Wednesday, February 25, 2009

SALTING the wounds of a bad merger.

BY Terry Bankert 2/24/09
Posted first on Blogging for Michigan
I wonder if Miss Tucker was paid what she earned?
I wonder why the "Hotel Union Person" , The Detroit Riverside Hotel, was so angry when the Michigan Democratic Party Labor Caucus "Labor Person" leader sent 200 convention delegates , Michigan Democratic Party Convention in Cobo Hall Detroit last week end, into the " Hotel Labor Person" work place to raise a little hades on behalf of Miss Tucker and others.
See the video:
Thumb Nail Slide show
I have been going to convention for over 25 yrs. That was great stuff.
Pictures of the Michigan Democratic Party Labor Caucus 02/21/09 Thumb Nail Slide Show
This is my interpretation of events.
The smart, big, loud bombastic voice, no tie, arms flaying, and respected " Labor Caucus Person" implores his assembled members to march across the street to help a sister who the " Corporation " will not give up her pay check.
Not in our town not across the street from our convention.
Wow, my vision was a trembling timid Hotel House keeper with children to feed fired and not paid for services rendered trembling out side The Detroit Riverside Hotel ,tears of desperation in her eyes she sees the Cobo Hall marquee, The Michigan Democratic Party is in town for convention. Across the street. Numbed but drawn passed the brown bomber and the majestic picture of Coleman she sees the sign "The Labor Caucus" is meeting. Entering her eyes meet those of a saint who listens and leads her to leadership who embraces her cause.
Or is there more to this story.
Sometime we are allowed to see a snapshot of an exciting movie. This was one snapshot, a window.
Later I learned much has been in the Detroit press about the picketing at The Detroit Riverside Hotel. No Detroit regular commercial media covered the Michigan Democratic Party Labor Caucus protest.
Blogging for Michigan , your alternative truthful new source, got the scoop.
I asked several at convention ,what is the real story here?
A white haired "labor Person" whispered google will answer your questions.
So a googling I went finding a couple of articles and TV spots and another snapshot.
The Union of the Hotel workers is in a "civil war" and it is an important but unreported story. Pulitzer here I come.
It seems a bunch of "Labor People" and their Unions broke from a "Big Labor Group" the AFL-CIO a couple of years back. One group representing the garment workers UNITE , led by Mr. Raynor, merges with another group called HEREIU , led by Mr. Wilhelm, which represented Hospital and Hotel workers.

The Union of Needle trades, Industrial and Textile Employees ( UNITE led by Raynor, they have the money) merged with the Hotel Employees and Restaurant Employees International Union (HEREIU led by John Wilhelm, they have the people) in 2004.
UNITE has tons of money and HEREIU has boatloads of people. Issue: Did the group with the people promise to not touch the money when they have the majority vote?
This merger of money and people is now called" UNITE HERE!"What a name.
Now corporate merger 101 would tell you that when two corporations merge the executives and shareholders better read the contract and one group of executive must go.
But not this group.
The plan was each of the leaders Raynor and Wilhelm would stay and equally share power. Just where in history has this occurred?
Raynor says that Wilhelm told him UNITES money was safe, said the fox to the chicken.
The people with the money , UNITE, must not have read the contract here called constitution of the new group UNITE HERE. What is described as a civil war broke out when the HERE faction which controls the majority vote starts flexing their muscle and spending what used to be UNITES money any way they feel like it.
Possibly their constitution calls for majority rule. Just a guess.
Meanwhile possibly, just possibly the AFL-CIO which I hear is a big player in the Michigan Democratic Party Labor Caucus threw a little muscle at the breakaway groups UNITE and HERE and that was what got the " Hotel Labor Person " so upset. But what do I know.
Waiting on the edge watching the implosion of " UNITE HERE" is a really big labor group the SEIU waiting for the opportunity to gobble up the membership and then the money , 500 million dollars and 400,000 members when the two factions split. One faction has already announced they will go with SEIU. I wonder how the AFL-CIO feels about this? Now this is just a trailer.
I hope Miss Tucker got paid, I will ask her later if I can find her.
In New York Federal Court the moneyed UNITE faction , with the money,is trying break away from the merger. Following is a lay version of the complaint which is the argument of the moneyed guys UNITE. The answer, if I can find one, or argument of HERE the group with the people will follow later, maybe.

