Report in which the committee requests to be kept informed of development - Report No 256, June 1988

Case No 1437 (United States of America) - Complaint date: 12-FEB-88 - Closed

1. 214. The American Federation of Labor and Congress of Industrial Organisations (AFL-CIO) presented a complaint of violations of trade union rights against the Government of the United States of America in a communication dated 19 February 1988. It submitted additional information in support of its complaint in a letter dated 9 March 1988. The Government supplied its observations in a communication of 27 April 1988.
2. 215. The United States has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) or the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 216. In its communication of 19 February 1988, the AFL-CIO refers to the conduct of the German-based multinational enterprise, BASF, in the United States. The current conflict involves BASF's action at its location in Geismar, Louisiana where workers have for many years been represented by Local 4-620 of the AFL-CIO affiliated Oil, Chemical and Atomic Workers' International Union (OCAW). However, according to the AFL-CIO, this is only one example of a pattern of anti-union conduct with victims at other locations.
2. 217. The AFL-CIO states that in 1984, an Administrative Law Judge of the National Labor Relations Board (NLRB) credited the testimony of an employee at the company's site at Wyandotte, Michigan regarding the anti-union policy of BASF. It quotes from the NLRB document (the full text of which is enclosed) :
   • On or about 25 May 1983, International Representative Larry Startin attended a third step grievance meeting at the Wyandotte site. While there, Startin asked Respondent's (BASF) Manager of Human Resources, Charles Caldwell, why Respondent was going after the Union as hard as they were. Caldwell answered that it was not anything personal but they had orders from Germany (Company world-wide headquarters) to get rid of all the unions in the United States. He went on to say they had already done it in two plants and Wyandotte was just next in line.
3. 218. The complainant highlights some of the elements of the company's anti-union campaign: a) attempts to destroy the union through changes in classifications or status of positions or through subcontracting of work to remove workers from the bargaining unit or replace them with non-bargaining unit employees who are without trade union representation; b) discrimination against union leaders and activists; c) the unilateral decision of the company at several locations not to honour provisions in collective bargaining agreements and clear past practice which provide for the payment of employees for reasonable time for union work, including activities related to the preparation and processing of grievances, a common practice in the United States which had previously been upheld by the NLRB and the courts. On this question of BASF's illegal and unilateral refusal to honour contract provisions and past practice on paid time off for union work, the AFL-CIO states that the company has persisted in challenging this practice in the NLRB and in the courts in spite of unfavourable decisions. For example, BASF, continued the appeals process up to the 6th Circuit Court of Appeals after having lost on this same issue in both the 2nd and 5th Circuit Courts.
4. 219. According to the complainant, this case illustrates the inadequacy of United States labor legislation in safeguarding the principles of freedom of association in certain situations, such as when a company is determined to destroy a union which represents its employees or to frustrate an attempt by workers in an unorganised plant to join a union. The combination of all of the delays in the system and the weak sanctions imposed on lawbreakers can, as in this instance, result in violations of the fundamental rights of workers to form and preserve their trade unions and engage in collective bargaining.
5. 220. The AFL-CIO states that much has been lost by BASF employees in the United States and by the unions which represent them. However, the struggle continues at BASF's location at Geismar, Louisiana where, in spite of having lived through a four-year lock-out, the workers continue to fight for their rights, their union and an acceptable collective agreement.
6. 221. One of the complainant's numerous attachments is the latest charge filed with the NLRB on 2 February 1988 to try to obtain good faith bargaining which, it states, proves the reasonableness of the union and its sincere desire for a decent collective bargaining agreement. From this document it appears that negotiations were held on six occasions starting 13 August 1987, with the company's final offer - proposed in a parking lot on 22 September - being discussed for the first time on 13 October 1987, and implemented unilaterally by BASF on 27 October for a three-year period. In the document it is alleged that the company refused to show up for a scheduled meeting and refused to meet at mutually acceptable times and places, although it also appears that there had been several informal meetings both before and after the lockout linked to this matter which occurred in June 1984. The document shows that apart from the union's frustration at the company's refusal or delay in supplying information on certain structural changes in the plant and lack of courtesy, the principal deadlocks in the bargaining meetings involved the company's drug screening programme and the use of permanent subcontractors to exclude recalling locked out employees. Further unsuccessful negotiating sessions were held on 18 November and 8 December 1987 and 19 January 1988.
7. 222. The document cites recent NLRB decisions deciding as unlawful the permanent replacement of locked out employees. It alleges that BASF's subcontracting was based on anti-union discrimination because those locked out employees (particularly the 110 maintenance workers) have little opportunity to join or maintain membership in the bargaining unit; it stresses that the company has no economic reason for subcontracting as statistics are available proving that work by members of the bargaining unit was less costly. The document also points out that the vast majority of the union's negotiating committee and leadership throughout the period of this labour dispute are from the maintenance department.
8. 223. The complainant supplies copies of four other NLRB cases concerning against BASF locations (Rensselaer, N.Y. and the International Chemical Workers' Union (ICWU) Local 227; Jamesburg, N.J. and ICWU Local 846; Wyandotte, Michigan and OCAW Local 7-627; Geismar, Louisiana and OCAW Local 4-620) in which the employer was variously found guilty of certain unfair labour practices, including refusing to bargain, discrimination through the unlawful reduction in hours of union officials, unilaterally discontinuing the practice of paying union officials for time lost when on union business, discontinuing the union's use of the office, telephone and copying machine. The complainant also encloses copies of the 5th Circuit Court of Appeal judgement of 2 September 1986 ordering BASF's Geismar location to comply with the earlier NLRB order to cease certain unfair labour practices against its employees' exclusive bargaining representative, the OCAW Local 4-620. Another enforcement order has been sought from the 6th Circuit Court of Appeal to force the employer to abide by the decision affecting the Wyandotte location and OCAW Local 7-627; there has not yet been a ruling on this matter.
9. 224. On 9 March 1988, the complainant supplied a copy of the sworn affidavit of the OCAW's international representative, Mr. Ernest Rouselle, to be used in the unfair labour practices case filed with the NLRB on 2 February 1988.

