Funding of employee’s action against union was interference: Board

Alberta employer’s coverage of almost $150,000 spent by employee challenging union merger ruled an unfair labour practice

An Alberta employer that paid the legal expenses of an employee challenging a union merge interfered with the rights of employees to choose their bargaining agent, the Alberta Labour Relations Board has ruled.

Gateway Casinos operated a casino in Edmonton and its employees were represented by the Palace Casino Staff Association, a small independent trade union. In late 2002, the association began exploring the possibility of merging with a larger, mainstream union. Negotiations began with the United Food and Commercial Workers, Local 401 (UFCW) and on June 27, 2003, it held a general meeting where its members could vote on the merger.

Employee challenged union succession

Sean Bennett, an executive with the association and a casino employee, was against the merger due to the timing and the lack of an alternative to the UFCW. He talked to his manager about the situation and was told he had three choices: Do nothing, complain to the labour relations board or seek legal advice on how to challenge the merger. The manager also gave him the name of a legal firm.

The vote passed and the UFCW applied to the board to succeed the association as the bargaining agent for casino employees. On the same day, Bennett filed an application with the Alberta Court of Queen’s Bench to declare the merger a nullity. Gateway then denied the UFCW access to the casino, but the board ordered it to give the union interim access.

The board held hearings on the successorship application in October and November 2003 and both Gateway and Bennett opposed the application with their own legal counsel. The UFCW was confirmed as the successor union on May 10, 2004.

Both Gateway and Bennett appealed the decision to the Court of Queen’s Bench but failed. The UFCW was certified to represent casino employees on Aug. 24, 2005. After failing to reach a new collective agreement the following month, casino employees went on strike.

Employer paid for employee’s legal expenses

During the strike, Bennett told the union that throughout the legal wrangling, Gateway had paid for all of his legal expenses except for $350 in retaining fees. Including his legal representation at the June 27 meeting, his application to have the merger declared a nullity, his participation in the successorship hearings and the appeals in court, the total expenses paid by Gateway amounted to $148,041.40. The UFCW filed an unfair labour practice complaint against Gateway, claiming it interfered with the process of employees choosing their bargaining agent and the formation of the union, contrary to Alberta’s Labour Relations Code.

The board cited previous cases where the payment of an employee’s legal fees in similar circumstances by the employer was “characterized as a financial subsidy or reward to an employee related specifically to his anti-union efforts.” This supported the concept that it was contrary to labour relations legislation for an employer to financially reward an employee for activity related to union formation or cessation because it could affect the process.

Both Bennett and Gateway were opposed to the merger of the staff association and the UFCW and this resulted in legal wrangling that lasted almost two years. Much of this legal wrangling was caused by Bennett’s applications and legal challenges, which were funded by Gateway. The board found it was unlikely Bennett would have done as much without Gateway’s financial support and the extent of his challenges may have influenced other employees who might have been “sitting on the fence.”

“Bennett had the right to oppose the merger with UFCW and the right to take legal proceedings to challenge the merger but these are rights to be exercised by him personally and not by the employer,” said the board. “The fact the employer was prepared to pay $148.041.40 would lead any reasonable employee to conclude that the employer was strongly supportive of the employee’s anti-UFCW activities and that perhaps such activities would be rewarded at some future time.”

Gateway argued other employees didn’t know it was funding Bennett’s legal actions, but the board found strengthening his legal battle provided more legitimacy to the employer’s opposition to the merger by having Bennett and other employees aligned with its position. The “surreptitious payments” to Bennett supported employee opposition to the merger and created an illusion that some employees were so opposed to the merger they were putting their own money up to challenge it, said the board.

The board found Gateway violated the code by interfering with the union succession process. Gateway’s funding of Bennett’s legal challenges made it too involved in the process and may have influenced the choice of employees voting on the merger, making it an unfair labour practice. See Gateway Casinos G.P. Inc. v. U.F.C.W., Local 401, 2010 CarswellAlta 1143 (Alta. Lab. Rel. Bd.).

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