Labor Logic

Listen to this article

John D. Finerty, Jr.

Employment law class action claims are more prevalent than ever. Class actions can arise for alleged wage and hour violations, pension disputes, health care or insurance claims and other claims that involve potentially hundreds of employees. Class actions involving wages, hours or other terms and conditions of employment, however, are subject to a unique defense in unionized workplaces: the National Labor Relations Act.

The NLRA mandates that a labor organization, duly elected by a majority of employees, is the “exclusive representative” of union employees. Class action claims on the other hand, seek to appoint a class representative to assert employment claims for employees or former employees. How can employees, however, have multiple “exclusive” representatives on employment matters? The recent case of Baker v. IBP, Case Nos. 02-3967 and 02-4065 (7th Cir. Feb. 4, 2004), held that they can’t.

Background

Deborah Baker and Richard Enyeart sued IBP, Inc., in federal district court, claiming that the company underpaid employees by systematically employing illegal aliens in violation of the Immigration and Nationality Act. According to the plaintiffs, IBP obtained about half of the employees at its central Illinois plant through referrals from immigrant-welfare organizations and with the assistance of employment “recruiters.” These recruiters were actually smugglers retained to bring illegal aliens into the country and supply them with fake credentials. IBP, according to the complaint, would pay these illegal employees up to four dollars per hour less and, thereby, depress wages for all employees in the plant.

The plaintiffs claimed that IBP’s hiring scheme was predicate illegal conduct under the Racketeer Influenced and Corrupt Practices Act, or RICO. If guilty, the court wrote, IBP’s managers committed hundreds of felonies. For those violations of federal law, the plaintiffs sought treble damages.

The Union’s “Exclusive Representation”

Employees at IBP’s Illinois plant were represented by a union. That union was elected under the NLRA as the employees’ exclusive representative with respect to wages. See 29 U.S.C. § 159(a). The court held, therefore, that the union, not the class representatives, had the exclusive duty to represent employees on wage matters.

In order for the plaintiffs to even state a claim, they had to allege that the union violated its duty to represent the employees. Under the rule of Vaca v. Sipes, 386 U.S. 171 (1967), workers may sue their employer for violation of a collective bargaining agreement only if the union has violated its duty of fair representation. As the court pointed out, “unless something went seriously wrong with the union’s representation of the workers, IBP as the employer was not only entitled but also legally required to pay the rates specified by the collective bargaining agreement. The complaint, however, did not name the union as a party and did not contend that the union neglected its duty to represent the employees’ interests with respect to wages.”

A Unique Defense

A defense available to employers subject to a collective bargaining agreement, therefore, arises under Rule 12(b)(6), Fed. R. Civ. P. That is, a class action plaintiff cannot state a claim against an employer whose employees are represented by a union over issues involving wages, hours or other terms and conditions of employment, within the meaning of the National Labor Relations Act. Certified labor unions represent employees exclusively with respect to these subjects. Such a class action is only possible if the complaint alleges the union violated its duty of fair representation.

For more information, contact John D. Finerty, Jr. at Michael Best & Friedrich at (414) 225-8269 or on the Internet at [email protected].