IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE AT CHATTANOOGA MICHAEL BURTON et al.

, Plaintiffs, v. INTERNATIONAL UNION, UAW et al., Defendants. BRIEF IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION Plaintiffs Michael Burton, Michael Jarvis, and David Reed move the Court to preliminarily enjoin their employer, Volkswagen Group of America, from unlawfully assisting the UAW with unionizing them and their co-workers. Section 302 of the Labor Management Relations Act (LMRA), 29 U.S.C. 186, strictly prohibits employers from delivering any thing of value to a union that seeks to represent their employees. Nevertheless, Volkswagen agreed to provide, and did provide, three things valuable to the UAW to assist its organizing campaign against Plaintiffs and their co-workers: paid captive audience meetings, use of company property, and non-compete clauses. As discussed below, there is an imminent threat that Volkswagen will again provide these things of value to the UAW and that, as a result, Plaintiffs will be unionized against their will. The Plaintiff employees thereby move to preliminarily enjoin Volkswagen from materially assisting the UAW with becoming their exclusive bargaining representative. 1 Case No. 1:14-CV-76

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FACTS I. The Organizing Agreement Plaintiffs are employed by Volkswagen at its manufacturing facility at 8001 Volkswagen Drive, Chattanooga, Tennessee 37416 (Chattanooga Plant), which employs approximately 1,500 production and maintenance employees. The UAW does not represent these employees, but seeks to unionize them. On January 27, 2014, the UAW and Volkswagen entered into an Agreement for a Representation Election (Organizing Agreement). See Burton Decl., Ex. B. In the agreement, Volkswagen agreed to assist the UAW with unionizing its employees in exchange for bargaining concessions and other consideration from the union. Specifically, Volkswagen agreed to provide three types of organizing assistance to the UAW. First, Volkswagen will conduct and pay its employees to attend captive audience meetings with the UAW at the Chattanooga Plant. Id., 5(d). Second, Volkswagen will give the UAW an office and use of other areas in the Chattanooga Plant to conduct its organizing campaign. Id., 5(c). Third, Volkswagen agreed to non-compete clauses that require it not [to] take a position opposed to . . . [union] representation, train its supervisors not to oppose the UAW, and not make any negative comments (written or verbal) against the UAW. Id., 5(b), (5)(f), 9. In addition to this organizing assistance, Volkswagen agreed to petition the National Labor Relations Board (NLRB) for an expedited election on February 12-14, 2014. Id., 3(a). Volkswagen and the UAW agreed in advance upon the dates 2

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and times for the election, id., 3(b), and on who was eligible to vote, id., 5. In consideration for Volkswagens assistance with organizing its employees, the UAW agreed to be subservient to Volkswagen when acting as an employee representative. First, the UAW agreed to delegate many of its duties and functions to a company Works Council whose leadership will be separate from the UAW and trained and funded by Volkswagen. Id., Ex. B, 1.1, 2.3, & 3. Second, the union agreed that, while the parties negotiate for an initial collective bargaining agreement, (a) the UAW will not engage in picketing, strikes, boycotts, or work slowdowns. Id., 7. Third, the UAW agreed to negotiate collective bargaining agreements that maintain[ ] and where possible enhance[ ] the cost advantages and other competitive advantages that [Volkswagen] enjoys relative to its competitors in the United States and North America, including but not limited to legacy automobile manufacturers. Id., 6(b). In other words, the UAW agreed not to bargain for wages and benefits for employees at the Chattanooga Plant that are equal or superior to those at General Motors, Ford, Chrysler, or other automakers. In addition, the UAW also agreed to limits on its organizing activities in consideration for Volkswagens assistance. This includes not making any negative comments about the company, id., 9, see also id. at 5(c); and not conducting organizing or other activities in connection with the Chattanooga Plant or any other Volkswagen facility for one year if the union loses the election, id., 6(c).

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II. Enforcement of the Organizing Agreement On February 3, 2012, Volkswagen petitioned the NLRB to conduct an expedited election, as required under the Organizing Agreement. An election was scheduled for only nine (9) days later, February 12-14, 2014. Volkswagen thereafter provided, and the UAW accepted, the assistance specified in the agreement, to wit: captive audience meetings were conducted for the UAW on company property and paid work time; UAW organizers were given an office and other uses of the Chattanooga Plant for organizing; and company managers and supervisors were gagged from speaking about the UAW or unionization. See Plaintiffs Decl., 8-11. Plaintiffs strongly oppose UAW representation and actively campaigned against the union. Id. at 5. Notwithstanding Volkswagens assistance, the UAW lost the election 712 to 626. See Burton Decl., 13. However, the UAW then filed objections with the NLRB that seek to overturn the election results and require a rerun election. Id. at 14; see UAW Objections to Conduct Affecting Election (Feb. 21, 2014), Volkswagen Grp. Of America, NLRB Case No. 10-RM-121704.1 By its terms, the Organizing Agreement remains in effect, meaning Volkswagen is obligated to provide the UAW with organizing assistance in a rerun election. On information and belief, the UAW will again demand this assistance (if it has not already done so), and Volkswagen will again provide this assistance to the UAW.

