Union blabs to members despite confidentiality agreement
Early bargaining for a new collective agreement sounds like a good idea, but it may not always work out that way. Take the case of Inergi, an Ontario company that provides business services to Hydro One, and its union, the Society of Energy Professionals.
Union representative Andre Kolompar suggested to Alex Brat, Inergi’s senior director of labour relations, that bargaining be started several months before the collective agreement was due to expire. If it didn’t work out, they would just proceed with the regular bargaining process once the agreement had expired. The two sides agreed all discussions would be strictly confidential and “not be disclosed to anyone not directly involved with the process.”
What went wrong
As it turned out, there was an underlying mistrust between the union and management that stemmed from contracting out work. The previous round of negotiations had resulted in the inclusion of Article X in the collective agreement, which addressed a concept called “rightshoring.” It prohibited any contracting out or offshoring of work being performed by union members if it resulted in a reduction of bargaining union staff. Soon after the agreement came into effect, Inergi closed one of its other operations and moved its work offshore — a move that probably ratcheted up worries about job security.
Another wrinkle was that when Brat came to work for Inergi, he was publicly critical of Article X. He couldn’t understand why management would have agreed to it and accused the union of being opportunistic.
Not surprisingly, both parties later acknowledged there were problems of trust in the bargaining relationship. And when setting down the parameters of the bargaining, no one thought to tie down what was meant by “anyone not directly involved in the process.”
The parties met for three days, discovered irreconcilable differences in their views on contracting out, and early bargaining ended. Both parties communicated to others who had not been at the bargaining table and both indicated rightshoring was the main stumbling block. The union sent out a memo explaining this and said subsequent bargaining was not going to be easy.
After hearing about the memo to the union rank and file, Brat phoned Kolompar and said it violated confidentiality and legal action might follow. Later, Kolompar e-mailed Brat, saying his assumption the union would not communicate with its members “was a complete misreading” of the confidentiality agreement and advised Brat to give up his “childish antics,” including threats of redress. In a subsequent e-mail, another member of the bargaining team also expressed disappointment with the “continued threats.”
Company sought $1.5 million in damages
Inergi filed a grievance seeking $1.5 million in “punitive, aggravated and exemplary damages” against the union for breaching the confidentiality agreement and thereby interfering with its economic and contractual relationship with employees and clients. It also alleged Brat’s reputation had been defamed by the union representatives in e-mails to management.
At the arbitration, the adjudicator said the union went too far when it disclosed to the general membership the reason the early bargaining failed. Although it might have blamed the employer, the union should not have made any reference to “discussions, proposals or information exchanged during the negotiation process.” However, in answer to the company’s assertion the union was bargaining in bad faith, the arbitrator said he could find no evidence the union had “lured the employer into bargaining in order to have something bad to say about it afterward.”
The arbitrator also found there was no evidence to show any change in the economic fortunes of the company as a result of the breach of confidentiality. The employees were still honouring the collective agreement and the company’s clients had not been adversely affected by the actions of any employee. He dismissed the company’s claim for interference with economic and contractual relations.
As for the defamation issue, Brat had threatened the union with legal action. As the arbitrator observed: “As I understand it, a statement is not defamatory if it is true.” Not only that, to be defamatory, the false statement would also have to damage the person’s reputation — and Brat seemed to be in good standing with his employer.
Remedy for an acrimonious situation
The union was wrong to communicate what went on in bargaining, said the arbitrator. While the communiqué was selective in the details it disclosed and did not provide the full story of what was happening in the negotiations, it shouldn’t have disclosed anything about the content of the talks in the first place.
The problem with awarding aggravated, punitive or exemplary damages, as the arbitrator saw it, was the party seeking these damages had done the same thing by revealing to others not at the bargaining table what had gone on there. The company officials mistakenly believed, as the union did, they were entitled to do so.
Given those circumstances, severe punishment was not called for, concluded the arbitrator. Not only that, severely punishing the union’s leaders and members would have a negative effect on future relations. No economic damages as a result of the breach of confidentiality had been shown and if a small or nominal amount for damages was demanded, it might leave the impression the obligation to keep information confidential was not serious or could be avoided by “paying the equivalent of a toll or licence fee.”
In the end, the union was ordered to give its members access to the award and to post a notice drawing the employees’ attention to both the union’s wrongdoing and the arbitration decision.
For more information see:
•Inergi L.P. and the Society of Energy Professionals, (June 23, 2008), Owen V. Gray – Sole Arbitrator (Ont. Arb. Bd.).
