Negotiations between unions and management over new collective bargaining agreements (“CBAs”) are usually contentious. Add in a corruption investigation affecting one of the largest labor unions in the country, in one of the biggest sectors of our economy, and those negotiations become exponentially more complex. This scenario is playing out right now between the United Auto Workers (“UAW”) and the largest car manufacturers in Detroit (“Detroit”).
Over the past few years, the Department of Justice has conducted an investigation into alleged illegal payoffs between Fiat Chrysler and the UAW, which has led to arrests and convictions for both Detroit and the UAW. The FBI raided the home of UAW president Gary Jones at the end of August intensifying the pressure. The UAW argues that this raid was unnecessary as it claims it is fully cooperating with the Federal authorities, but it comes at a critical juncture as UAW’s current CBA is set to expire on September 14th.
The scope of the investigation has already placed the UAW in a difficult position. In June, opponents of unionization used the investigation in their efforts to successfully prevent a Volkswagen plant from unionizing. See Nick Carey, Federal Corruption Probe Hits Home for UAW Boss, Contract Talks Under ‘Storm Cloud’, Reuters (Aug. 28, 2019), https://www.reuters.com/article/us-autos-corruption-labor/federal-corruption-probe-hits-home-for-uaw-boss-contract-talks-under-storm-cloud-idUSKCN1VI229. This weakened position may also blunt the effectiveness of a threatened strike in the event both sides cannot make a deal by the 14th – as members might be more hesitant to engage in a prolonged strike if they feel leadership will not be able to obtain a satisfactory agreement.