How ATU took on a multi-billion-dollar company

(Editor's Note: This is the final part of a three-part series on the National Labor Relations Board.)

By DON McINTOSH

Staff Reporter

In 1995 something changed between Amalgamated Transit Union (ATU) Local 757 and Laidlaw Inc. Before that time, multi-billion-dollar, Canadian-based Laidlaw had been like other companies the Portland-headquartered bus operators', bus mechanics' and paramedics' union had learned to deal with - no pushover, but willing, ultimately, to come to an agreement.

But something changed in 1995. In bargaining unit after bargaining unit, the company's campaign against the union seemed to take on a new vehemence, and it began to use a barrage of legal and illegal tactics to thwart the union.

Some union locals might have backed down or pulled out. But Local 757 decided to fight back. For four years, the union has been waging a multi-front guerrilla war against Laidlaw before the National Labor Relations Board (NLRB), city councils and school boards; in the workplace; and in the realm of public opinion.

If U.S. labor law had been effectively enforced by the National Labor Relations Board, Local 757 would have been spared tens of thousands of dollars in continuing legal, organizing, and public relations expenses. Instead, this union's experiences fighting a large, aggressively anti-union employer are a textbook example of the possibilities and the limitations of some of the most energetic and creative union strategies.

Introduction to a multinational

ATU 757 first met Laidlaw in 1987 when it organized Laidlaw drivers and mechanics under contract with Portland Public Schools. What they faced across the bargaining table was a company growing rapidly, not so much by besting competitors but by buying them, financing the deals with new stock issues. So systematically has it pursued this business strategy that a 1997 Forbes magazine profile of the company dubbed Laidlaw "The Consolidator."

In each of Laidlaw's four major service divisions - school bus, intercity bus, ambulance, and municipal bus - the company has bought its way to being the biggest of the pack. Its largest recent acquisitions include American Medical Response, Inc., the biggest ambulance company in the United States, and Greyhound Lines, Inc., the primary intercity bus operator in the United States.

The second key to Laidlaw's growth has been that it's well-placed to take advantage of the trend toward privatizing and contracting out services that were formerly handled by government. Professor Elliott Sclar, a privatization expert at Columbia University in New York, says Laidlaw doesn't wait for government privatizers to call; it is heavily in the business of selling privatization to local public officials.

"They sell competitiveness and efficiency, but the only people who really like competition are the buyers," Sclar says. "Since the sellers are in the market long-term and the buyers only research it periodically, the sellers end up with the advantage."

Sclar's research suggests that the first bids on newly privatized contracts are money-losers designed to kill off local competition. Once the competition is whittled down to two or three national companies, subsequent bids go up dramatically.

It's a profitable strategy for the company, but the benefits aren't spread evenly at Laidlaw. While its lowest-paid employees make minimum wage or barely above that, in 1997 its chief executive officer James Bullock received a basic salary of (in Canadian dollars) $760,000, plus a $1.6 million bonus, plus $2.2 million in profit from exercising his stock options.

How can the company afford such salary largess? The technology of buses hasn't changed, Sclar points out. "The real productivity of a bus driver is determined by the speed of the bus and the number of passengers, and both of those are limited by public policy." Thus, the one factor Laidlaw is able to manipulate to keep costs low and profits up is labor. That means it will pay wages as low as the market will bear, and it means unions that demand raises are distinctly unwelcome.

Coral Semle, area general manager for the Laidlaw school bus division in Oregon, Colorado and Utah, acknowledged as much in an interview with the Northwest Labor Press: "The union is asking everybody, 'Is $6.50 an hour enough to live on?' If you can separate emotion from the issue, the question for us is, 'Can I hire enough qualified people at $6.50 an hour to meet our contractual obligations?' If I can, then that's what I'll do, and any businessperson would do the same."

Unions, then, are to be resisted as much as possible.

A Laidlaw employee handbook tells the workers how it is: "Laidlaw is a non-union company and will remain so because we believe that our employees prefer being treated as individuals ... Laidlaw will actively oppose, within the boundaries of the law, any attempt to limit your right to deal directly with supervisors and management."

Susan Stoner, staff lawyer for ATU Local 757, thinks she's figured out the company's labor strategy. "Originally they would fight elections and try to defeat them, but they rarely were able to because they're a bad company to work for. People hate them, so it's easy to organize them. "So they backed off of that and instead they focused on not allowing you to get a contract. To do that, they have to commit unfair labor practices."

