Carpenters Union takes
$9.4 million hit at Arbitration
Roofer makes point about
“Most Favored Nations” issue
but did Arbitrator have the power?
“[Prate’s] only conclusion had to be
that he was still selected by the
union leadership for destruction.”
Under the standard “most favored nations” clause in collective bargaining agreements, no employer is supposed to be worse off than the competition. Hence in the matter of Prate Installations, Inc. and Chicago and Northeast Illinois District Council of Carpenters, the contract provided in part that “in no event shall any EMPLOYER be required to pay higher wages or be subject to more favorable wage rates, contract terms or work rules, than those agreed to by the UNION to any Collective Bargaining Agreement with any other construction industry employer….”
Prate, engaged in insulation, shingling, and siding, signed with the Carpenters through the association bargaining of the RCEC (residential). Prior to changes in the 1998 area agreement specialty contractors like Prate compensated their employees by piecework rather than by the hour. Prate’s specialties are notoriously difficult to supervise on-site. But in 1998 the union pushed hard for hourly pay in the roofing specialty, and got it, and in the process made enemies with Prate. Thereafter the union, through its trust funds, appeared to make good on its threat to shut Prate down. It almost succeeded by striking and auditing Prate. The battle ended – or so Prate thought – with a settlement agreement.
But in the ensuing years the union sought to enforce the hourly pay provision by going after Prate but not its competitors, where piecework survived due to lack of uniform enforcement by the union. Prate’s president repeatedly attempted to bring to the attention of the union the persistent use of piecework compensation in the roofing specialties, but he was ignored. The arbitrator found that although the union claimed Prate’s reports of violations were too vague, they were in fact “exquisitely detailed.” This went on for two years. Meanwhile business agents harassed Prate at its jobsites. There was only explanation for the refusal to take his reports of piecework practices seriously: “….his only conclusion had to be that the was still selected by the union leadership for destruction.”
Arbitrator James Martin sustained the grievance, awarding the difference between what Prate paid its employees by the hour and what it would have paid them on a piecework basis, plus attorney’s fees.
But the union believes he had no jurisdiction over any claim extending past the date of the new area agreement executed in 2005. Although the grievance was filed in 2004, under a contract in which the selection of an umpire was between the parties on a case-by-case basis, the 2005 agreement established a panel of named arbitrators to hear grievances. Hence, the union will be arguing in its petition in federal court to vacate the award, any part of the award pertaining to damages that would have arisen after the new agreement was outside the jurisdiction of Arbitrator Martin.