medical benefits.

It is worth repeating Tackett’s “traditional principles of contract interpretation” that militate against vested lifetime retiree medical benefits:

  • Courts should not construe ambiguous writings to create lifetime promises.
  • The rules of contractual interpretation require a clear manifestation of intent before conferring a benefit or obligation.
  • Contractual obligations will cease, in the ordinary course, upon termination of the CBA.
  • When a CBA is silent as to the duration of retiree benefits, a court may not infer that the parties intended those benefits to vest for life.

For further information, please contact any of the authors of this article — James P. McElligott, Jr., Robert M. Cipolla and Robert B. Wynne — or any other member of the McGuireWoodsemployee benefits team.

Summary of NLRB Decisions for Week of February 26 – March 2, 2018

The Summary of NLRB Decisions is provided for informational purposes only and is not intended to substitute for the opinions of the NLRB.  Inquiries should be directed to the Office of the Executive Secretary at 202‑273‑1940.

Summarized Board Decisions

Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., as a single employer and/or joint employers  (25-CA-163189, et al.; 366 NLRB No. 26)  Muscatine, IA, February 26, 2018.

The Board granted in part the Charging Parties’ “motion for reconsideration, recusal, and to strike” the Board’s Decision and Order reported at 365 NLRB No. 156 (2017), overrulingBrowning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery (Browning-Ferris), 362 NLRB No. 186 (2015), which had established a new legal standard for determining whether two employers are joint employers under the Act.  Because the Agency’s Designated Agency Ethics Official determined that Member Emanuel is, and should have been, disqualified from participating in this case, the Board vacated and set aside the Board’s underlying Decision and Order, leaving the overruling of Browning-Ferris of no force or effect.  The Board retained the case on its docket for further proceedings.

Charges filed by individuals.  Administrative Law Judge Robert A. Ringler issued his decision on November 14, 2016.  Chairman Kaplan and Members Pearce and McFerran participated.


Omnisource Corporation  (08-CA-167138; 366 NLRB No. 23)  Mansfield, OH, February 27, 2018.

The Board adopted the Administrative Law Judge’s conclusion that the Respondent violated Section 8(a)(1) by discharging four employees because of their protected concerted activity of giving statements in the grievance process.  In so doing, the Board found that it was unnecessary to pass on the judge’s finding that the Respondent also violated Section 8(a)(3), as it would not materially affect the remedy.  Member Pearce joined with his colleagues in adopting the judge’s finding that the Respondent violated Section 8(a)(1), but would have found that the Respondent also violated Section 8(a)(3).

In adopting the judge’s conclusion, Chairman Kaplan noted that he relied on the judge’s credibility-based findings that the Respondent did not have an honest belief that the employees had made deliberate or maliciously false statements but did not rely on the judge’s articulation of the standard for protected conduct for employees engaged as union officials in processing grievances.

Charge filed by United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union, AFL-CIO/CLC, Local 9130-03.  Administrative Law Judge Paul Bogas issued his decision on February 13, 2017.  Chairman Kaplan and Members Pearce and McFerran participated.


New England Regional Council of Carpenters, Local 33 (New England Finish Systems, LLC and Colonial Systems, Inc.)  (01-CD-183789 and 01-CD-183838; 366 NLRB No. 24)  Boston, MA, February 27, 2018.

In this Section 10(k) jurisdictional dispute proceeding between New England Regional Council of Carpenters, Local 33 (Carpenters) and International Union of Painters and Allied Trades, District Council 35 Carpenters (DC 35), the Board awarded the work in dispute to employees represented by the Carpenters.  The disputed work in Case 01-CD-183789 involves the installation of glass shower doors at a project, and the installation of interior demountable glass walls at another project.  The disputed work in Case 01-CD-183838 involves the installation of interior demountable glass walls at various projects located at five different locations in the Boston area.  The Board awarded the work involving interior demountable glass walls in both disputes to employees represented by the Carpenters based on the factors of employer preference and past practice, area and industry practice, economic and efficiency of operations, and relative skills and training.  The Board also awarded the work involving shower door installation to employees represented by the Carpenters based on employer preference, as well as efficiency.

