Why Unions Have Failed to Win Remedies

LaborTalk (January 25, 2006)

A Close Look at the Plight of U.S. Workers;Why Unions Have Failed to Win Remedies

By Harry Kelber

Does it bother you that it took the annual wages of 431 workers in 2004 to equal the average compensation of just one top corporate executive (CEO)? This shocking statistic is contained in a report by the Economic Policy Institute and United for a Fair Economy.

Are you enraged that in 2003, it took a CEO one and a half workdays (260 in a year) to earn what an average worker made in 52 weeks of labor?Are you bitter to learn that between 1992 and 2003, the median CEO received an 80.8% raise, in contrast to the median workers' hourly wage, which rose a total of 8.7% for the 11-year period.



What is your reaction to the fact that in 2004, the average CEO of a major corporation received $9.94 million in total compensation, and that the CEO of Yahoo, Terry S. Semel, received $109,301,385? (For that amount, you could provide health-care insurance for 5,000 children who don't have it.Or you could help 2,500 poor children out of poverty.)

Does the AFL-CIO hope to embarrass or shame CEOs by publishing data about their excessive greed? It won't happen. In 1965, a CEO's earnings was equal to that of 24 workers. Today, it's 18 times that amount--and will probably keep growing. You can't appease a hog.

Employees and unions have no voice in determining their CEO's compensation, but the CEO has plenty to say about what his employees earn. And the more he can grind down the corporation's "labor costs," the more generously will he be rewarded.

Consider the job cuts at General Motors and Ford. The auto workers were not consulted about the layoffs, and there was no real concern for those auto workers who had given their company ten, twenty or more years of loyal service. The Big Three automakers have eliminated or announced plans to eliminate nearly 140,000 good-paying jobs since the year 2000. But not many people, except for the auto workers themselves, are unduly excited or ready to demand the discharge of all management officials responsible for the debacle.

Sweeney Typifies AFL-CIO's Credibility Problem

In his speech before the National Press Club on Jan. 18, AFL-CIO President John Sweeney enumerated all of labor's complaints about injustice and the lack of fairness toward working families, reciting a litany of grievances, from the minimum wage, denial of worker rights and the outsourcing of jobs to problems about health care, pensions and taxes.

It was a good speech, but it had no effect on the audience, who have heard the same talking points in Sweeney statements many times before. It certainly won't have an electrifying effect on the politicians in Washington, who know that Sweeney's words won't translate into action. His message has become predictable and boring, even to the union members he is trying to defend.

Sweeney seems satisfied to denounce Corporate America and the Bush administration as though that is his primary function, instead of promoting a course of action that would advance labor's cause.

It doesn't help labor's predicament that none of the 48 members of the AFL CIO Executive Council have chosen to remain silent, leaving the impression that they have nothing meaningful to say about labor's current problems.

Because of the lack of national leadership, union members have become anesthetized to whatever abuses are imposed on them by profit-hungry corporations and anti-labor politicians in Congress.

Does the situation have to become much worse, before it becomes better? Can the union people who don't want to wait that long come up with better answers?

Our weekly "LaborTalk" and "The world of Labor" columns can be viewed at our Web site: http://www.laboreducator.org/Harry Kelber's e-mail address is: hkelber@igc.org

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AMO Sues MEBA over Interlake Steamship Contract Raiding.

It has always been an open question just how beneficial the Interlake Steamship Company has been to the MEBA. Obviously having more members is always a good thing for a Union. And so looking at strictly the money does not tell the whole story.

But a Union is also a business and as such parts of that business have to justify themselves. The dues paid by all the Interlake Members comes to around $140,000 per year. Now then, out of that $140,000 per year the MEBA has to represent the Members of the Interlake group. That means a local rep, real estate, and the occasional senior official inspection trip to the locus in quo.



Really, not much left over from that $140,000.

But now the MEBA has to fend off lawsuits from the disgruntled former owners of the Interlake contract, the American Maritime Officers (AMO).

