Cleanup of Pence family gas stations cost Indiana more than $20 million


Vice President Mike Pence turns nostalgic when he talks about growing up in small-town Columbus, Indiana, where his father helped build a Midwestern empire of more than 200 gas stations that provided an upbringing on the “front row of the American dream.”

The collapse of Kiel Bros. Oil Co. in 2004 was widely publicized. Less known is that the state of Indiana — and, to a smaller extent, Kentucky and Illinois — are still on the hook for millions of dollars to clean up more than 85 contaminated sites across the three states, including underground tanks that leaked toxic chemicals into soil, streams and wells.

Indiana alone has spent at least $21 million on the cleanup thus far, or an average of about $500,000 per site, according to an analysis of records by The Associated Press. And the work is nowhere near complete.

The federal government, meanwhile, plans to clean up a plume of cancer-causing solvent discovered beneath a former Kiel Bros. station that threatens drinking water near the Pence family’s hometown.

To assess the pollution costs, the AP reviewed thousands of pages of court documents, tax statements, business filings and federal financial disclosures, as well as federal and state environmental records for Indiana, Kentucky and Illinois. The total financial impact isn’t clear because Indiana officials have yet to release cost figures for 12 contaminated areas. Other records are incomplete, redacted or missing.

The public cleanup of more than 25 former Kiel Bros. sites in Kentucky and Illinois — where officials have done a better job keeping costs down — has been much less expensive, totaling about $1.7 million, according to an analysis of records obtained under each state’s public records law.

Kiel Bros. has paid for only a fraction of the overall effort. In court documents , the company cited payment of $8.8 million in “indemnity and defense costs,” but also noted that $5 million of that amount came from the states.

Indiana’s Department of Environmental Management, which regulates gas stations, did not respond to a detailed list of questions from the AP. Spokesman Ryan Clem said the agency is working to provide records requested under Indiana’s public records law that could shed some light on how much former Kiel Bros. sites have cost the state.

Pence spokeswoman Alyssa Farah called the findings “a years old issue” that the vice president has addressed before. She did not elaborate.

In a statement, Pence’s older brother Greg Pence — who was president of Kiel Bros. when it went bankrupt and is now running for Congress as a Republican — distanced himself from the cleanup costs.

“Greg Pence has had nothing to do with Kiel Bros since 2004. This is another attempt by the liberal media to rehash old, baseless attacks,” campaign spokeswoman Molly Gillaspie said.

The fact that the company stuck taxpayers with the lion’s share of the cleanup bill rankles some observers, especially in light of the family’s reputation as budget hawks critical of government spending.

The Pence family, especially Greg Pence, has “some answering in public” to do, said A. James Barnes, an environmental law professor who served in high-ranking posts at the Environmental Protection Agency under President Ronald Reagan.

Mike Pence, then a third-year congressman, lost more than $600,000 when the company went under. He later became Indiana governor and now has assets worth between $532,000 and $1.13 million. Greg Pence, who is seeking the vice president’s old congressional seat, has total assets worth $5.7 to $26 million.

Nearly a decade after going under, Kiel Bros. sites still ranked among the top 10 recipients of state money for such cleanups in Indiana in 2013, the last year for which the petroleum industry has reliable spending data for the company. That was out of more than 230 companies seeking cleanup money that year, including major gas station chains with a substantially larger presence in the state.

Founded as an oil distributor by businessman Carl Kiel in 1960, the company expanded into the gas station business. Pence’s father, Edward, joined in the early years and, by the mid-1970s, rose to corporate vice president.

Mike Pence says he worked for the business — which mostly operated under the name Tobacco Road — starting at age 14. But it was his brother who took over after Edward Pence’s 1988 death and eventually became president.

By the early 2000s, Kiel Bros. was swimming in debt as industry consolidation and low gas prices stretched profit margins to the brink. The business racked up environmental fines and closed stores. In June 2004, Greg Pence resigned as the company filed for bankruptcy.

“The oil and gas industry changed rapidly in the 1990s and early 2000s, and many small, independent companies like Kiel Brothers were not able to survive,” said Gillaspie, Greg Pence’s spokeswoman.

Not long after, Pence also resigned from the board of a local bank that loaned $16 million to the company. He and Ted Kiel, whose father founded the company, had personally guaranteed the loans, promising to repay outstanding debts with their own assets, records show.