"The nature of unfair labor practices that you commit to prevent a contract is subtle," Stoner adds. The law requires that employers bargain "in good faith" with unions with the goal of reaching agreement. It may seem an abstract mandate, but what's considered bad faith had been pretty well defined by case law. [See sidebar, "How to make sure the union never gets a contract"] In the contract battles ATU 757 has fought with Laidlaw, the company has committed almost every one of the kinds of acts that qualify as unfair labor practices. Three cases stand out - Portland Public Schools, Tigard and Corvallis.

Portland Public Schools: The case of the reluctant John Hancock

In the 1980s, when Portland Public Schools began contracting out part of its school bus operation, Laidlaw rushed to the scene and won the contract. Local 757, which represented school bus drivers working for the district, organized the Laidlaw drivers and mechanics in 1987 and signed its first contract with the company in March 1989, winning wage increases, seniority rights, and medical benefit improvements. The company agreed to further improvements when the contract came up for renewal in June 1992, and again, seemingly, in September 1995. But then things got strange.

After the agreement was ratified by the workers, the union sent a copy to Laidlaw so its representative could sign it. The company implemented most of the terms of the agreement, but the union heard nothing back about the signed contract. After several months spent waiting for Laidlaw to sign the contract, ATU contacted the National Labor Relations Board. The NLRB issued a complaint, but Laidlaw refused to respond to that also. On Aug. 26, the Board in Washington, D.C. ordered Laidlaw to sign the contract; but the company still failed to comply. In November, the NLRB threatened to go to the U.S. Court of Appeals to enforce the order. The company failed to respond, and the NLRB went to court. On March 14, 1997, the Ninth Circuit Court of Appeals in San Francisco agreed with the NLRB; eight months later, it ordered Laidlaw to sign the contract and provide to the Board all payroll records so a back pay award could be computed based on a minor pay increase that had been agreed to but not implemented. After the company refused to comply again, the NLRB began contempt of court proceedings. At last, the company produced a signed copy of the agreement but, says the union, it had changed the page listing wage rates, and it failed to provide payroll records as ordered. The company was given a deadline to provide the records or be held in contempt of court, subject to fines and jail time. On the eve of that deadline, it complied, in October 1998, more than three years after the contract had been negotiated.

Throughout all of this extraordinary defiance, with multiple stages of legal delay, the only thing that separated the terms in the unsigned contract from the terms the company had already implemented was a 50-cent-an-hour difference in the wages paid to drivers for non-school-related charter work. Was all this effort spent just to avoid a back pay settlement that totaled $10,826.96? Laidlaw may have proved a point - that it can willfully disregard the NLRB and not face any consequence for years - but in doing so it may have caused agency officials to lose patience with the company, buying itself greater legal difficulties later on.

Tigard School District: When labor peace is trampled on, everyone loses

In March 1995, Laidlaw bought one of its biggest U.S. competitors, the nationwide school bus company Mayflower Transit. School bus drivers working for Mayflower under a contract with Tigard School District found themselves working for Laidlaw. ATU Local 757 filed for an election and in June 1996, the drivers voted by a 3-to-1 margin to certify ATU 757. Negotiations began right away and were fairly successful.

But at the same time the negotiations were under way, the company was having difficulty living up to its contract with Tigard. Semle says the Mayflower contract bid had been a money loser, so when Laidlaw took over the contract, it found it was losing money. "We closed the books that fiscal year with a $200,000 loss," Semle said. "Drivers wages were so low that we couldn't attract people." With high turnover and understaffing, service complaints mounted. Laidlaw went to the Tigard School District to ask for additional money to give raises, and the district agreed to pay for half of a $1 an hour increase. Thus, when Local 757 President Ron Heintzman proposed a raise to $8.50, the company, knowing a deal with the district had been reached, offered $9. Heintzman was delighted. But, Heintzman recalls, when a tentative agreement negotiated between the union and the company was presented to the workers for ratification, one employee got up and made an announcement. She had been told by a manager that the terms of the contract, including $1 an hour pay raises, were going to be implemented by the company in two days regardless of whether the workers approved the contract or not. Hearing this, the drivers rejected the contract; after all, if they were getting raises and improvements anyway, what did they need to pay union dues for?

