News Story

Union Files Federal Complaint Against Company For Giving Its Members Raises

Michigan auto supplier didn't get permission from the union first

In one Michigan county, a union filed a federal complaint to stop an employer from giving raises, at least without its permission.

The National Labor Relations Board ruled that Lenawee Stamping Corporation must take back wage increases and a bonus offer it made in an attempt to attract more skilled workers.

The matter is now in a federal appeals court, with the company pushing back against NLRB. The independent federal agency says the company violated its collective bargaining agreement with the United Auto Workers union when it offered the wage increases and bonuses without the union’s agreement.

According to documents filed with the NLRB, the plant manager met with two officials of the union local, including its president in November 2015, to discuss raising the starting wage for skilled employees from $22.19 an hour to $30 an hour. The union officials did not agree to the wage increase, arguing that it would have to go through a collective bargaining process.

The company raised wages anyway. In subsequent meetings between the company and the union, the two parties couldn’t come to an agreements over how to modify the existing collective bargaining agreement.

In March 2016, the company again announced it planned to raise wages without first consulting the union. This time, it raised the starting wage of a semiskilled worker from $10 per hour to $10.75 per hour. In April it notified a union representative that it was going to raise the starting wage of semiskilled workers again, this time to $11.50 an hour. The union didn’t agree to either raise.

In March 2016, the company also announced it would begin paying current employees a $100 bonus for every new employee they brought into the facility. It also promised $1,000 to any new employee who kept working at the facility long enough to finish a probationary employment period. The union local never agreed to the bonuses.

The UAW filed charges against the company with the NLRB. It then issued a complaint, arguing that the auto supplier had violated federal labor law. After a one-day hearing, an administrative law judge issued an order stating that the company had violated federal law by raising wages and offering bonuses without the union’s consent.

At the union’s request, the NLRB then ordered the company to rescind the wage increases and offers of bonuses.

“The Company insists that its decision to increase wages was necessary given the Company’s inability to hire and retain employees,” said the NLRB in an argument to the U.S. Appeals Court. “The Company’s motive for modifying the agreement is irrelevant to determining whether the modifications violated [federal labor law].”

Derk Wilcox, senior attorney with the Mackinac Center Legal Foundation, believes the NLRB’s original decision will be upheld by the court.

“Even though taking away their raises will hurt the workers, the UAW is likely to win this legal battle,” Wilcox said. “The labor law is designed to give the union control, even if it hurts the business. Here, the stamping company desperately needs to recruit and hire new employees to meet demand, but the UAW would rather reward long-time union members than see the company grow and hire more people.”

Kirchhoff Automotive, the parent company of Lenawee Stamping, did not return a phone call or email requesting comment.

A spokesperson with the UAW said in an email that the union does not comment on pending NLRB matters.