Hot Topics in Business Law

Sep 2, 2021 |

Article 1: “Workers at Mexico GM Plant End Contract, Oust Union in Vote”

https://abcnews.go.com/International/wireStory/workers-mexico-gm-plant-end-contract-oust-union-79543215?cid=clicksource_4380645_1_heads_hero_live_headlines_hed

According to the article, workers at a General Motors plant in Mexico have voted to end a collective bargaining contract negotiated by an old guard union accused of intimidation tactics in earlier votes. It was an early display of the effectiveness of labor mechanisms negotiated under the U.S.-Mexico-Canada Trade Agreement.

Nearly 6,000 workers at the GM plant in Silao voted over two days, according to a statement from Mexico’s Labor Ministry. In the final tally, the “nos” were 3,214 to 2,623 votes in favor.

The vote means the contract is terminated, but the workers maintain the same benefits and labor conditions. The vote was a rejection of the union, part of the Confederation of Mexican Workers. A new group has been working to organize the plant’s workers.

The vote was held inside the plant with observers from the Labor Ministry, National Electoral Institute and the United Nations’ International Labor Organization.

The conditions for the vote “demonstrate the government’s commitment to union democracy and respecting the will of the workers,” the Labor Ministry said in the statement.

GM said in a statement that production at the Silao plant would continue under the terms of the current agreement until a new one is negotiated and approved by a majority vote. The Labor ministry will issue a final resolution within 20 business days.

“General Motors appreciates that the GM Silao Collective Bargaining Agreement (CBA) legitimizing process was carried out with high participation and no incidents have been reported by the Ministry of Labor,” the statement said. “For GM it is very important that employees have been able to exercise their rights in a personal, free, secret and direct form. GM also appreciates the collaboration of the U.S. and Mexican governments and of the independent observers who supervised the exercise.”

In May, the U.S. government filed a complaint under the USMCA after the old union was caught allegedly destroying ballots in an earlier vote.

For decades, corrupt Mexican unions signed low-wage “protection contracts” behind workers’ backs.

The “rapid response” mechanisms under the trade pact allow a panel to determine whether Mexico is enforcing labor laws that allow workers to choose their union and vote on contracts and union leadership. If Mexico is found not to be enforcing its laws, sanctions could be invoked, including prohibiting some products from entering the United States. The May complaint was the first to be filed under the USMCA.

Mexican auto workers make one-eighth to one-tenth of the wages of their U.S. counterparts, something that has spurred a massive relocation of auto plants to Mexico and a loss of U.S. jobs. For decades, union votes in Mexico were held by show of hands, or not at all. Workers at many factories in Mexico were unaware they even had a union until they saw dues deducted from their paychecks.

As part of efforts to get the USMCA, which replaced the old North American Free Trade Agreement, Mexico passed labor law reforms stating all union votes would be by secret ballot, and workers at all factories in Mexico could vote on whether to keep their current union.

It was one such vote among the 6,494 employees of GM transmission and pickup plants in Silao in April that triggered the complaint.

Workers at the plant had been asked to vote yes or no on whether to recognize the union that has long controlled the plant’s labor contract. That union is part of the Confederation of Mexican Workers, or CTM, which formed part of the party that ruled Mexico for most of the past century. Mexico’s Labor Ministry declared that vote invalid.

Generating Movement, an effort to organize workers inside the plant, celebrated the vote and said it was working to register as a union and hoped to represent the workers in the next contract negotiation.

Hector de la Cueva, a union advisor and coordinator of the Labor and Union Advisory Research Center, compared the CTM to a “zombie” and said they would try to get back.

“Now what is on the table is which union is going to sign the new collective contract?” de la Cueva said at a Generating Movement news conference in Silao. “The workers showed that there is great discontent and they rejected that CTM contract and also that union.”

The CTM had not commented on the results of the vote.

Discussion Questions

1. Describe the U.S.-Mexico-Canada Trade Agreement.

The U.S.-Mexico-Canada Trade Agreement (USMCA) is an updated version of the North American Free Trade Agreement (NAFTA) that became effective on July 1, 2020.

 For a thorough explanation of the USMCA, please refer to the following internet address:

 https://www.trade.gov/usmca

According to the U.S. Department of Commerce’s International Trade Administration, the USMCA is a “21st century, high standard trade agreement supporting mutually beneficial trade resulting in freer markets, fairer trade, and robust economic growth in North America.

 2. Regarding labor-management relations, what is a collective bargaining agreement?

A collective bargaining agreement is a contract between labor and management governing the specific terms of the labor-management relationship. The collective bargaining agreement typically addresses wages and salaries, benefits, working conditions, etc. Again, it is an enforceable agreement, meaning that if either side breaches the contract, they can be sued for violating the terms and/or conditions of the collective bargaining agreement.

