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Constitutional Death of the UAW “Part Eight” 

by William Hanline


“We are not lawyers, just rank and filers!”


On March 6, 2006, District Court Judge Cleland in Detroit, Michigan conducted a 6-hour fairness hearing. Disappointing as it was, only a couple hundred retirees of hundreds of thousands showed up to oppose the UAW-GM Settlement Agreement. The reason why we did not use any figures here is simple; the actual number of UAW-GM retirees receiving pension checks is unknown. For, nowhere in the court record is the actual number of “retirees” stated either by the UAW or by General Motors. According to people inside the courthouse, 34 retirees signed up to speak but only 22 had the opportunity. Insiders also said the UAW paid for two busloads of members from different local unions, if they were in support of the settlement agreement, while all other UAW retirees who had any objections to the deal had to pay their own way. Ever since that day, opinions have been flying about over the internet and newspapers, much like June bugs around plum trees about the fairness of the settlement agreement. 


Here are a few remarks that were in the Detroit News and Detroit Free Press Inc: 


One GM retiree Bob Henderson quoted folk singer Woody Guthrie: “Some men rob you with a six gun – others with a fountain pen.”


Mark Baumkel, a lawyer for the objecting retirees, raised several issues, calling it a rush to approve a “diabolical and utterly unfair” plan.


Gerald Sutinen was a union benefits representative until retiring from GM’s design staff in March 1993. He said he signed dozens of retirement agreements that guaranteed retirees health care benefits for life. “These were supposed to be unalterable,” he said.


William P. Haden who worked for GM in Oklahoma City and Pontiac until April 1993, called the deal “atrocious.” “Corporate America has gone crazy,” he said.


“You work all those years, and then they take it away from you.” said Robert McAvoy, who drove from Owosso with this wife, Theresa.


Another retiree said the deal opens the door for GM to take away more benefits. Robert Smith drove nearly six hours from Indiana to address the court for less than five minutes.


“Once the bear has tasted the honey that was stored by the worker bees, he’s going to come back and take more until it’s gone,” said Robert Henderson


Linda Cook, a 30-year GM retiree, questioned why the company’s board of directors kept approving contracts with generous health care benefits. “Didn’t they see the future coming?”


Reporters wrote one article after another about the emotions displayed by retirees during the hearing. This is very understandable. However, no matter what retirees have to say, the reality comes down to one very important fact: The judge has until March 22 to make his ruling and it is all up to him now. At the risk of sounding cynical toward the Judge or accusing him of being uncaring, the truth is, the judge does not care about people’s emotions, or their present financial situation, or the burden his decision will have on retirees, their family members, or their communities. His job is to weigh the facts, follow written law, the precedence of previous cases, and make his ruling based on those principles. Therefore, this would be an appropriate time to review some of the legal items not mentioned in the media that retirees failed to bring before the court during that hearing.


There is an old cliché that says, “Justice is Blind,” and after reviewing various dockets and supporting exhibits (documents) pertaining to this case, Justice is not only blind, she is not reasonable and cannot hear. 


According to reputable lawyers, the court ignored the fact that a genuine conflict is the first requirement to a lawsuit. Allow me to repeat that, “there must be a conflict” in order for there to be a lawsuit. The court allowed this case to proceed even though General Motors and the UAW did reach a settlement agreement, even though they filed the case after the fact of reaching such agreement. The latter, in and by itself, is blatant proof that the UAW and GM have an agreement, not a conflict. But it is a NEW AGREEMENT to replace an OLD AGREEMENT. The agreement is to renege on ALL the settled contracts with the retirees, and I might add the only agreements voted on and ratified by retirees.


GM and the UAW did not go to court to file a lawsuit over any conflict or disagreement. NO, to the contrary, they walked hand in hand to a Federal Judge to get approval or to sanction the otherwise illegitimate agreement they could not legally negotiate under any existing labor laws or past Supreme Court rulings. This prevented the UAW from appearing as though the union was colluding with GM, which would be questionable under the NLRA (National Labor Relations Act).


