In a breakthrough appellate court ruling, Iron Worker Union officials can now be sued under anti-trust laws for running a union kickback scheme known as "job targeting" which has diverted $500 million in workers wages over the past 5 years.

Job targeting schemes are primary tools used to secure a Big Labor cartel over billions of taxpayer dollars used in federal contracting (as well as many private construction projects). They are used to freeze non-union contractors out of getting work, while lining the union bosses’ pockets with the wages of construction workers.

Attorney Mike Avakian, General Counsel of the Center for National Labor Policy, brought the cutting-edge suit for several New England companies, and National Right to Work Foundation attorneys submitted an amicus curiae (.pdf) brief because job targeting schemes severely undermine non-union employees’ interests. Here’s a quick preview from the Daily Labor Report, a subscribers-only service:

Five nonunion steel erector companies in New England may proceed with their claims that a job targeting fund run by the Iron Workers and other activity in conjunction with union contractors violated federal antitrust and labor laws, the U.S. Court of Appeals for the First Circuit ruled Aug. 1 (Am. Steel Erectors Inc. v. Local 7, Int’l Ass’n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 1st Cir., No. 07-1832, 8/1/08).

. . .

The Iron Workers created a job targeting program called the Market Recovery Program (MRP) to help mitigate the disadvantage for union contractors. The union targets certain construction projects and offers a subsidy to signatory contractors bidding on the project. When a signatory contractor wins a contract on a targeted project, the union and the contractor execute an agreement specifying the terms and the amount of the subsidy. The MRP is funded by money withheld by union contractors from union members’ paychecks.

In other words, job targeting schemes enable union officials to seize and funnel part of workers’ paychecks back to the union contractors, enabling such firms to undercut competitors’ bids by artificially lowering operating costs (through kickbacks of artificially high forced union dues). Meanwhile, the workers receive lower wages in effect.

The case also alleges that these funds were used to bully businesses to renege on agreements with nonunion companies by targeting them for picketing, harassment, and intimidation.

All in all, a pretty sordid tale. On appeal, the U.S. Court of Appeals for the First Circuit determined that the union was not exempt from federal anti-trust law, allowing the plaintiffs to proceed with their suit in U.S. District Court. Key quote from the decision (.pdf – emphasis mine):

Nonetheless, unions, particularly when acting in concert with non-labor groups, are not given carte blanche to engage in anticompetitive activities. As the Supreme Court has explained, "[i]t would be a surprising thing if Congress, in order to prevent a misapplication of [antitrust] legislation to labor unions, had bestowed upon such unions complete and unreviewable authority to aid business groups to frustrate its primary objective."

Shamefully, the U.S. Department of Labor has been totally AWOL on the job targeting issue even though DOL’s official position is that it violates the Davis Bacon Act. This deliberate enforcement failure has given union bosses a green light to exploit this lucrative and corrupt practice at workers’ and taxpayers’ expense.

In fact, high-level DOL officials — including Secretary Elaine Chao herself — rebuffed direct requests to get involved in this very case which has the potential to mop up billions of dollars in corruption occurring right under DOL’s nose. Even as the seminal case is now breaking the plaintiffs’ way, Bush’s DOL is still sitting on its hands. (Why do these people even bother showing up for work?)

The plaintiffs’ lawsuit is resulting in a major step forward for taxpayers and for high-quality, lower-cost non-union firms and their workers who are effectively blackballed from performing federal contracts, project labor agreements, and other constructions jobs.

The National Right to Work Foundation’s letters calling for an investigation of the SEIU union’s apparently illegal scheme to coerce "donations" for its Political Action Committee (PAC) prompted this excellent editorial in the Wall Street Journal.

Now that editorial has caused a local union official to blow the whistle in this letter to the editor. Aside from cheering the Foundation’s efforts, her letter alludes to another problematic aspect of the SEIU union’s dirty political fundraising scheme.

Marlene Jones, a registered nurse who is also the head of her Pennsylvania-based SEIU local, writes the following:

I have been a member of the Service Employees International Union (1199P) for 27 years. I am the president of a local nurses union in Pennsylvania. Every day I experience the pressure for our local nurses union to have all of our members contribute to the Political Action Committee fund. SEIU even goes as far as telling its locals that if a percentage of its members contribute, they will receive 1% of their high union dues back to the locals.

[emphasis added]

So on top of the SEIU constitutional amendment penalizing SEIU locals by seizing dues money when they don’t hit PAC fundraising goals, Ms. Jones says top SEIU bosses are promising conditional kickbacks of certain union dues seized from workers and sent to the International affiliate. But those kickbacks apparently do not occur if the local union fails to meet the SEIU’s PAC fundraising mandates. This could be yet another way SEIU bosses are in violating federal law by securing PAC "contributions" with the threat of financial reprisals.