Charges filed by New England Finish Systems, LLC, and Colonial Systems, Inc.  Chairman Kaplan and Members McFerran and Emanuel participated.


KHRG Employer, LLC d/b/a Hotel Burnham & Atwood Cafe  (13-CA-162485; 366 NLRB No. 22)  Chicago, IL, February 28, 2018.

The Board adopted the Administrative Law Judge’s recommended dismissal of the complaint, which alleged that the Respondent had unlawfully discharged an employee for engaging in protected concerted activity.  In doing so, the Board rejected the judge’s conclusion that the discharge should be analyzed under Wright Line, and instead stated that the correct analysis was whether the employee’s conduct was so egregious or opprobrious as to lose the protection of the Act.  Applying that standard, the Board found that the employee lost the Act’s protection by entering a security passcode to allow nonemployees into a secured area of the Respondent’s hotel during the delivery of a petition to management.

Charge filed by UNITE HERE, Local 1, AFL-CIO.  Administrative Law Judge Christine E. Dibble issued her decision on January 27, 2017.  Chairman Kaplan and Members Pearce and McFerran participated.


Duquesne University of the Holy Spirit  (06-CA-197492; 366 NLRB No. 27)  Pittsburgh, PA, February 28, 2018.

The Board granted the General Counsel’s Motion for Summary Judgment in this test-of-certification case on the ground that the Respondent failed to raise any issues that were not, or could not have been, litigated in the underlying representation proceeding in which the Union was certified as the bargaining representative.

Charge filed by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union, AFL-CIO, CLC.  Chairman Kaplan and Members Pearce and Emanuel participated.


Unpublished Board Decisions in Representation and Unfair Labor Practice Cases

R Cases

No Unpublished R Cases Issued.

C Cases

Hanson Cold Storage Co. of Indiana d/b/a Hanson Logistics  (13-CA-178619)  Hobart, IN, February 26, 2018.  Upon a remand from the Seventh Circuit, the Board further remanded the case to the Regional Director to rule on the voting eligibility of an employee who was on medical leave at the time of the election.  Charge filed by International Brotherhood of Teamsters Local 142.  Members Pearce, McFerran, and Emanuel participated.


Appellate Court Decisions

No Appellate Court Decisions involving Board Decisions to report.


Administrative Law Judge Decisions

Standard Register, Inc. d/b/a Taylor Communications  (05-CA-194336; JD-14-18)  York, PA.  Administrative Law Judge Arthur J. Amchan issued his decision on February 26, 2018.  Charge filed by Local 594-S, District Council No. 9 of the Graphic Communications Conference of the International Brotherhood of Teamsters.

United Food and Commercial Workers Union, Local 540 (Tyson Foods)  (16-CB-193820; JD-13-18)  Dallas, TX.  Administrative Law Judge Keltner W. Locke issued his decision on February 27, 2018.  Charge filed by an individual.

Queen of the Valley Medical Center  (20-CA-191739, et al.; JD-15-18)  Napa, CA.  Administrative Law Judge Sharon Levinson Steckler issued her decision on February 28, 2018.  Charges filed by National Union of Healthcare Workers (NUHW).

Orient Tally Company, Inc., and California Cartage Company LLC, a single employer  (21-CA-160242 and 21-CA-162991; JD(SF)-04-18)  Wilmington, CA.  Administrative Law Judge Ariel L. Sotolongo issued his decision on February 28, 2018.  Charges filed by Warehouse Worker Resource Center.

Dex Media, Inc.  (27-CA-196726; JD(SF)-05-18)  Denver, CO.  Administrative Law Judge Dickie Montemayor issued his decision on February 28, 2018.  Charge filed by International Brotherhood of Electrical Workers, Local 1269.

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