Furthermore, the court failed to uphold its own ruling that all members of the retirees’ class would be notified by mail of the settlement agreement and the hearing. There are several retirees here in Alabama and other retirees across the country who either did not receive their packages in the mail, or received them the same day or days after the hearing took place. Where is the fairness in that? Why hasn’t the court ordered recess of the fairness hearing until every retiree has the necessary information to respond as a class member? 


The Unions Obligation to Represent Retirees?


Since Judge Cleland allowed the case to move forward, it means if he rules on behalf of the Settlement Agreement he will set a new precedent giving unions the legal right to negotiate reductions in retirees’ benefits. The Sixth Circuit Court has disagreed with NLRB rulings and refuses to enforce the NLRB’s cease-and-desist order pertaining to Chemical Workers v. Pittsburgh Glass, 404 U.S. 157 (1971). 


Federal labor law has been strict and unambiguous about unions representing retirees once they become retired. We encourage folks to read the entire docket of “Chemical Workers v. Pittsburgh Glass.” With the help from Brother Tom Seymour, a retiree from UAW Local 858/807, we hope to help you better understand how the law safeguards retirees’ earned vested benefits from reductions in contract negotiations after they leave the bargaining unit and retire. 


Retirees’ benefits are not, within the meaning of 8(a) (5) and 8 (d) of the NLRA, a mandatory subject of bargaining as “terms and conditions of employment” of the retirees. Pp. 163-176. [404 U. S. 157-158] 

(a) The collective-bargaining obligation extends ONLY to the “terms and conditions of employment” of the employer’s “employees,” and the term “employee” has its ordinary meaning, i.e., some one who works for another for hire, which excludes retirees. Pp. 165-171


(b) The collective-bargaining obligation is limited to the terms and conditions of employment of the “employees” in the bargaining unit appropriate for the purpose of collective bargaining. “Retirees were not members of the unit represented by the union, because they were no longer working.” 


Nor could they be members, since they lack a substantial community of interest with the active employees in the unit. Pp. 171-175.


(c)Even if an industry practice of bargaining over retirees’ “rights exist,” which is disputed, that cannot change the law and make into bargaining unit Employees those who are not. Pp. 175.-176.


Retirees’ benefits are not a mandatory subject of bargaining as “TERMS AND CONDITIONS OF EMPLOYMENT” of the active employees remaining in the bargaining unit, although their own future retirement plans are. Retirees’ benefits do not “vitally” affect the “terms and conditions of employment” of current employees. This is even though GM, the UAW and the public press in general advocate that retirees, and their so called legacy cost, do. This convoluted position can only be put forth if you accept the fact that GM failed to fully fund its pension and benefit trust, as required by law, at the time any given individual retired. Moreover, the UAW, for over 30 years, contract after contract, not only looked the other way, they approved of this under funding. The benefits that active workers may reap by including retired employees under the same healthcare insurance contract as themselves are speculative and insubstantial at best. The relationship that the NLRB asserted exists between bargaining in behalf of retirees, and the negotiation of active employees’ retirement plans, is equally too speculative a foundation on which to base an obligation to bargain. Pp. 176-182. 

The court reasoned, First, “retirement with this Company, as with most other companies, is a complete and final severance of employment. Upon retirement, employees are completely removed from the payroll and seniority list, and thereafter they perform no services for the employer, and paid no wages, are under no restrictions as to other employment or activities, and have no rights or expectations of re-employment,”


The inequity of bargaining power that Congress sought to remedy was that of the “working” man, and the labor disputes that it ordered to be subjected to collective bargaining were those of employers and their active employees. Nowhere in the history of the National Labor Relations Act is there any evidence that retired workers are to be considered as within the ambit of the collective-bargaining obligations of the statute.


Moreover, the risk cannot be overlooked that union representatives on occasion might see fit to bargain for improved wages or other conditions favoring ACTIVE employees at the expense of retirees’ benefits. (Given that, retirees are in the helpless position of having no vote on negotiated contracts.)


