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The Union Label: Electric Restructuring's Hidden Side

Fortnightly Magazine - September 15 1997

federal district court against ComEd, Kincaid Generation LLC and the Illinois commission, alleging that the plant sale agreement violated the Illinois Collective Bargaining Successor Employer Act. That statute makes any collective bargaining agreement binding on a successor employer if union contract contains a successor clause. ComEd responded in kind, filing its own suit against Local 15. The utility claimed that the National Labor Relations Act and the federal Labor Management Relations Act preempted the state successor law.

On February 21, Judge Wayne R. Andersen found in favor of the utility, ruling that federal law preempted the Illinois successor statute. See, Commonwealth Edison Co. v. IBEW, Local 15, 961 F.Supp. 1169 (N.D.Ill.). In his opinion, Judge Andersen cited the U.S. Supreme Court, which held in 1974 that a new employer should have the right not to hire any of the employees of its predecessor See, Howard Johnson Co. Inc. v. Detroit Local Joint Executive Bd., et al., 417 U.S. 249, at 261-62 (1974). According to Judge Andersen, the Illinois law had invaded substantive aspects of the bargaining process, something not envisioned under the National Labor Relations Act.

"The state of Illinois may not require a new employer such as Kincaid to honor the terms of a collective bargaining agreement it neither assumed nor bargained for," Andersen wrote. "Such regulation is prohibited by the NLRA and is left to the free play of economic forces."

For good measure Andersen also cited a 1994 case that overturned a similar successor statute. See, United Steelworkers of America, AFL-CIO-CLC v. St. Gabriel's Hosp., 871 F.Supp.335 (D.Minn.1994).

Meanwhile, the IBEW has appealed Andersen's decision to the U.S. Court of Appeals for the Seventh Circuit.

Charles A. Werner of Schuchat, Cook & Werner, also attorney for the union local, says he will argue that because all the business affiliated with Kincaid is in-state, the successor statute should apply and not be pre-empted by federal law.

"The facts of this case [deal] with the sale of a generating station in Illinois to an outfit that will continue to operate the same station basically with the same people doing the same thing to the same customers with the same coal and the same control by the Illinois Commerce Commission. The state laws should apply."

He insists it's not a collective bargaining issue at stake, that the union isn't asking for collective bargaining: "It's just if you come in and get [employees] you ought to at least not drop their wages 50 percent." Nonunion plants included, he adds.

Stepping back, Werner says he doesn't think asset transfers will lead to union busting.

But the grand slam question is this: Should Andersen's decision stand, how will it be reconciled with worker protection legislation now being considered in Illinois?

Ironically (em considering its position in the Kincaid case (em Commonwealth Edison supports the proposed Illinois legislation. Glenn D. Newman, the utility's associate general counsel for labor, offers some reasons.

"The language in the proposed legislation makes no reference to collective bargaining agreements and would be a job protection for all non-supervisory employees," he says.