STATEMENT OF INTEREST OF THE UNITED STATES re: lawsuit against VW/UAW

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE

AT CHATTANOOGA

MICHAEL BURTON, MICHAEL JARVIS, ) and DAVID REED, ) ) Plaintiffs, ) ) v. ) ) Case No. 1:14-CV-76 INTERNATIONAL UNION, UNITED ) AUTOMOBILE, AEROSPACE & ) AGRICULTURAL IMPLEMENT ) WORKERS OF AMERICA, UAW; ) VOLKSWAGEN GROUP OF AMERICA, ) INC.; and VOLKSWAGEN GROUP ) OF AMERICA CHATTANOOGA ) OPERATIONS, LLC, ) ) Defendants. )

______________

STATEMENT OF INTEREST OF THE UNITED STATES

______________

M. PATRICIA SMITH Solicitor of Labor ERIC C. HALLSTROM Special Counsel WILLIAM J. STONE Senior Attorney U.S. Department of Labor 200 Constitution Ave., N.W. Washington, D.C. 20210 RICHARD F. GRIFFIN, JR. General Counsel National Labor Relations Board Washington, D.C. 20570

DAVID A. ONEIL Acting Assistant Attorney General DAVID M. BITKOWER Deputy Assistant Attorney General JOHN M. PELLETTIERI Attorney, Appellate Section Criminal Division U.S. Department of Justice 950 Pennsylvania Ave., N.W., Rm. 1260 Washington, D.C. 20530 (202) 307-3766 [email protected]

Case 1:14-cv-00076-CLC-SKL Document 41 Filed 05/21/14 Page 1 of 34 PageID #: 436

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ........................................................................................................... i STATEMENT OF INTEREST ....................................................................................................... 1 STATEMENT OF THE ISSUES.................................................................................................... 1 BACKGROUND ............................................................................................................................ 1

I. Ground-Rules Agreements for Union Recognition ...................................................... 1

II. Section 302 of the Labor-Management Relations Act .................................................. 4

III. The Procedural and Factual History of this Case .......................................................... 6

ARGUMENT .................................................................................................................................. 9

I. Section 302 Does Not Create a Private Right of Action ............................................... 9

II. Section 302 Does Not Prohibit the Terms of the Ground-Rules Agreement Challenged by the Plaintiffs ........................................................................................ 14

A. The Text of Section 302 Does Not Justify the Plaintiffs Proposed

Interpretation ......................................................................................................... 15 B. The Statutory Context Does Not Support the Plaintiffs Proposed

Interpretation of Section 302 ................................................................................ 17 C. The Legislative History of Section 302 Does Not Support the Plaintiffs

Proposed Interpretation ......................................................................................... 22 CONCLUSION ............................................................................................................................. 25


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TABLE OF AUTHORITES

Cases: Adcock v. Freightliner LLC, 550 F.3d 369 (4th Cir. 2008), cert. denied, 668 U.S. 932 (2009) ................. 5, 6, 16, 18, 20 AK Steel Corp. v. United Steelworkers of Am., 163 F.3d 403 (6th Cir. 1998) ............................................................................................ 21 Alexander v. Sandoval, 532 U.S. 275 (2001) ...................................................................................................... 9, 13 Am. Premier Underwriters, Inc. v. Nat'l R.R. Passenger Corp., 709 F.3d 584 (6th Cir. 2013) ............................................................................................ 10 Amalgamated Clothing & Textile Workers Union v. Facetglas, Inc., 845 F.2d 1250 (4th Cir. 1988) ...................................................................................... 4, 20 Amalgamated Clothing Workers of Am. v. Richman Bros.Co., 348 U.S. 511 (1955) .......................................................................................................... 12 Arroyo v. United States, 359 U.S. 419 (1959) ................................................................................................ 5, 11, 22 Bakerstown Container Corp. v. Int'l Bhd. of Teamsters, 884 F.2d 105 (3d Cir. 1989).............................................................................................. 13 BASF Wyandotte Corp. v. Local 227, Int'l Chem. Workers Union, 791 F.2d 1046 (2d Cir. 1986)............................................................................................ 24 Bowling Green v. Martin Land Dev. Co., 561 F.3d 556 (6th Cir. 2009) ............................................................................................ 10 Bullock v. Bank-Champaign, N.A., 133 S. Ct. 1754 (2013) ...................................................................................................... 16 Burlington N.R. Co. v. Bhd. of Maint. of Way Emps., 481 U.S. 429 (1987) .......................................................................................................... 13 California v. Sierra Club, 451 U.S. 287 (1981) .......................................................................................................... 11 Cannon v. Univ. of Chicago, 441 U.S. 677 (1979) .................................................................................................... 10, 11


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Caswell v. City of Detroit Hous. Comm'n, 418 F.3d 615 (6th Cir. 2005) ............................................................................................ 11 Chamber of Commerce v. Brown, 554 U.S. 60 (2008) ............................................................................................................ 21 Cort v. Ash, 422 U.S. 66 (1975) ............................................................................................................ 10 Credit Suisse Sec. (USA) LLC v. Billing, 551 U.S. 264 (2007) .......................................................................................................... 14 Dana Corp., 356 N.L.R.B. No. 49 (2010) ............................................................................................. 19 Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) .......................................................................................................... 11 Green v. Bock Laundry Mach. Co., 490 U.S. 504 (1989) .......................................................................................................... 22 Hosp. Emps. Div. of Local 79 v. Mercy-Memorial Hosp. Corp., 862 F.2d 606 (6th Cir. 1988), vacated on other grounds, 492 U.S. 914 (1989) ............... 13 Hotel & Rest. Emps. Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561 (2d Cir. 1993)...................................................................................... 3, 4, 18 Hotel Emps. & Rest. Emps. Union, Local 57 v. Sage Hospitality Res., LLC, 390 F.3d 206 (3d Cir. 2004), cert. denied 544 U.S. 1010 (2005) ....................... 5, 6, 16, 18 Hotel Emps., Rest. Emps. Union, Local 2 v. Marriott Corp., 961 F.2d 1464 (9th Cir. 1992) ............................................................................................ 4 Int'l Union v. Dana Corp., 278 F.3d 548 (2002) .......................................................................................................... 21 Johnson v. City of Detroit, 446 F.3d 614 (6th Cir. 2006) ............................................................................................ 15 Kimbrell v. NLRB, 290 F.2d 799 (4th Cir. 1961) ............................................................................................ 18 Linden Lumber Div., Summer & Co. v. NLRB, 419 U.S. 301 (1974) ............................................................................................................ 3


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Local 357, Int'l Bhd. of Teamsters v. NLRB, 365 U.S. 667 (1961) .......................................................................................................... 23 Mik v. Fed. Home Loan Mortg. Corp., 743 F.3d 149 (6th Cir. 2014) ........................................................................................ 9, 10 Montague v. NLRB, 698 F.3d 307 (6th Cir. 2012) ............................................................................................ 19 Mulhall v. Unite Here Local 355, 667 F.3d 1211 (11th Cir. 2012) ............................................................................... 5, 6, 15 Muniz v. Hoffman, 422 U.S. 454 (1975) .......................................................................................................... 13 New Process Steel, L.P. v. NLRB, 560 U.S. 674 (2010) .......................................................................................................... 15 NLRB v. American Nat'l Ins. Co., 343 U.S. 395 (1952) ............................................................................................................ 2 NLRB v. Gissel Packing Co., 395 U.S. 575 (1969) ............................................................................................................ 3 NLRB v. L. Ronney & Sons Furniture Mfg. Co., 206 F.2d 730 (9th Cir. 1953) ............................................................................................ 18 NLRB v. Virginia Elec. & Power Co., 314 U.S. 469 (1941) ............................................................................................................ 3 NLRB v. Waterman S.S. Corp., 309 U.S. 206 (1940) .......................................................................................................... 18 Otis Hospital, 219 N.L.R.B. 164 (1975) .................................................................................................... 3 Radio Officers Union v. NLRB, 347 U.S. 17 (1954) ............................................................................................................ 23 Scheidler v. Nat'l Org. for Women, Inc., 547 U.S. 9 (2006) .............................................................................................................. 22 Sinclair Refining Co. v. Atkinson, 370 U.S. 195 (1962) .......................................................................................................... 13