Available at http://uaw.org/sites/default/files/UAW_Election_Objection.pdf (last visited Mar. 6, 2014).

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Plaintiffs and their co-workers thus remain under threat that their employer will unlawfully assist the UAW with unionizing them against their will. Plaintiffs thereby seek a preliminary injunction to stop Volkswagen from again delivering to the UAW, and the UAW from again receiving, things valuable for organizing. ARGUMENT The Court must consider four factors in determining whether to issue a preliminary injunction: (1) whether the plaintiffs have shown a strong or substantial likelihood or probability of success on the merits; (2) whether the plaintiffs have shown irreparable injury; (3) whether the issuance of a preliminary injunction would cause substantial harm to others; (4) whether the public interest would be served by issuing a preliminary injunction. Mason County Med. Assn v. Knebel, 563 F.2d 256, 261 (6th Cir.1997). Each factor supports the issuance of a preliminary injunction here. I. There Is a Strong Likelihood That the UAW and Volkswagen Are Violating 302 of the LMRA Section 302(a)(2) of the LMRA makes it unlawful for any employer . . . to pay, lend, or deliver, any money or other thing of value . . . to any labor organization . . . which represents, seeks to represent, or would admit to membership, any of the employees of such employer. 29 U.S.C. 186(a)(2) (emphasis added). Section 302(b)(1) reciprocally makes it unlawful for a union to to request, demand, receive, or accept, or agree to receive or accept any money or other thing of value prohibited by subsection (a). 29 U.S.C. 186(b)(1). Section 302(c) provides for nine exceptions 5

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to these broad prohibitions, none of which applies here. [A] literal construction of this statute does no violence to common sense. Arroyo v. United States, 359 U.S. 419, 424 (1959). Section 302 unambiguously bans the exchange of anything of value between a union and an employer, subject to a strictly limited set of exceptions. Mulhall v. Unite Here Local 355, 618 F.3d 1279, 1290 (11th Cir. 2010) (Mulhall I), further proceedings, 667 F.3d 1211 (11th Cir. 2012) (Mulhall II), cert. dismissed as improvidently granted, 134 S. Ct. 594. Not surprisingly, this is the interpretation Congress intended.2 As established below, Volkswagen and the UAW are violating 302 because organizing assistance is (A) a thing of value that (B) Volkswagen can pay, lend, or deliver to the UAW and that is (C) not exempted by 302(c). A. Organizing Assistance Is a Thing of Value under 302 1. Congresss frequent use of thing of value in a variety of statutes, including conflict-of-interest statutes like 302,3 has evolved the phrase into a term of art

See, e.g., H.R. Rep. No. 86-741 (1959), reprinted in 1959 U.S.C.C.A.N. 2318, 2469 (House Report stating that 302 makes it illegal for an employer to pay or deliver anything of value to a representative of his employees, except in those instances permitted by subsection (c).); 92 Cong. Rec. 4900 (Sen. Pepper) (under the language of the amendment, it would be unlawful for any representatives of employees . . . to receive anything of benefit or value from the management) (emphasis added); 92 Cong. Rec. 4895 (Sen. Wheeler) (This language clearly goes so far as to make the employer guilty of violation of the law if he contributed anything to the union for the benefit of the union.).
2

Thing of value or anything of value is used in conflict-of-interest statutes that govern federal officials, 5 U.S.C. 7353(a), public officials, 18 U.S.C. 201(b), recipients of federal funds, id. 666, trustees of employee benefit plans, id. 1954,
3 (footnote continued on next page)