Nurse Jones ends her letter with the following plea:

When will it end? Good luck with the investigation. Our members do not want to contribute to the PAC fund.

This month’s issue of the Capital Research Center’s Labor Watch newsletter features a cover story on Big Labor’s attempts to force public safety officers nationwide into monopoly union collectives. The article details many unjust aspects of federal monopoly bargaining power grab, not the least of which is that it trumps state laws while stripping employees of their right to negotiate their own terms of employment or be rewarded for their individual merits.

While the National Right to Work Committee continues to lead the fight against the bill’s passage, Foundation attorneys are preparing for a legal challenge if it becomes law. We have previously reported on this overall situation here.

One passage in the Labor Watch piece is particularly noteworthy:

Congressional Quarterly Today reported on May 30 that Sen. Reid still “intends to call up” H.R.980 for a Senate floor vote prior to this fall’s elections. Whether he actually does this may depend on what action is taken by Senate Republicans who oppose the legislation. If they hold firm, Reid will not be able to secure a final floor vote before the November elections without first allowing several right-to-work amendments to be considered and voted on. The most important of these amendments is sponsored by Sen. Jim DeMint (R-S.C.). It would repeal all provisions in federal labor law that authorize the firing of employees for refusing to pay dues or “agency” fees to an unwanted union.

A Battle For Forced Dues

[Harry] Reid knows that if a right-to-work amendment like DeMint’s comes up for a vote, union officials will oppose it with all their might, and they will order their Senate supporters to oppose it as well. This will, in turn, demonstrate clearly that Big Labor’s battle for [mandated monopoly bargaining for Public Safety employees] is largely a battle for forced union dues. [emphasis added.]

Yesterday, SCOTUSblog reported on the opposition by National Right to Work Foundation attorneys to the Solicitor General’s self-contradictory motion for divided arguments in the Foundation’s Locke v. Karass Supreme Court case. (For more background on the SG’s unwelcome machinations and the Foundation’s principled opposition, read this post.)

The SCOTUSblog post brings to light this new tidbit of news: "Jeremiah Collins, a lawyer for the respondent, said the union did not plan to file an opposition."

Of course he won’t. The Solicitor General is making Big Labor’s legal arguments. Why not add another lawyer to the union legal team at taxpayer expense?

If the Solicitor General forces his way in, Foundation staff attorneys representing a group of Maine State employees may get 5 fewer minutes to argue their case. Looking at his misguided legal brief (which the union later cited 14 times in its own brief), there can be little doubt that the SG would use the time to make the union officials’ case against the employees and the First Amendment.

As the Foundation attorneys’ response makes clear, the Administration’s interest in the case is extremely tenuous and far fetched, and under court rules it should therefore be barred from participation in oral arguments (as in similar situations in the past).

Welcome to Big Labor’s anti-employee legal team, Mr. Solicitor General. Thank you very little.

We’ve just released a mini video segment on the Foundation’s ongoing efforts to hold union officials liable for a campaign of intimidation and harassment against Patricia Pelletier, a Connecticut worker who successfully initiated a decertification election to eject an unwanted union from her workplace. Union hotheads even planted crack cocaine in her work area to try to get her fired. Check it out:

For more background on the case, the Foundation’s press release is available online here. The Hartford Courant’s coverage of the Foundation’s pending lawsuit is available here.

As always, check back at the Foundation’s YouTube Channel for more Right to Work video updates.

The Bush Administration is arguing Big Labor’s legal positions in court again.

Right to Work supporters recall the Bush Administration’s lousy record when it comes to employee free choice and worker freedom. Solicitor General Paul Clement seemed to take pleasure in parroting union lawyer talking points in important legal proceedings like Davenport v. Washington Education Association. Before resigning in May, Clement took another swipe at employee freedom in Locke v. Karass, another Foundation case going to the Supreme Court.

Clement’s successor, Acting Solicitor General Gregory Garre, appears to be picking up where Clement left off. On Friday, Garre filed a motion with the Supreme Court to participate in oral arguments in Locke. Worse, Garre wants to cut into time already allocated to Foundation attorneys.

In Locke, Foundation attorneys are representing 20 Maine state employees who contend that the union which "represents" them — the Maine State Employees Association (MSEA) — is violating their First Amendment rights by sending part of their forced dues to a giant union slush fund which the affiliated Service Employees International Union (SEIU) can use to finance costly litigation, even though such litigation does not directly impact the state employees’ own bargaining unit. SEIU is one of the most radical and politically militant national unions.

On Monday, the Foundation filed its opposition to the federal government’s motion, making several important points to challenge both the SG’s motion to participate and the motion for divided argument.

The Acting Solicitor General has failed to adequately demonstrate the government’s concrete interest in the case. Importantly, no federal statute is at stake. Garre’s motion claims the government’s interest by vaguely pointing to the Secretary of Labor’s responsibility to advise the President on labor policy and carry out Congressional policy and to the National Labor Relations Act, though Garre even contradictorily argues in the motion "that questions arising under the NLRA are distinguishable from this case."

