BY ALISON GRANT

CLEVELAND -- A labor struggle is brewing in a row of nondescript offices on the 16th floor of the Federal Office Building in downtown Cleveland.

The case before Region 8 of the National Labor Relations Board is about the kind of dusty technicality that seems destined to become a footnote in employment history: the proper scope of "neutrality agreements" that unions use to add members.

In the last decade, neutrality agreements have been one of organized labor's most potent strategies for growth. Companies signing such agreements pledge to stay neutral and not interfere in union attempts to organize workers.

The AFL-CIO said it organized nearly 3 million workers from 1998 to 2003. Only a fifth of those workers joined as a result of traditional federally supervised elections in which organizers and employers vied for votes for or against unionization, says Ohio State University law professor James Brudney.

Unions contend that the secret-ballot elections supervised by the National Labor Relations Board can be skewed by company tactics. According to a Cornell University study: One out of four employers illegally fires at least one worker during a union election campaign, three out of four hire anti-union consultants, and eight out of 10 force workers to attend one-on-one anti-union meetings.

Now neutrality agreements are under attack. The National Right to Work Legal Defense Foundation says the agreements coerce employees and trample their rights. "Federal labor law is supposed to be about employee free choice," said foundation Vice President Stefan Gleason.

Unions say Right to Work's fight against neutrality pacts is aimed at their very existence as they try to reverse a decline that has left them with just 8.2 percent of private sector workers. "The game plan is to destroy labor," said Peter Nussbaum, an attorney for the United Steelworkers of America.

The Cleveland case involves an unlikely alliance between the Steelworkers and Heartland Investment Partners LLP, an investment firm founded by David Stockman, former federal budget director in the Reagan administration. These days he sports a mane of longish white hair and manages his holdings from an office in Greenwich, Conn.

On the other side is the employer-backed Right to Work foundation, a nonprofit group that opposes what it calls compulsory unionism. It is supported by grants from the Olin chemical and munitions fortune, the founders of Wal-Mart and other conservative foundations.

Stockman launched Heartland in 1999, buying what he saw as undervalued Midwestern manufacturers.

One of Heartland's properties is a car mat factory in Holmesville, Ohio. The Steelworkers launched an organizing drive there in 2003.

The plant was covered by a specific neutrality agreement with the Steelworkers that grew out of an earlier agreement between Heartland and the union. In the original deal, Heartland agreed that companies it owned, or bought in the future, would not fight Steelworkers' efforts to organize their employees.

James Stone, an attorney representing Heartland, said the company believes neutrality agreements avoid the unnecessary rancor of NLRB-supervised elections. And according to Steelworkers' organizing director Michael Yoffee, Stockman "has said -- and the USWA agrees -- that the warlike atmosphere that usually occurs between workers and their employers when workers try to form a union and negotiate a contract is old-fashioned and counterproductive."

As is common in neutrality agreements, when the union started organizing in Holmesville, it used a card-check system, in which the employer agreed to recognize the union once a majority of workers signed cards saying they wanted one.

The system has been used across a wide range of industries. But in Holmesville, there was opposition. "They came to my house and said everything they did was secret," said Linda Kandel, a 21-year employee at the factory. "I had to sign a card right in front of them. I said, `I don't think so."'

The Right to Work foundation intervened on behalf of Kandel and three other plant workers who charged the union with unfair labor practices.

The union's organizing drive failed because it did not collect enough cards from employees. Right to Work pushed forward toward a bigger goal: Wiping out the paragraphs in the neutrality agreement that extended the deal between Heartland and the union to companies in which the venture capital firm acquired ownership or control.

Bill Messenger, Right to Work staff attorney, calls it the "virus clause."

The arrangement restricts the range of businesses in which Heartland can invest by requiring that they accept neutrality agreements, Messenger said. It was, he said, an illegal "hot cargo" pact.

The term comes from contracts the Teamsters negotiated in the 1950s that allowed truck drivers to refuse to carry the goods of companies where workers were on strike. It was a highly effective tactic until it was outlawed by Congress in 1959.

Up to now, the hot-cargo claim has been applied to contracts that restricted the provision of goods or services. Right to Work wants to extend what is illegal to include preventing companies from signing contracts that limit their own investments.

A few years ago, the foundation attacked neutrality agreements and card checks by arguing that labor and corporations were not being adversarial enough. The labor board didn't buy it.

The foundation didn't give up. It is pushing 10 cases now, either attacking the labor-management agreements head on or, as in Holmesville, trying to snip at the edges.

Under an NLRB now dominated by Republican appointees, two of those cases already have been accepted on appeal by the commissioners in Washington.

The board, set up in 1935 to oversee union elections and labor-management relations, hasn't ruled yet on the cases. In taking one of them, though, the sentiment was clear: "The fact remains that the secret-ballot election remains the best method for determining whether employees desire union representation," the majority wrote.

NLRB Chairman Robert Battista has said that it is time to re-examine neutrality and card checks because business groups are complaining of union intimidation. Battista is a Detroit management lawyer who represented the Detroit Newspapers during a strike in the 1990s.

The issue has become so hot that the agency's general counsel, appointed by President Bush, has taken over handling neutrality/card check claims. Instead of being reviewed in local offices like Region 8's in Cleveland, the claims go to General Counsel Arthur Rosenfeld first.

It was Rosenfeld who decided the Holmesville claim had merit, and he has ordered Region 8 to prepare an administrative complaint against the union and Heartland.

The agency tried to negotiate a settlement. Heartland and the Steelworkers wouldn't budge. "Heartland strongly believes that it did not violate the law," Stone said.

Region 8 has drafted the order and Rosenfeld's office is reviewing it. A formal complaint is expected within weeks. Then the NLRB will schedule a hearing before an administrative law judge in Cleveland.

Both sides say the decisions in such cases are crucial.

"Neutrality and card check agreements present a direct threat to the jurisdiction of the board and its crown jewel, the secret-ballot election process," Charles Cohen, an attorney for the U.S. Chamber of Commerce, told a Senate subcommittee last year.

"This is a drop-dead issue," said Tom Juravich, director of the Labor Relations and Research Center at the University of Massachusetts. "Outlawing them would really stab right at the heart of the legitimate rights of labor people."

CONTESTED CASES

The National Right to Work Legal Foundation has filed charges with the National Labor Relations Board in these cases involving neutrality and card-check agreements between companies and unions.

UNITED STEELWORKERS OF AMERICA: Heartland Industrial Partners, Holmesville, Ohio (general counsel ordered regional office to issue complaint); Cenquent Towing Products, Goshen, Ind. (awaiting board decision); Goodyear, Asheboro, N.C. (regional office issued complaint, union will try organizing again)

UNITED AUTO WORKERS: Dana Corp., Upper Sandusky, Ohio, and Metaldyne Precision Forming, St. Marys, Pa. (awaiting board decision); Dana Corp., Bristol, Va. (under review by general counsel); Dana Corp., St. Johns, Mich. (hearing next month before administrative law judge); Thomas Built Buses-Freightliner, High Point, N.C. (hearing held, awaiting administrative law judge's decision); Freightliner/DaimlerChrysler Inc., Gaffney, S.C. (regional office issued complaint, supplemental charge filed); Ford, General Motors and DaimlerChrysler (on appeal to general counsel)

HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES: Four Points by Sheraton, Santa Monica, Calif. (general counsel ordered regional office to issue complaint)

Source:  Newhouse News Service