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Textile Workers Union of Am. v. Lincoln Mills, 353 U.S. 448 (1957) .......................................................................................................... 17

Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) .......................................................................................................... 11 Unite Here Local 355 v. Mulhall, 134 S. Ct. 594 (2013) ................................................................................................ 6, 7, 13 United States v. Boffa, 688 F.2d 919 (3d Cir. 1982).............................................................................................. 16 United States v. Burge, 990 F.2d 244 (6th Cir. 1992) ............................................................................................ 16 United States v. Douglas, 634 F.3d 852 (6th Cir. 2011) ............................................................................................ 16 United States v. Jeter, 775 F.2d 670 (6th Cir. 1985) ............................................................................................ 15 United States v. Marmolejo, 89 F.3d 1185 (5th Cir. 1996) ............................................................................................ 15 United States v. Nilsen, 967 F.2d 539 (11th Cir. 1992) .......................................................................................... 15 United States v. Palumbo Bros., 145 F.3d 850 (7th Cir. 1998) .............................................................................................. 2 United States v. Roth, 333 F.2d 450 (2d Cir. 1963).............................................................................................. 11 United States v. Ryan, 350 U.S. 299 (1956) .......................................................................................................... 22 United States v. Schiffman, 552 F.2d 1124 (5th Cir. 1977) .......................................................................................... 16 United States v. Townsend, 630 F.3d 1003 (11th Cir. 2011) ........................................................................................ 15 Ventimiglia v. United States, 242 F.2d 620 (4th Cir. 1957) ............................................................................................ 24


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Verizon Info. Sys., 335 N.L.R.B. 558 (2001) .............................................................................................. 4, 18 Wolgast Corp. v. NLRB, 349 F.3d 250 (6th Cir. 2003), enforcing 334 N.L.R.B. 203 (2001) .................................. 21 Statutes: 28 U.S.C. 517 ............................................................................................................................... 1 29 U.S.C. 101 ............................................................................................................................. 13 Labor Management Cooperation Act of 1978, 5(b), 29 U.S.C. 175a ..................................... 20 National Labor Relations Act, 29 U.S.C. 151 et seq. ........................................................ 1, 2, 19 29 U.S.C. 151 ............................................................................................................. 1, 18 29 U.S.C. 153 ................................................................................................................... 2 29 U.S.C. 154 ................................................................................................................... 2 29 U.S.C. 153 ................................................................................................................... 2 29 U.S.C. 156 ................................................................................................................... 2 29 U.S.C. 157 ................................................................................................................... 2 29 U.S.C. 158 ................................................................................................................... 2 29 U.S.C. 158(a)(2) ........................................................................................................ 12 29 U.S.C. 158(a)(3) ........................................................................................................ 23 29 U.S.C. 158(a)(5) .......................................................................................................... 3 29 U.S.C. 158(b) ............................................................................................................ 23 29 U.S.C. 158(b)(3) ......................................................................................................... 2 29 U.S.C. 158(b)(6) ....................................................................................................... 12 29 U.S.C. 158(c) ............................................................................................................ 23 29 U.S.C. 158(d) .............................................................................................................. 2 29 U.S.C. 158(2) ............................................................................................................ 24 29 U.S.C. 159 ............................................................................................................. 2, 19 29 U.S.C. 159(c) .............................................................................................................. 3 29 U.S.C. 159(c)(1) .......................................................................................................... 3 29 U.S.C. 159(e) .............................................................................................................. 3 29 U.S.C. 160 ................................................................................................................... 2 29 U.S.C. 160(e) ............................................................................................................ 12 29 U.S.C. 160(j) ............................................................................................................. 12 29 U.S.C. 160(l) ............................................................................................................. 12 29 U.S.C. 161 ................................................................................................................... 2 29 U.S.C. 162 ................................................................................................................... 2


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Labor-Management Relations Act of 1947, 29 U.S.C. 141 ............................................................................................................. 5, 24 29 U.S.C. 185 ............................................................................................................. 4, 23 29 U.S.C. 186 .......................................................................................................... passim 29 U.S.C. 186(a) ........................................................................................................ 1, 10 29 U.S.C. 186(a)(2) ................................................................................................ 4, 8, 16 29 U.S.C. 186(b) ........................................................................................................ 1, 10 29 U.S.C. 186(b)(1) ............................................................................................... 5, 8, 16 29 U.S.C. 186(c) ...................................................................................... 5, 10, 11, 16, 17 29 U.S.C. 186(c)(9) ........................................................................................................ 20 29 U.S.C. 186(d) ................................................................................................ 10, 11, 16 29 U.S.C. 186(e) ............................................................................................ 1, 10, 11, 12 Labor-Management Reporting and Disclosure Act, 29 U.S.C. 433 .......................................... 16 Pub. L. No. 86-257, 505, 73 Stat. 537 ....................................................................................... 25 Miscellaneous: 92 Cong. Rec. 5180, 5181 (1946) (statement of Sen. Overton) .................................................... 22 92 Cong. Rec. 4900 (1946) (statement of Sen. Byrd) ................................................................... 22 92 Cong. Rec. 4746 (1947) (statement of Sen. Taft) .................................................................... 23 104 Cong. Rec. 16,464 (1958) (statement of Rep. McGovern) .................................................... 25 H.R. Rep. No. 98-1159 (1984) (Conf. Rep.), reprinted in 1984 U.S.C.C.A.N. 3712 .................................................................................................. 12 H.R.J. Res. 648, 98th Cong., 2d Sess. (1984) ............................................................................... 12 H.R. Rep. No. 245, 80th Cong., 1st Sess. (1947) ......................................................................... 24 S. Rep. No. 98-83, 98th Cong., 1st Sess. (1983) .......................................................................... 12 S. Rep. No. 105, 80th Cong., 1st Sess. (1947) .............................................................................. 22 S. Rep. No. 187, 86th Cong., 1st Sess. (1959) .............................................................................. 25 Adrienne E. Eaton & Jill Kriesky, Union Organizing Under Neutrality and Card Check Agreements, 55 Indus. & Lab. Rel. Rev. 42 (2001)................................. 4


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Collective Bargaining Contracts: Techniques of Negotiation and Administration with Topical Classification of Clauses (BNA 1941) .......................................................... 3 Harry A. Millis & Emily Clark Brown, From the Wagner Act to Taft-Hartley, A Study of National Labor Policy and Labor Relations (1950)........................................ 17 http://www.dol.gov/olms/regs/compliance/LM10_FAQ.htm (FAQs 18 & 19) (last visited May 20, 2014) ............................................................................................... 17 Ninth Annual Report of the National Labor Relations Board for the Fiscal Year Ended June 30, 1944 (1944)................................................................................. 3, 17 Press Release, UAW, UAW Withdraws Volkswagen Election Objections (Apr. 21, 2014), available at http://uaw.org/articles/uaw-withdraws- volkswagen-election-objections (last visited May 20, 2014) ............................................. 8 Union Contract and Collective Bargaining, 4 Labor Equipment (PH) (1948) .......................... 3, 4 Websters Third New International Dictionary (1993) ................................................................ 16


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STATEMENT OF INTEREST

The United States of America respectfully submits this statement of interest in

accordance with 28 U.S.C. 517. The plaintiffs in this case seek injunctive and declaratory relief

under Section 302 of the Labor-Management Relations Act of 1947 (LMRA), 29 U.S.C. 186,

alleging that a voluntary agreement between an employer and a labor union establishing ground

rules for potential union recognition violates the statute. The Department of Justice enforces the

statutes criminal prohibition. The National Labor Relations Board (NLRB) is responsible for

administering the National Labor Relations Act, 29 U.S.C. 151 et seq., which includes

resolving labor disputes and encouraging voluntary labor-management agreements. The United

States therefore has a significant interest in the Courts disposition of this case.

