Employees target Dex Media and union officials for corrupt scheme to funnel sales commissions to union agents
Phoenix, AZ (April 2, 2009) – A United States District Court has given the green light to a precedent-setting union racketeering lawsuit filed by National Right to Work Foundation attorneys for several Phoenix-based employees against Dex Media and International Brotherhood of Electrical Workers (IBEW) Local 1269 union officials.
Judge Mary Muguia denied significant parts of the defendants’ motions for summary judgment and held that union officials and the company should stand trial for giving preferential treatment to union agents through a skewed performance-based pay system.
The employees’ lawsuit alleges that union officials also employed by Qwest Communications subsidiary Dex Media manipulated company procedures to receive greater compensation at the expense of the nonunion plaintiffs.
The lawsuit also alleges that Dex Media colluded with union officials to implement this scheme, violating the Labor Management Relations Act (LMRA) and the Racketeering Influenced and Corrupt Organizations Act (RICO).
Some of the methods used to increase the union agents’ compensation included reassigning accounts from nonunion employees to union officials, giving union agents “double commissions” for sales made by other workers, and allowing union officials to regularly sell lucrative “group ads” while denying similar opportunities to nonmember employees. By knowingly aiding union agents as they stage-managed company rules to increase their performance-based pay, Dex Media is accused of bribing union officials to act against workers’ interests.
Although the judge ruled there was insufficient evidence to try the RICO claims filed against IBEW Local 1269, the lawsuit against union officials and Dex Media will proceed. The court scheduled a status hearing for April 27, at which time a date will be set for trial of the LMRA and RICO conspiracy claims against the corporate defendants and the union agents.
“Union officials colluded with their employer to sell out the very workers they claim to represent,” said Stefan Gleason, vice president of the National Right to Work Foundation. “We anticipate a successful legal resolution, but the only way to permanently stop this type of abuse is to get rid of union officials’ monopoly bargaining privileges and make union representation truly voluntary.”