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Union cancels Boeing vote, claiming gun-toting workers told it to take off – Fox News

Posted in Unions

It looks as if some residents in South Carolina take their state’s Right-to-Work laws very seriously.A Charleston-area union claims that some of their organizers and recruiters met the barrel of a gun when they knocked on the doors of workers from…


Great story.  Glad these individuals stood up for themselves.  And now they want to give the Unions even more personal information. Good luck with that Big Labor.

Ambush Election Rules Apply to Decertification Elections As Well

Posted in Unions

Employers concerned about the NLRB’s new “ambush” election rules have rightfully protested that the new procedures make it easier and faster for unions to hold an election certifying the union as the exclusive bargaining representative of employees.  On April 14, 2015, the day the new rules became effective, The Wall Street Journal’s Opinion page asked – probably in jest -

“How About Quickie Decertification Votes?

The NLRB has decided that elections to unionize a workplace can take place two weeks after the paper work is filed. Will the same time frame applies to elections to decertify a union?”

Actually, they do.  Just as employees can petition to hold an election to become a unionized workforce, they can also petition for an election to become a non-union workforce.  This is called a decertification petition.  (The National Right to Work Foundation has an excellent discussion of the decertification process – here.)  29 C.F.R. 102.83 through 102.88 contain the National Labor Relations Board’s procedure for decertifying a union.  Section 102.86 states the Board shall follow the same process in decertification elections as it does in certification elections.  In other words, most – if not all – of the same new rules that employers find objectionable when faced with a unionization campaign can be utilized during a desertification effort.

In his Memorandum of Disapproval rejecting the Senate’s resolution that sought to block the new election rules, President Obama stated “[w]orkers deserve a level playing field that lets them freely choose to make their voices heard, and this requires fair and streamlined procedures for determining whether to have unions as their bargaining representative.”  I am glad that the right of employees to be free of clutch of big union bosses enjoys the support of the President.

FBI Raids Firm Accused of DBE Fraud

Posted in Disadvantage Business Enterprises (DBE)

I have previously posted and spoken about the increasing prevalence of DBE fraud investigations and prosecutions.  Usually those investigation are started by the Department of Transportation’s Inspector General’s Office and may lead to the unsealing of an indictment by the Department of Justice.  I have also warned of the growing threat of whistleblower lawsuits related to alleged fraud in the DBE program which sometime lead to a federally directed civil lawsuit against a firm. However, until recently, I have never heard of a whistleblower DBE fraud lawsuit leading to an FBI raid.

Earlier this week, it was reported that the FBI recently raided the offices of a large Tennessee based heavy highway firm after one of its former employees filed a whistleblower lawsuit regarding alleged DBE fraud.  This should be concerning to prime contractors operating under the DOT’s DBE regulations for several reasons.

First, as I predicted, DBE fraud prosecutions, which first  became en vogue in the Southern District of New York, are a growing trend nationally. The story out of Tennessee comes on the heals of recent DBE fraud investigations in North Carolina and Utah, among other jurisdictions. Prosecutors nationwide are focusing on ferreting out DBE fraud.

Second, the raid shows that the risks of a whistleblower lawsuit are both civil and criminal.  I have talked about how whistleblower lawsuits have caused contractors to incur significant damages under the federal False Claims Act for violating the DOT’s DBE rules.  However, in those cases, the damage was almost exclusively monetary.  Now, the risks of a whistleblower lawsuit could include a criminal investigation.

Third, typically a firm being investigated for DBE fraud has some form of advance warning of the investigation.  The warning could be in the form of a letter from the Inspector General’s Office advising the contractor of the investigation, the service of a whistleblower lawsuit on the company, or target letter from the Department of Justice.  However, when the FBI serves a warrant, you do not receive any warning (indeed it would defeat the purpose of the search).  Therefore, failure to follow the DOT’s DBE rules could result in the FBI showing up at your office unannounced and carting off boxes of documents and computers.

With the recent changes in the DOT’s DBE rules and the increased scrutiny of the program by federal authorities, now more than ever construction firms need to be paying attention to DBE compliance.

$650,000 Jury Award Against Sheet Metal Workers Union Affirmed

Posted in Secondary Boycotts, Unions

As I have blogged about before, one of the most powerful weapons contractors and owners have in combating illegal secondary activity by unions is Section 303 of the Labor Management Relations Act.  Section 303 authorizes a party to bring in action in federal court for monetary damages against a labor union who has caused harm because of illegal labor practices.

Late last year the Second Circuit Court of Appeals, which covers appeals from federal courts in New York, Connecticut, and Vermont, affirmed a $650,000 jury award in favor of a commercial sign subcontractor and against Sheet Metal Workers Local 137.  In that case, plaintiff was a commercial sign manufacturer and installer who entered into a contract with a prime contractor to Wells Fargo bank for the installation of new signs at locations throughout the New York Metropolitan area.  Accordingly to the complaint, plaintiff was not a signatory to Local 137 collective bargaining agreement.  Soon thereafter, Local 137 began threatening Wells Fargo because it was permitting the non-union sign company to work on the bank’s projects.  Local 137 engaged in classic illegal secondary activity, such as, displaying inflatable rats at Well Fargo locations, picketing Wells Fargo locations, disrupting deliveries to Wells Fargo, and causing Wells Fargo bad publicity.  Accordingly to the complaint, Local 137’s action eventually led to Wells Fargo insisting that the plaintiff be replaced with a sign company that was signed with Local 137 and plaintiff was replaced on the Wells Fargo projects.