STATEMENT OF THE ISSUES

The United States will address the following issues:

1. Whether Section 302(e) of the Labor-Management Relations Act of 1947, 29

U.S.C. 186(e), creates a private right of action to seek injunctive and declaratory relief for

alleged violations of Sections 302(a) and (b) of the Act, 29 U.S.C. 186(a) & (b).

2. Whether Section 302 prohibits a voluntary agreement between a union and

employer setting the ground rules for a union organizing campaign in which the employer agrees

to (1) hold meetings with employees at which the union is present, (2) allow union access to the

employers property for organizing purposes, and (3) remain neutral with respect to unionization.

BACKGROUND

I. Ground-Rules Agreements for Union Recognition

Federal law regulates labor-management relations to minimize industrial strife. 29 U.S.C.

141 & 151. Consistent with that goal, employers and unions may enter into voluntary


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agreements establishing procedures for organizing campaigns and union recognition. These

agreements have long been recognized as lawful by the NLRB and enforced by the courts.

1. The National Labor Relations Act (NLRA), 29 U.S.C. 151 et seq., enacted in

1935, create[d] a national, uniform body of labor law and policy in order to protect the

stability of the collective bargaining process and maintain peaceful industrial relations.

United States v. Palumbo Bros., 145 F.3d 850, 861 (7th Cir. 1998). Congress established a

centralized administrative agency, the National Labor Relations Board, to administer the NLRA

and to resolve labor disputes. See 29 U.S.C. 153-156, 160-162.

The NLRA sets out an integrated scheme governing employees, employers, and unions

during organizing campaigns, representation elections, and collective bargaining. Section 7 first

sets forth the fundamental rights of employees to self-organization; to form, join, or assist

labor organizations; to bargain collectively; and to engage in other concerted activities; as

well as the right to refrain from any or all of such activities. 29 U.S.C. 157. The NLRA then

prohibits certain union and employer unfair labor practices that interfere with the rights of

employees. 29 U.S.C. 158. It sets out procedures for union recognition, 29 U.S.C. 159, and

makes clear that, once a union is recognized, both the employer and the union have an obligation

to bargain collectively, 29 U.S.C. 158(a)(5), (b)(3) & (d).

2. Voluntary resolution of labor-management disputes is at the core of the NLRA.

See NLRB v. American Natl Ins. Co., 343 U.S. 395, 401-02 (1952). The NLRA is designed to

promote industrial peace by encouraging the making of voluntary agreements governing

relations between unions and employers. Id.

a. Voluntary agreement is particularly important in the context of union recognition.

Although the NLRA entitles an employer to request a secret-ballot election overseen by the


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NLRB, 29 U.S.C. 159(c)(1) & (e); see Linden Lumber Div., Summer & Co. v. NLRB, 419

U.S. 301, 305-06 (1974), an employer may agree to recognize a union as the exclusive

bargaining representative if the union demonstrates majority support through other means, see,

e.g., NLRB v. Gissel Packing Co., 395 U.S. 575, 597 (1969) (card-check procedure). Even in

elections overseen by the NLRB, it has long been common for employers and unionswith

encouragement from the NLRBto reach agreement about such vital issues as the scope of the

unit in which the election will be held and the identity of eligible voters. See Otis Hospital, 219

N.L.R.B. 164, 164-65 (1975); Ninth Annual Report of the National Labor Relations Board for

the Fiscal Year Ended June 30, 1944, at 8-11 (1944). Voluntary agreement with respect to the

procedures for recognition benefits both employers and unions by providing a path for peaceful

resolution of those tensions inevitably flowing from a union organizing effort. Hotel & Rest.

Emps. Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 566 (2d Cir. 1993).

b. In addition to voluntary agreement with respect to elections, it has also long been

common for employers and unions to agree on ground rules for a union organizing campaign.

Since the NLRAs beginning, for example, employers have agreed to provide unions with access

to their propertyincluding bulletin boards and the employers facilitiesand lists of

employees for purposes of organizing. See Collective Bargaining Contracts: Techniques of

Negotiation and Administration with Topical Classification of Clauses 149, 586 (BNA 1941);

Union Contract and Collective Bargaining, 4 Labor Equipment (PH) 53,280 (Mar. 15, 1948),

56,754.6 (Apr. 26, 1948). Similarly, after the Supreme Court clarified in 1941 that employers

had the right to speak for or against unionization so long as their speech was not unduly coercive,

see NLRB v. Virginia Elec. & Power Co., 314 U.S. 469, 477 (1941), some employers chose to


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exercise their speech rights by agreeing not to engage in antagonistic propaganda, Union

Contracts and Collective Bargaining 53,352 (Apr. 15, 1946).

Agreements setting the grounds rules for union organizing campaigns have become

prevalent. See Adrienne E. Eaton & Jill Kriesky, Union Organizing Under Neutrality and Card

Check Agreements, 55 Indus. & Lab. Rel. Rev. 42, 46-48 (2001). The terms in these agreements

vary, but typical terms have included the employers agreement to refrain from expressing its

views about union representation and to provide the union with access to the employers

facilities and with a list of names and addresses of employees. Id.; see also, e.g., Hotel Emps.,

Rest. Emps. Union, Local 2 v. Marriott Corp., 961 F.2d 1464, 1467-68, 1470 (9th Cir. 1992).

The NLRB has approved such agreements and respected their terms, see, e.g., Verizon Info. Sys.,

335 N.L.R.B. 558, 558-60 & n.7 (2001), and courts have routinely enforced ground-rules

agreements containing similar provisions under 29 U.S.C. 185, which permits suits for

violation of contracts between an employer and a labor organization, see, e.g., J.P. Morgan

Hotel, 996 F.2d at 563, 566-68; Marriott Corp., 961 F.2d at 1467-70; Amalgamated Clothing &

Textile Workers Union v. Facetglas, Inc., 845 F.2d 1250, 1252-53 (4th Cir. 1988).

II. Section 302 of the Labor-Management Relations Act

1. Section 302 of the Labor-Management Relations Act of 1947, 29 U.S.C. 186,

makes it a crime for any employer . . . to pay, lend, or deliver, or agree to pay, lend, or deliver,

any money or other thing of value . . . to any labor organization, or officer or employee of such

an organization, that represents or seeks to represent the employers employees. 29 U.S.C.

186(a)(2). The statute also makes it a crime for a labor union to request, demand, receive, or

accept, or agree to receive or accept, any payment, loan, or delivery of any money or other thing


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of value prohibited by subsection (a). 29 U.S.C. 186(b)(1). These prohibitions have several

exceptions that are not at issue in this case. See 29 U.S.C. 186(c).

Section 302s purpose is to stop corruption of collective bargaining through bribery of

employee representatives by employers, extortion by employee representatives, and abuse

[of power] by union officers. Arroyo v. United States, 359 U.S. 419, 425-26 (1959).