The drivers knew their raise was coming from the school board; to get a contract approved, the union would have to win something at the bargaining table. But now Laidlaw refused to return to the bargaining table, saying the company had already implemented the terms of the agreement. When the company refused to respond to repeated requests to bargain, the union filed an unfair labor practice charge with the NLRB. The board found merit in the charge, and scheduled a trial date.

On Nov. 4, 1997, before the hearing could take place, the company entered into a voluntary settlement, promising to meet at least six hours at a time at least twice a month for the next six months. The union sent Laidlaw a letter with 10 dates in the coming month that it was available for meetings, but the company once again failed altogether to respond. By February, the union still hadn't heard from the company, so it scheduled a strike vote, and drivers voted to authorize a strike. Only then did the company agree to meet. A company representative met with the union for 45 minutes, received the union proposal, and promised to get back to the union with a response. Forty-five days later, the union still hadn't heard from the company, and it again took a strike vote, which passed 43 to 5.

Some workers attempted to decertify the union. But the petition to decertify was blocked by the NLRB because of the number of pending unfair labor practice charges.

Meanwhile, service problems continued, and relations between Laidlaw and the Tigard School Board worsened.

"My sense is we were dealing with a big multinational company that just doesn't give a damn," said Patricia Biggs, chair of the Tigard School Board. With the wages so low, the company found it difficult to get enough bodies to fill the routes, let alone qualified drivers, and turnover was unacceptably high.

Biggs recalls the long list of headaches and mishaps that resulted. Inexperienced school bus drivers frequently got lost. Children were picked up or dropped off up to 45 minutes late. On the return trip after a football game in Ashland, the lead driver led a six-bus caravan carrying Tigard football players, fans, and cheerleaders south well into California before alert passengers insisted the buses turn around. After another athletic team was dropped off in The Dalles, the driver went home, leaving the team stranded for hours. On a field trip, the superintendent of Tigard Public Schools was left standing in Seaside. [Tigard was by no means unique in having problems with Laidlaw - in 1997 in Clark County, Washington, the company's low wages created such a driver shortage that schools were canceling field trips.]

As the problems continued, the Tigard School Board took away scheduling responsibility from the company. When the contract came up for renewal in June 1999, the district decided it had had enough, and awarded the contract to Ryder, a Laidlaw competitor. Semle maintains that the contract was lost because Ryder bid $25,000 less than Laidlaw. But Biggs insists there was no way the district was willing to do business with Laidlaw again.

And so, after three years of organizing, bargaining, and legal maneuvering, ATU 757 found itself back at square one, with no contract, and possibly, no bargaining unit.

Come September, if Ryder hires back a significant number of Laidlaw employees, Stoner says successorship requirements will apply and Ryder will have to recognize the union. If not, ATU 757 would be faced with a choice about whether to organize a low-wage, part-time, high-turnover workforce.

"We've already put tons of money into this campaign," Stoner said. "And it's a hard group to organize."

The Corvallis case: Stall, Stonewall, and Delay, Inc.

In July 1996, unhappy with wages that started at $6.65 an hour, drivers at the Laidlaw-contracted Corvallis public transit system contacted ATU 757 looking to organize. The union filed for election with the NLRB, but Laidlaw objected, arguing that its Corvallis School District school bus drivers should be included in the proposed bargaining unit since school bus drivers fill in for transit drivers while they're on break. After an NLRB hearing was held to resolve the objection, the NLRB agreed with the union and determined that the units were quite separate - the two groups of drivers were operating under different contracts with different public bodies, and even within the company, city transit and school bus operations are normally in separate divisions, with different management hierarchies.

But Laidlaw appealed the decision to the NLRB in Washington, D.C., an appeal which took its place in line behind an enormous backlog of cases. Rather than wait six months or a year, the union decided to organize the school bus drivers, too. Because the transit driver bargaining unit appeal was still pending, the NLRB said it would not process the school bus election request until the Board in Washington, D.C., made its decision.

So the union decided to withdraw both petitions and file one that covered both groups of workers. Laidlaw could hardly appeal what had been its original position, and an election was quickly scheduled. On Nov. 21, 1997, the transit and school bus drivers voted 42 to 2 to join the union.