Simply put, for decades the NLRB has enforced the NLRA stating that unions cannot represent retirees in negotiations except to improve retirees’ benefits and the union had no legal right to make former retiree’s employer agree to any improvement. Retirees’ issues as “former employees” are only viewed as permissive issues in collective bargaining, not mandatory, meaning the union cannot strike over any refusal by the company to agree to increases for “former employee” benefits. 


Understanding and knowing retirees had NO bargaining power, the courts did protect retirees’ vested benefits from companies’ desire to unilateral reduction benefits. 


The UAW has filed a boatload of cases in the past to protect retirees’ contractually vested healthcare benefits. What is more important, the UAW won most of those cases in favor of preserving retirees’ life long health-care benefits. 


The cases were fought to prevent companies from “Unilaterally” changing vested life long retirement benefits.


The difference in the UAW-GM case is the union is willing to work with the company to change those benefits. Furthermore, GM is paying for all the legal fees the union will accrue because of these litigations. Could the latter and former be a violation of Section 302 of the LMRA, as well as a violation of Section 2 (5) of the NLRA? Once again, why would the court continue litigating a case that should not be in court? And as a consequence of it being in court, it forces the presiding judge to contrary rulings in favor of and/or over-ruling decades of Supreme Court decisions and NLRB regulations and decisions just to keep the case in motion? None of it makes sense! Unless they want to overturn the few rights, retirees have.


“The Supreme Court really should take up one of these cases to resolve the conflicts in the circuit courts,” said, Thomas Kienbaum, a labor specialist and corporate Lawyer at Kienbaum Opperwall hardy & Pelton in Birmingham, MI Sunday, June 26, 2005, by Christine Tierney, Detroit News

VEBA Las Vegas


Then there are questions concerning the new Direct Contribution -VEBA. Information UAW members should have before the Court rules to allow the Settlement Agreement to proceed.


1) The new DC-VEBA will be administered by a 7-person committee. The committee will be composed of three members from the public, with the fourth public member holding the chairperson’s position. The other three committee members will be appointed by the UAW. According to court Dockets and documents the four members of the public side have already been picked. However, every request for the names of the three people from the UAW has fallen on deaf ears. Why hasn’t the UAW appointed those people? Could it be because Ron Gettelfinger is waiting for the current crop of UAW Vice President retirements so Owen Bieber (currently retired, former UAW President) can be joined by a couple of the newly retired Vice Presidents. Moreover, would placing these retired top officers of the UAW on the “Committee” provide Gettelfinger with a 3-man campaign crew at the coming Constitutional Convention? Think about Owen Bieber, maybe even Doug Fraser and a retired Vice President. Think about this trio taking the podium at the convention and testifying to the convention delegates that “what Gettelfinger and his cohorts have done at GM and Delphi is GOOD, and if you cannot believe us, who can you believe?”


Because many of you have not read the dockets and documents as we have, you do not know that the positions on the new DC-VEBA Committee will pay $28,000 a year. One heck of an incentive to push the court into approving the new VEBA, especially by UAW, International Executive Board members who are about to retire, something the Judge is apparently overlooking.


Do UAW members have the right to know who will be determining their health care benefits from this point forward? So far we have had no luck in getting the three UAW names. If anyone can find out who the three UAW members are please let me know.


Furthermore, the new DC-VEBA has not received determination by the IRS. This is very important and the court ought to know that determination documents and cases can take almost as long to complete as the settlement agreement was negotiated. Yet the company and union will start administering, and place into affect, the programs before the VEBA is certified by the IRS as a VEBA. VEBA certification is very complex and has to meet very stringent regulations. Chances are good that this would not fit the requirements of the IRS. What would the consequences of failed determination mean to the active member and retiree? 


So! Why would the court allow the case to move forward without certification of the very program the court is about to rule on and force upon retirees? 


Next is the question of the Segregated Fund that the new Settlement Agreement will allow. 