Plaintiff sued Local 137 under Section 303 claiming that it was terminated by Wells Fargo because of Local 137’s secondary activity that violated Section 8(b) of the NLRA.  Section 8(b) prohibits a union from  threatening, coercing, or restraining a business in order to cause that business from doing business with another business.  The jury agreed with the plaintiff and awarded plaintiff $650,000 in damages.

Interestingly, based on the allegation in the complaint, Local 137 actions may not have garnered much attention from the NLRB on an unfair labor practice charge.  Especially in recent years, the NLRB has taken a restrictive view on what constitutes illegal secondary activity under Section 8(b).  Conversely, judges and juries have taken a more expansive view of what constitutes an illegal secondary activity and have not hesitated in awarding significant judgments against unions that violate Section 8(b).

Why the Ironworkers Conviction is Monumental

Posted in Unions

Yesterday’s guilty verdict is the trial of former Ironworkers’ Union President, Joe Dougherty, is a monumental decision with far reaching ramifications.  First, there is no longer any question that union bosses enjoy no immunity from federal racketeering and extortion laws.  Second, the decision clears the way for contractors to employ what has been called the “thermonuclear device” of litigation, civil RICO, against trade unions.

1.  Enmons is Dead.

Thanks to a 1973 U.S. Supreme Court case, U.S. v. Enmons, for over 40 years union bosses and their minions enjoyed de facto immunity from federal criminal charges for actions that would otherwise be criminal so long as they were in furtherance of a “legitimate union objectives.”  Until recently, courts had been loath to reel in the breadth of Enmons.  That changed in 2011 in a decision from the federal court in New York in the case U.S. v. Larson, where the court refused to dismiss an indictment of members of the Operating Engineers Union, who engaged in activity similar to that in the Ironworkers case.  In that case, the court distinguished Enmons and said that decision was never meant to apply to acts of violence and extortion against non-union construction companies and project owners, who chose to build non-union.  That decision paved the way for a series of guilty pleas from members of Operators in the case.  In the Ironworkers’ case, Judge Baylson reached a similar conclusion and it paved the way for the conviction of Joe Dougherty.

Thus, there is now no question that acts of violence and extortion are no longer protected under U.S. v. Enmons and unions can no longer hide behind that decision in escaping prosecution for their crimes.  Last year, it was reported that the U.S. Attorney in Philadelphia was making cases, like the Ironworkers case, a priority. Moreover, at the news conference initially announcing the indictment over a year ago, the U.S. Attorney was explicit that the case may not stop with the Ironworkers’ Union.  Indeed, as any non-union contractor working in Philadelphia knows, the allegations against the Ironworkers’ Union were hardly unique to that specific union.  There is no doubt that Ironworkers’ case was a test case for the Department of Justice here in Philadelphia and we should not be surprised if similar indictments are unsealed against other members of the building trades.

I am sure there is a bit of Hoya paranoia happening in the Philadelphia building trades right now, but that paranoia may soon spread nationally because U.S. Attorneys’ like to bring “copy cat” cases in other jurisdictions.

2.  Civil RICO Claims.

What is perhaps the bigger ramification of the Ironworkers’ conviction is contractors are now “cleared hot” to bring civil RICO claims against trade unions.  Joe Dougherty was prosecuted under the Racketeer Influenced and Corrupt Organizations Act, otherwise known as RICO.  RICO is a Nixon era body of laws that was passed with the intention of fighting the mafia and other organized crime syndicates.  The RICO act has both a criminal and civil component.  The civil component requires a plaintiff to prove most of the same elements of a criminal RICO claim. The civil component also permits the court to award a plaintiff trebel (triple) damages and attorneys fees.

The reason why contractors did not likely have a viable RICO claim before the Ironworkers’ conviction involves a bit of background on what is required to prove a RICO claim.  (RICO is a very complex area of the law. The complexity of RICO is probably why it took the jury in the Ironworkers case a few days to come back with a verdict.)  A fundamental element of a RICO claim is that the defendants must have committed a RICO “predicate act” which are set forth in the RICO act.  Simply put, if you have no predict act you have no RICO claim.  Predict acts include murder, gambling, mail fraud, wire fraud, and money laundering.

The RICO predicate act most likely triggered by union strong arm tactics is the Hobbs Act, which makes it a federal crime to conspire to commit extortion.  For example, Joe Dougherty was convicted of violating the Hobbs Act.  The problem before the Ironworkers’ conviction was that the Enmons case foreclosed a civil RICO claim against a trade organization because Enmons held that the Hobbs Act was not violated so long as a union was furthering legitimate objectives.  However, now that Enmons is dead and a violation of the Hobbs Act does occur when unions commit extortion against non-union contractors and the owners that hire them, the path is cleared for contractors subjected to that extortion to bring a civil RICO claim against the union.  Civil RICO claims are expensive to defend and they give aggrieved contractors the first real weapon with teeth to combat union intimidation.   I would not be surprised if the contractors that were harmed by the Ironworkers do not file civil RICO claims against the Ironworkers’ Union in the near future.