Feds rule Kaiser lockout illegal Company to fight decision calling for Steelworkers to get back pay

Hannelore Sudermann - Staff writer

The National Labor Relations Board has ruled that Kaiser Aluminum illegally locked out Steelworkers at five plants.

The decision could make the company liable for wages of 2,900 Steelworkers back to Jan. 14, 1999, when the lockout began. Kaiser officials say they'll challenge the ruling before an administrative law judge.

Back-pay liability could total $270 million, according to the United Steelworkers of America union, whose labor dispute with the company has continued for 19 months.

The locked-out workers include 2,100 from the Mead refinery and Trentwood rolling mill and about 800 workers in Gramercy, La.; Newark, Ohio; and Tacoma.

Wednesday's decision by the NLRB's general counsel in Washington, D.C., is based on a union appeal to the board's national office after a regional director rejected 24 Steelworker allegations of unfair labor practices last summer.

NLRB General Counsel Leonard Page dismissed 22 of the 24 charges but upheld two. The company can either settle with the union or take the issue to trial.

The NLRB determined two of the union's allegations of unfair labor practices are valid:

• The company insisted on an impasse after the union rejected an offer that would have shifted major negotiating issues from the master bargaining unit to the individual plant level, instead of dealing with all five plants as a single bargaining unit.

• The company failed to make a bargaining proposal that was specific about the wage rate of new hires, who make up more than half of the bargaining unit.

These two issues arose in bargaining over the company's Dec. 17, 1998, contract offer. The offer was made 11 weeks into the Steelworkers strike over a contentious labor contract.

"Kaiser believes that the lockout is not illegal," said Chicago attorney Jeremy Sherman, lead negotiator for Kaiser, who noted that the NLRB ruled in favor of Kaiser on 22 of the 24 allegations.

"But these are the two charges that really count," said Jeffrey Demain, a San Francisco attorney who helped the Steelworkers with the NLRB appeal. "They are about the legality of the lockout. The rest were minor issues."

Company officials said they're certain the two remaining claims will be dismissed.

"As a result, we believe the decision will have no financial impact on the company," said Kaiser President and CEO Ray Milchovich.

A decision resulting from a trial could be appealed to a five-member NLRB board in Washington, D.C. Then the case could move on to the U.S. Court of Appeals.

"This is the beginning of what could be a very lengthy legal process," Sherman said. "It's a process that, even if it moves rapidly, could take even several years."

Still, the union was claiming victory Wednesday. "It vindicates what we've said all along -- that this lockout is illegal from day one," said David Foster, chief negotiator for the Kaiser Steelworkers.

"In terms of an outside agency and the highest official responsible for enforcing the labor laws, in his mind there is plenty enough evidence to issue an indictment."

Demain said this ruling would increase pressure on the company to settle quickly, pointing out that the back pay owed will continue piling up at the rate of about $500,000 a day.

Even today, if the company has to pay the full amount of back wages for the time of the lockout, "the Steelworkers would own Kaiser," Foster said. "The wisest course of action now would be to end the lockout immediately and bring our members back to work tomorrow morning."

Typically, the amount of back pay required depends on the company's ability to pay it. Kaiser officials would not say what a possible payment of more than $200 million would do to the company.

The NLRB decision came on the heels of the Kaiser negotiators breaking talks with the union in Pittsburgh on Tuesday night. Both sides say that the lockout decision had nothing to do with the end of the two days of scheduled bargaining.

After 10 p.m., company negotiators, including Milchovich, rejected a comprehensive offer the union made that morning and left the talks.

"The union's offer was unacceptable to us because it added additional costs over and above what we were prepared to spend," Sherman said.

The union claims its offer would have cut $10million from the company's annual expenses by 2004.

"It would not save us millions of dollars," Sherman said of the offer. "It would add costs to already high-cost plants."

Two weeks ago, the union rejected the company's comprehensive proposal on grounds that it eliminated too many jobs and depleted retiree health insurance benefits.

Sherman said he has suggested that the two sides meet again May 8. Foster responded that he hadn't heard that, but "if they're willing to meet in May, we will be there."

He also said the Steelworkers were willing to go back to their jobs at any time. The company has operated with a temporary work force since the Steelworkers first went on strike Sept. 30, 1998.

According to the NLRB, few rulings are overturned upon appeal. Because of the size of the company and because it involves an impasse, the Kaiser case is unusual. 

However, the issue of a company paying back pay as a result of a labor complaint is not uncommon.

In 1995, Greyhound Lines Inc. settled a strike suit and had to pay 5,800 drivers and maintenance workers $23.6 million in back pay.

On the picket line at the Mead refinery Wednesday afternoon, a handful of picketing Steelworkers cautiously welcomed the reports of the NLRB decision. 

"It's nice to hear good news for a change," said Dan Goodwin, who has a 30-year tenure at Mead. 

Goodwin and his cohorts filled the wood and tarp shelter at the plant gate to look over the union's press release detailing the decision. They grew quiet as they mulled the idea of getting back pay for the time they've been locked out of their jobs.

"We really don't know what this means," Goodwin said, waving the paper. "But we're optimistic."


•Staff writer Karen Dorn Steele contributed to this report.