Ted Kiel settled. The bank fought Greg Pence in court and obtained a $3.8 million judgment, which he later settled for pennies on the dollar, according to records and interviews.

Gillaspie said Pence reached a “satisfactory settlement agreement with all parties.”

Many of the gas stations were sold off and are still operating. But some sites were abandoned, including a graffiti-covered storage tank facility that once towered over an Indianapolis neighborhood. Nearby residents cheered last December as a crew tore down the tank, which was sold by the company for $10 in 2005 and has been an eyesore ever since. The cleanup will cost an estimated $260,000 , according to the city.

Elsewhere in the city, business continues as usual at a gas station that has been in continuous state of cleanup since 1990. Pictures taken in 1992 show standing pools of black sludge where two underground storage tanks were removed. At the time, Greg Pence and state environmental regulators pledged to work together on the cleanup. Since then, it has become one of the most expensive Kiel Bros. sites, costing the state $1.7 million.

In the immediate aftermath of the bankruptcy, the state sought about $8.4 million from the company for cleanup and fines. After a new Republican governor, Mitch Daniels, assumed office in 2005, the state dropped that claim , which had been filed under Daniels’ Democratic predecessor, Gov. Joe Kernan.

The justification for the change is a matter of debate.

Citing the complexities of bankruptcy law, experts said there was no guarantee a judge would approve Indiana’s claim.

“Bankruptcy court is the last refuge of environmental scofflaws,” said Pat Parenteau, a Vermont Law School professor who specializes in environmental and natural resource issues. “This is one of the more fiendishly complicated areas of crossover between environmental law and bankruptcy law that you can imagine.”

But Tim Method, a former deputy commissioner of the Indiana Department of Environmental Management, said the state’s approach to business regulation changed abruptly with the new administration.

“Daniels felt we ought to work for business rather than be a hindrance,” said Method, who was among a handful of administrators forced out after Daniels took over.

Greg Pence wasn’t out of work for long. Within months, Daniels appointed him deputy commissioner of the Department of Environmental Management, the same agency fighting Kiel Bros. in court. Pence stepped down after only a few months, however, and returned to the petroleum business.

Daniels spokesman Jim Bush said the Pence family’s political influence played no role in Greg Pence’s hire. He declined to comment on the state’s decision to drop its claim against Kiel Bros. in bankruptcy court.

For some families living near Columbus, the Kiel Bros. business left behind more than debt. They smelled oil in water drawn from private wells. Nearly three decades later, the unincorporated area known as Garden City is a federal Superfund site, a designation reserved for the nation’s most heavily polluted locations.

Investigators initially determined Kiel Bros. was the source of the oil, along with a plume of trichloroethylene detected decades ago under a gas station. The chemical called TCE is a solvent used to degrease metal parts. The EPA says the plume is drifting toward the aquifer that is Columbus’ primary source of drinking water.

State officials seesawed over whether the company was responsible for the TCE before concluding in 2002 that it was not.

“Why did we absolve the company that we think the problem started with?” said Kevin Butler, a former teacher whose father was one of the first to smell the oil. “It just doesn’t seem very logical that this problem would be centered to this area, and confined to this area, if it wasn’t the responsibility of that company.”

Indiana has since spent more than $860,000 cleaning up the petroleum. The EPA estimates it could cost $320,000 to $1.6 million to take care of the TCE, which taxpayers will likely foot the bill for.

After Kiel Bros. filed for bankruptcy, more than 500 creditors sought more than $150 million from the company, with the state of Indiana filing one of the largest claims, records show .

In dropping its claims against the company for more than $8.4 million, state officials stated in a 2007 court filing that “significant cleanup activity has occurred.” They also said they were “satisfied” with the company’s plan for future cleanup, which relied on the state paying much of the cost.

The decision likely made more money available for other creditors, including businesses the company was in debt to, said John A. E. Pottow, a bankruptcy expert and University of Michigan Law School professor.

“You don’t normally drop your claims in a bankruptcy case, so that’s kind of weird,” said Pottow. “If I’m a creditor, I am elated if one of my peers drops their claim.”