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which the courts generally construe to envelop[ ] both tangibles and intangibles, and not to be limited to things with monetary worth. United States v. Nilsen, 967 F.2d 539, 542-53 (11th Cir. 1992); see, e.g., United States v. Jeter, 775 F.2d 670, 680 (6th Cir. 1985); United States v. Marmolejo, 89 F.3d 1185, 1191-92 (5th Cir. 1996), affd sub. nom. Salinas v. United States, 522 U.S. 52 (1997); United States v. Schwartz, 785 F.2d 673, 680 (9th Cir. 1986); United States v. Girard, 601 F.2d 69, 71 (2d Cir. 1979). This interpretation is consistent with the meaning of both thing and value. See Blacks Law Dictionary (9th ed. 2009) (thing. 1. The subject matter of a right, whether it is a material object or not; any subject matter of ownership within the sphere of proprietary or valuable rights); id. (value, n. 1. significance, desirability, or utility of something.). Thus, courts have found a wide variety of goods, services, and benefits to be things of value, such as a promise to reinstate an employee, an agreement not to run in a primary election, [t]he testimony of a witness, and the content of a writing, just to offer a few examples. Girard, 601 F.2d at 70 (collecting cases). Thing of value is used the same way in 302 as in other statutes. The Supreme Court has repeatedly recognized that 302s prohibitions . . . are drawn broadly. Local 144 Nursing Home Pension Fund v. Demisay, 508 U.S. 581, 585 (1993); see Arroyo, 359 U.S. at 420; United States v. Ryan, 350 U.S. 299, 305 (1956). Congress and real estate transactions, 12 U.S.C. 2607. The term is also used in laws that prohibit conversion of public property, 18 U.S.C. 641, embezzlement at lending institutions, id. 657, extortion by mail, id. 876(b), and procurement of a thing of value by false pretenses, id. 912. 7

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gave the broadest possible scope to the statute by adding to the word money the words or other thing of value, because favors may be conferred in many ways under many circumstances. United States v. Roth, 333 F.2d 450, 453 (2d Cir. 1964). The statutes use of the word any to modify thing of value also indicates an expansive meaning, that is, one or some indiscriminately of whatever kind. United States v. Gonzales, 520 U.S. 1, 5 (1997) (quoting Websters Third New Intl Dictionary 97 (1976)). And, as the Sixth Circuit recently held, 302s scope is not limited to only monetary items. United States Douglas, 634 F.3d 852, 858 (6th Cir. 2011) (emphasis added). Of all the things in this world widely regarded as valuable, money and the like comprise only a small percentage. Id. 2. The three types of organizing assistance at issue fit easily within the phrase thing of value. First, Volkswagen delivered a valuable service to the UAW by conducting captive audience meetings for it. Volkswagen hosted the meetings on its property, required employees to attend most of the meetings, and paid its employees for their attendance. See Organizing Agreement, 5(d). These meetings are exceedingly valuable to the UAW as an organizing tool because the union could not otherwise force employees to attend meetings regarding unionization, much less pay them to do so. Moreover, the active participation of Volkswagen management in these meetings conveys a message of company support for unionization. Volkswagens performance of this valuable service for the UAW is naturally a thing of value, particularly given that conducting the meetings requires the 8

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expenditure of money (paying employees to attend) and use of tangible resources (Volkswagens property). See, e.g., United States v. DeBrouse, 652 F.2d 383, 386-87 (4th Cir. 1981) (union officials acceptance of carpet installation service from an employer a thing of value under 302); Burnette v. United States, 222 F.2d 426, 427 (6th Cir. 1955) (per curiam) (services and labor of two employees a thing of value under 18 U.S.C. 641); Schwartz, 785 F.2d at 679-81 (assistance in arranging for the merger of [two unions], as well as other services is a thing of value to union trustees under 18 U.S.C. 1954); see also United States v. Croft, 750 F.2d 1354, 1362 (7th Cir. 1984). Indeed, the wages that Volkswagen paid employees to attend the meetingsestimated between $10,875 and $14,6254alone is a thing of value to the union. See Hospital Employees Div. of Local 79, SEIU v. MercyMemorial Hosp., 862 F.2d 606, 608 (6th Cir. 1988), further proceedings, 492 U.S. 914 (1989) (vacated on other grounds), on remand, 881 F.2d 1076 (6th Cir. 1989) (table) (reinstating 302 ruling) (union could bring 302 action against employer for financially assisting employees with decertification campaign); NUHW v. Kaiser Found. Health Plan Inc., 2013 WL 2645708 (N.D. Cal. June 12, 2013) (denying motion to dismiss a 302 claim against an employer for providing union agents with paid time off to campaign against a rival union).