The Segregated Fund has no limits and will be controlled entirely by the Committee, not the trustee (bank) or investment manager. It seems that a red flag would pop up, not knowing the purpose and amount of money of the segregated fund that can be created arbitrarily by the committee after the court’s ruling. Why would the court allow/agree to such a program? A program that could lead to mismanagement of the money intended for retirees’ benefits. Furthermore, there is no legal record of the specific purpose for the Segregated Fund, or its potential size; more importantly, the fiduciary accountability imposed on the “Trustee” is not imposed on the “Committee” and the Segregated Fund.


Then there is the questionable act of the Union negotiating a contract that will force employees, and retirees, to pay money to the company for services? Especially the fact that the contributions made to the program will not be absolutely voluntary. The language in the settlement agreement states that if a retiree fails to make payment by the final due date, the retiree will default into the catastrophic plan retroactive to the first of the month. Retirees can renew their modified plan coverage by making payment, but the modified coverage will not go into effect until the end of the month payment is made. This means a retiree who chooses to make his/her own monthly contributions could unknowingly find himself, herself, or their family, without full coverage for up to a minimum two-month period. The alternative is to have the monthly contributions automatically deducted from their pension check. 


The UAW and GM make this VEBA thing sound like something new when in fact VEBAs have been around since 1928. They were amended in 1984 and again in 1986 to stop unions from abusing the VEBA programs. 


The real question we need to ask ourselves as contributors to the new VEBA is: Do we truly want our union to get involved in another tax scheme that could possibly create another three story building next to the UAW-GM “CHR,” for the sole purpose of administering the new VEBA? Which in turn could, and most likely will, create another source of annual income for the International Union? Would that constitute another form of non-voluntary contribution of dues to the union, similar to the joint funds?


The GM Contract Re-opening That Never Was?


It has come to our attention that on March 13, 2006, Richard Ruppert, a top Administrative Aide to Shoemaker, filed court Document # 1395 in the litigation before Judge Cleland. The last paragraph says


“5. As set forth in my February 24, 2006 Declaration [filed under seal], UAW-GM Vice President Richard Shoemaker met on June 9, 2006 with a national leadership meeting composed of the elected presidents and chairpersons of all GM and Delphi local unions. Vice President Shoemaker told the leadership meeting that the Union had more leverage at that time to make less painful changes to retiree health care than if the Union delayed addressing the problem. The presidents and chairperson attending the meeting gave him unanimous support to continue negotiations with GM about possible changes to retiree health care benefits. In my February 24, 2006 Declaration, I described this leadership meeting as the UAW-GM National Council. I now clarify that while the leadership body that met on June 9, 2006 has the same membership as the UAW-GM National Council, it was not formally convened as that UAW-GM National Council. I declare under penalty of perjury that the foregoing is true and correct.” s/Richard Ruppert.”


Ruppert claims this is true on personal knowledge. But he attached no minutes or official notes of any UAW-GM National Council officer to corroborate this paragraph.


Shades of Watergate, Iran Contra… President Nixon had Haldeman and Erlichman. President Reagan had Lt. Col. Oliver North. Individuals no one heard of nor voted for, administrative bureaucrats with no accountability to or responsibility to voters, shoved into the limelight by their masters to say and do anything to protect them.


Why are the actual written minutes and reports of all GM Council meetings held May 2005 to date not being forwarded to the court? As a matter of fact, where are the records of all those meetings since May 2005, of the Delphi Council, GM Council, and information meetings? Why was unilateral union meetings held at the UAW-GM Center for Human Resources? Why were all of your locally elected members travel expenses covered by joint funds for conducting unilateral union meetings? It has been in these “meetings,” dear friends, brothers and sisters, that your contractual rights, and more importantly, the Death of the Constitution has taken place and festered.


Judge Cleland should lend a lot of weight to this revisionism by the UAW this late in the case, using the principle “if part of it is a lie, it is all lies.”


To conclude, the overall reason this article was written was to raise one big question in the mind of the reader. 




Say NO to concessions 


No Concessions!


Onward in Solidarity 


Work To rule!


Remember their game evolves from three works: “Complicate, Obfuscate, Confuse, Win” Don’t be fooled by those who would deceive you!

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