2. The courts of appeals have expressed different views on whether an agreement to

establish ground rules for an organizing campaign, such as an employers agreement to remain

neutral and provide union access to company property, may violate Section 302. The Third and

Fourth Circuits have held that agreements containing these or similar terms fall outside the scope

of Section 302. See Adcock v. Freightliner LLC, 550 F.3d 369 (4th Cir. 2008), cert. denied, 558

U.S. 932 (2009); Hotel Emps. & Rest. Emps. Union, Local 57 v. Sage Hospitality Res., LLC, 390

F.3d 206 (3d Cir. 2004), cert. denied, 544 U.S. 1010 (2005). Those courts explained that the

statutory text and the overall structure and purposes of the federal labor laws counsel against

making voluntary ground-rules agreements criminal under Section 302. See Adcock, 550 F.3d at

375-76; Sage, 390 F.3d at 218-19.

In Mulhall v. Unite Here Local 355, 667 F.3d 1211 (11th Cir. 2012), a divided panel of

the Eleventh Circuit concluded that under some circumstances, Section 302 could reach such an

agreement. The employer and union had entered into an agreement in which the employer agreed

to remain neutral during the unions organizing campaign, to give the union access to its property

for organizing purposes, and to provide the union with the names and contact information of

employees. Id. at 1213. The Eleventh Circuit held that these types of organizing assistance can

be a thing of value that, if demanded or given as payment, could constitute a violation of 302.

Id. at 1213. The court acknowledged that [e]mployers and unions may set ground rules for an


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organizing campaign, but in the courts view, these innocuous ground rules can become illegal

payments if used as valuable consideration in a scheme to corrupt a union or to extort a benefit

from an employer. Id. at 1215.

The Supreme Court granted a writ of certiorari in Mulhall, but after briefing and oral

argument, the Court dismissed the writ as improvidently granted. Unite Here Local 355 v.

Mulhall, 134 S. Ct. 594 (2013). Justice Breyer, joined by Justices Sotomayor and Kagan,

dissented from the decision to dismiss the writ. Id. at 594-95. [I]n considering the briefs and

argument, Justice Breyer stated, the Court became aware of two logically antecedent

questions that could have prevented it from reaching the question of the correct interpretation

of 302. Id. at 595. Specifically, Justice Breyer observed that the case was potentially moot,

because the agreement between the union and employer had expired, and that Mulhall, the sole

plaintiff in the case, arguably lacked Article III standing. Id. Justice Breyer would have asked for

additional briefs on standing and mootness, rather than dismiss the writ of certiorari. Id. at 595.

He also would have directed briefing on a third question, namely whether 302 authorizes a

private right of action. Id. at 595.

III. The Procedural and Factual History of this Case

1. The defendant United Autoworkers Union (UAW) is a union that sought to

become the exclusive bargaining representative for employees of defendants Volkswagen Group

of America and Volkswagen Group of America Chattanooga Operations, collectively

Volkswagen, which manufacture automobiles at a plant in Chattanooga, Tennessee. Compl.

3-7. On January 27, 2014, UAW and Volkswagen entered into a voluntary agreement that,

among other things, set ground rules for an organizing campaign by UAW. Compl., Ex. A

(Agreement).


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In the agreement, UAW and Volkswagen agreed to jointly petition the NLRB for an

expedited secret-ballot election overseen by the NLRB on February 12 to 14, 2014. Compl. 11.

UAW agreed not to visit employees at their homes and not to make negative comments about

Volkswagen during the organizing campaign. Id. 12(d). UAW also agreed that if elected

exclusive bargaining representative it would delegate many of its responsibilities and functions

to a Works Council populated by individuals selected by Volkswagen employees, including

employees not represented by UAW, id. at 12(a); it would not engage in picketing or strikes

while the parties negotiated an initial collective bargaining agreement, id. at 12(c); and it

would, when negotiating a collective bargaining agreement, endeavor to maintain[] and where

possible enhanc[e] the cost advantages and other competitive advantages that [Volkswagen]

enjoys relative to its competitors in the United States and North America, id. at 12(b). For its

part, Volkswagen agreed that during the organizational campaign it would conduct meetings

with all its employees, during work time, where it would voice support for a Works Council and

allow UAW to solicit support from employees. Id. 11(a). Volkswagen also agreed to allow

UAW use of company property for organizing activities and not to take a position opposed to

UAW or union representation. Id. 11(b) & (c).

The parties complied with the agreement and, in February 2014, an election was held.

Compl. 15-19. The employees voted 712 to 626 against representation by UAW. Id. 19. As

a result, Volkswagen does not have any further obligations under the agreement, Agreement

8, and UAW may not conduct an organizing campaign and seek recognition at Volkswagen for

one year, unless during that period another union commences a serious, concerted and

legitimate effort to organize Volkswagen employees, Agreement 6(c).


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UAW then filed objections with the NLRB seeking to invalidate the results of the

election and require that it be redone. Compl. 20.

2. On March 12, 2014, three employees of VolkswagenMichael Burton, Michael

Jarvis, and David Reedfiled the present suit. Compl. 6. The complaint alleges that there is

imminent risk that Volkswagen will violate Section 302(a)(2) by providing what plaintiffs

call organizing assistancethe all-employee meetings, use of company property, and

neutrality promised in the ground-rules agreement in the event of a rerun election. Id. 21,

31. The complaint also asserts an imminent danger that UAW will violate Section 302(b)(1)

by requesting this assistance in the event of a rerun election. Id. 32-33. The complaint also

alleges that Volkswagen presently is violating Section 302(a)(2) because it agreed to pay,

lend, or deliver these three types of organizing assistance to UAW, Compl. 30, and that UAW

is violating Section 302(b)(1) because it agreed to accept the organizing assistance from

Volkswagen. Id. 32-33.

Plaintiffs seek injunctive relief prohibiting Volkswagen from providing, and UAW from

requesting, the allegedly unlawful organizing assistance promised in the agreement. Compl. pp.

11 (Prayer for Relief). Plaintiffs also seek a declaratory judgment that Volkswagen and UAW

have violated and will violate Section 302 by providing and requesting the organizing assistance.

Id. at 11-12.

3. After the plaintiffs filed their complaint, UAW chose to withdraw the objections

to the election it had filed with the NLRB. See Press Release, UAW, UAW Withdraws

Volkswagen Election Objections (Apr. 21, 2014), available at http://uaw.org/articles/uaw-

withdraws-volkswagen-election-objections (last visited May 20, 2014). On April 21, 2014, the

NLRB certified the results of the election.


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ARGUMENT

This statement of interest addresses two questions about the scope of Section 302 that are

of specific interest to the United States: whether Section 302 creates a private right of action and

whether Section 302 applies to the ground-rules agreement at issue here. Section 302 does not

create a private right of action to enforce its prohibitions, and it does not, as alleged by plaintiffs,

prohibit employers from agreeing to provide, in a ground-rules agreement for resolving questions

concerning representation, organizing assistance of the type challenged in this case. There is a

substantial danger that if construed in the manner urged by plaintiffs Section 302 will disturb the

finely-wrought balance of the federal labor laws.1

I. Section 302 Does Not Create a Private Right of Action

Section 302 does not create a right of action for private parties to seek relief for alleged

violations of the statute. The language, structure, and legislative history of Section 302 evince no

intent on the part of Congress to create a private right of action. The statute establishes criminal

prohibitions, to be enforced by the government, and authorizes the governmentand only the

governmentto seek injunctive relief.

1. [P]rivate rights of action to enforce federal law must be created by Congress.

Alexander v. Sandoval, 532 U.S. 275, 286 (2001). Congress may create a private right of action

expressly or by implication. Mik v. Fed. Home Loan Mortg. Corp., 743 F.3d 149, 158 (6th Cir.

2014). But the mere fact that a federal statute has been violated and some person harmed does

1 There also appear to be substantial questions of standing and mootness in this case. The results of the election, upon their certification by the NLRB, appear to extinguish Volkswagens contractual obligations to provide organizing assistance to UAW. Although the complaint alleges that UAWs challenge to the results of the election creates an imminent risk of future violations of Section 302, UAW withdrew that challenge. The United States confines its brief to questions regarding the scope of Section 302.