This estimate is arrived at by multiplying employees approximate minimum ($14.50) and maximum ($19.50) hourly wage rates by the length of the meetings (30 minutes) and the total number of employees (1500). See Burton Decl., 4, 9. This estimate does consider the time of the managers who conducted the meetings.
4

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Second, use of Volkswagens private property, including use of an office in the Chattanooga Plant and other parts of the facility, is a thing of value. The right to use physical facilities, even temporarily, is a quintessential property right,5 and a thing of value under any possible construction of that term. See NLRB v. BASF Wyandotte Corp., 798 F.2d 849, 856 & n.4 (5th Cir. 1986) (use of in-plant office a thing of value under 302(a), but exempted by 302(c)(1) because union officials using the office were company employees); United States v. Schiffman, 552 F.2d 1124, 1126 (5th Cir. 1977) (union officials violated 302 by receiving discounted hotel rooms); see also Marmolejo, 89 F.3d at 1191-94 (use of prison facilities for conjugal visits a thing of value under 18 U.S.C. 666); United States v. Freeman, 208 F.3d 332, 341 (1st Cir. 2000) (use of nightclub property a thing of value under 666). In fact, organizations often pay to use property to solicit prospective customers, such as retail space or convention booths. See, e.g., Gibson v. F.T.C., 682 F.2d 554, 558 (5th Cir. 1982). The UAW itself procured space at a local hotel to meet with Volkswagen employees. See UAW Notice, Ex. C to Burton Decl. By giving the UAW an office and other space inside the Chattanooga Plant, Volkswagen gave the union prime real estate to solicit employees that is far superior to any off-site properties the UAW otherwise would have to rent to conduct organizing activities. Given that See, e.g., Truax v. Corrigan, 257 U.S. 312, 327 (1921) (Plaintiffs business is a property right . . . and free access for employees, owner, and customers to his place of business is incident to such right.); United States v. Gen. Motors Corp., 323 U.S. 373 (1945) (General Motors entitled to compensation for governments temporary use of its building); Arkansas Game & Fish Commn v. United States, 133 S. Ct. 511, 519 (2012) (temporary taking of property compensable under Fifth Amendment).
5

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the UAW has no legal right to use the Chattanooga Plant for its organizing activities, see Lechmere, Inc. v. NLRB, 502 U.S. 527, 532-34 (1992), Volkswagen plainly gave a thing of value to the UAW by giving it use of company property for organizing. Third, the Organizing Agreements non-compete clauses provide the UAW with a thing of valuecontractual control over the companys speech and activities regarding unionization. Volkswagen is legally bound to abide by the Organizing Agreement, id. at p.4, which would be an enforceable contract but for its illegality. Thus, by agreeing to align [its] message and communications with the UAW, id., 3(f), to not take a position opposed to . . . [UAW] representation, id., 5(b), to inform employees that it supports a Works Council and employee attendance at meetings with the UAW, id., 5(d), to gag company supervisors and managers from speaking ill of the UAW, id. 5(f), and to not make any negative comments (written or verbal) against the UAW, id. 9, Volkswagen is delivering control over its speech and conduct regarding unionization to the UAW. And control over another partys speech is a thing of value. See Nilsen, 967 F.2d at 542-43 (testimony of adverse witness that defendant wished to silence a thing of value under 18 U.S.C. 876(b)); United States v. Zouras, 497 F.2d 1115, 1121 (7th Cir. 1974) (same). Generally speaking . . . intangible property rightssuch as . . . non-competition or exclusivity agreementsare certainly things of value that are capable of being exercised, transferred, or sold. United States v. Gotti, 459 F.3d 296, 323 (2d Cir. 2006). Non-compete agreements are found in many types of contracts. See generally 11

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45 A.L.R.2d 77. For example, private gag orders appear to be fairly common when businesses are sold. EEOC v. Severn Trent Servs., 358 F.3d 438, 440 (7th Cir. 2004). Commercial non-compete agreements certainly have value to the contracting parties,6 as they are considered intangible assets whose value is depreciable for federal tax purposes. 26 U.S.C. 197(d)(1)(E); see Recovery Grp. v. Commr of Internal Revenue, 652 F.3d 122 (1st Cir. 2011) ($400,000 paid for non-competition agreement must be amortized over 15 year period). Similarly, a non-compete agreement with an employer is something of great value to a union like the UAW.7 A simple example illustrates the value of the assistance at issue here. Assume a company wants to solicit Volkswagens employees to buy a product. Volkswagen certainly would give something of value to that company if it agreed to: (1) pay its employees to attend in-plant meetings with the companys salesman; (2) give those See e.g., Mayer Hoffman McCann, P.C. v. Barton, 614 F.3d 893 (8th Cir. 2010) (non-competition agreement supported by valuable consideration and enforceable by liquidated damages); Rain v. Rolls-Royce Corp., 626 F.3d 372, 375 (7th Cir. 2010) (non-disparagement clause enforceable by $1,000,000 in liquidated damages and attorney fees). Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 626-27 (1977) (non-competition agreement entered into in exchange for valuable consideration).
6