Win a few; lose a few. And that's how it goes for AMO. While the latest MEBA Telex Times of january 20, 2005 trots out all sorts of previous minor (no doubt hastily assembled) legal actions by AMO (who indeed, are rarely without sin), several important pieces of information are left out. The only lawsuit mentioned in the Telex Times was of course the one AMO lost. A famous victory for the MEBA, Mom and Apple Pie.

But never let it be said that the Telex Times is truthful (to read the MEBA Telex Times, click on the link: Admiral's Blog).

But what then was the truth?


From the TT:

"In late 2004, AMO filed lawsuits against MEBA Officers in the Interlake Steamship Company fleet. In the suit, AMO sought, among other things, to deprive those members of their life savings, investments and other monetary accounts."

Sounds ominous eh?

3 People who took lumpsum buyouts from AMO went back to work on the Interlake vessels (AMO has the same rule about prohibited work without Trustee permission as MEBA. We may safely assume they would not have been granted permission).

AMO Plans demanded they return the Lumpsum if they wished to continue working. They would still be entitled to the money, they just could not take the money and work at the same time. AMO Plans later sued. MEBA defended them on the basis that their employment was "continuous" since it was the same company. In addition, it's probable (and there's plenty of case law) that the Court was loath to take away somebody's retirement as well.

This raises troubling issues. If the MEBA paid for these peoples' legal defense, how would the MEBA be able to enforce its own rule about prohibited employment?

Davis shoots the Retirement fund in the foot and then brags about it.

Two suits that AMO won were not mentioned in the TT. And these had less to do with depriving hard working Members of their life savings and more to do with the legality of the MEBA snatching the Interlake contract out from under AMO's rosy red veined nose.

One suit was to compel Interlake into Arbitration. AMO won that suit as well as the resulting arbitration.

Another was the suit against former AMO Official and later MEBA Consultant, Jerry Joseph. AMO won and was awarded $8.75 million. The award is being appealed.

And that brings us to this little problem. The former AMO Members, Interlake or Joseph are NOT the ultimate "deep pockets". The deep pockets are the MEBA Benefit Plans. As Willie Sutton would say, "Because that's where the money is". That's why they are listed as codefendants in the case.

It seems the Davis Administration can never simply be straight with the facts.

How then to deal with this? For Davis a vigorous defense probably consists first of all of delaying the case for as long as possible, since the well established tactic of the Davis Administration has always been deny, obfuscate and delay, in so doing, moving that evil day of reckoning to a point farther off into the misty future.

The lawyers can milk this one for a long time. Because this is not about protecting Members jobs, this is about protecting Administration officials from the consequences of their acts.

BvK

References:

From the MEBA Telex Times of January 20, 2006

MEBA DEFENDING ATTACKS
AMO has filed a complaint in Ohio against MEBA based on our Union's collective bargaining agreement with Interlake. MEBA believes the complaint is baseless and is vigorously defending against it. At this time, MEBA cannot provide more details, but will do so in the near future.The Davis Administration is committed to vigorously defending the Union from attacks launched by the American Maritime Officers (AMO) while at the same time moving forward to secure new jobs for the membership and protecting the Union's solid job base. Some recent examples are: AMO filed Article XX charges directly against MEBA in connection with an MEBA contracted Company that had won a charter award for the operation of seven U.S. Government owned vessels. Article XX proceedings involve disputes regarding one AFL-CIO union raiding another AFL-CIO union. AMO began the Article XX proceedings shortly after affiliating with an AFL-CIO Union in an effort to obtain Article XX protection. MEBA defended the frivolous charges leveled by AMO, and won the Article XX case. There is a brief synopsis of this Article XX case below as well as some other Article XX cases where AMO was found to have raided other unions, which resulted in the imposition of sanctions against it by the AFL-CIO and AMO's consequent departure from the house of labor in order to avoid those sanctions. In late 2004, AMO filed lawsuits against MEBA Officers in the InterlakeSteamship Company fleet. In the suit, AMO sought, among other things, to deprive those members of their life savings, investments and other monetaryaccounts. The case was filed in the U.S. District Court in Southern Florida. MEBA's counsel represented the Officers in the suit. In July of 2005, theCourt determined that the AMO's suit was "wrong, and unreasonable and thus arbitrary and capricious." The Judge then dismissed the case against all the Officers "with prejudice." The term "with prejudice" means that the cases against the Officers cannot be revisited. AMO had to pay the court costs associated with the case. It is apparent that AMO is not pleased with MEBA's success over the past fewyears, and will do anything it can to halt our Union's progression.

