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Appeals court reinstates anti-union claims against Wal-Mart Friday, Jan 20, 2006 By James Jefferson Arkansas News Bureau LITTLE ROCK - A federal appeals court Thursday reinstated a lawsuit against Wal-Mart Stores Inc. by employees challenging the legality of the world's largest retailer's policy to exclude union members from some employment benefit plans. The 8th U.S. Circuit Court of Appeals in St. Louis reversed a July 2003 decision by a federal judge in the Western District of Arkansas, Wal-Mart's home base, who dismissed the case for lack of jurisdiction. The appeals court ordered further proceedings on the employees' claims that, among other things, the union exclusion clause improperly led employees to believe that they would lose their benefits if they chose to unionize. A spokesman at Wal-Mart's Bentonville headquarters said the company would study the ruling. "We have not had a chance to review it, so we don't have a comment on it at this time," spokesman Marty Heires said. The lawsuit was brought by participants in Wal-Mart's profit sharing plan, 401(k) pension plan, and health and welfare plan. Their dispute with the company arose when 11 automotive service technicians at a Kingman, Ariz., Wal-Mart store sought to form a union, aided by the United Food and Commercial Workers International Union. To discourage the effort, Wal-Mart sent a team of labor relations managers who met with Wal-Mart employees to convince them to vote against union representation, the appeals court said. A union election was never held. The plaintiffs instead brought charges against Wal-Mart, alleging that the union exclusion clause undermined the union's efforts to unionize Wal-Mart associates. The National Labor Relations Board investigated the allegations and issued a complaint. In February 2003, an administrative law judge concluded that the clause violated provisions of the National Labor Relations Act and ordered the company to rescind the clause and post notices informing employees of the rescission. Wal-Mart filed exceptions to the decision which are pending before the board. The board proposed a settlement with Wal-Mart in May 2003. The plaintiffs sought to block negotiations, and that matter also has not been resolved. Meanwhile, the workers filed a federal lawsuit in the Northern District of California, asserting 14 violations of the Employment Retirement Income Security Act (ERISA). They sought an injunction and monetary damages, including all profits caused by the clause. The California federal court granted a Wal-Mart motion to transfer the case to the Western District of Arkansas. The Arkansas federal court dismissed the complaint, ruling that its jurisdiction over the matter was preempted by the NLRB's jurisdiction under the labor relations act over the plaintiff's ERISA claims. In its ruling Thursday, the 8th Circuit acknowledged courts have generally held that the act preempts lawsuits that seek relief for conduct that is protected or prohibited by the labor relations act. But in this case, the court noted, the plaintiffs contend that Wal-Mart breached its fiduciary duties under ERISA in efforts to amend the plan. To make such a determination, it was not necessary to decide whether the exclusion clause violates the labor act, but whether the company breached its fiduciary duties by misleading participants of the plan or misrepresenting the terms or administration of the plan, the court said. "Although the plaintiffs' causes of action reference the question of legality of Wal-Mart's conduct towards unions, it does not depend on a determination of whether Wal-Mart's actions violated the act," Judge Michael J. Melloy wrote for the panel. "There, because the plaintiffs' claims are not National Labor Relations Act claims ... the federal courts have jurisdiction." |