In seeking to enjoin the non-competition clauses, Plaintiffs do not contend that Volkswagen is required to speak against the UAW. The employer can unilaterally speak, or not speak, without violating 302 because nothing in that circumstance is delivered to the union. Only by granting the UAW contractual control over its speech and activities is Volkswagen delivering a thing of value to the union in violation of 302(a). For example, Volkswagen does not deliver anything of value to a competitor, say General Motors (GM), every time it independently decides not to advertise or compete in a market. However, Volkswagen certainly would deliver something of great value to GM if it entered into a noncompetition agreement that bars Volkswagen from promoting its products or competing against GM in a particular market. The same principle applies here.
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salesmen an office and other space in the Chattanooga Plant; and (3) inform employees that Volkswagen approves of the product and prohibit supervisors from speaking ill of it. This is what Volkswagen gave to the UAW to peddle its product union representationto employees. It is plainly a thing of value. 3. This organizing assistance has great value to the UAW under 302. The value of something is usually measured by the consideration given for it. See, e.g., Jeter, 775 F.2d at 680, 682; United States v. Townsend, 630 F.3d 1003, 1011-12 (11th Cir. 2011) (surveying cases). In consideration for Volkswagens promise of organizing assistance, the UAW agreed to waive its right to strike, see Organizing Agreement, 7; limit union organizing activities, see id., 6(c); delegate its authority to a company Works Council if employees are unionized, id., 6(a) & Ex. B; and not bargain for wages or benefits that erode Volkswagens cost advantages vis--vis other automakers, id., 6(b). The UAW has provided similar forms of consideration to other companies for organizing assistance. See Adcock v. Freightliner, 550 F.3d 369, 372 (4th Cir. 2008). This consideration alone establishes value under 302. See Mulhall II, 667 F.3d at 1216 (union conducting political campaign in consideration for organizing assistance sufficient to support a 302 claim). Volkswagens assistance is valuable to the UAW because it saves the union money by reducing its need to rent property to meet with employees, such as conference rooms at hotels. See Burton Decl, Ex. C. The assistance also significantly increases the UAWs chances of unionizing Volkswagens employees, which would increase 13

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dues revenues. See Burton & Reed Decl., 15; Jarvis Decl., 16. This is not only common sense, but has been demonstrated empirically. For example, with employer assistance, unions in one study prevailed in 78% of the situations in which they attempted to organize, compared to only a 46% success rate in contested elections.8 Monetary value is not required under 302, see Douglas, 634 F.3d at 858, so such value need not be proven here. But even if it were, the organizing assistance has considerable monetary value for the reasons discussed above. See Mulhall I, 618 F.3d at 1289. Indeed, Volkswagen literally paid its employees to attend UAW meetings. The assistance Volkswagen gave to the UAW is functionally indistinguishable from the company giving cash to the union to support its organizing campaignthe three types of assistance are simply in-kind contributions to the UAWs organizing campaign. Certainly, Volkswagens assistance is not worthless to the UAW. Yet, given that no minimum value is required for injunctive relief under 302(e), that is what the Court would have to accept not to find a violation of 302 here. That is untenable. Volkswagens assistance with unionizing the employees of the Chattanooga Plant clearly has great value to the UAW, however value may be measured. B. Organizing Assistance Can Be Paid and Delivered under 302.

The three types of organizing assistance are not only thing[s] of value under 302(a), they also fulfill the other statutory requirements because they can be Zev J. Eigen & David Sherwyn, A Moral/Contractual Approach to Labor Law Reform, 63 Hastings L.J. 695, 722 (2012).
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deliver[ed] and serve as a payment. 28 U.S.C. 186(a). 1. Delivery is defined as [t]he formal act of transferring something, such as a deed; the giving or yielding possession or control of something to another. Blacks Law Dictionary (9th ed. 2009); see Websters Dictionary 481 (unabridged) (2d ed. 1980) (to give or transfer; to put into anothers possession or power, to commit, to pass from one to another). In the context of 302, delivery refers to that which a union can receive or accept. 29 U.S.C. 186(b)(1). Volkswagen can deliver captive audience meetings to the UAW, as it is a valuable service. It is commonly said that a person or entity delivers a service. See, e.g., Northwest Austin Mun. Utility Dist. No. One v. Holder, 557 U.S. 193, 200 (2009) (utility district was created in 1987 to deliver city services); Nixon v. Missouri Mun. League, 541 U.S. 125, 135-37 (2004) (using phrases deliver electric and water services and deliver telecommunications service). For example, if the UAW hired a consultant to arrange and conduct employee meetings, the consultant could deliver these services to the union. Volkswagen also can deliver the right to use its property and control over its communications to the UAW, as both result in giving or yielding possession or control of something to another. Blacks Law Dictionary (9th ed. 2009) (emphasis added). The Organizing Agreement is a binding contract. The contractual rights it provides to the UAW to use an office and other space in the Chattanooga Plant are like the rights transferred in a rental agreement. And the right to control 15