More than a year of not very successful negotiations followed with no agreement reached. On Feb. 11, 1999, the drivers voted 43 to 5 to authorize a strike, and on the morning of March 30, they walked off the job for a day. By the afternoon, supervisors from Laidlaw operations in Portland, Medford and Coos Bay arrived in Corvallis to operate some of the school buses for the afternoon ride home, but most parents had already made alternate arrangements.

On April 5, the drivers again walked off the job to publicize the unfair labor practices the company was accused of committing.

Faced with a growing mountain of unfair labor practice charges related to the requirement to bargain in good faith, the NLRB issued a consolidated complaint against Laidlaw for unfair labor practices in Corvallis, Tigard-Tualatin, Tri-Met Lift in Beaverton, and Bethel School District drivers represented by the Teamsters. The complaint covered some 23 separate violations.

Meanwhile, the union began taking its case to the public and to the Corvallis School Board and City Council. In the spring it gathered enough signatures to qualify an initiative for a Sept. 21 local ballot; the measure would mandate that the City of Corvallis require transit subcontractors to pay prevailing wages and benefits based on that paid by other nearby transit agencies.

The union challenged city councilors and school board officials to attend a negotiating session with Laidlaw to see for themselves why drivers were ready to strike. On March 8, two public officials accepted the challenge; they left when Laidlaw representatives failed to appear after 45 minutes. The union took out ads in the Corvallis Gazette-Times. It sent letters to parents. It distributed 1,500 lawn signs with the message, "$6.65 is not a livable wage." And it generated 1,000 postcards to the school board and the city council asking them to intervene.

Meanwhile, negotiations continued. Assured by the Corvallis City Council that the next contract cycle would contain a city-financed wage floor of $8 an hour, Laidlaw agreed at a May 26 negotiating session to offer drivers a raise to $7.75 an hour, but it added a new "non-negotiable" demand. For 17 months of negotiations, the company had been discussing a two-year deal; now it demanded a four-year contract, take it or leave it.

The two-year contract they had been working on all this time was to have expired July 2000, but the company's complete unwillingness to budge on the wage issue for the first 15 months of negotiations now meant that much of the contract time had been eaten up.

As Laidlaw's regional human resources director Ronn English put it, "A two-year contract means in one year we have to go through this whole charade all over again."

Heintzman is not hopeful that an agreement will be reached before the Sept. 21 ballot.

A pattern of abuse?

Conflicts like those in Portland, Tigard, and Corvallis are by no means the exception. Of the 85,000 employees at Laidlaw's 1,300 locations, about a third are represented by unions. English reports that Laidlaw has good relationships with a number of local unions. It may be that when a union doesn't ask for much, or where contractors are willing to pay extra to ensure decent wages, Laidlaw and the union get along fine. But when unions fight for wages that might cut into company profit margins, the company can be ferocious.

In April 1999, Laidlaw locked out 20 bus drivers in the Bethel, Oregon, School District for 14 days after 11 of the drivers engaged in an unannounced afternoon walkout. The drivers, who make $6.75 an hour, had voted in Teamsters Local 206 a year earlier and had been in contract negotiations with Laidlaw for over seven months.

In 1995, the company's intransigence led Seattle school bus drivers represented by the Teamsters to wage a bitter 30-day strike that crippled the Seattle School District and forced its school board to hustle to find replacement transportation. Despite the fact that the Teamsters won support from the community, the school board, and local newspapers, Laidlaw remained defiant, and the drivers went back to work without the provision they were striking over.

"We're in a brief period of time when there's a labor shortage," Stoner said. "When and if the economy goes bad, Laidlaw is going to be a rampaging bull. You won't be able to stop them. They'll probably lower wages, bust unions, do everything."

"You can't fight them using strikes," Stoner continues. "It's impossible, because they can hire anybody, they've got so much money."

Laidlaw's revenues are $3.5 billion a year, with after-tax profit of $346 million in 1998. By way of comparison, ATU 757, with 4,000 members at 21 workplaces in Oregon and Washington (a large local by the standards of the Amalgamated Transit Union) has revenues of $1.7 million a year from member dues of $13.50 to $45.56 a month.