3. Regarding labor-management relations and the collective bargaining process, what are “intimidation tactics?”

“Intimidations tactics” is a broad term that references any attempt by labor or management to coerce a party to act against his or her will. It could include management threatening labor, labor threatening management, or even the union threatening workers (for example, union members threatening replacement workers who cross the union picket line in order to work.) Federal law prohibits the use of intimidation tactics in labor-management relations. For example, Section 8(a)(1) of the National Labor Relations Act broadly prohibits employers from interfering with workers’ labor organizing rights.

Article 2: “FTC Doubles Down, Hits Facebook with Amended Antitrust Complaint”

https://abcnews.go.com/Technology/ftc-doubles-hits-facebook-amended-antitrust-complaint/story?id=79541588&cid=clicksource_4380645_7_heads_posts_headlines_hed

According to the article, the Federal Trade Commission is not backing down in its antitrust legal battle against Facebook.

The agency filed an amended complaint against the social media giant recently — voting 3-2 along party lines to proceed — after a federal judge in June dismissed an initial antitrust complaint brought by the FTC.

The new complaint alleges that after Facebook failed to develop innovative mobile features for its network, the company instead opted for an “illegal buy-or-bury scheme” to maintain dominance, according to a statement from the FTC. The agency also accuses the company of “unlawfully” acquiring innovative competitors after its own failed efforts to create popular mobile features.

“Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” Holly Vedova, the FTC’s Bureau of Competition acting director, said in a recent statement. “This conduct is no less anticompetitive than if Facebook had bribed emerging app competitors not to compete.”

“The antitrust laws were enacted to prevent precisely this type of illegal activity by monopolists,” Vedova added. “Facebook’s actions have suppressed innovation and product quality improvements. And they have degraded the social network experience, subjecting users to lower levels of privacy and data protections and more intrusive ads.”

Vedova said the FTC’s latest legal move seeks to “put an end to this illegal activity and restore competition for the benefit of Americans and honest businesses alike.”

Many of the arguments are along similar lines of the initial lawsuit, though the FTC said the new complaint includes additional data and evidence.

The new complaint in part focuses on the “transition period” when the emergence of smartphones and mobile internet use seemingly threatened Facebook’s dominance.

The agency alleges in a statement that after Facebook suffered “significant failures during this critical transition period,” the company opted instead to engage in anticompetitive behavior and buy up mobile innovators, including former rivals Instagram and WhatsApp.

The agency also takes aim at Facebook’s treatment of software developers, saying that after starting its Facebook Platform as an open space for third-party software developers, it abruptly reversed course and required developers to agree to conditions that prevented successful apps from emerging as competitors.

When he dismissed the initial antitrust complaint, District Judge James Boasberg stated that the agency’s complaint “is legally insufficient and must therefore be dismissed.” Boasberg said the FTC failed to provide enough facts to prove Facebook’s alleged monopolistic behavior.

Lina Khan, a vocal critic of Big Tech’s dominance, took the helm at the FTC earlier this year, leading many to speculate a crackdown on the industry could be looming. Facebook has petitioned for Khan to be recused from the antitrust investigation, but the agency recently dismissed the petition.

Facebook blasted the suit as “meritless” in a recent statement to the media, and noted that its acquisitions of Instagram and WhatsApp were cleared by the FTC at the time.

“It is unfortunate that despite the court’s dismissal of the complaint and conclusion that it lacked the basis for a claim, the FTC has chosen to continue this meritless lawsuit. There was no valid claim that Facebook was a monopolist — and that has not changed,” a company spokesperson said. “Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful. The FTC’s claims are an effort to rewrite antitrust laws and upend settled expectations of merger review, declaring to the business community that no sale is ever final. We fight to win people’s time and attention every day, and we will continue vigorously defending our company.”

Discussion Questions

1. Describe “antitrust.” What is the purpose of antitrust law?

“Antitrust” is a broad term referring to legislation preventing or controlling trusts or other monopolies, with the intention of promoting competition in business.

2. What is the Federal Trade Commission (FTC?) What is the FTC’s role regarding the enforcement of antitrust law?

The Federal Trade Commission (FTC) is a federal administrative agency broadly charged with the responsibility of protecting consumers. Since antitrust law is designed to prevent or control trusts or other monopolies with the intent of promoting competition in business and thereby benefiting consumers, the FTC is empowered to enforce antitrust law.

 For more information regarding the FTC, please see the following internet address:

 https://www.ftc.gov/

3. Based on the information provided in the article, do you believe Facebook violated U.S. antitrust law? Why or why not?

This is an opinion question, so student responses will likely vary.

The pertinent information provided in the article is the following:

 The new (amended) complaint alleges that after Facebook failed to develop innovative mobile features for its network, the company instead opted for an “illegal buy-or-bury scheme” to maintain dominance, according to a statement from the FTC. The agency also accuses the company of “unlawfully” acquiring innovative competitors after its own failed efforts to create popular mobile features.

 “Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” Holly Vedova, the FTC’s Bureau of Competition acting director, said in a recent statement. “This conduct is no less anticompetitive than if Facebook had bribed emerging app competitors not to compete.”