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Volkswagens communications and actions regarding unionization are like the right often transferred in non-competition agreements. The notion that one can deliver such control to another is consistent with long-established English usage. See, e.g., Atlanta, K. & N. Ry. v. Southern Ry., 153 F. 122, 123 (6th Cir. 1907) (court erred in requiring a railway to deliver possession of the disputed right of way and desist from interfering with the use and occupation of same) (emphasis added). 2. Organizing assistance can also act as payment under 302 when its performance fulfills an obligation. Mulhall II, 667 F.3d at 1215. In other words, it is a payment when given or demanded in exchange for consideration from the union. Id. Payment is defined as [p]erformance of an obligation by the delivery of money or some other valuable thing accepted in partial or full discharge of the obligation. Blacks Law Dictionary 1243 (9th ed. 2009) (emphasis added). An employer can pay a union to do something with in-kind services just as easily as it can with money. The organizing assistance is naturally understood as a payment. Volkswagen agreed to give the UAW these thing[s] of value in exchange for the unions agreement to delegate functions to a company Work Council, waive its right to strike, and limit its organizing activities. See p.3, supra. The organizing assistance is thereby a valuable thing the UAW accepted to perform certain actions. See Blacks Law Dictionary, supra. It accordingly is a payment. And that interpretation does no violence to the language. One can say, in common parlance, that Party A paid Party B for his service by conducting meetings on his 16

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behalf, giving him a right-of-way,9 or a non-competition agreement, just as easily as one can say that Party A paid Party B by giving him opera tickets, a hotel room, stock, or any other valuable thing. Volkswagen can both pay and deliver organizing assistance to the UAW. C. Section 302(c) Does Not Exempt Organizing Assistance Section 302s limiting principle is the nine exceptions stated at 302(c). None of them exempts organizing assistance. That is significant. That Congress did not exempt organizing assistance means no such exemption is intendedexpressio unius est exclusio alteriusand such an exemption cannot be implied into the statute. Cf. Hillman v. Maretta, 133 S. Ct. 1943, 1953 (2013); Olden v. LaFarge Corp., 383 F.3d 495, 504-05 (6th Cir. 2004). For example, the Sixth Circuit Court upheld a district court decision that an industry steward arrangement that ran afoul of 302s text could not be exempted from the statutes prohibitions notwithstanding a special need in the industry for a stewardship of this sort. Reinforcing Iron Workers Local Union 426 v. Bechtel Power Corp., 463 F. Supp. 643, 646-47 (E.D. Mich. 1978), affd, 634 F.2d 258 (6th Cir. 1981). [T]o uphold the validity of the industry steward fund, it must be found to be in strict compliance with the requirements set forth in [ 302]. 463 F. Supp. at 645. The There is no question that one party could pay another by giving the second party a right of way or easement; courts have used that terminology for well over a century. See, e.g., Feeney v. Chester, 63 P.192, 193 (Idaho 1900) ([t]he defendant . . . paid the consideration by giving the right of way for the ditch through his land); In re Flint & P.M.R. Co., 63 N.W. 303, 304 (Mich. 1895) (parties paid the notes they had granted to their counter-parties by granting rights of way).
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same holds true for things valuable to unions for organizing purposes. In fact, far from exempting organizing assistance from its ambit, 302 expressly governs union organizing activities. The statute prohibits employers from delivering things of value to any labor organization . . . which represents, seeks to represent, or would admit to membership, any of the employees of such employer, 29 U.S.C. 186(a)(2) (emphasis added), and to employee groups with the intent to influence any other employees in the exercise of the right to organize and bargain collectively through representatives of their own choosing. Id., 186(a)(3) (emphasis added). Congress added this language to 302 when amending the statute in 1959 for the purpose of extending 302 prohibitions to organizing activities. See S. Rep. No. 86-187 (1959), reprinted in 1959 U.S.C.C.A.N. 2318, 2330. Since that time, 302 has been enforced [i]n the context of labor union organizing. United States v. Burge, 990 F.2d 244, 250 (6th Cir. 1992); see United States v. Pecora, 798 F.2d 614, 621-25 (3d Cir. 1986); United States v. Sink, 355 F. Supp. 1067 (E.D. Pa.), affd, 485 F.2d 683 (3d Cir. 1973); cf. Mercy-Memorial Hosp., 862 F.2d at 608. Any claim by the UAW that 302 contains an unwritten organizing exemption is simply untenable. D. Adcock Is Unpersuasive and Conflicts with Sixth Circuit Precedent There is a circuit split on whether things valuable for organizing can be a thing of value to a union under 302. The Third and Fourth Circuits held organizing assistance exempt from 302 in Hotel Employees Union v. Sage Hospitality, 390 F.3d 206, 219 (3d Cir. 2004) and Adcock v. Freightliner, LLC, 550 F.3d 369 (4th Cir. 18