From AMO Currents:

http://amo-union.net/1-20-06-lawsuit.php

AMO files suit against MEBA for interfering with Interlake contract

American Maritime Officers has filed a lawsuit against the Marine Engineers Beneficial Association for “intentional” interference with AMO’s collective bargaining agreement with Interlake Steamship Co. in 2003. The suit, filed in Lucas County Court of Common Pleas in Toledo, Oh., names MEBA and two of its top officials--President Ron Davis and Vice President Don Keefe--as defendants. Also named are the MEBA Medical and Benefits Plan, the MEBA Vacation Plan, the MEBA Training Plan, the MEBA 401(k) Plan, and the MEBA Pension Trust. In the suit, AMO is seeking a jury trial and damages “in an amount of $60 million or more” for “the intentional tortious interference with a contractual relationship” or for “unjust enrichment.” AMO is also seeking “punitive damages in the amount of $280 million,” legal fees, “all costs incurred in this case,” and “any further relief in law or equity to which plaintiff (AMO) is entitled.” AMO represented the engineers, mates and stewards in the Interlake Steamship Co. fleet of self-unloading Great Lakes bulk carriers under successive three-year collective bargaining agreements for many years. The most recent collective bargaining agreement between AMO and Interlake Steamship Co. was in force between August 1, 2000 and July 31, 2003. In its suit against MEBA, the MEBA officials and the MEBA benefit funds, AMO notes that Interlake Steamship Co. and MEBA signed a 10-year collective bargaining agreement on July 25, 2003--six days before the expiration of the collective bargaining agreement between AMO and Interlake Steamship. The contract between Interlake and MEBA was signed in secrecy at the Lake Michigan home of James Barker, Interlake’ Steamship Co.’s chairman and principal owner, following “extensive negotiations” conducted without the knowledge of AMO or the Interlake fleet vessel officers. Between July 25, 2003 and July 31, 2003, “senior management officials” of Interlake Steamship Co. and several MEBA officials and representatives--including Davis and Keefe--boarded Interlake vessels at anchorage and “met with the vessels’ maritime officers and advised them of the terms of the new collective bargaining agreement,” AMO said in its complaint. The Interlake Steamship Co. executives and MEBA officials and representatives “required the maritime officers to become and remain members of MEBA as a condition of employment and provided the maritime officers with forms to sign up for membership in MEBA” and to withdraw from membership in AMO. The complaint by American Maritime Officers characterized the covert contract plan between Interlake Steamship Co. and MEBA as “very meticulous.” During its negotiations with Interlake Steamship Co., MEBA “had actual knowledge” that AMO had had a valid collective bargaining agreement with the company, and that AMO was “the exclusive bargaining agent with respect to rates of pay, wages, hours of work and conditions of employment” of the Interlake Steamship Co. vessel officers between August 1, 200 and July 31, 2003. AMO prevailed in a case in 2005 against Jerome E. Joseph, a former AMO national executive vice president who became a paid consultant to Ron Davis and MEBA in April 2002. During earlier court-ordered arbitration between AMO and Interlake Steamship Co., Joseph was found to have brokered negotiations between MEBA and Interlake, and he was among the MEBA representatives who boarded the company’s vessels to promote the Interlake-MEBA contract and coerce the vessel officers into MEBA membership between July 25, 2003 and July 31, 2003. In American Maritime Officers v. Jerome E. Joseph in the Superior Court of the District of Columbia (Civil Division), the jury found that Joseph had “misappropriated” AMO’s property--specifically, “records and papers, including protected, proprietary information”. The jury also found that Joseph had used the confidential information to promote MEBA’s interests in the Interlake Steamship Co. matter and others. In that case, the jury levied a judgment in excess of $8 million against Joseph.