10

not automatically give rise to a private cause of action in favor of that person. Cannon v. Univ.

of Chicago, 441 U.S. 677, 688 (1979). The judicial task is to interpret the statute Congress has

passed to determine whether it displays an intent to create not just a private right but also a

private remedy. Sandoval, 532 U.S. at 286 (emphasis added). Congressional intent is the

lodestar, see Bowling Green v. Martin Land Dev. Co., 561 F.3d 556, 559 (6th Cir. 2009), and to

discern that intent, courts consider (1) whether the statute create[s] a federal right in favor of the

plaintiff, (2) whether there is any indication of legislative intent, explicit or implicit, either to

create or to deny a remedy for the plaintiff, (3) whether it is consistent with the underlying

purposes of the legislative scheme to imply such a remedy for the plaintiff, and (4) whether the

cause of action [is] one traditionally relegated to state law, so that it would be inappropriate to

infer a cause of action based solely on federal law, Cort v. Ash, 422 U.S. 66, 78 (1975); see

generally Am. Premier Underwriters, Inc. v. Natl R.R. Passenger Corp., 709 F.3d 584, 593 (6th

Cir. 2013) (finding no private right of action after considering the four Cort factors); Bowling

Green, 561 F.3d at 559-61 (same); Mik, 743 F.3d at 158-60 (same).

2. The text and history of Section 302, considered in light of these factors, establish

that Congress did not intend to create a private right of action. Section 302(a) and Section 302(b)

define prohibited transactions involving employers, unions, employees, and their agents. 29

U.S.C. 186(a) & (b). Section 302(c) enumerates exceptions to these prohibitions. 29 U.S.C.

186(c). Section 302(d) creates criminal penalties for willful violations. 29 U.S.C. 186(d).

And Section 302(e) provides that federal district courts shall have jurisdiction . . . to restrain

violations of Section 302, without limitations that apply in other contexts. 29 U.S.C. 186(e).

These provisions create a mechanism for government, not private, enforcement of rules intended

to root out and prevent corruption and bribery in the labor context.


11

a. In order for a statute to create a private right, its text must be phrased in terms of

the persons benefited. Gonzaga Univ. v. Doe, 536 U.S. 273, 283-84 (2002) (quoting Cannon,

441 U.S. at 692 n.13). Congress must confer the right in clear and unambiguous terms.

Caswell v. City of Detroit Hous. Commn, 418 F.3d 615, 619 (6th Cir. 2005) (quoting Gonzaga,

536 U.S. at 290). Statutes that focus on the person regulated rather than the individuals

protected create no implication of an intent to confer rights on a particular class of persons.

Sandoval, 532 U.S. at 289 (quoting California v. Sierra Club, 451 U.S. 287, 294 (1981)).

Section 302 does not create any private right. The text of Section 302 describes in detail

the prohibited conduct of employers, unions, and employeesprohibiting employers from

delivering things of value to labor organizations, for example, and labor organizations from

accepting such things of value from employers. The text does not, however, contain any

language conferring rights on a particular class or identifying a particular class as an intended

beneficiary. As a result, [t]he question whether Congress . . . intended to create a private right

of action [is] definitively answered in the negative. Gonzaga, 536 U.S. at 283-84 (quoting

Touche Ross & Co. v. Redington, 442 U.S. 560, 576 (1979)) (alterations in Gonzaga).

b. There is no indication of legislative intent to create a remedy for private parties

for violations of Section 302. Section 302 was enacted to prevent bribery and corruption in the

labor context. Arroyo, 359 U.S. at 425-26; accord United States v. Roth, 333 F.2d 450, 453 (2d

Cir. 1963). Consistent with that purpose, the statute establishes criminal penalties to be pursued

by the government. 29 U.S.C. 186(d). Although Section 302 also creates federal district court

jurisdiction to restrain violations of the statute, 29 U.S.C. 186(e), that provision is best

understood as establishing jurisdiction for injunctive relief sought by the government.


12

The legislative history supports this conclusion. In the early 1980s, Congress considered

but rejected amendments to Section 302(e) that would have given the United States explicit

standing to enjoin violations of Section 302 where the criminal intent required for criminal

prosecution was lacking, see S. Rep. No. 98-83, 98th Cong., 1st Sess. 13 (1983); and that would

have explicitly provided a right of action for suits brought by any person directly affected by the

alleged violation, id. The Senate Labor Committee explained that the amendments would have

specified jurisdiction for suits to restrain violations of [Section 302] brought by any person

directly affected by the alleged violation. Id. at 12-13. These proposals were eliminated in the

Senate when the legislation was ultimately enacted in 1984. See H.R.J. Res. 648, 98th Cong., 2d

Sess. 585-86 (1984); H.R. Rep. No. 98-1159, at 416 (1984) (Conf. Rep.) (Amendment No. 136),

reprinted in 1984 U.S.C.C.A.N. 3712. Plainly there would have been no need to amend Section

302(e) to create a private right of action if such a right of action had been created when the

statute was enacted or previously amended.

c. It would also be inconsistent with the legislative scheme to imply a private right

of action in Section 302. Section 302 is but one component of an integrated scheme governing

employees, employers, and unions during organizing campaigns, representation elections, and

collective bargaining. See supra pp. 2-5. The NLRA allows private parties to file charges with

the NLRB alleging unfair labor practices by employers and unions, including charges based on

conduct that could also violate Section 302, and the NLRB may petition courts to enjoin conduct

it deems unlawful. See 29 U.S.C. 158(a)(2), 158(b)(6), 160(e), (j) & (l). It is well established

that the right to seek an order enjoining unfair labor practices is exclusively within the authority

of the Board. See, e.g., Amalgamated Clothing Workers of Am. v. Richman Bros. Co., 348 U.S.

511, 516-17 (1955). Allowing private parties to bring suits for injunctions under Section 302


13

would intrude into the governments administration of the federal labor laws and be inconsistent

with the basic policy of federal labor law that injunctive relief is prohibited in all but the

narrowest of circumstances. See, e.g., Burlington N.R. Co. v. Bhd. of Maint. of Way Emps., 481

U.S. 429, 437 (1987); 29 U.S.C. 101. Consistent with that basic policy, the same Congress that

enacted Section 302 in 1947 also rejected a proposal that would have allowed private parties to

seek injunctive relief in federal court for certain unfair labor practices. See Muniz v. Hoffman,

422 U.S. 454, 465-67 (1975) (discussing legislative history of Taft-Hartley Amendments).

3. In 1962, in Sinclair Refining Co. v. Atkinson, 370 U.S. 195 (1962), the Supreme

Court suggested in dictum that Section 302(e) permits private litigants to obtain injunctive relief.

Id. at 204-05 & n.19. Courts have relied on Sinclair in holding that Section 302(e) allows for a

private cause of action for injunctive relief but not damages. See Bakerstown Container Corp. v.

Intl Bhd. of Teamsters, 884 F.2d 105, 107 (3d Cir. 1989) (citing cases).

Those cases are not controlling. The basis for the dictum in Sinclair has since been

severely undermined. See Unite Here Local 355 v. Mulhall, 134 S. Ct. at 595 (Breyer, J.,

dissenting from dismissal) ([I]n light of the Courts more restrictive views on private rights of

action in recent decades, the legal status of Sinclair Refinings dictum is uncertain.) (internal

citation omitted). The understanding of private cause of action that held sway 40 years ago, at

the time that Sinclair was decided, has been abandoned. Sandoval, 532 U.S. at 286-87; see

Johnson v. City of Detroit, 446 F.3d 614, 621 (6th Cir. 2006) (describing recent Supreme Court

cases that altered the landscape of the law in this area).2 Section 302 must be considered in

2 The Sixth Circuit assumed that Section 302 creates a private right of action in Hosp. Emps. Div. of Local 79 v. Mercy-Memorial Hosp. Corp., 862 F.2d 606, 608 (6th Cir. 1988), vacated on other grounds, 492 U.S. 914 (1989), but the issue apparently was undisputed in that case.