 In your author’s opinion, at this point these are merely allegations, and the FTC as plaintiff will have the burden of proving in court, by the greater weight of the evidence, that Facebook’s actions violated U.S. antitrust law. In a civil action, the initial burden of proof is always on the plaintiff.

Article 3: “FAA Proposes More Than $500,000 in New Fines Against Unruly Airline Passengers”

https://www.cnn.com/2021/08/19/politics/faa-unruly-passengers-fines/index.html

According to the article, federal authorities are proposing more than a half-million dollars in new fines against commercial airline passengers they say refused to wear masks, hit flight attendants, and even threw luggage across the cabin.

The Federal Aviation Administration’s recent announcement of $531,545 in fines against 34 passengers accused of being unruly on board is the single largest announcement of federal fines since the start of a nationwide crackdown earlier this year, bringing this year’s total to more than $1 million.

Of the incidents detailed by federal investigators for the first time, nearly two-thirds involve passengers accused of violating the federal transportation-wide mask mandate, which was just extended by the Transportation Security Administration to remain in place through January 18. Federal documents show that nine of the 34 incidents involve a passenger accused of touching or hitting another person on the plane, including crew members. Eight passengers are accused of illegally drinking alcohol they brought on board the plane. Half of the incidents involve flights to or from vacation destinations in Florida.

With this announcement, the FAA has now proposed fines against nearly 80 passengers after receiving nearly 3,900 reports of incidents. The FAA said recently that based on the reports, it has opened 682 investigations into possible violations of federal laws.

House Transportation Chairman Peter DeFazio told the media this week that he would like to see punishment that’s even harsher than fines, with those accused of in-flight violence facing prison time.

“The first time we take one of these jerks who is assaulting flight attendants or attempting to take an aircraft down — and they go away for a few years and they get a massive fine– I think that will send a message,” Chairman DeFazio said.

But the FAA points out it does not have the authority to file criminal charges. Instead, it proposes civil fines that the accused violators may pay or dispute.

The largest flight attendant union, the Association of Flight Attendants, has also called for more prosecutions.

“If you interfere with a crew member’s duties and put the rest of the plane in jeopardy, or assault the crew member, you’re facing $35,000 in fines for each incident and up to 20 years in prison,” association President Sara Nelson said. “People need to understand there are severe consequences here.”

The largest fine announced recently — $45,000 — is against a passenger accused of throwing his luggage at another passenger and, while lying on the aisle floor, “grabbing a flight attendant by the ankles and putting his head up her skirt.” That New York to Orlando flight was forced to land early in Virginia.

A different passenger faces a $42,000 fine for allegedly “snorting what appeared to be cocaine from a plastic bag” in an episode that included “stabbing gestures towards certain passengers.” Another passenger would not wear his face mask, the FAA, said, and “acted as though his hand was a gun and made a ‘pew, pew’ noise as if he was shooting a fellow passenger.”

Discussion Questions

1. Describe the FAA.

The Federal Aviation Administration (FAA) is a federal administrative agency that is part of the United States Department of Transportation. It is charged with the responsibility of regulating the country’s aerospace system.

 Please see the following regarding the espoused mission, vision, and values of the FAA (https://www.faa.gov/about/mission/):

Our Mission

 Our continuing mission is to provide the safest, most efficient aerospace system in the world.

 Our Vision

 We strive to reach the next level of safety and efficiency and to demonstrate global leadership in how we safely integrate new users and technologies into our aviation system. We are accountable to the American public and our aviation stakeholders.

 Our Values

 Safety is our passion. We work so all air and space travelers arrive safely at their destinations.

 Excellence is our promise. We seek results that embody professionalism, transparency and accountability.

 Integrity is our touchstone. We perform our duties honestly, with moral soundness, and with the highest level of ethics.

 People are our strength. Our success depends on the respect, diversity, collaboration, and commitment of our workforce.

 Innovation is our signature. We foster creativity and vision to provide solutions beyond today’s boundaries.

 For more information regarding the FAA, please refer to the following internet address:

 https://www.faa.gov/

 2. In your reasoned opinion, should the FAA have the authority to impose civil fines on passengers? Why or why not?

This is an opinion question, so student responses may vary.

 In your author’s opinion, the FAA should most certainly have the authority to impose civil fines on passengers. Keep in mind that as referenced in response to Article 3, Discussion Question 1 above, the mission, vision, and values of the FAA all relate to safety, and as referenced in the article, these civil fines are imposed on passengers who imperil safety.

3. As indicated in the article, the FAA does not have the authority to file criminal charges against unruly passengers. Why not?

In answering this question, keep in mind that only federal and state prosecutors have the authority to file criminal charges against individuals. Expressed another way, such authority is not within the purview of the FAA, although the FAA could certainly work with prosecutors in terms of providing evidence that can be used against unruly passengers in criminal court.