In the United States District Court Southern District of New York the civil war of UNITE HERE is being played out. The UNITE faction is the Plaintiff and the HERE faction is the Defendant.
The UNITE faction made a number of allegations and requests in their complaint.
They say the HERE faction has " engaged in conduct that destroys the basis for the merger of these Unions the old UNITE and HERE. The UNITE wants the court to tell them they are free to go their own way and keep all of the assets they brought to the merger of 2004.
The UNITE faction wants to be released from their contract/constitution with HEREIU because the merger has failed in its essential purpose. I guess that means they are not protecting their members.
They say the HERE faction will not treat the UNITE faction fair.
They continue to claim the HEREIU faction will dominate the convention to be held June 2009 in Chicago. SO! Isn’t that what a democracy does. The majority rules. What’s new?
The UNITE argument III states "The merger agreement between UNITE and HEREIU demonstrates that the UNITE HERE Constitution does not expressly ban disaffiliation and cannot be used to deprive UNITE Chartered Bodies their assets. They want to take their money , at least 500 million dollars, and run.
The UNITE argument IV states HERIU entered into the merger to gain access to the assets of UNITE and its affiliates. From other sources it appears UNITE is flush with cash. They put in their complaint that HEREIU was in perilous financial condition. Although it had approximately 200,000 members, as a result of poor financial stewardship the union had little cash and very few investments. Their pension and health benefit funds were badly underfunded and in danger of being terminated.
In contrast UNITES financial condition was strong with cash from membership dues and substantial income from Amalgamated Bank which was wholly owned by UNITE and its affiliates.
UNITE also owned two buildings in New York City and one in New Jersey and received rental income from unaffiliated tenants.
In total UNITE has about 500 Million Dollars while HEREIU has less than 20 million.
John W Wilhelm of HEREIU represented they would create one union where power would be shared by two Presidents and the HEREIU faction would not use its superior numbers to dominate UNITE. Sounds like a fantasy to me.
UNITE President Raynor agreed to have fewer number of UNITE representative on the various boards says Wilhelm.
The two president were to make most decisions and HERE would not exercise its membership muscle. This language would not work in the real world I know of.
Basically they are using their recollection of oral pledges made before the contract/constitution was formed. Its 101 contract law that all thing must be merged in the written document or they do not exist. UNITE said they relied on what HERE told them not what was in the contract/constitution.
These guys negotiate work agreements?
This one is great. The HERE faction with the majority vote got their ducks in order before a December 17-18 2008 meeting and successfully got their resolutions passed. The complaint talks about destitute HEREIU affiliates and HEREIU’s instance on deficit spending.
This is really about old money , new need and who has the votes.
HEREIU ( the one without the money)stated on several occasions that the international Union UNITE HEREIU should simply sell off its assets and " spend everything" demonstrating and " extremely cavalier attitude towards the UNITE assets built up by generations of low paid garment and textile workers. Possibly the UNITE people should have protected themselves before the merger. Who ever their Harvard and Yale guys were, great job. Go Cooley!
They said: "The huge budget deficit demanded by the HEREIU faction to fund its goal and program demonstrates that the merger was viewed as an opportunity to exploit UNITE and plunder its assets."
In the UNITE point VII they state " The merger of UNITE and HEREIU has failed of its essential purposes"
The purpose of the merger was to increase the organizing ability of both factions. " The test of the success or failure of this merger should be wether the merged union organize substantially more workers that the two units on their own would have. Its is argued this test has not been met because the goal of organizing hundreds of thousands of new workers in the hospital industry has not been met.
There is some argument about the Western State Boards I will skip.
On 8/9/05 Local 24 joined the Midwest Joint Board. Labor Guy Daughtery was the International trustee for this local. This ended 12/31/05 and it followed with Daughtry becoming Midwest State Director of the Midwest Joint Board a full time paid position.
He sought election to President of the Food Services Division one of the division of Local 24. He instructed other full time Joint Board staff to seek election for positions on Local 24 and discouraged rank and file members from running for elected position in Local 24 so that he could continue power.
It was a by- law violation for Daughtery and others to serve in these dual positions. Wilhelm the HEREIU President knew this when he swore them in.