When an underground tank leaks, companies are liable for the damage, but Indiana has been especially amenable to using public money to pay for heavily contaminated soil to be excavated and for high-powered pumps to suck toxic liquid and vapor from the soil.

The state’s payout limit was $2 million per site until Mike Pence signed a 2016 law as governor, increasing it to $2.5 million. In 2016, Indiana paid out nearly two-and-a-half times the national average per incident, according to records.

Historically, Indiana has been somewhat ambivalent toward environmental enforcement, said David M. Uhlmann, an environmental law and policy professor at University of Michigan Law School.

The decision to drop the court fight with Kiel Bros. could have been “Indiana being Indiana,” Uhlmann said. But another plausible explanation “is Pence and his family having outsized influence,” he said.

Farah, the vice president’s spokeswoman, said Pence did not use his political position to gain favorable treatment for his brother or the company, saying any suggestion otherwise is “simply not grounded in fact.”

Just outside the Pences’ hometown, the state installed elaborate water-filtration systems decades ago at several homes and businesses that are closest to the service station above the chemical plume.

Mike Musillami, owner of a drive-in restaurant, said he’s fortunate to have the equipment, which is maintained by state officials. But many of his customers aren’t as lucky, he said. They rely on bottled water or paper cartridge filters or simply take the risk of drinking from the tap without an elaborate filtration system.

“Long term, this cannot be good for them,” he said. “These are people who are our daily customers. We want them around a long time.”

By: Brian Slodysko

Associated Press

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A tank at a Kiel Bros. facility is torn down in Indianapolis on Dec. 11, 2017. (Brian Slodysko / AP)

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On Amazon Prime Day, worker strikes and a site crash dent online shopping bonanza

amazon.jpg workers, who have long gone on strike in the run-up to the holidays, have found a new occasion to get their employer’s attention: “Prime Day.”

Nearly 1,800 Amazon workers in Spain went on strike Monday during Prime Day, the company’s biggest sales day of the year, according to labor activitists. Thousands more Amazon employees in Germany are expected to walk off the job Tuesday, the second day of the 36-hour sale, for similar reasons. The unions that represent the warehouse workers, Comisiones Obreras and Verdi services union, say they are calling for better working conditions, pay and health benefits.

“The message is clear — while the online giant gets rich, it is saving money on the health of its workers,” Verdi spokeswoman Stefanie Nutzenberger said in a statement on the German union’s website.

Prime Day, which Amazon created four years ago, has grown rapidly in recent years and now brings in billions in sales for the company. On Monday, the sale kicked off at 3 p.m. — and almost immediately crashed Amazon’s website and mobile app for about 45 minutes. “UH-OH,” said a message on the company’s app. “Something went wrong on our end.” Amazon said it was trying to fix the problem.

The Prime Day computer glitch — which appeared to be the most widespread to date — and worker strikes added up to a spate of bad news for the online giant, which has been heavily promoting its discount event for weeks.

“There is no doubt that this will erode sales and deter some customers from buying,” said Neil Saunders, managing director of research firm GlobalData Retail. “The outage is especially problematic as many of Amazon’s Prime deals are promoted for a set window of time — something that could cause a great deal of frustration for potential customers.”

This week’s labor protests underscore a growing challenge for Amazon: It is facing increased scrutiny over its hiring and labor practices at a time when it is looking to add thousands of new warehouse workers and growing at breakneck speed.

Amazon and its billionaire founder, Jeff Bezos, have a long history of thwarting unionization efforts in the United States. (Bezos also owns The Washington Post, where last week unionized employees approved a new contract with the newspaper company after 14 months of tense negotiations.)

But in Europe, where unionization is more widespread, labor unions have been on the front lines of calling for workers’ rights at the company’s warehouse facilities, where physical demands can be grueling and temperatures can reach extremes. Until now, though, most of their efforts have been centered on the critical holiday season. In November, for example, hundreds of Amazon workers in Italy and Germany went on strike, saying they were under “high pressure to create more and more in less time.”

A spokeswoman for the Seattle-based giant said it was committed to providing workers with “positive working conditions.”

“Amazon is a fair and responsible employer and as such we are committed to dialogue, which is an inseparable part of our culture,” spokeswoman Melanie Etches said in an email.

This week’s strikes have also inspired widespread calls on social media platforms for shopper boycotts.

