Workers could have a legal tactic against lying employers

It’s now some six weeks since the U.S. Supreme Court ruled in “Glacier Northwest v. the Teamsters” that employers can bypass the National Labor Relations Board and sue workers’ unions for damage as a result of a strike – in state court.

But workers may have a new way to resist companies that misrepresent organized labor and possible outcomes of workers organizing an employer.

Lies could have legal – and financial – consequences.

In “Glacier,” the Court on June 1 voted 8-1 (with Justice Ketanji Brown Jackson the only dissent) that Glacier, a Vancouver, Wash., concrete company, could sue for damages they allege were intentionally caused when workers let the company load concrete onto their trucks, and then went on strike, leaving management unable to deliver the product and causing the employer to discard the concrete.

The company sued the Teamsters in Washington state court for destruction of property, but that state’s supreme court dismissed the case because the issue was appropriately considered by the NLRB – which was already investigating the incident and supported issuing a complaint that Glacier had sued in retaliation for the work stoppage.

But the U.S. Supreme Court, in an opinion written by Justice Amy Coney Barrett accepted the company’s assertion that the Teamsters hadn’t taken reasonable precautions to protect Glacier’s property, comparing the concrete to perishable goods such as milk or poultry. Jackson’s dissent was blunt, noting that precedent establishing the NLRB as the exclusive agency for such disputes “makes clear that we have no business delving into this particular labor dispute.

“Workers are not indentured servants,” she continued, “bound to continue laboring until any planned work stoppage would be as painless as possible for their master.”

Still, the ruling seemed to be another action to weaken the already-weak federal labor law.

However, labor lawyers and other advocates are now holding up a lawsuit against a California grocery chain as a way to use existing law to fight union-busting companies, if not strikes specifically.

In a mostly overlooked ruling from April, the California-based Save Mart Supermarkets asked U.S. District Judge William Orrick to dismiss a lawsuit accusing Save Mart of lying about retirement benefits to stop workers from organizing.

Orrick dismissed the motion and said the class-action lawsuit can proceed.

Save Mart – the country’s 109^th-largest private employer, according to Forbes, with about $5 billion in annual revenue – has hundreds of grocery stores in California and Nevada under different retail names, with more than 14,000 workers. Local chapters of the United Food and commercial Workers represent about 11,500 Save Mart workers.

As reported by the online news service Truthout, workers’ suit centers on promises made by managers about retirement benefits to undercut the appeal of union membership to workers, a common anti-union scheme in organizing campaigns. A Save Mart loss in the case could alarm companies using similar tactics.

 

“Unions need to address large companies’ anti-union tactics any way they can, especially given how weak our labor laws have become,” said Naomi Soldon, partner of the union-side labor law firm Soldon McCoy, which isn’t representing anyone in the dispute. Soldon told Truthout that the case takes a “novel approach” to fighting union-busters, and a decision in favor of the workers “should help organizing drives, in general, as it shows employees that they have rights.”

 

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on allegations of “two misrepresentations” by the company: promises of nonunion retirement benefits “as good or better than those of their union counterparts,” and managers telling workers to retire earlier than they should have to in order to maximize benefits and income.

 

The misrepresentation were part of Save Mart’s strategy to undermine union organizers, plaintiffs’ lawyers said.

 

For years, Save Mart had provided similar retirement benefits to nonunion workers. But the terms of benefits to union workers were binding, as per the collective bargaining agreement governing them, while nonunion retirees were compensated at the discretion of management. So last year, after Save Mart was bought by private-equity firm Kingswood Capital Management, management took benefits away from nonunion retirees. And four employees who’d worked for Save Mart for a total of 146 years filed the class-action suit.

 

“Put simply, Save Mart made false assurances about benefits as a means of suppressing union enrollment among Save Mart employees,” plaintiffs’ attorneys claimed, estimating that their clients represent a class that could consist of thousands of workers who are owed “hundreds of millions of dollars.”

 

Human Resource representatives and company executive were trained to communicate that employees should not pay dues to join the union, since non-union benefits — including retirement benefits — would always be as good as or better than the benefits enjoyed by union employees, the lawsuit says. Such meetings were held at stores where management realized workers were organizing.

 

Union employees didn’t have to consider the possibility of losing their benefits because they had contracts, according to UFCW Local 8-Golden State.

 

“Our members can rest assured they have the benefit of solid successor language which guarantees they will continue to enjoy the benefits of their union memberships and labor contracts,” the union said in a prepared statement.

 

The complaint features testimony by HR executives who for years delivered such messages without realizing they were deceptive until the Kingswood-controlled company started reneging on promises and eliminating benefits.

 

Eric Fink, associate professor of Elon University School of Law in North Carolina, said there’s a high threshold under the National Labor Relations Act for securing charges against union-busting managers who make deceptive claims about benefits, and the remedies are weak.

 

“Even if the bait-and-switch in this case could be the basis for an Unfair Labor Practice charge, it would require proof that the employer was motivated by anti-union animus, which would be difficult,” Fink said.

“More significantly, in contrast to the limited remedies available [there], the potential remedies in an ERISA [Employee Retirement Income Security Act of 1974] suit are substantial,” he continued. “If this suit is successful, and if other employers anticipate the possibility of facing similar suits, the deterrent effect could be much greater than has been the case with [Unfair Labor Practice] charges.”