The High Court has the option to simply extend time for oral arguments, but Garre wants to cut into the time of both the Foundation attorneys and MSEA lawyers — even though the Court’s rules permit divided arguments "only in the most extraordinary circumstances." But of the 22 pages of argument in the Solicitor’s amicus brief, 17 are devoted to opposing the pro-worker legal position taken by Foundation attorneys.

Moreover, the MSEA cites the Solicitor’s arguments 14 times in its own brief. If the Court grants the government’s motion, it would "deny the Employees their full opportunity to present their views."

The Bush administration’s stance in Locke is inexplicable. With only a few more months before he leaves office, Bush has no electoral reason to try to appease Big Labor (not that Republican appeasement of union bosses works out very well). But as the Acting Solicitor General’s motion demonstrates, the Bush administration doesn’t have enough significant legal interest either.

Yet, the Solicitor General’s office persists in going out of its way to undercut the rights of nonunion employees forced to pay dues as a condition of employment, despite the administration’s supposed support of the Right to Work. So once again we have to observe the old saying: With "friends" like these… who needs enemies?

And the Solicitor General’s office can’t say it doesn’t know the harm it is doing. Its demand for oral argument time comes after the Foundation asked it to withdraw its legal brief because, if the Justices took it seriously, it would do serious harm to employees’ rights.

Instead, Foundation attorneys may now find themselves arguing not only against Big Labor’s lawyers, but also against the Bush Administration.

Yesterday, a pro-Big Labor blogger at OpenLeft inadvertently highlighted the absurdity of the SEIU’s apparently illegal fundraising scheme (emphasis mine):

If the local doesn’t put enough money into the national PAC, they will have to pay a penalty of regular funds out of union dues to the international. PAC contributions are voluntary and only come when members feel empowered, whereas union dues are automatic, so this is a strong incentive for locals to organize and empower their members. It’s a good policy move, and it was voted on and ratified at the SEIU Convention.

Surely the author realizes that there’s some tension between "voluntary contributions" and an SEIU policy that penalizes local affiliates for failing to meet MANDATORY political fundraising targets? Actually, he does:

The requirement and penalty do somewhat cut against what it means to voluntarily give to political causes. A possible lawsuit might be viable.

For sure. Here’s the relevant section of US code quoted in the National Right to Work Foundation’s letters (.pdf) to the Departments of Justice and Labor (emphasis mine):

(2) For purposes of this section and section 79l(h) of title 15,^[1] the term “contribution or expenditure” includes a contribution or expenditure, as those terms are defined in section 431 of this title, and also includes any direct or indirect payment, distribution, loan, advance, deposit, or gift of money, or any services, or anything of value (except a loan of money by a national or State bank made in accordance with the applicable banking laws and regulations and in the ordinary course of business) to any candidate, campaign committee, or political party or organization, in connection with any election to any of the offices referred to in this section or for any applicable electioneering communication, but shall not include

. . .

It shall be unlawful—

(A) for such a fund to make a contribution or expenditure by utilizing money or anything of value secured by physical force, job discrimination, financial reprisals, or the threat of force, job discrimination, or financial reprisal; or by dues, fees, or other moneys required as a condition of membership in a labor organization or as a condition of employment, or by moneys obtained in any commercial transaction;

No political expenditures " . . . secured by financial reprisals or the threat of financial reprisals?" Sounds like a pretty explicit violation of U.S. law.

The SEIU’s political fundraising apparatus is absolutely enormous. As the author of the OpenLeft post notes, its institutional clout and massive campaign expenditures dwarf other organizations’ contributions. But coercing local SEIU affiliates into bankrolling a national campaign strategy has the potential to irreparably taint our electoral process. When even a pro-Big Labor mouthpiece concedes the viability of the Foundation’s case, it’s time for the Departments of Labor and Justice to take action.

ADDENDUM: Here’s more commentary on the political implications of the SEIU’s fundraising from QandO and Protein Wisdom.

The Wall Street Journal has a great editorial up on the National Right to Work Foundation’s ongoing efforts to push the Departments of Labor and Justice to investigate the SEIU for illegal campaign fundraising. Money quote (emphasis mine):

The mighty Service Employees International Union (SEIU) plans to spend some $150 million in this year’s election, most of it to get Barack Obama and other Democrats elected. Where’d they get that much money?

That’s a question the Departments of Labor and Justice are being asked to investigate by the National Right to Work Legal Defense Foundation. Specifically, the labor watchdog group wants Justice to query a new SEIU policy that appears to coerce local workers into funding the parent union’s national political priorities.