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2008). In contrast, the Eleventh Circuit held it too broad to hold that all neutrality and cooperation agreements are exempt from the prohibitions in 302, and that organizing assistance can be a thing of value that, if demanded or given as payment, could constitute a violation of 302. Mulhall II, 667 F.3d at 1213. The Sixth Circuit has yet to directly address this issue. However, Adcock conflicts with controlling Sixth Circuit precedent. Adcock held union use of company property to not be a thing of value under 302 because it supposedly lacks ascertainable monetary value. 550 F.3d at 372. This is not only incorrect on its own merits, see pp. 12-13, supra, but conflicts with the Sixth Circuits holding in Douglas that 302 requires no monetary value at all. 634 F.3d at 848. Adcock and Sage are also unpersuasive, and Mulhall is mostly persuasive,10 for the reasons stated above. Indeed, Adcock and Sage require accepting the unbelievable proposition that employer assistance with unionizing more employees is of no value to a union, i.e., is utterly worthless. This is untenable on its face. Assistance with gaining more members is as valuable to a union as assistance with gaining more customers is valuable to a business. Indeed, it is difficult to envision anything of greater value to the UAW than Volkswagens assisting it with unionizing the Chattanooga Plant. Plaintiffs have established a strong likelihood of success on the merits.

Plaintiffs disagree with Mulhalls holding that organizing assistance can only be paid, but not deliver[ed]. 667 F.3d at 1215. See pp. 16-17, supra.
10

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II.

Plaintiffs Will Suffer Irreparable Injury if Volkswagen Assists the UAW with Unionizing Them Against Their Will Plaintiffs are under threat of irreparable injury, namely, being exclusively

represented by a union under the partial control of their employer. Volkswagen assisting the UAWs organizing campaign significantly increases the unions chances of becoming the exclusive representative of Plaintiffs and their co-workers under 29 U.S.C. 159(a). Exclusive representation creates a fiduciary relationship between a union and employees akin to that between a trustee and beneficiary. Mulhall I, 618 F.3d at 1287 (citing Teamsters Local 391 v. Terry, 494 U.S. 558, 567 (1990)). It extinguishes the individual employees power to order his own relations with his employer. NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180 (1967). Moreover, just as a beneficiary does not directly control the actions of a trustee . . . an individual employee lacks direct control over a unions actions taken on his behalf. Terry, 494 U.S. at 567. Plaintiffs associational rights will be irreparably infringed upon if they are forced into an unwanted fiduciary representative with the UAW. Directly on point is Mulhall I, which held that an employee (Mulhall) had standing to seek an injunction under 302 to stop a union (Unite) from receiving organizing assistance from his employer based on the threat of exclusive union representation, even though Mulhall could not be required to join the union. 618 F.3d at 1286-90. The Eleventh Circuit recognized that the organizing assistance . . . if provided, will substantially increase the likelihood that Mulhall will be unionized against his will. Id. at 1289. 20

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If Unite is certified as the majority representative of . . . employees, Mulhall will have been thrust unwillingly into an agency relationship[.] Id. at 1287. And regardless of whether Mulhall can avoid contributing financial support to or becoming a member of the union . . . its status as his exclusive representative plainly affects his associational rights. Id. The same analysis governs here, except the threat of injury to Plaintiffs and their co-workers is worse. First, the threat is more imminent. In Mulhall, the employer opposed providing organizing assistance to the union. Id. at 1285. Here, Volkswagen does not. It provided valuable assistance to the UAW just a few short weeks ago, and will likely do so again in the immediate future unless enjoined. Second, the injury will be worse than in Mulhall because the UAW committed to be subservient to Volkswagen upon becoming the representative of Plaintiffs and their co-workers as a quid pro quo for organizing assistance. The UAW agreed to not strike in support of bargaining demands, see Organizing Agreement, 7, to delegate some of its powers to a company-funded Works Council, id., 6(a)-(b), and not to bargain for employee wages and benefits that erode Volkswagens cost advantages vis--vis other automakers, id. 6(b). So not only are Plaintiffs under threat of being forced to accept unwanted union representation, they will be forced to accept a company union that their employer partially controls. [C]ollective bargaining is a sham when the employer sits on both sides of the table by supporting a particular organization with which he deals. NLRB v. Penn. Greyhound Lines, 303 U.S. 261, 21