14

light of the Supreme Courts modern private-right-of-action cases, and as discussed above, those

cases make clear that Section 302 does not create a private right of action.

II. Section 302 Does Not Prohibit the Terms of the Ground-Rules Agreement Challenged by the Plaintiffs

The plaintiffs allege that the defendants are violating or will violate Section 302 by way

of Volkswagen providing, and UAW requesting, three discrete forms of organizing assistance:

(1) employee meetings with UAW during work time; (2) UAW access to Volkswagen property

for purposes of organizing; and (3) Volkswagen neutrality with respect to UAW and union

representation. See Compl. 10, 29-33. Those routine ground-rules provisions in an organizing

campaign do not violate Section 302. The treatment of these terms as per se prohibited fits

poorly with the statutory language of Section 302. Equally important, construing Section 302 to

prohibit these types of provisions creates insurmountable tensions within the overall structure of

the labor lawsthreatening to substitute a regime of injunctions and per se prohibitions under

Section 302 for the nuanced and detailed administrative process overseen by the NLRB. The

legislative history is inconsistent with any claim that Congress intended to criminalize the

provision of organizing assistance of the type challenged by plaintiffs.

Under these circumstances, Section 302 cannot be read to invalidate ground-rules

agreements of the form at issue here. When particular conduct might be regulated under different

statutory provisions, courts endeavor to reconcile those provisions, paying particular attention to

whether the conduct is regulated by a specialized administrative scheme. See, e.g., Credit Suisse

Sec. (USA) LLC v. Billing, 551 U.S. 264, 275-76 (2007) (finding that securities laws and SEC,

rather than antitrust laws and district courts, exclusively regulate certain conduct in public

offerings). Even when a reading of a statute might be textually permissible in a narrow sense,

it may be structurally implausible, because it would render other statutory provisions


15

functionally void. New Process Steel, L.P. v. NLRB, 560 U.S. 674, 681 (2010). That is the case

here: Section 302 should not be interpreted to criminalize agreements that have long been

considered lawful under the NLRA as incidental to the process of resolving disputes about union

representation. The plaintiffs claims therefore must fail.

A. The Text of Section 302 Does Not Justify the Plaintiffs Proposed Interpretation

The key text plaintiffs rely on is the statutes prohibition on an employers pay[ing],

lend[ing], or deliver[ing] any money or other thing of value to a labor union or union official

or employee. 29 U.S.C. 186(a)(2). The broad phrase thing of value has been used in dozens

of provisions throughout the United States Code, including several criminal provisions.

Congress[s] frequent use of thing of value in various criminal statutes has evolved the phrase

into a term of art which the courts generally construe to envelop[] both tangibles and

intangibles. United States v. Nilsen, 967 F.2d 539, 542 (11th Cir. 1992) (citing cases); see

Mulhall, 667 F.3d at 1214-15. This broad interpretation is based upon a recognition that

monetary worth is not the sole measure of value. Nilsen, 967 F.2d at 542-43; see United States

v. Jeter, 775 F.2d 670, 680 (6th Cir. 1985) (Congress[s] very use of the more expansive thing

of value rather than property strongly implies coverage beyond mere tangible entities.).

Courts have found a wide variety of goods, services, and benefits to be things of value within

the meaning of the criminal laws.3

But several features of Section 302s text make this statute uniqueand a poor fit for the

contractual provisions challenged here. Section 302 applies only when an employer pay[s],

lend[s], or deliver[s] money or a thing of value to a labor union or union officer or employee, or

3 See, e.g., United States v. Townsend, 630 F.3d 1003, 1010-11 (11th Cir. 2011) (relaxed conditions of pretrial detention); United States v. Marmolejo, 89 F.3d 1185, 1191 (5th Cir. 1996) (conjugal visits).


16

the union or its officer or employee requests such a payment, loan, or delivery. 29 U.S.C.

186(a)(2) & (b)(1). The verbs pay, lend, and deliver capture transactions with a

corrupting potentialbut are inapt to describe an employers compliance with the terms of a

negotiated ground-rules agreement. See Sage, 390 F.3d at 219 (a ground-rules agreement for

organizing involves no payment, loan, or delivery of anything). Pay naturally refers to

compensation with money. E.g., Websters Third New International Dictionary 1659 (1993).

Lend typically refers to providing money or an item for temporary use on the condition it will

be returned. Id. at 1293. Deliver does have a more general meaning of give, transfer, or

yield possession or control of a thing. Id. at 597. But the canon of noscitur a sociis, see Bullock

v. Bank-Champaign, N.A., 133 S. Ct. 1754, 1760 (2013), suggests a financial-transfer focus for

this term as wellfor example, delivery of free tickets to a sporting event. See, e.g., United

States v. Douglas, 634 F.3d 852, 859 (6th Cir. 2011) (Section 302 applied to wage and benefit

payments to friends and relatives of union officials); United States v. Burge, 990 F.2d 244, 249-

50 (6th Cir. 1992) (sham consulting fees); United States v. Boffa, 688 F.2d 919, 935-36 (3d Cir.

1982) (use of an automobile); United States v. Schiffman, 552 F.2d 1124, 1126 (5th Cir. 1977)

(preferentially-low rates at a hotel).4 The statutory text therefore would not naturally encompass

the ground-rules agreement at issue here.5

4 Other parts of Section 302 similarly suggest a focus on financial transfers. See Adcock, 550 F.3d at 375 (penalty provision, Section 302(d), shows that Congress clearly intended 302s thing of value to have at least some ascertainable value); see also 29 U.S.C. 186(c) (exemptions pertaining to monetary and financial transactions). 5 Volkswagen correctly states (Br. in Supp. of Mot. to Dismiss 25) that the Department of Labor has not interpreted the disclosure provision in the Labor-Management Reporting and Disclosure Act, 29 U.S.C. 433, to require employers to report promises of the types at issue in this case. While the language of that provision may be read in the manner suggested by Volkswagen, i.e., to require reporting only of items with ascertainable value, DOLs guidance on the provision expressly states: [T]his guidance does not interpret the provisions of section 302(c), and conclusions reached by the Department regarding payments of the kind referred to in section


17

B. The Statutory Context Does Not Support the Plaintiffs Proposed Interpretation of Section 302

To the extent that the literal meaning of pay[ing], lend[ing], or deliver[ing] any money

or other thing of value could be construed to reach components of negotiated agreements over

ground rules for potential representation, Section 302 should be read not in a vacuum, but in light

of its origins, the surrounding body of labor law, and the disruptive effects of the plaintiffs

proposed approach. Reading Section 302 in that context makes clear that the plaintiffs view is

fundamentally at odds with the accepted premises and core goals of the federal labor laws. Their

proposed construction of Section 302 would upset settled understanding of the law by employers

and unions and would undermine Congresss goal of promoting industrial peace through

voluntary employer-union agreements.

1. As the Supreme Court has recognized, the NLRA expresses a federal policy

that industrial peace can be best obtained when employers and unions voluntarily reach

agreement and the federal courts . . . enforce these agreements. Textile Workers Union of Am.

v. Lincoln Mills, 353 U.S. 448, 455 (1957). Employers and unions have accordingly long entered

into, and the NLRB has sanctioned, so-called consent election agreements in which the parties

themselves resolve such potentially outcome-determinative election issues as voting eligibility,

the scope of the unit in which the election will be conducted, and the date of the election. See

NLRB, Ninth Annual Report of the National Labor Relations Board for the Fiscal Year Ended

June 30, 1944, at 8, 11 (1944); see also Harry A. Millis & Emily Clark Brown, From the Wagner

Act to Taft-Hartley, A Study of National Labor Policy and Labor Relations 87 (1950) (over a 12-

302(c) would not bind the Department of Justice in carrying out its criminal enforcement responsibilities. See http://www.dol.gov/olms/regs/compliance/LM10_FAQ.htm (FAQs 18 & 19) (last visited May 20, 2014).


