Wednesday, December 31, 2008

What's a "Thing of Value" Under the LMRA?

Card The Fourth Circuit recently issued an interesting decision on the LMRA's prohibition under against employers giving anything of value to a union (Section 302).  In Adcock v. Freightliner, the court rejected the argument of employees (represented by the Right to Work Foundation) that a card check agreement between an employer and union violated Section 302.  According to the court:

The issue presented in this appeal is whether Freightliner LLC (Freightliner) delivered "money or other thing[s] of value" to the International Union, United Automobile and Agricultural Implement Workers of America (the Union) pursuant to a card check agreement with the Union, wherein Freightliner agreed, among other things, to: (1) require some of its employees to attend, on paid company time, Union presentations explaining the card check agreement; (2) provide the Union reasonable access to nonwork areas in company plants to allow Union representatives to meet with employees; and (3) refrain from making negative comments about the Union during organizing campaigns. . . . As the Employees’ argument goes, because these concessions made by Freightliner benefited the Union’s organizing efforts, they were "thing[s] of value" under § 302, because a "thing of value" means anything that has subjective value to the Union. . . .

Under the plain language of the statute, the concessions made by Freightliner in the Card Check Agreement do not involve the payment or delivery of a "thing of value." The concessions provided by Freightliner all involve permitting the Union access to employees during an organizing campaign. Such concessions do not involve the delivery of either tangible or intangible items to the Union. . . .

Our reading of the statute is consistent with the purposes of § 302. . . . [Section] 302 is aimed at preventing "bribery, extortion and other corrupt practices conducted in secret."  In this case, the concessions made by Freightliner do not involve bribery or other corrupt practices.

Our interpretation of the phrase "thing of value" also is buttressed by § 302’s penalty provision. Under § 302’s penalty provision, the severity of the sentence is dictated by the monetary value of the thing delivered by the employer or received by the union. A person who willfully violates § 302 is guilty of a felony unless the value of the money or thing involved does not exceed $1,000, in which case the person is guilty of a misdemeanor. Thus, Congress clearly intended § 302’s "thing of value" to have at least some ascertainable value. In this case, unquestionably, the concessions made by Freightliner, which simply involved allowing the Union access to Freightliner’s employees, have no such whatsoever.

I haven't looked at this issue in detail, but it's my sense that this decision is in line with other interpretations of Section 301.  Perhaps we'll hear an opposing view from some of our RTWF readers.


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I'm not with RTWF, but hopefully I can comment too. ;) I disagree with the Adcock court, for two reasons. First, companies don't ordinarily open up their doors to anyone, much less unions. The fact that they were doing it in this case, indicates that they had something to gain for doing so. I'm sure Verizon would have liked to have that kind of access, to sell their FIOS service, or any other company, to market directly to potential customers. I think the union, when they negotiated for it, saw this access as a 'thing of value.'

More importantly, you can put a value on the access, at least in this case. The company required "some of its employees to attend, on paid company time, Union presentations explaining the card check agreement." Now, the company could have explained card check, but chose to agree to have the union do it. In this case, I would say that the value of the 'thing' that was given to the union was (at least) the value of the wages that were paid to employees during the presentation. They weren't building widgets - they were listening to the union, while the company paid for their time.

Is this what the authors of s302 were thinking when they wrote it? No, but I would assume mostly because they didn't imagine that it would happen.

I think my feeling would have been different had the company said, 'any union at all, who wants to come talk to out employees about the card check agreement that we are willing to enter into with any union who wants to represent our employees, is welcome to come and we will require (and pay) for our employees to listen.' But they didn't - this was an agreement with one specific union.

How much would UFCW or SEIU pay to have an hour to discuss card check with the employees of [insert any large company that opposes unionization]? I would guess the answer is somewhat more than $1,000.

Posted by: Tor | Jan 1, 2009 9:42:54 PM

I don't have any comments to offer (I was not involved in the case, save for attending oral argument) but I'm curious as to why you refer to my employer as "RTWF"? It's a rather odd construction. First, it's the "National Right to Work Legal Defense Foundation." I've frequently seen it referred to as NRTW Foundation, or perhaps even NRTWF, but never RTWF. It is some sly effort at insult, or to belittle its accomplishments?

Just curious.

Posted by: James Young | Jan 2, 2009 5:39:58 PM

No intent to slight at all--I actually think all that "Democrat Party" stuff is silly on both sides. I thought I'd seen RTWF before (I know I've used it myself), but I'm happy to change it to your preferred acronym, or none at all. Just let me know. -JH

Posted by: Workplace Prof | Jan 2, 2009 5:45:49 PM

National Right to Work Foundation Vice President Stefan Gleason made the following statement after the U.S. Court of Appeals upheld union lawyers' motion to dismiss of the case challenging a corrupt quid-pro-quo organizing agreement reached by Freightliner and UAW union officials in North and South Carolina:

Regrettably, the court severely misread and misinterpreted the statute. "Things of value" as defined under numerous federal statutes have long been held by courts to include intangible or non-monetary benefits.

The Congressional intent of the statute was to prevent employers from inducing union officials to bargain away workers' interests. That is exactly what was done here. Freightliner gave the UAW union officials organizing assistance that the court concedes is a "benefit" to the union. This benefit included preferred access to the employees, pro-union captive audience meetings on paid company time to solicit union authorization cards, employer silence, and an agreement that only the UAW would be able to recruit new dues payers without a secret ballot election.

These are most certainly "things of value" no matter how that term is defined -- subjective value, objective value, monetary value, etc. In fact, unions spend millions of dollars on corporate campaigns to attack companies with the very goal of obtaining these valuable advantages.

In return, the UAW hierarchy agreed to pre-negotiated contract concessions, and even the cancelling of certain employee benefits at other facilities. All of this was done before the employees had shown any interest in having UAW union officials represent them.

At the motion to dismiss phase, the allegations of the complaint must be taken as true. Therefore, even under the appellate court's holding that an ascertainable monetary value is required under 302, the U.S. District Court's dismissal of the complaint should have been reversed and case remanded for fact finding as to monetary value, which can easily be established.

Apparently union officials think they are entitled to another exception in federal criminal rules and procedures.

The union-abused employees represented by National Right to Work Foundation attorneys are likely to ask for a rehearing en banc or petition to the U.S. Supreme Court to correct this miscarriage of justice.

Posted by: Workplace Prof Blog Reader | Jan 3, 2009 10:12:55 AM

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