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268 (1938) (quoting H.R. Rep. No. 74-1147, *18 (1935)). These harms are irreparable because, after Volkswagen assists the UAW with unionizing Plaintiffs and their co-workers, the Court cannot unring this bell. Section 302(e) provides only for jurisdiction to restrain violations of 302(a) and (b). 29 U.S.C. 186(e). Thus, this Court can enjoin Volkswagen from providing assistance to the UAW, and enjoin the UAW from demanding or receiving it. Cf. Mercy- Memorial Hosp., 862 F.2d at 608 (union could bring 302 action against employer for assisting decertification campaign). But, after this assistance is provided to the UAW, the Court cannot rectify the effect that it will have on the organizing campaign or decertify the UAW if it unionizes Plaintiffs with Volkswagens assistance. To protect Plaintiffs rights under 302, the UAW must be enjoined from receiving valuable organizing assistance from Volkswagen before it occurs again. III. A Preliminary Injunction Will Not Harm Others

Temporarily enjoining Volkswagen from providing things of value to help the UAW unionize its employees will harm no one. The UAW has no right to the companys assistance under 302 or any other statute. See Lechmere, 502 U.S. at 532 (By its plain terms . . . the NLRA confers rights only on employees, not on unions or their nonemployee organizers.) (emphasis in original). Volkswagen will remain free to unilaterally take whatever position it desires regarding unionization, see fn. 7, supra. An injunction simply will prohibit Volkswagen from materially assisting the UAW with becoming the representative of its employees, and thus will have only 22

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beneficial effects. IV. A Preliminary Injunction Will Serve the Public Interest by Effectuating 302s Purpose of Stopping Employer-Union Collusion Section 302 exists to protect employees in dealings between the union and employer. Jackson Purchase Rural Elec. Coop. Assn v. Intl Bhd. of Elec. Workers, 646 F.2d 264, 267 (6th Cir. 1981). Specifically, it is designed to prevent conflict[s] of interest and protect employees from the collusion of union officials and management. Mulhall I, 618 F.3d at 1290-91 (citations omitted). This case presents a classic example of an employer and union colluding at employee expense. Volkswagen is assisting its favored union, the UAW, with becoming the representative of its employees. In exchange, the UAW has agreed to behave in a manner pleasing to Volkswagen management. Caught in the middle are employees, like Plaintiffs, who are faced not only with being unionized against their will, but of being represented by a union subservient to their employer. Enjoining this collusive arrangement will serve Congress intent when enacting 302, and thus the public interest. For centuries the law has forbidden any person in a position of trust to hold interests or enter into transactions in which self-interest may conflict with complete loyalty to those whom they serve. See S. Rep. No. 86-187 (1959), reprinted 1959 U.S.C.C.A.N. 2318, 2330. Or, as U.S. Senator Carl Hatch explained by analogy during 302s enactment: [A] lawyer knows full well that he, representing a client, would not take a gift from the opposition. 92 Cong. Rec. 5428. Here, the UAW seeks a relationship with Plaintiffs and their co-workers akin to that 23

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between attorney and client. Air Line Pilots v. ONeill, 499 U.S. 65, 74 (1991). For the UAW to pre-negotiate concessions at their expense to obtain Volkswagens assistance with becoming their representative is an egregious conflict of interest. Cf. Aguinaga v. UFCW, 993 F.2d 1463, 1470-71 (10th Cir. 1993). It is as wrongful as a plaintiffs lawyer agreeing not to vigorously represent clients vis--vis an insurance company in exchange for the insurance companys assistance with recruiting those clients. Stopping this collusive scheme is in the public interest. For the reasons stated herein, Plaintiffs motion for a preliminary injunction should be granted. Respectfully submitted this 18th day of March 2014. /s/ William H. Horton William H. Horton (BPR No. 1935) Horton, Ballard & Pemerton 735 Broad Street, Suite 306 Chattanooga, Tennessee 37402 (423) 826-2645 (423) 826-2639 (fax) WHorton@whorton-law.com William L. Messenger (Va. Bar No. 47179)* c/o National Right to Work Legal Defense Foundation 8001 Braddock Road, Suite 600 Springfield, Virginia 22160 (703) 321-8510 (703) 321-9319 (fax) wlm@nrtw.org * Pro hac vice motion to be filed Attorneys for Plaintiffs 24

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CERTIFICATE OF SERVICE I hereby certify that on the 18th day of March, 2014, a copy of the foregoing pleading was filed electronically. Notice of this filing will be sent by operation of the Courts electronic filing system to all parties indicated on the electronic filing receipt. All other parties will be served by personal service or U.S. mail. Parties may access this filing through the Courts electronic filing system. HORTON, BALLARD & PEMERTON By: s/ William H. Horton

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