18

year period nearly half [of the representation petitions] were reported as adjusted without

formal action). Employers have also long provided unions with access to employers premises

and supplied employee lists during organizing campaigns. See supra pp. 3-4. The NLRB and

courts have long sanctioned these practices, so long as employers provided the same

opportunities to rival unions. See, e.g., NLRB v. Waterman S.S. Corp., 309 U.S. 206, 209-10 &

n.4, 225-26 (1940) (access); Kimbrell v. NLRB, 290 F.2d 799, 802 (4th Cir. 1961) (access);

NLRB v. L. Ronney & Sons Furniture Mfg. Co., 206 F.2d 730, 735 (9th Cir. 1953) (employee

names and addresses). And as noted, the NLRB has recognized as lawful, and courts have

enforced, ground-rules agreements for the conduct of union organizing campaigns. See, e.g., J.P.

Morgan Hotel, 996 F.2d at 566 (2d Cir. 1993); Verizon Info. Sys., 335 N.L.R.B. at 558-60 & n.7.

Section 302 must be read against this backdrop. Plaintiffs contention that an employer

would commit a federal crime by complying with the terms of an agreement for the resolution of

representational disputes cannot be reconciled with the longstanding and settled body of law

allowing such agreements, including the particular provisions challenged here. These provisions

are useful in the process leading to voluntary recognition and are useful only for that purpose.

Such a procedural agreement (unlike plaintiffs hypothetical direct payment of cash) implicates

none of the concerns animating Section 302. These voluntary agreements do not involve bribery

or other corrupt practices and do not provide personal[] benefit[s] to union officials; instead,

they eliminate the potential for hostile organizing campaigns in the workplace. Adcock, 550

F.3d at 375; see Sage, 390 F.3d at 219. Reading the statute to criminalize such voluntary

agreements would penalize the friendly adjustment of industrial disputes, despite Congresss

longstanding policy of encouraging such cooperation as a way of avoiding industrial strife. 29

U.S.C. 151.


19

2. Criminalizing agreements to provide assistance during an organizing campaign

would also intrude upon the jurisdiction of the NLRB. The NLRB has been delegated

responsibility for resolving labor disputes, including disputes regarding union elections and

recognition. 29 U.S.C. 159. The Sixth Circuit accordingly has deferred to the primacy of the

NLRB in determining the legality of agreements between a union and employer that precede the

unions recognition as exclusive bargaining representative. See Montague v. NLRB, 698 F.3d

307, 314-16 (6th Cir. 2012), denying petition for review, Dana Corp., 356 N.L.R.B. No. 49

(2010). The court has recognized that Congress has given the Board the power to make

industrial policy as long as it is doing so within the confines of the statutory language and that

the balancing of conflicting legitimate interests in pursuit of the national policy of promoting

labor peace through strengthened collective bargaining is precisely the kind of judgment that . . .

should be left to the Board. Id. (internal citation and quotation marks omitted).

If a voluntary agreement between a union and employer results in unfair labor practices,

to the detriment of employees, the NLRB may seek to enjoin the offending conduct. In Adcock,

for example, although the court of appeals concluded that the agreement did not violate Section

302, the NLRB pursued unfair labor practice charges against the union and employer because the

union agreed not to seek wage increases for employees if elected the exclusive bargaining

representative. See 550 F.3d at 374-77. The plaintiffs in this case contend that UAW made

similar concessions. Compl. 9. They allege that through the ground-rules agreement UAW is

under the contractual control of Volkswagen, and Volkswagen can require UAW to delegate

its responsibilities to a company-funded Work Council, not strike or picket in support of better

wages or working conditions, and not seek wages or benefits for Plaintiffs and other Employees

that erode Volkswagens cost advantages vis--vis other automakers in North America. Compl.


20

24(b). These allegations are conclusory, but in any event, the proper recourse for the plaintiffs

to seek relief is to file unfair labor practice charges with the NLRB, not a private suit for

injunctive and declaratory relief under Section 302.6 The availability of such adequate

remedies, namely unfair labor practice proceedings before the NLRB, severely undermines

attempts to stretch 302 beyond its limits Adcock, 550 F.3d at 377; see also Facetglas, 845

F.2d at 1253 (enforcing a neutrality agreement that contained terms to be included in the parties

collective bargaining agreement if the union became recognized as bargaining representative).

3. Plaintiffs theory is also untenable because it would cast doubt on a host of other

voluntary agreements outside of the union-recognition context that play a key role in effectuating

the purposes of the NLRA, including some terms common in collective-bargaining agreements.

The fundamental policy of the labor laws is to encourage voluntary agreements that reduce labor

strife, and plaintiffs broad construction of Section 302 would invalidate innumerable such

agreementsmost or all of which provide a thing of value to a union that, plaintiffs would

maintain, is paid or delivered. The interpretation of Section 302 urged by the plaintiffs, for

example, would criminalize an employers agreement to allow union access to a plant or

employer bulletin board, yet as the Sixth Circuit has held, bargained-for access provisions

6 The plaintiffs appear to contend that these supposed concessions demonstrate the improper effects of the organizing assistance that Volkswagen provided to UAW. The plaintiffs do not, because they cannot, allege that UAWs agreement to these concessions alone violates Section 302. Section 302 does not prohibit a union from providing things of value to an employer; it only prevents employers from delivering (and the union or union representatives from accepting or receiving) thing[s] of value. Adcock, 550 F.3d at 376. Although the plaintiffs allege that Volkswagen agreed to fund the Works Council, Compl. 12(a) & 24(b), they do not allege that in doing so Volkswagen agreed to a payment that violates Section 302. See Compl. 10, 30-33 (specifying as things of value three forms of pre-election organizing assistance Volkswagen agreed to provide UAW); see also 29 U.S.C. 186(c)(9) (exempting from Section 302s prohibitions money or other things of value paid by an employer to a plant, area or industrywide labor management committee established for one or more of the purposes set forth in section 5(b) of the Labor Management Cooperation Act of 1978).


21

implement the employees own undisputed 7 right to negotiate and benefit from a collective

bargaining agreement which allows union access for purposes of investigating the premises and

interviewing employees on-site. Wolgast Corp. v. NLRB, 349 F.3d 250, 256 (6th Cir. 2003),

enforcing 334 N.L.R.B. 203 (2001). Similarly, while plaintiffs would construe Section 302 to

criminalize promises of neutrality during an organizing campaign, the Sixth Circuit has enforced

collective-bargaining agreements between a union and employer in which the employer agreed to

remain neutral if the union sought to mount an organizing campaign at unrepresented facilities

owned by the employer. See Intl Union v. Dana Corp., 278 F.3d 548 (2002); AK Steel Corp. v.

United Steelworkers of Am., 163 F.3d 403, 408 (6th Cir. 1998). Plaintiffs expansive reading of

Section 302 has the potential to criminalize virtually any term in a collective bargaining

agreement, which, by reinforcing the unions ability to win valuable concessions for its

members, allegedly would pay or deliver a thing of valueenhanced prestige and

influenceto the union. A system of peaceful adjustment of grievances or economic disputes

would thus become subservient to Section 302 and its exceptions.