In the United States, advocacy groups are planning several consumer rallies outside Amazon-owned Whole Foods Market locations to protest the sale of Nazi, Confederate and white nationalist merchandise through Amazon’s marketplace of third-party sellers. There have also been widespread calls on social media for shoppers to boycott Amazon during Prime Day, which continues through Tuesday.

“People are demanding change, not just from politicians but also businesses,” the Action Center on Race and the Economy said in a statement promoting Whole Foods protests. “The goal of #PrimeDayofAction is to raise awareness about the harmful practices of the nation’s largest online retailer and to ask: is there anything Amazon won’t do for a dollar?”

It is too soon to tell, protest organizers said, how the workers’ strikes might affect shipments throughout Europe. “It is a priority of Amazon to serve and keep our customers’ delivery promises,” said Etches, the Amazon spokeswoman.

Employee walkouts in Germany are expected to affect six warehouses, while labor organizers in Spain say about 96 percent of workers at the company’s San Fernando warehouse outside Madrid are on strike. (Amazon disputed that figure and said “the majority” of employees at the Spanish facility were at work Monday.)

“Amazon is a massive behemoth — it will take more than a strike in Spain to rattle its cage,” said Peter Horst, founder of marketing consulting firm CMO. “But at the same time, these strikes create a moment for consumers to pause and say, ‘What’s happening here? I love these low prices, but I’m also starting to have sympathy for some of these workers.'”

He and others pointed to Walmart, Amazon’s largest competitor, as a cautionary tale. The company has become the world’s largest retailer, mostly by offering rock-bottom prices, but it has also received widespread criticism for the treatment of its workers, some of whom say they have had to rely on government programs to make ends meet.

This year’s Prime Day is expected to bring in $3.4 billion for the company, up from an estimated $2.4 billion a year ago, according to retail research firm Coresight Research. Despite the event’s rocky start, Amazon said demand continued to be high.

A number of other retailers, including Target, Macy’s, Kohl’s and eBay, are also promoting discounts throughout the week.

First published by The Washington Post

By: Abha Bhattarai

Washington Post

Article Photo:

Packages move along a conveyor belt at the Inc. fulfillment center in Robbinsville, New Jersey on June 7. As Prime Day kicks off, workers in Spain are striking, demanding better working conditions. (Bess Adler / Bloomberg)

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From arbitration to discrimination: 3 ways Trump’s Supreme Court pick could transform U.S. labor law


President Donald Trump‘s nominee for the Supreme Court may prove a crucial conservative vote in cases defining protections for gay and lesbian workers, the scope of union organizing, and the rights of workers to take their grievances to court, according to labor law experts.

On Monday night, Trump announced the selection of Brett Kavanaugh, a federal judge on the U.S. Court of Appeals for the District of Columbia Circuit.

The Supreme Court dealt two significant blows to unions in its most recent term, issuing one ruling that will weaken funding for public sector unions and another that lets companies force workers to settle complaints through private arbitration instead of the courts.

Justice Anthony Kennedy, who said late last month that he would step down from the bench, sided with the conservatives in both cases. But experts said the court’s opposition to organized labor’s priorities are likely to intensify if Kavanaugh is confirmed, as business groups will accelerate their efforts to erode the clout of unions under a conservative court.

“This last term was horrendous for workers. If you are to have imagined a nightmare scenario for workers and workers rights, this would be it,” said Benjamin Sachs, a labor law expert at Harvard University. “But in those cases, the ruling justices also planted seeds that could lead to further damage against workers.”

On the right, conservative policy experts expressed optimism that Trump’s nominee would continue pushing the court in the direction Chief Justice John Roberts has steered it in recent years.

“The Supreme Court has shown enthusiasm for respecting the rights of individual workers and going after a constitutionally questionable status quo of forced unionism,” said Akash Chougule, policy director at Americans for Prosperity, a conservative advocacy group tied to the network run by the billionaire Koch brothers. “Where constitutional questions remain, we think that effort will continue.”

An overview of Kavanaugh’s written opinions on labor law by Littler Mendelson P.C., a law firm that represents employers in labor disputes, found that the nominee’s writings “do not reveal any particular leanings that might concern the employer community.” Richard Trumka, president of the AFL-CIO, said Kavanaugh “routinely rules against working families” and denies “employees relief from discrimination in the workplace.”

