The board set out to determine if a Texas branch of the National Association of Letter Carriers, a union representing postal service workers, violated its duty of representation by not dividing an $800,000 settlement fairly between retirees and employees.
The local postal service management in Wichita Falls , Texas, decided to shave the two 15-minute breaks allowed for workers to two 10-minutes breaks. The decision led to a class action grievance suit by the union against the local postal service for violating a collective bargaining agreement.
Ten years later, the suit was settled via arbitration in April 2004, in which the union and the postal service agreed on the postal service paying out $800,000. However, the union sought outside counsel to come up with how the settlement would be doled out.
The union balked at the counsel’s suggestion that retirees, who had their break times shortened, receive none of the settlement. Instead, the union decided to give retirees half as much as employees. The decision prompted two retirees, Terry Erwin and Terry Pennington, to file unfair labor practice charges against the union, alleging the union overstepped its duty of fair representation by failing to treat retirees the same as active employees.
Administrative Law Judge Keltner Locke said in 2005 the union had no obligation to represent the retirees when deciding how the settlement should be split. The NLRB found that even if the union had a duty to fairly represent the retirees, the union did not breach that duty, citing a 1967 Supreme Court decision that says a union violates its duty of fair representation only if its actions are “arbitrary, discriminatory or in bad faith.”
The board ruled that the union, if it relied only upon advice from counsel, could have given the retirees nothing. In the ruling, the board said that “in an effort to be fair, the union adopted a compromise position and gave each living retiree a half share,” and that “the union’s distribution of the settlement proceeds cannot be said to be arbitrary, discriminatory or in bad faith.”
For the full decision by the board go here .
« S&P: A Good Fund May Not Stay That Way