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MacIver News Service | April 16, 2018
By M.D. Kittle
MADISON, Wis. – Big Labor is pushing its weight around again, this time filing an expensive lawsuit against a service-disabled, veteran-owned electrical contractor company.
Flaugher said the union pension plan administrators are going after his company with everything they’ve got – all in an effort to get the names, addresses, and Social Security numbers of nonunion managers and administrative staff.
The litigation, wending its way through federal court in Milwaukee, is part of a union trust fund harassment and intimidation campaign against Colgate-based Veterans Electric and its nonunion employees, according to company owner Scott Flaugher.
Flaugher said the union pension plan administrators are going after his company with everything they’ve got – all in an effort to get the names, addresses, and Social Security numbers of nonunion managers and administrative staff.
It’s a power play that Flaugher and his labor law expert attorney say violates Wisconsin privacy law. More so, if big labor prevails in the Badger State, it could open the door to union harassment nationwide.
Flaugher, a veteran of the first Gulf War’s Operation Desert Storm, has no intention of surrendering.
“I think they are shocked that I’ve fought them this far,” he said.
The lawsuit was filed in the United States District Court, Eastern District of Wisconsin by the administrators of the various trust funds for Veterans Electric’s union employees, represented by the International Brotherhood of Electrical Workers Local 494.
In 2016, the funds overseers requested, through their accounting firm, a routine audit of Veterans Electric’s employee records, according to court documents. The audit was completed on May 30, 2017. Auditors found a minimal underpayment of $252.30 to the union health and welfare plans, and the company “promptly issued payment.”
The company gave fund managers exactly what was required under the collective bargaining agreement with Local 494: records of employees who are members of the union.
But the funds administrators wanted more. They sought information on non-union employees – managers and office staff. Flaugher agreed to provide redacted information, removing personally identifiable information from the nonunion employee records. The trust funds demanded a full release, and sued.
They claim, without apparent evidence, that Flaugher is somehow hiding some employee who should be a member of the union and, thus, entitled to benefits contributions by the employer.
Flaugher repeatedly has denied the accusations, and he’s not sure how to prove to his adversaries that he doesn’t have “secret employees” on the payroll short of giving them the prohibited documents they seek.
Robert Rayburn, a trustee of the funds, could not be reached for comment. Another official at the Milwaukee office of the Electrical Construction Industry Health and Welfare Plan did not return MacIver News Service’s requests for comment.
The question before the court is whether the trustees of the benefit plans have the authority to demand access to Veterans Electric non-union employee records, “even though those employees are not participants in the … Trust Funds,” according to court documents.
Flaugher and his attorney, Andrew Newell, argue the union pension trustees have no such authority. The nonunion employees, Flaugher said, asked him not to turn over their private information, and Wisconsin’s privacy laws are very clear on companies protecting employee privacy.
Flaugher is concerned that the trust funds will turn over the non-union employee information to the IBEW local and it will be used to target and harass the employees.
And the defendants point to a U.S. Supreme Court case that found, while there is no artificial limit on a trustee’s audit authority, the scope of that authority has to be agreed upon in the collective bargaining agreement. The existing contract between Veterans Electric and the union, however, limits audited information to only records of union employees with the company.
Flaugher is concerned that the trust funds, which, for obvious reasons, is closely tied to the union, will turn over the non-union employee information to the IBEW local and it will be used to target and harass the employees.
Newell said on the eve of Wisconsin’s right to work law going into effect, the union, “which is separate from the trust funds in theory,” sent out a newsletter reminding their members that Local 494 had their names and would be happy to publish them in a future newsletter, should they wish to leave the union.
“Viewed in that lens you can understand why a union representative, who also serves as trustee on a trust fund, would want the names and addresses of management, if some day there were a vote of employees to decide whether they want to stay in the union or not,” the attorney said. “It also set the precedent that they (the trustees) are entitled to this information, so next year when they audit they will get the names, Social Security numbers and addresses of anyone who is left in the union.”
The union fund overseers are using the central tool of litigation to get what they’re after, seeking personal information through the discovery process. Veterans Electric has filed for a judgment on the pleadings, attempting to curtail what it sees as a legal trick by the plaintiffs to uncover information it does not have a right to possess.
Pension fund trustees have argued that they need immediate access to the personal information, insisting that the company is delinquent in contributing to the funds. The facts in the case dispute that contention, showing there is no grounds for the lawsuit, Newell said.
The attorney pointed to a similar case – Sullivan v. William Randolph Inc. – decided by the U.S. Court of Appeals for the Seventh Circuit. The court upheld a lower court ruling in favor of the defendant, a construction company, awarding it $56,000 in attorney’s fees.
Big labor in the Sullivan case also argued that they had to sue to discover whether the construction company owed contributions to a union pension fund, because the business refused to cooperate with an audit. There was, however, nothing to back up that claim in the court record.
“They have confused assertion with evidence,” the court wrote of the plaintiffs. “One cannot sue, without courting sanctions, unless one has grounds to believe that one has been injured by a wrong committed by the person who wants to sue.”
Flaugher, Veterans Electric founder, estimates he has spent about $30,000 so far defending himself in the lawsuit. But there’s much at stake, not just for his company.
“…I have this union always letting me know I don’t really have any control of my business, that they’re the ones who are going to dictate how my business is run,” Flaugher said.
“If Veterans Electric were to lose this case no former union members would be safe from having a union know where they live, what they make, and do with that information what they want,” Newell said. “I think that’s really what it’s about for the union. I think the union is driving the bus on this litigation. They want the option to intimidate and harass people, giving them the leverage to keep them in the union.”
Flaugher, a war veteran who has built his contracting firm through long hours and hard work, has no intention of backing down.
“The way I’ve looked at this from the beginning, I built this business. It’s my money that started this business. It’s me putting in 16-hour days for no pay,” he said. “Then I have this union always letting me know I don’t really have any control of my business, that they’re the ones who are going to dictate how my business is run, and that’s a big bur in my saddle.”