Here are three areas where Trump’s Supreme Court pick could dramatically change U.S. labor law.

1. The scope of the union.

Workers can form a union with a simple majority vote. Under current labor law, the union represents all the workers in the relevant group – whether they voted for the union to be formed or not.

But the Supreme Court’s ruling in Janus v. AFSCME said government workers cannot be forced to pay fees to a union, calling it a violation of their free speech rights. Now, labor groups fear that the court will take one step further and say public sector workers also cannot be represented by a union they did not seek to join. The court could rule that membership requires some sort of declaration from an employee that she wants to be a part of the union, which could reduce the number of workers the union represents.

“It’s the cornerstone of our whole labor system since the New Deal,” said Kate Andrias, a labor law expert at the University of Michigan. “Pulling that apart represents real change – there’s no doubt, whatever side you’re on, that it would be a huge transformation of our labor relations.”

Several cases have already been filed by the National Right to Work Committee that aim to limit unions’ ability to represent all the workers in a given unit, according to Sachs, the Harvard professor. One of those cases could eventually land before the Supreme Court.

2. Employment discrimination against gay people.

Kavanaugh may also have to decide whether businesses can discriminate in hiring based on sexual orientation. The courts had long held that a company can reject a job application because someone is gay, bisexual or transgender. But, more recently, some lower courts – including the U.S. Court of Appeals for the 2nd Circuit – have found that LGBTQ people are protected from hiring discrimination.

That at least raises the possibility that the Supreme Court will eventually have to weigh in, with the employment outcomes for millions of people potentially hanging in the balance.

“It’s a momentous question,” said Brishen Rogers, a labor law professor at Temple Law School and visiting scholar at the Roosevelt Institute, a left-leaning think-tank.

Under Kennedy, gay rights activists were optimistic they had an ally. Kennedy wrote the majority opinion in Obergefell v. Hodges, the 2015 case that found that same-sex couples have the right to marry. That ruling suggested that he could support broader employment protections for gay and lesbian workers.

“Most people were pretty optimistic with Kennedy that he’d say lesbian, gay and bisexual people were protected,” Rogers said. “With a more conservative replacement, it’s less likely that would happen.”

In employment discrimination cases, Kavanaugh’s decisions “over the years typically favored the employer,” the review by Littler Mendelson found. The review did not specifically cite a case about discrimination based on sexual orientation.

3. Taking employers to courts instead of arbitration.

Organized labor is also worried that a court that includes Trump’s nominee would allow more employers to force their workers to take their complaints through arbitration, a private adjudication, rather than through the public courts.

In its most recent session, the Supreme Court ruled in Epic Systems Corp. v. Lewis that companies can require workers to settle employment disputes through individual arbitration, finding that employees should not always have the ability to bring collective action claims through the courts. The decision, written by Justice Neil Gorsuch, a Trump appointee, could affect more than 25 million workers.

Business groups celebrated the decision, arguing that it will help employers avoid expensive litigation. But liberals and labor advocates fear that the court could further erode workers’ ability to pursue an independent judgment on their grievances. The Supreme Court has already suggested that it will hear one case about forced arbitration.

“It’s a huge concern for us,” said Cathy Ruckelshaus, general counsel at the National Employment Law Project. “It’s keeping people out of courts and unable to get any remedy under the labor and employment statutes.”

Kavanaugh ruled last year against employees’ right to bring a lawsuit under the Occupational Safety and Health Act’s retaliation provision, the Littler Mendelson review said.

Jeff Stein
Washington Post
Article Photo:

Brett Kavanaugh, President Donald Trump’s nominee to fill Justice Anthony Kennedy’s seat on the Supreme Court, speaks on July 9, 2018.

(Michael Reynolds / EPA-EFE/REX)

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Supreme Court’s Janus ruling could undercut private sector unions too

labor day .jpg

Supreme Court ruling last month that said public sector workers can’t be forced to pay fees to unions they don’t want to join could squeeze overall union revenue, limiting organized labor’s ability to champion a variety of progressive causes that affect private sector workplaces as well, some labor experts say.