The union adopted a new amendment to its constitution at last month’s SEIU convention, requiring that every local contribute an amount equal to $6 per member per year to the union’s national political action committee. This is in addition to regular union dues. Unions that fail to meet the requirement must contribute an amount in "local union funds" equal to the "deficiency," plus a 50% penalty. According to an SEIU union representative, this has always been policy, but has now simply been formalized.

No other major institution could get away with its bosses demanding that every single one of its workers step in line behind its political preferences. This is the sort of imposed political obeisance that infuriates so many workers and turns them away from
unions.

Ed Morrissey at Hot Air follows up with commentary on some of the broader implications of SEIU political activism (emphasis mine):

Now the SEIU suddenly has $150 million, from which they’ve already committed at least $85 million specific to Democratic candidates. That money got squeezed out of the locals under duress, in obvious violation of the spirit and letter of federal law. The union knows how to protect itself and its interests, and the lockstep nature of their support for Democrats should awaken voters to the threat their policies comprise. This is nothing more than a closed-feedback loop for Democrats, and Card Check is the prize that will ensure its rapid growth. The Department of Justice needs to put an end to this shakedown racket immediately.

In early June, Foundation staff attorneys moved to block an injunction intended to force unwilling workers back into a union they’d already chosen to toss out.

Despite the fact that the vast majority of employees at a Narricot Industries facility in Norfolk, Virginia (a) did not belong to the United Brotherhood of Carpenters and Joiners Local 2316 and (b) overwhelmingly signed on to a union decertification petition, union bosses sought to retain monopoly bargaining privileges with a series of last ditch unfair labor practice charges leveled against the workers’ employer. Among other things, union lawyers claimed that Narricot Industries’ alleged unfair labor practices somehow incited employee opposition to the union’s presence. (For the full story, check out the Foundation’s press release here).

After examining the case, Foundation staff attorneys determined that employee disatisfaction with the Carpenters Union clearly predated allegations of unfair labor practices. Accordingly, the Foundation filed a motion to intervene in the District Court’s hearing to defend employees’ decision to eject the union from their workplace.

Yesterday, the District Court ruled in favor of the employees, finding that company misconduct had nothing to do with workers’ decision to eject the union. The court also concluded that imposing union representation on unwilling employees for the duration of the NLRB’s unfair labor practice investigation would violate workers’ rights to not associate with an unwanted union. Here’s the crux of the court’s decision (.pdf):

The presence of the employee intervenors in this action in opposition to the imposition of an injunction, as well as the facts in the record which show that the employees, not Narricot, initiated the effort to remove the Union, have convinced the court that imposition of an injunction mandating the recognition of the union would not be just and proper.

With the NLRB and the union bosses aligned against them, Narricot employees really dodged a bullet. For now, at least, they’re free of the unwanted union.

Score another win for Big Labor at the expense of employee freedom. Yesterday in New York, Governor David Paterson signed a law making union dues mandatory for public employees who choose to refrain from union membership.

In the past, the law authorizing union bosses to force public employees to pay up as a requirement of keeping their job would expire every two years. The union boss spin is almost unbelievable:

[Union bosses] said on Wednesday that making the law permanent guaranteed that unions would have the money to adequately represent members and nonmembers alike, which they were required to do under a state law known as the Taylor Law. “In public employment, they have the right not to belong, but I still must represent them,” said Richard C. Iannuzzi, president of New York State United Teachers. “If under the law we’re obligated to represent every employee, then it’s only fair that every employee pays something toward the cost of being represented.”

Iannuzzi’s language is fairly typical among union officials (they frequently use the term "fair share" to describe the dues they seize from nonmembers to pay for unwanted "representation"). But painting union bosses as hapless victims of the very special privileges they got enacted is absolutley absurd. Exclusive representation — monopoly bargaining — is a statutory power given to unions precisely because union bosses lobbied for it.

I’d love to call Iannuzzi’s bluff — will he and other union bosses actually consent to lifting federal and state laws which give unions the special privilege of monopoly bargaining? If they had a beef with the Taylor Law, why not just petition the state to repeal the offensive portions? No, instead, the union despots demanded even more privileges — the power to line their pockets and entrench compuslory unionism.

Unfortunately, Republicans in the state Senate — after years of refusing to make forced dues for nonmembers permanent — gave in to Big Labor’s demands:

The Legislature overwhelmingly approved the bill last month. Similar bills had passed the Democrat-controlled Assembly before, only to fail in the Senate. But with Republicans in a pitched battle to preserve their thin majority in the Senate, the party seemed unwilling to block a priority of organized labor. It passed the Senate last month by a 62-to-0 vote. The Assembly approved it 140 to 5.

Clearly, New York State Senate Republicans have abandoned principle for politics. But the leftist union bosses are always ungrateful — if they get a chance to replace any of these Republican appeasers with a union-backed Democrat, they’ll do it without hesitation.