News Release

Employees Force Settlement in Precedent-Setting Federal Union Racketeering Lawsuit

Right to Work Foundation uses innovative legal techniques after company and union officials collude to enrich union bosses

Phoenix, Arizona (July 22, 2009) – With free legal aid from the National Right to Work Legal Defense Foundation, five Phoenix-based employees who refrained from formal dues-paying union membership forced a settlement with the defendants in a federal lawsuit laying out how union agents conducted a corrupt scheme to divert sales commissions from the employees to union officials.

National Right to Work Foundation attorneys used the Racketeering Influenced and Corrupt Organizations Act (RICO) anti-corruption statute (establishing new legal precedent in the process) and the Labor Management Relations Act (LMRA) to attack a scheme allegedly orchestrated by Qwest Communications and Dex Media, publisher of the yellow pages phone books, and International Brotherhood of Electrical Workers (IBEW) Local 1269 union bosses.

Evidence discovered in the lawsuit showed that IBEW Local 1269 union officials manipulated company procedures to receive greater compensation at the expense of the nonunion plaintiffs. 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 manipulated company rules to increase their performance-based pay, Qwest and Dex were accused of bribing union officials to act against workers’ interests in bargaining negotiations.

In April, a United States District Court judge denied significant parts of the defendants’ motions for summary judgment and held that the union officials and company should stand trial for giving preferential treatment to union agents through the distorted performance-based pay system. The judge’s decision and an earlier decision denying motions to dismiss have established a favorable anti-corruption precedent enabling National Right to Work Foundation litigators to target other union schemes under the federal racketeering statute.

“Because IBEW Local 1269 union bosses acquired monopoly bargaining privileges from Qwest and Dex Media, they were emboldened to conjure up a scheme fleecing the very workers they claimed to represent,” said Stefan Gleason, vice president of the National Right to Work Foundation. “The only meaningful way to limit union corruption is stripping union officials of their government-granted monopoly bargaining privileges and making union representation truly voluntary.”

“The Foundation employs cutting-edge legal strategies to take on such compulsory unionism abuses nationwide and forcing corrupt union bosses to be accountable to the rule of law.”

The National Right to Work Legal Defense Foundation is a nonprofit, charitable organization providing free legal aid to employees whose human or civil rights have been violated by compulsory unionism abuses. The Foundation, which can be contacted toll-free at 1-800-336-3600, is assisting thousands of employees in over 200 cases nationwide.

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