Unions, and organizations funded by them, have driven a flurry of state and local legislation in recent years that has mandated minimum wage increases, paid sick time, parental leave and predictable scheduling for shift workers. Chicago instituted paid sick leave laws and is raising its minimum wage to $13 an hour in part because of union-funded campaigns.

Lisa Vickery, an attorney at Fisher Phillips who represents management in labor cases, believes a hit to union coffers could dampen those initiatives.

“I don’t think we can underestimate the role that unions play in legislation, particularly in pushing ballot initiatives,” Vickery said. “We are going to see a decrease in this political activity.”

Money that unions funnel toward Democratic candidates who help get those laws passed also could dry up, said Cesar Rosado, co-director of the Institute for Law and the Workplace at Chicago-Kent College of Law.

“I think this is going to have a huge impact on funds for union activity overall and progressive causes,” Rosado said.

Unions have relied on strong growth in their public sector ranks as private sector membership has dwindled. In Illinois, more than half of government workers are union members, compared with 10 percent of private sector workers, according to Nationwide, government workers make up nearly half of the unionized workforce even though they represent a less than 20 percent of the total workforce.

Last month’s 5-4 ruling against the American Federation of State, County and Municipal Employees, the nation’s largest public sector union, bars unions from collecting mandatory fees from government employees who don’t want to join the union but still benefit from the contracts negotiated on their behalf.

The decision in Janus v. AFSCME, a case that originated in Illinois, is considered a massive blow to organized labor because employees may be disinclined to join unions if they don’t have to pay anything to reap the contract benefits. Unions are required to represent all workers in the bargaining unit, including in expensive arbitration proceedings, regardless of whether they are members.

A loss of dues-paying government workers “threatens the larger capacity of the labor union to be effective for raising wages and benefits and moving policy,” said Bob Bruno, labor professor at the University of Illinois at Urbana-Champaign. Bruno, in a study conducted with the Illinois Economic Policy Institute, estimates that the Janus ruling will decrease public sector union membership, in Illinois and nationally, by about 8 percent.

The Service Employees International Union — which counts 2 million members, half of them public sector workers — cut its budget by 30 percent in anticipation of the Supreme Court’s decision, President Mary Kay Henry has said. The union is behind the Fight for $15 campaign to organize and raise the wages of fast-food workers and other private sector employees who traditionally have not been unionized.

But Henry minimized concerns that a funding dip would damage those workplace initiatives.

“SEIU members won’t let this court case impact our campaigns to help working people — white, black and brown — join together in unions,” Henry said in an emailed statement. “We’re going to keep our foot on the gas — we won’t slow down until we turn millions of poverty-wage jobs into union jobs that pay enough to raise a family on.”

Jeremy Glenn, an attorney at Cozen O’Connor who represents management in labor cases, believes unions will continue to invest in minimum wage and other legislative advocacy in order to demonstrate their value as they fight to keep members.

He also expects them to ramp up efforts to organize private sector employees in industries that traditionally have not been unionized to make up for a possible decline in public sector membership. They have been doing that for years to combat a general membership decline, making inroads in white-collar professions such as adjunct university professors and graduate student teaching assistants, as well as low-skill service jobs such as baggage handlers and cabin cleaners employed by private contractors at airports.

Still, Glenn expects the Janus ruling to result in a loss of revenue that will affect unions’ staffing, and that could have an impact on private sector workplaces in other ways.

Unions may employ fewer business representatives who help members negotiate grievances, and as a result may focus on resolving grievances through settlements rather taking them to arbitration, he said. Or, he said, companies may see more employees representing themselves in arbitration, which could take longer and cost employers more.

Meanwhile, the Janus ruling could give momentum to efforts to abolish mandatory fees for private sector union members altogether.

Currently 28 states have adopted right-to-work legislation that says individuals can’t be required to join labor unions or pay union dues. A national bill is pending in Congress.

“There will be pressure to give private sector employees (in the remaining 22 states) the same choice: the option to opt out of paying agency fees,” Glenn said.

Private sector employees in unionized workplaces who don’t want to be members currently have the right to file paperwork to become Beck objectors, which means they pay lower fees that go only to collective bargaining, contract administration and grievance adjustment. But typically the Beck objector fee is only about 15 percent less than full union dues, and for many people it isn’t worth the hassle, Glenn said. The option to opt out entirely could be more enticing, he said.

