Monday, 7 July 2003

Nothing Like Salt(ing) In The Wound

If it weren't for the personal tragedy that I am sure is involved, the facts in today's 2-1 decision by the Fifth Circuit, Williams v. IBEW Local 520, would be laughable. Williams, an open shop electrical contractor was "salted" by Local 520 of the IBEW as he was preparing for a large commercial project. Salting was defined in his brief as "union workers concealing their union membership, applying for non-union jobs, and then demanding union level compensation from the employer." When work was about to begin on the project, the union members revealed their union membership and demanded union rates. Since he had bid the job using non-union wages, he was not able to meet their demands and they went on strike. Unable to hire non-union electricians, and in order to salvage the job, he signed a CBA with the union which required him to use the union hiring hall exclusively. After more trouble with the union he unilaterally began hiring non-union electricians. A grievance was filed by the Union and he was found to have violated the CBA. Ultimately an agreed judgment was entered which required him to use the union hiring hall exclusively and submit his records to an audit. The audit showed he owed approximately $160,000 in back wages. In order to avoid the CBA Williams planned to do only residential work, but when that work dried up, in order to save his business he purposefully did 2 commercial jobs without complying with either the CBA, or the agreed judgment, by once again hiring non-union workers. Hauled back into court he was found in contempt and found to owe another $110,000.

He and his wife filed Chapter 13 bankruptcy, which was soon converted to Chapter 7. Not content to have forced him into liquidation, Local 520 contested the dischargability of his debts. The bankruptcy judge, the district judge and one Court of Appeals judge agreed with the Union that the debts were nondischargeable. Fortunately for Williams, two of the judges on the appeals court panel at least gave him a break, finding that while the $110,000 debt was not dischargeable, the $160,000 debt was. The difference has to do in their interpretation of the bankruptcy provision which hinges on whether or not his actions were "wilful and malicious." While he might not have known that his breach of the CBA was to sure to cause harm to the union in the first instance; once he was told by a court that his conduct was improper, as a matter of law his actions were wilful and malicious.

Obviously, the IBEW was acting 'legally', and I am sure their actions were justified at least to themselves; still it is hard to see how many, except perhaps lawyers, ultimately benefitted from this pyrrhic victory.

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Nice comment !