To see details of the AMO filing, click on link below to the Lucas County Ohio website:


http://www.co.lucas.oh.us/ClerkDockets/Docket.asp?selCaseType=CI&NumberSearchCriteria=200507134&StartDate=&EndDate
=&selParty=0&submit1=Continue+%3E%3E%3E

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MEBA Members and Retirees feel pinch of Health Care costs

"Those who went before us built this industry - they built it with their patriotism, their sweat, and their tears. For them, we must be ever mindful of this obligation. We cannot, and we will not, let them down."

Marine Engineers Beneficial Association (MEBA) President Ron Davis on the occasion of his receiving the Admiral of the Ocean Sea award in New York City on November 11, 2005 spoke those words.

Indeed, for a Union leader, those are words to live by. But MEBA Members and especially Retirees have been finding out just what those words mean. Davis and his fellow Trustees who make weighty decisions regarding the Union run medical plan, decided in October 2005 to cut benefits for all participants and impose drastic increases in the premiums paid by Retirees.



”.…... a six fold increase in med payments……”

For the average MEBA Retiree who is married, the increases will mean a 4 fold increase in premiums. For the poorest Retirees it means as much as a 6 fold increase. A Merchant Marine Officer who retired with a $2000 per month pension will now be expected to pay out over 1/3rd of that pension for medical coverage.

All participants in the plan will see higher co-pays, co-insurance and greater maximum out-of-pocket expenses. Only Retirees are required contribute to the cost of coverage.

The MEBA over the years has been able to provide Members and Retirees with a better health care plan than most Americans get and for good reason. “….we spend years working in hot engine rooms breathing asbestos….. these problems show up later in life.” In recent years the cost of this largesse has taken its toll. Also, Employer contribution rates have dropped. Retiree premiums were doubled just 3 years ago. The Union has taken steps to curtail costs by switching to PPO’s, but the adjustments are not enough.

In the past there was a percentage schedule for retirees. Premiums were based on retirement pay. The more affluent pensioners paid more, the poorer pensioners paid less. It was a system that no one seemed to mind. The new premium scheme calls for a minimum payment of $300 per month for single retirees and $700 per month for retirees with dependents who are not on Medicare. Medicare recipients will see their payments to the Government rise as the Union will no longer be paying for Medicare Part B.

While the same percentage rate of 6 percent of retirement pay is still in effect, only the most affluent retirees will come close to paying that. Senior Union Officials who retire with larger pensions than rank and file members will be protected from paying more because a cap of $800 per month has been placed on the premiums.

Employers have been trying to jettison pensioners and their liabilities for years. It seems now, with the help of Union officials, they have hit upon a back door method for doing so. The premiums have been raised to where participants can no longer afford to stay in the system. It is possible that as many as 75% of retirees will be seeking health care coverage in the commercial market or simply become one of the 46 million other Americans without health care coverage.

For three years, MEBA Union Officials have been telling Members that the condition of their health plan was fine, “we can ensure retiree medical benefits well into the future”. This included the time period they were up for election in 2004 and the period in 2005 that the election was under challenge. As soon as the election was over however, they changed their tune, saying if no changes are made, the medical plan will be bankrupted “in the near future”.

A group of dissident retirees who contacted an ERISA Attorney were told that what was done was perfectly legal, but “obviously a scam to protect Senior (Union) Officers”. These Retirees are also hoping to find some new officials in charge of the MEBA after the next election.

A Real Admiral wears a Hat

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