Collective bargaining is the cornerstone of the NLRA. A theory of Section 302 that could

sweep in all employer agreements to provide a union with things it believes valuable and finds

objectively useful would subvert the statutes core provisions. Rather than upset the careful

balance Congress struck in the labor context between protection, prohibition, and laissez-faire

in respect to union organization, collective bargaining, and labor disputes, Chamber of

Commerce v. Brown, 554 U.S. 60, 65 (2008) (internal citations and quotation marks omitted),

this Court should reject the expansive and unwarranted interpretation of Section 302 advanced

by the plaintiffs.


22

C. The Legislative History of Section 302 Does Not Support the Plaintiffs Proposed Interpretation

A party contending that legislative action changed settled law has the burden of showing

that the legislature intended such a change. Green v. Bock Laundry Mach. Co., 490 U.S. 504,

521 (1989). A statute should not be construed to work a fundamental change in established law

absent a clear expression of congressional intent. See, e.g., Scheidler v. Natl Org. for Women,

Inc., 547 U.S. 9, 20 (2006). The legislative record provides no support for the conclusion that

Congress intended to criminalize ground-rules agreements affording union access and employer

neutrality when it enacted Section 302.

1. Section 302 resulted from congressional concern about corruption of collective

bargaining through bribery of employee representatives by employers, extortion [of

employers] by employee representatives, and abuse by union officers of the power which they

might achieve if welfare funds were left to their sole control. Arroyo, 359 U.S. at 425-26. The

statute reacted to a demand by the president of the United Mine Workers that a tax of 10 cents a

ton on coal be paid to the union for an indiscriminate use for so-called welfare purposes. S.

Rep. No. 105, 80th Cong., 1st Sess. 52 (1947) (Senate Report); see, e.g., United States v. Ryan,

350 U.S. 299, 304-05 (1956).

Members of Congress believed that if any such huge sums were to be paid to the union,

their use must be strictly safeguarded so that the funds would be used for the benefit of

employees rather than union officials. Senate Report 52; see Arroyo, 359 U.S. at 426. More

generally, the congressional debate reflects concern that if union officials could demand that

employers pay royalties on production, they might take[] advantage of the positions which they

occupy . . . to fill their own pockets. 92 Cong. Rec. 5180, 5181 (1946) (statement of Sen.

Overton); see, e.g., 92 Cong. Rec. 4900 (1946) (statement of Sen. Byrd) (provisions purpose is


23

to prevent the payment of a royalty to the representatives of a union); 92 Cong. Rec. 4746

(1947) (statement of Sen. Taft) (provision was intended to address extortion or a case where the

union representative is shaking down the employer). Congress therefore barred employers from

making payments to unions and union officials, and unions and union officials from demanding

such payments, except under certain circumstances. See LMRA 302, 61 Stat. 157.

2. Nothing in the legislative record suggests that Congress intended to criminalize

compliance with ground-rules agreements like the one at issue in this case. To the contrary, at the

same time Congress enacted Section 302, it enacted several other provisions that acknowledged

the validity of labor agreements that provided benefits to unions.

For example, Congress provided that an employer and union may mak[e] an agreement

that requires employees to become union members as a condition of employment. LMRA

101, 61 Stat. 140-141 (enacting 29 U.S.C. 158(a)(3) & (b)). As a result employers may

agree to require employees to pay union membership dues as a condition of employment, see

Radio Officers Union v. NLRB, 347 U.S. 17, 39-42 (1954). Congress also permitted agreements

making union-run hiring-halls the exclusive source of hiring referrals. See Local 357, Intl Bhd.

of Teamsters v. NLRB, 365 U.S. 667, 672-76 (1961). Congress underscored its commitment to

voluntary resolution of disputes by authorizing the federal courts to enforce contracts between

an employer and a labor organization. LMRA 301(a), 61 Stat. 156-157 (enacting 29 U.S.C.

185). These congressional actions permitting agreements that give valuable benefits to unions

and making these agreements enforceable in federal court are at odds with any inference that it

intended to criminalize agreements setting procedures for an organizing campaign.

Further, in 1947 Congress enacted 29 U.S.C. 158(c) to insure both to employers and

labor organizations full freedom to express their views to employees on labor matters. Senate


24

Report 23-24; see LMRA 101, 61 Stat. 142. And Members of Congress acknowledged, without

disturbing, the settled understanding that an employer can permit forms of union access to

employer property beyond what the NLRA requires. At the time of the 1947 amendments, the

NLRA provided that it was an unfair labor practice for an employer to dominate or interfere

with the formation or administration of any labor organization or contribute financial or other

support to it, but also stated that an employer was not prohibited from permitting employees to

confer with him during working hours without loss of time or pay. 29 U.S.C. 158(2) (1940).

While considering possible amendments to that provision, the House Report accepted as a

commonplace truth that an employer can do more for the union of his employees than the act,

by its terms, permits such as provid[ing] . . . bulletin boards for the unions use and

allow[ing] representatives of the union to confer not only with the employer but as well with

employees on company property. H.R. Rep. No. 245, 80th Cong., 1st Sess. 28-29 (1947); see

BASF Wyandotte Corp. v. Local 227, Intl Chem. Workers Union, 791 F.2d 1046, 1051-52 (2d

Cir. 1986). The Congress that expressly recognized employer free speech and took for granted

that employers may allow union access to employees and property would not have silently

outlawed voluntary employer-union agreements encompassing the very same elements.

3. The 1959 amendments to Section 302 likewise evidence no congressional intent

to criminalize voluntary agreements for organizing campaigns. As originally enacted, Section

302 provided that an employer could not pay or deliver any money or thing of value to any

representative of any of his employees who are employed in an industry affecting commerce. 61

Stat. 157. That language was interpreted to apply only to payments made to incumbent unions

and union representatives and not to unions seeking to become the collective bargaining

representative. See Ventimiglia v. United States, 242 F.2d 620, 623-24 (4th Cir. 1957).


25

To close this gap, Congress extended Section 302s reach to any labor organization, or

any officer or employee thereof, which represents, seeks to represent, or would admit to

membership, any of the employees of the employer. Pub. L. No. 86-257, 505, 73 Stat. 537

(emphasis added); see S. Rep. No. 187, 86th Cong., 1st Sess. 13 (1959). Although Congress

expressly extended Section 302 so that it would apply during the organizing process, no one

suggested that the statute would criminalize voluntary ground-rules agreements for organizing.

To the contrary, the one Member of Congress who mentioned such agreements found it obvious

that Section 302 would not prohibit card-check agreements and other similar agreements that are

part of normal and legitimate labor relations. 104 Cong. Rec. 16,464 (1958) (statement of Rep.

McGovern). Rather, he reaffirmed that the statute prohibits improper payments to union

officials, employees or middlemenin a word, it forbids bribes or pay-offs. Id.

CONCLUSION

If the Court does not dismiss the complaint for mootness or lack of standing, it should

nonetheless dismiss the complaint for the reasons stated above.

Respectfully submitted,

M. PATRICIA SMITH Solicitor of Labor ERIC C. HALLSTROM Special Counsel WILLIAM J. STONE Senior Attorney U.S. Department of Labor 200 Constitution Ave., N.W. Washington, D.C. 20210 RICHARD F. GRIFFIN, JR. General Counsel National Labor Relations Board Washington D.C. 20570

DAVID A. ONEIL Acting Assistant Attorney General DAVID M. BITKOWER Deputy Assistant Attorney General /s/John M. Pellettieri JOHN M. PELLETTIERI Attorney, Appellate Section Criminal Division U.S. Department of Justice 950 Pennsylvania Ave., N.W., Rm. 1260 Washington, D.C. 20530 (202) 307-3766 Dated: May 21, 2014


TABLE OF CONTENTSSTATEMENT OF INTERESTSTATEMENT OF THE ISSUESThe United States will address the following issues:CONCLUSION

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STATEMENT OF INTEREST OF THE UNITED STATES re: lawsuit against VW/UAW