Illinois, a union stronghold with an overwhelmingly Democratic legislature, is not expected to pass a state right-to-work law despite Republican Gov. Bruce Rauner’s support. But if unions’ diminished capacity to fund labor-friendly legislators reshapes the political composition of state governments, even historically blue states could swing toward adopting right-to-work legislation, Bruno said.

Some pro-labor advocates, including Bruno, worry that the Janus ruling could also help right-to-work activists bring a constitutional challenge to mandatory fees in private sector unions. But whether the Supreme Court’s logic in outlawing fair-share fees in the public sector could be extended to the private sector is a matter of debate.

The fair-share fees required of employees who decline to join the union — which in the Janus case were about $45 monthly, or 22 percent less than regular dues — are meant to support only the union’s collective bargaining activities and not its political initiatives. But Justice Samuel Alito’s majority opinion said that all public sector bargaining is inherently political. Collecting fees from nonconsenting government employees, who are protected by the First Amendment, violates their free-speech rights, the court said.

Private sector employees don’t have that same First Amendment protection in their employer relationships, and most legal analyses of the ruling said the court’s reasoning wouldn’t apply to them. But Chicago-Kent’s Rosado disagrees.

Private sector employees are governed by the National Labor Relations Act, a federal law that requires employers to bargain with unions that employees have voted to represent them, and those unions may set mandatory fees and may lobby for all sorts of public causes, including government spending and minimum wage levels, that some employees may not agree with, he said.

“I don’t see a big difference, therefore, between the First Amendment issue in the public and private sectors,” Rosado said. “Therefore, I can totally see Janus getting extended to the private sector.”

As a result, Rosado said, labor unions will have to try harder to get workers to pay fees voluntarily — and that’s not a bad thing, he said.

Unions are shifting strategy to demonstrate not only their value to their members, but to society at large, Bruno said.

“It’s important the union be seen in the community as a champion of the community’s interest, so that when they’re bargaining it’s not just for their members but for the common good,” Bruno said. “More money in schools, more racial justice, more health care clinics on the South Side, you rally with public housing advocates and social justice advocates. And when you bargain you do so with those communities in mind.”

At the regional chapter of SEIU Healthcare, which represents about 90,000 public and private sector health care workers in Illinois, Indiana, Missouri and Kansas, spokesman James Muhammed said bracing for numerous legal challenges to mandatory fees has made the union stronger. The union has ramped up communication about the benefits of membership and the importance of uniting to fight “the forces that are against organized labor,” Muhammed said. Members are now more educated about the historic role unions played in setting basic worker standards, such as vacation days, he said.

SEIU Local 1 in Chicago — which represents mostly private sector employees, including food service workers, janitors, window washers and security officers in six Midwestern states — for several years has been engaged in an “intense effort” to get members to renew their membership, in anticipation of the Supreme Court acting on the fee issue as well as the proliferation of right-to-work laws now in place in most of the states it operates in, said spokeswoman Izabela Miltko-Ivkovich. The messaging is not only about the benefits of membership “but also understanding that economic justice cannot be attained without racial, environmental and immigrant justice,” she said.

The local has renewed 92 percent of its members, she said, and it was able to keep membership steady even in its four right-to-work states (Michigan, Wisconsin, Indiana and Missouri).

“When there’s a crisis, people come forward and unite in solidarity in a way that people don’t when times are comfortable,” said the Rev. C.J. Hawking, executive director of Arise Chicago, a nonprofit that advocates for the rights of low-wage, nonunionized private sector workers, such as domestic workers.

That renewed solidarity has consequences. As unions in the public and private sectors get more aggressive in rallying workers against a common enemy, it could cause more labor strife, Rosado said.

“The good part is that it generates this vibrancy, this militancy,” Rosado said. “The downside is that it might make it harder for these unions to have any kind of working relationship with management.”

Chicago Tribune

Twitter @alexiaer

Article Photo:

Union supporters march on Labor Day to protest low wages on Sept. 4, 2017, in downtown Chicago. The recent Supreme Court ruling that says public sector workers can’t be forced to pay fees to unions could weaken labor organizations and limit their political activism. (Nancy Stone / Chicago Tribune)

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Third-party governor candidate McCann will get to stay on November ballot


State Sen. Sam McCann will appear on the November ballot as a third-party candidate for governor after Republicans aligned with Gov. Bruce Rauner declined to challenge his candidacy.

