Daily Labor Report®

Fiat Chrysler Workers Want Judge to Re-Examine UAW Lawsuit

Feb. 2, 2018, 1:12 PM

Autoworkers in Toledo, Ohio, are hoping a federal judge will let them present new evidence in a three-year-old lawsuit against the UAW and Fiat Chrysler Automobiles as an ongoing investigation shows fraudulent behavior by labor negotiators.

Workers at the Toledo Assembly Complex sued the company and the union in 2015 in a dispute over a grievance about seniority rights. Among other things, they allege the union had dropped the grievance and misled the workers about its status, causing them to miss a deadline.

The case is on appeal at the U.S. Court of Appeals for the Sixth Circuit. But the workers are asking the matter instead be returned to the U.S. District Court for the Northern District of Ohio.

“The very fact that a high-level FCA official has admitted paying money and other things of value to union officials in order to compromise the union’s interests in fairly and fully representing their members” means the trial judge should let the workers “conduct further discovery to see whether, and to what extent plaintiffs have been victimized,” attorney Ken Myers wrote in a Jan. 30 motion.

Former Fiat Chrysler labor negotiator Alphons Iacobelli pleaded guilty Jan. 22 to violating the Labor Management Relations Act. His is the third conviction in the scheme, dating to 2009, to divert more than $1.5 million from a worker training center and provide cash and expensive gifts to union officials.

The scandal prompted three other lawsuits in the months since the charges were made public, and autoworkers are demanding compensation because they don’t believe union negotiators were acting in the best interests of the rank and file during contract talks.

In his plea, Iacobelli admitted providing “payments and things of value to UAW officers and UAW employees in an effort to obtain benefits, concessions, and advantages for FCA in the negotiation, implementation, and administration of the collective bargaining agreements between FCA and the UAW.”

The plea is new evidence that may shed light as to why the union dropped those grievances in the first place, Myers said.

Seeking Class Status, Return of Dues

Four days after Iacobelli’s plea, Fiat Chrysler workers filed a lawsuit in the U.S. District Court for the Eastern District of Michigan. That complaint alleges that the corruption resulted in “tainted” bargaining at the hands of the union. The workers are seeking class status and want to reclaim the dues they paid from 2009-2015.

“The UAW breached its duty to its membership, by acting based upon the improper motivation of FCA’s bribery, and the UAW’s requesting and receiving prohibited payments and things of value,” the complaint says. “The UAW’s representation of its membership was arbitrary, perfunctory, or inexcusably neglectful.”

None of the participants in the scheme have been charged with bribery.

The UAW and FCA repeatedly claim that no collective bargaining was influenced by this scheme.

Brian Farrar, the lawyer representing the workers in the Eastern District of Michigan, said it’s clear that union members are entitled to compensation. “They are getting short shrift from their employer,” he told Bloomberg Law.

Retirees Allege They Were Tricked

A group of retirees in Toledo also filed a lawsuit Jan.11, alleging the auto company and the UAW failed to represent the workers “by accepting bribes to bargain away Plaintiffs’ jobs.”

The retirees say they were induced to retire from the Chrysler Jeep Complex in 2006 to work at the Toledo Wrangler paint shop, which was run at the time by a third-party supplier. When Chrysler took over direct management of the paint shop in 2012, it fired those workers, their attorney, Leslie O. Murray, said.

Another lawsuit, also filed by Murray, alleges a different group of workers was “deprived of pension and other benefits” because their seniority was calculated improperly.

Those workers filed grievances at the time and lost. When the charges against Iacobelli and others were announced in August, the workers realized they had a real claim on their hands, Murray said. They are seeking back wages, front wages, lost benefits, and other compensation.

Former Temps Filed Suit in 2015

The 2015 lawsuit alleges the workers were full-time temps who didn’t receive wages or benefits contained in the collective bargaining agreement. After six years, they were hired full-time but didn’t get the same seniority rights as other six-year employees, the original complaint alleges.

They took their complaint to UAW Local 12 to be dealt with in-house, but several months later the union dropped those grievances without telling its members until it was too late, according to Myers. In turn, the members filed a lawsuit against the union for failing to represent them and against the FCA for violating the collective bargaining agreement.

For many autoworkers who previously questioned the union’s handling of contracts or other complaints, a light bulb went off when the investigation was revealed in August 2017, the attorneys told Bloomberg Law.

“It shows that there’s going to be some consequences for these bribes,” Myers said of the recent lawsuits. “A lot of people are angry and we’ll see what the courts decide.”

Prof: Workers Have Shot With Trial Court

Judge Jeffrey J. Helmick in the Northern District of Ohio sided with the union and FCA in July and dismissed the workers’ 2015 case. Oral arguments in the Sixth Circuit appeal are scheduled for March 13.

The workers have a chance to get the case back before Helmick, A. Benjamin Spencer, a professor of civil procedure and federal jurisdiction at the University of Virginia School of Law, said.

“I would think they could be successful,” he said. The evidence in the criminal prosecutions “would be regarded as something that a court could take into account to determine whether union representatives had breached their duties under the law,” Spencer said.

It’s difficult in general to get a trial judge to re-evaluate a previous decision, he said.

“There’s a strong preference for finality and that is not granted lightly,” he said. But a judge would likely want to take a look at a case to ensure that the judgment couldn’t have been affected by facts previously concealed from the court.

To contact the reporter on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bloomberglaw.com

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