On 1/5/2009 Daughtery was removed as Michigan State Director being replaced by Clayola Brown.
Local 24 has begun litigation against their Midwest board and is attempting to keep them out of contact with the membership.
As party to this obstruction John Wilhelm is accused of taking retaliatory acts against the Midwest Board to include;
1. Telling Daughtry and others to strip the Detroit office of the Midwest Joint Board removing their assets.
2.Telling the Detroit employers to only deal with Daughtry as the defator officer in charge of Local 24.
3.Running a disaffiliation campaign to remove Local 24 from the Midwest Board.
4. Advising employers to give employee union dues payments to local 24 instead of the Midwest Joint Board.
5. Telling his allies to be confrontational inside and outside the Michigan State Council office head quarters with the intent of creating such a disturbance to force the landlord to keep the joint board representative out.
6. Instructing Daughtry to refuse to agree to the removal of the joint board property, including files important to representation of members.
7.Telling Daughtry to not allow the Amalgamated Life Insurance Company to remove its files impeding the servicing of medical claims for non- local n24 affiliate members.
8.Telling Daughtery and his agents to intimidate staff of the joint board who follow the directions of Brown instead of Daughtery.
9.Diverting International Union personnel and financial resources to accomplish all of these things.
UNITE argument XI says " The Defendant wrongful conduct has resulted in paralysis in UNITE HERE that cannot be allowed to continue.
I guess this means they were all to busy to help Miss Tucker?
One interesting argument concerned the "salting" used in a manner I was unfamiliar with.
" Salting" refers to the practice of recruiting union loyalist and assisting them to secure employment with employers who are target of union organizing campaigns. International Union assets are typically expended to find, recruit, train, and sometimes compensate " salts" even while they are employed on their employers payroll. UNITE claims HEREIU have salted their loyalist into shops represented by UNITE HERE for political purposes instead or organizing.
Now they are claiming they have been out politicked.
They assert this is a misuse of union assets.
What they are really looking for is the court to declare that the UNITE HERE Constitution does not prohibit the joint boards to leave UNITE HEREIU.
The Second thing they are demanding is for the court top declare that the UNITE Affiliate ( who have most of the money) to enjoin HEREIU ( who have most of the votes) from interfacing with those assets.
The third thing UNITE is asking for is the court to declare that the UNITE HEREIU contact/constitution and merger agreements are void due to the Defendants HEREIU breach of the covenants of good faith and fair dealing.
That they are void due to Defendant frustration of purposes for the merger of unite and hereiu.
And finally they want UNITE HEREIU dissolved.
After dissolution the want UNITE HEREIU assets put into a constructive trust and an accounting due to unjust enrichment. Then they will sue the beegeebers out of them.
The UNITE faction allege fraud and deceit, unclean hands of the HEREIU faction. The want any form of control estoped.
The Unite faction wants the continued jurisdiction of the PUBLIC REVIEW BOARD. That usually means UNITE must control it.
And they want damages and a jury trial.
It appears the guys with money were attempting to use the guys with larger membership number for political and organizing advantage. The card were turned on them when the guys with greater numbers exercised control and started to spend the money.
Just who advised UNITE?
Later after I get a copy I will summarize the answer of John W. Wilhelm and HEREIU
A Face Book Friend, I have 1200 and you are invited, who I know to be a SEIU member shared the following.
"Terry, you are very well on to something that has unfortunately been taking place for about five years now. And with the lay offs, downsizing etc many are scrambling and trying to hold on for dear life, organizing anyone they can find. It is in my opinion that when you mix unions or classification someone will come up short because eventually certain groups interest, will cause a conflict of interest. This internal struggle that unite is having is nothing compared to problems that is yet to come with all of these mergers. SEIU is 2 million strong internationally and growing. And steadily sending out the troops to colonize and organize."

I have a lot of questions. Your help would be appreciated. Send tips or threats to . You can join and post on my face book page for the world to read.

Where is Uncle Larry when you need him?
Posted Here By
Terry Bankert 2/24/09
Consider continuing this discussion or sharing hot tips on Face Book

To read the most recent Federal Litigation concerning Unite Here see for pdf Gillis v. Wilhelm.

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