"There's no way as a local or even as an international union that we can fight Laidlaw financially," says Heintzman. Instead, unions like Local 757 have to use their natural advantages. English dismisses the idea that the company has a centrally coordinated strategy against unions. But at the very least, Laidlaw benefits from a high degree of centralization, while unions suffer from a high degree of fragmentation. English, for example, is the company's chief union negotiator for a territory that includes California, Texas, Oregon and Washington. On the other hand, the unionized portion of Laidlaw's U.S. workforce is divided among hundreds of locals from as many as 10 national unions, including the Amalgamated Transit Union; the American Federation of State, County and Municipal Employees; Boilermakers; Communication Workers of America; Laborers; Machinists; Operating Engineers; Service Employees; Teamsters; and United Food and Commercial Workers.

Laidlaw's unions have recently started to compare notes. In June 1998, Local 757 organized a regional conference on Laidlaw, inviting representatives from nearly a dozen local unions in Oregon, Washington and Alaska. And in May 1999, representatives from several dozen Amalgamated Transit Union locals from around the country met at the George Meany School of Labor Studies near Washington, D.C., to confer about Laidlaw.

Not surprisingly, when representatives from Local 757 attended these conferences, they discovered that other unions had had the same experiences. In the six years from 1992 to 1998, over 330 unfair labor practice charges were filed against Laidlaw around the United States. And Stoner says many unions aren't filing charges every time the laws are violated. Just as employers often aren't aware that they're breaking the law, many unions may not be aware that an unfair labor practice has occurred. And even if they are aware, they may not be able to afford expert legal advice. "Labor attorneys charge by the hour," Stoner says, "and they're not cheap." Local 757 is unusual in that it has a full-time staff attorney.

Stoner says at this point Local 757 has made a commitment to the other unions not to withdraw unfair labor practice complaints against Laidlaw. "We've got to teach them how to behave," she said. In the eyes of the NLRB, the growing mound of unfair labor practice charges may have marked Laidlaw as a repeat offender. Cathy Shelton, officer-in-charge at the NLRB's Portland office, says that when the agency detects a pattern of violation, unfair labor practice charges are put on a fast-track for investigation, and the agency is less likely to allow an informal settlement.

Such a change in the agency's attitude may have born fruit May 4, when after considerable pressure from the NLRB, the company signed a far-reaching formal settlement that, if it works as intended, will place severe restrictions on Laidlaw's future ability to drag its feet in negotiations. In the settlement, the company waives all future rights to hearings and appeals if NLRB investigators determine the company has violated the legal requirement to bargain in good faith with a union. The settlement covers any union in Oregon, Washington or Alaska.

While it's not a formal admission of guilt, the company will have to post notices at all locations affirming its workers' right to collectively bargain through their union, and promising, among other things, not to disparage the union to employees or encourage them to decertify.

Strategic lessons

As conflict with Laidlaw has broadened and lengthened, Local 757 has developed a set of strategies tailored to this kind of employer. Clearly, a key part of its strategy is a commitment to filing unfair labor practice charges when the law has been violated.

To begin with, when the company is refusing to bargain in good faith, filing unfair labor practice charges can be a defense against decertification.

"Under U.S. labor law," Stoner explains, "the employees, after one year of being in a union, can vote out the union if they don't have a contract. So as soon as the one-year period is up, Laidlaw starts encouraging decertification petitions."

Stoner came across an example of this at the 1998 union conference on Laidlaw when she heard about the experience Seattle-based Machinists District 160 had negotiating with English: "He would cancel meetings and not be available for long periods of time. Then he'd show up and only be there for an hour. After a year of this, there was no contract, and they were decertified."

Filing unfair labor practice charges might have prevented this, since the NLRB often blocks decertification petitions if it has evidence that the company was trying to stall or sabotage bargaining. After all, if company stonewalling leads workers to conclude the union can't get anything for them, they may turn against the union.

"Unfair labor practices really ARE unfair. They have ramifications, and those ramifications poison the work force," Stoner says.

A second benefit from filing complaints is that it helps the union make its case that Laidlaw is a lawless corporation.

"The one advantage we have against them is that we're locally based and we can 'home town' them," Stoner says.

Local 757 has been aggressive in pursuing this strategy, educating the public and using its influence on school boards and city councils to oppose contracting out, hamper Laidlaw's efforts to renew its contracts, and urge public bodies to take busing operations back in-house. Complaints issued by the NLRB hurt Laidlaw's public image; Local 757 hopes the company will eventually consider its image worth saving and change its ways regarding labor.

"If the idea of economic morality takes hold in the public mind, marauding corporations won't be welcome anywhere, and they'll have to change their behavior," Stoner says.