B. The Government's reply

1. 225. In a communication of 27 April 1988 the Government supplies details on each of the four NLRB cases concerning BASF Company locations in the United States referred to by the complainant. It points out that BASF complied with the NLRB's orders and the cases were all definitively closed: Rensslaer on 30 April 1987, Jamesburg on 4 April 1986, Wyandotte on 27 May 1987 after the NLRB withdrew its enforcement petition and Geismar on 16 December 1986.
2. 226. As regards the AFL-CIO's allegations that BASF's unfair labour practices are part of an anti-union campaign ordered by company headquarters in Germany and inadequately protected against by the United States labor laws, the Government stresses that, in the Wyandotte case cited by the AFL-CIO, the Court did not find that BASF had an anti-union policy. In fact, after hearing the testimony cited above the judge went on to note that when the witness subsequently contacted another company official about the statement, the second official denied that the company had an anti-union policy; in discussing this evidence, the judge observed:
   • This is probably a matter of semantics. A company has a legal right to "think" whatever it wants about unions but it has no right to engage in unfair labor practices to undercut the union's support among its employees or engage in any unfair labor practices. I am deciding this case with that philosophy in mind. A company does not violate the Act if it wants to get rid of the union but only if it does something illegal to get rid of the union.
3. 227. As for the allegation that BASF attempted to change classifications or to subcontract work with the goal of removing workers from the bargaining unit or replacing them with non-bargaining unit employees without union representation, the Government notes that in the only case adjudicated to conclusion involving the issue of classification (the Wyandotte case), the judge and the NLRB found in favour of BASF on that issue. It states that the AFL-CIO has provided no other evidence to support its allegation. To the extent that the pending case in Louisiana may raise the issue, it is the position of the United States not to comment upon active proceedings.
4. 228. With respect to the allegation that BASF discriminated against union activitists, the Government notes that none of the cases cited by the AFL-CIO that has been adjudicated to conclusion appears to raise the issue. It claims that the AFL-CIO has provided no other evidence to support its allegation. To the extent that the pending case in Louisiana may raise the issue, it is the position of the United States not to comment upon active proceedings.
5. 229. As regards the allegation that BASF refused to honour provisions in collective agreements and past practices that provide for the payment of employees for reasonable time for union business, the Government observes that in the three cases involving paid union time mentioned by the AFL-CIO, BASF was found to have violated the National Labor Relations Act (NLRA) by failing to bargain over the issue. The NLRB awarded relief to the complaining parties, and BASF complied with the Board's orders. Additionally, in the separate federal court action in which BASF sought to have the payments for union time declared unlawful, the district court and the Court of Appeal concluded that the collective bargaining agreement provisions did not violate the legislation. With respect to the related charge that BASF litigated the paid union time issue in bad faith by trying to have such clauses in the collective agreement declared unlawful, the Government notes that while each of the cases cited by the AFL-CIO involved the same general issue, there were differences of detail. Furthermore, a legal ruling of a United States Court of Appeal is binding upon the United States district courts within its jurisdiction but not upon other courts of appeal or district courts. Finally, states the Government, United States law provides a remedy for frivolous litigation: under Rule 11 of the Federal Rules of Civil Procedure, a court may impose appropriate sanctions.
6. 230. Lastly, the Government explains that the NLRA creates a comprehensive scheme for administrative adjudication of unfair labour practice cases and judicial enforcement of NLRB orders. In the cases cited by the AFL-CIO, the parties were able to present evidence and legal arguments in support of their positions. On some issues, the unions prevailed; on others, BASF prevailed. Where BASF was found to have violated the NLRA, meaningful sanctions designed to correct the violations (including cease and desist orders and back pay awards) were imposed and in each case, BASF complied with the Board's orders. In addition, according to the Government, considering the extent of the procedural safeguards in the adjudication process and the complexity of the issues presented, the time within which the NLRB and the courts resolved these cases was not unreasonable. It thus concludes that the AFL-CIO's complaint fails to provide any specific information to support its contention that United States labor laws are inadequate to safeguard the principles of freedom of association.