Lorna Harris is the assistant editor of Canadian HR Reporter’s sister publication CLV Reports, a weekly newsletter that reports on collective bargaining and other issues in labour relations. She can be reached at (416) 298-5141 ext. 2617 or [email protected].
Union representative Andre Kolompar suggested to Alex Brat, Inergi’s senior director of labour relations, that bargaining be started several months before the collective agreement was due to expire. If it didn’t work out, they would just proceed with the regular bargaining process once the agreement had expired. The two sides agreed all discussions would be strictly confidential and “not be disclosed to anyone not directly involved with the process.”
What went wrong
As it turned out, there was an underlying mistrust between the union and management that stemmed from contracting out work. The previous round of negotiations had resulted in the inclusion of Article X in the collective agreement, which addressed a concept called “rightshoring.” It prohibited any contracting out or offshoring of work being performed by union members if it resulted in a reduction of bargaining union staff. Soon after the agreement came into effect, Inergi closed one of its other operations and moved its work offshore — a move that probably ratcheted up worries about job security.
Another wrinkle was that when Brat came to work for Inergi, he was publicly critical of Article X. He couldn’t understand why management would have agreed to it and accused the union of being opportunistic.
Not surprisingly, both parties later acknowledged there were problems of trust in the bargaining relationship. And when setting down the parameters of the bargaining, no one thought to tie down what was meant by “anyone not directly involved in the process.”
The parties met for three days, discovered irreconcilable differences in their views on contracting out, and early bargaining ended. Both parties communicated to others who had not been at the bargaining table and both indicated rightshoring was the main stumbling block. The union sent out a memo explaining this and said subsequent bargaining was not going to be easy.
After hearing about the memo to the union rank and file, Brat phoned Kolompar and said it violated confidentiality and legal action might follow. Later, Kolompar e-mailed Brat, saying his assumption the union would not communicate with its members “was a complete misreading” of the confidentiality agreement and advised Brat to give up his “childish antics,” including threats of redress. In a subsequent e-mail, another member of the bargaining team also expressed disappointment with the “continued threats.”
Company sought $1.5 million in damages
Inergi filed a grievance seeking $1.5 million in “punitive, aggravated and exemplary damages” against the union for breaching the confidentiality agreement and thereby interfering with its economic and contractual relationship with employees and clients. It also alleged Brat’s reputation had been defamed by the union representatives in e-mails to management.
At the arbitration, the adjudicator said the union went too far when it disclosed to the general membership the reason the early bargaining failed. Although it might have blamed the employer, the union should not have made any reference to “discussions, proposals or information exchanged during the negotiation process.” However, in answer to the company’s assertion the union was bargaining in bad faith, the arbitrator said he could find no evidence the union had “lured the employer into bargaining in order to have something bad to say about it afterward.”
The arbitrator also found there was no evidence to show any change in the economic fortunes of the company as a result of the breach of confidentiality. The employees were still honouring the collective agreement and the company’s clients had not been adversely affected by the actions of any employee. He dismissed the company’s claim for interference with economic and contractual relations.
As for the defamation issue, Brat had threatened the union with legal action. As the arbitrator observed: “As I understand it, a statement is not defamatory if it is true.” Not only that, to be defamatory, the false statement would also have to damage the person’s reputation — and Brat seemed to be in good standing with his employer.
Remedy for an acrimonious situation
The union was wrong to communicate what went on in bargaining, said the arbitrator. While the communiqué was selective in the details it disclosed and did not provide the full story of what was happening in the negotiations, it shouldn’t have disclosed anything about the content of the talks in the first place.
The problem with awarding aggravated, punitive or exemplary damages, as the arbitrator saw it, was the party seeking these damages had done the same thing by revealing to others not at the bargaining table what had gone on there. The company officials mistakenly believed, as the union did, they were entitled to do so.
Given those circumstances, severe punishment was not called for, concluded the arbitrator. Not only that, severely punishing the union’s leaders and members would have a negative effect on future relations. No economic damages as a result of the breach of confidentiality had been shown and if a small or nominal amount for damages was demanded, it might leave the impression the obligation to keep information confidential was not serious or could be avoided by “paying the equivalent of a toll or licence fee.”
In the end, the union was ordered to give its members access to the award and to post a notice drawing the employees’ attention to both the union’s wrongdoing and the arbitration decision.
For more information see:
•Inergi L.P. and the Society of Energy Professionals, (June 23, 2008), Owen V. Gray – Sole Arbitrator (Ont. Arb. Bd.).
Lorna Harris is the assistant editor of Canadian HR Reporter’s sister publication CLV Reports, a weekly newsletter that reports on collective bargaining and other issues in labour relations. She can be reached at (416) 298-5141 ext. 2617 or [email protected].