Monday marked the deadline to dispute the validity of candidate petitions with the Illinois State Board of Elections. But a spokesman for the Illinois Republican Party said the group decided not to pursue a challenge after a review found McCann had reached the 25,000 signatures needed to qualify.

McCann, a Republican from central Illinois, is running for governor under the new banner of the Conservative Party. He is a supporter of organized labor, and he long has been at odds with Rauner, contending the governor has alienated fiscal and social conservatives.

Republican and Democratic candidates seeking statewide office need a minimum of 5,000 petition signatures to get on the ballot, but that threshold jumps to 25,000 for third-party candidates. McCann last week turned in roughly 65,000 in an attempt to survive any challenges to his candidacy.

The state GOP that Rauner heavily subsidizes has called him a “spoiler” amid concerns he could draw support from the governor’s GOP base to the benefit of Democrat candidate J.B. Pritzker. Rauner has labeled him a “pawn” of Pritzker and House Speaker Michael Madigan, who also heads the Democratic Party of Illinois. McCann received $50,000 from the International Union of Operating Engineers Local 150, which endorsed Pritzker in the primary election.

McCann has rejected those attacks, saying he offers an alternative to the “political elite” in the Democrat and Republican parties, noting the vast personal wealth of both Pritzker and Rauner.

“The only choice is McCann based on Gov. Rauner’s failures and J.B. Pritzker’s shortcomings,” McCann spokesman Rick Crosley said Monday.

His campaign adds another hurdle to Rauner’s re-election bid, which narrowly survived a primary challenge from state Rep. Jeanne Ives of Wheaton. Ives lost by just 3 percentage points after mobilizing social conservatives angry about Rauner’s signature on laws that expanded abortion, immigrant and transgender rights.

McCann has seized on similar issues, while also criticizing Rauner for failing to prevent an income tax hike after several Republican lawmakers joined Democrats last summer to raise taxes and end a yearslong budget standoff.

McCann has faced political controversies in the past involving taxes owed by his construction firms, his military record and his use of campaign money. McCann acknowledged last year using campaign funds to purchase a $61,000 SUV, as well as an engine for a personally owned Jeep, and spending more than $19,000 for a truck and trailer for parades.

Monique Garcia

Chicago Tribune

Twitter @moniquegarcia

Article Photo:

State Sen. Sam McCann sits in the Senate chamber in Springfield on May 31, 2018. He’s running for governor as a third-party candidate. (Terrence Antonio James / Chicago Tribune)

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Morning Spin: As Supreme Court ruling threatens labor, teacher union leader says it’s been adding members

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Illinois Federation of Teachers President Dan Montgomery says the union has been growing statewide and nationally despite last week’s expected Supreme Court ruling that stopped the collection of “fair share” bargaining fees from public workers who don’t want to be union members.

“Our union is adding members. The AFT (American Federation of Teachers), our national union, is bigger than it’s ever been. We’re adding members here in Illinois all the time. … The graduate employees at the University of Chicago have just voted to join us,” Montgomery said Sunday on WGN AM-720.

“People want to be in the union and they want to be active,” he said.

Montgomery said he believes the union still will be very politically active — both with campaign contributions for candidates and boots on the ground. He said attendance at regional forums to meet and question candidates was up during the primary campaign.

Montgomery noted teacher mobilization efforts in several Republican-leaning states, the “Red for Ed Movement” as it was dubbed, involved places where collective bargaining was illegal and no “fair share” laws were in effect.

“That didn’t stop the teachers from organizing and taking to the streets and actually having a lot of public support,” he said. “I think that’s just the mode we’re in right now with the extreme right-ward conservative turn the nation’s taken.” (Rick Pearson)

By Chicago Tribune staff
Article Photo:
In this June 25, 2018, photo, people gather at the Supreme Court awaiting a decision in the Illinois union dues case Janus vs. AFSCME. (J. Scott Applewhite / AP)
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No July Meeting!

Laborers Local One will not have a July monthly membership meeting. Please expect a phone call reminder about it. We will come back to our normal meeting schedule Tuesday, August 7, 2018. Have a safe and happy Independence Day!