C. The Committee's conclusions

1. 231. The Committee observes that there are basically two sets of allegations in this case: the first centres on various unfair labour practices by the German-based multinational, BASF, in four United States locations - most recently at Geismar, Louisiana - which the complainant considers show that employers's general anti-union policy; and secondly the inadequacy of United States labor legislation, viz. the National Labor Relations Act to protect against such violations of the workers' fundamental trade union rights.
2. 232. The Committee notes the Government's statements denying delays in the legislative procedures or weaknesses in sanctions imposed on lawbreakers, as well as its explanation that, while each of the cases cited by the complainant found BASF in violation of the NLRA on some points, the judgements at the same time found in favour of the employer on others, and particularly regarding the testimony as to BASF's anti-union policy, the judge did not find that such a policy existed.
3. 233. Before turning to the substance of the allegations, the Committee would point out with concern that this is the third recent complaint lodged - by different complainants - against the United States on the grounds of anti-union tactics and unfair labour practices by multinationals or large enterprises, in particular through abuse of the legislative provisions on recognition of collective bargaining agents and on procedures leading to conclusion of collective agreements. The Committee recalls that in Case No. 1401 (253rd Report, paras. 42 to 58, approved in November 1987) the charges against Norsk Hydro Aluminium Inc. had been dismissed by the Administrative Law Judge of the National Labor Relations Board and the Committee considered that the case did not call for further examination. Nevertheless, it stated its opinion that "by, for example, exploiting a series of possibly avoidable delays and misunderstandings, and by prolonging unduly the negotiations for a collective agreement, the company's attitude was not conducive to any kind of final agreement being reached following the negotiations". Likewise, in Case No. 1416(254th Report, paras. 58 to 86, approved in March 1988) the Committee conceded that the case did not call for further examination in the light of the lack of evidence to support certain allegations, the NLRB's respect for due process and the fact that the complainant only represented a small minority of the workers employed by the new caterer. The Committee observed, however, that it remained open to the union involved to campaign and petition for coverage of the other food service workers on UN premises if it so wished.
4. 234. In the present case, the Committee considers that the allegation relating to inadequacy of the pertinent legislation and its sanctions has not been proved. As pointed out in the Government's reply, the NLRA provides a series of procedural safeguards for the filing and hearing of unfair labour practice charges which, in the four cases cited by complainant, in fact led to verdicts against BASF on most of the vital issues. The complainant did not present any information to show that BASF has not complied with the NLRB's orders to cease and desist from certain violations of the Act. The Committee realises that fresh charges were filed on 2 February 1988 concerning the disruption of bargaining in late 1987 - which led to the unilateral imposition by the Company's Geismar location of a three-year collective agreement - but notes that the charges relate only to the recent bargaining and not to non-compliance with earlier sanctions. The very fact that the complainant's affiliates continue to use - and win with - the NLRB procedures indicates to the Committee that the system is not entirely without the confidence of the workers' organisations involved.
5. 235. As regards the specific criticism of BASF's actions at Geismar, the Committee notes that the use of subcontracters as a means of weakening or eliminating the union is linked to the general allegation of discrimination against union leaders and activitists since BASF has singled out for subcontracting the one department from which the union's leaders and negotiating team come. In the Committee's opinion, given that this measure was apparently not linked to economic necessity, this might give rise to a violation of the principle that no one should be prejudiced in his employment by reason of his trade union membership or legitimate trade union activities (see Digest of Decisions and Principles, 1985, para. 538). The Committee considers that subcontracting accompanied by the dismissal of union leaders can constitute an act of anti-union discrimination, just as dismissal, compulsory retirement, downgrading, transfers or blacklisting. The Committee requests the Government to ensure that the national machinery will hear this grievance speedily and impartially.
6. 236. As for the allegations that BASF has not honoured collective agreement provisions and established past practice on paid time-off for union business, the Committee notes that, despite many challenges by BASF before the courts, the United States judiciary has consistently (as the complainant and the Government point out) held that such clauses and practices should be respected, and has ordered BASF to do so. These verdicts are in line with the ILO standards concerning the granting of reasonable facilities to workers' representatives, such as time off for union business without loss of pay, access to all workplaces in the undertaking, access to management, notice board and distribution facilities and the use of other material facilities to enable them to exercise their functions promptly and efficiently (see the Workers' Representatives Recommendation 1971 (No. 143), Part IV).

The Committee's recommendations

1. 237. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • a) The Committee considers that subcontracting accompanied by dismissals of union leaders can constitute a violation of the principle that no one should be prejudiced in his employment on grounds of union membership or activities. The Committee requests the Government to ensure that the national machinery will hear the union's grievance on this issue against BASF (at its Geismar location) speedily and impartially.
   • b) In the Committee's opinion, the national courts' decisions obliging BASF to honour collective agreement provisions and past practice on paid time off for union business are in line with the ILO standards on the subject.
   • c) The Committee considers that the other aspects of this case do not call for further examination.
   • d) The Committee requests the Government to keep it informed of developments in the unfair labour practice charges against BASF, Geismar, filed by the complainant's affiliate with the NLRB on 2 February 1988.