UNITE HERE - Split and Reaffiliation With AFL-CIO

Split and Reaffiliation With AFL-CIO

The merger of UNITE and HERE was not a successful one. By 2007, Raynor was accusing Wilhelm of stifling change, and Wilhelm was angry at Raynor's "heavy-handed" managerial style. Raynor's critics also said the union president often agreed to "sweetheart deals" that hurt workers but which added new members and avoided protracted organizing battles. According to at least one account, Raynor was unhappy with the fact that the HERE faction had a majority on the board, which permitted Wilhelm and his supporters to veto his proposals. Raynor allegedly began talking about a "divorce" of the two merged unions in order to precipitate just such an outcome. In 2007 the union lost its bargaining certificate at Vancouver's General Motors Place. The British Columbia Labour Relations Board conducted a vote to find the employees preferred affiliation with the Christian Labourers Association of Canada Significant conflict within the union emerged in early 2009. The union had 366,958 members in March 2009. In late 2008, General President Bruce Raynor and 15 local and regional UNITE HERE affiliates in the laundry and garment industries filed lawsuits against Hospitality Division President John Wilhelm, accusing him and his division of fraud, theft, gross mismanagement of $61 million in funds committed to union organizing drives, and failing to resolve members' grievances. Raynor also accused Wilhelm and his allies of attempting to impose their will on the executive board and the majority of members. Wilhelm and several affiliate leaders in the hospitality division sued Raynor and his allies in the laundry and garment division, claiming that Raynor had acted in violation of the union's constitution and procedures in firing large numbers of Wilhelm supporters in Detroit and Phoenix, Arizona. Wilhelm also accused Raynor of disloyalty and dual unionism for continuing to press for the disaffiliation of the garment division affiliates after the UNITE HERE executive board had voted down the proposal.

By March 2009, the conflict had become unresolveable. On March 7, 2009, Raynor and his supporters held a disaffiliation referendum vote among the members in their affiliate unions in advance of UNITE HERE's first quadrennial convention (set for summer 2009), and said that if they were successful they would affiliate with the Service Employees International Union (SEIU). Wilhelm and his supporters said that the UNITE HERE constitution prevented any such vote without the permission of the international union's executive board. Also at issue was control over Amalgamated Bank, which UNITE brought with it into the merger and whose ownership (and its substantial net worth) now belonged to UNITE HERE. Wilhelm sued Raynor and the 15 affiliates in February 2009 in U.S. district court, but the court declined to prevent the vote.

The period before the vote lead to more accusations of misconduct. Wilhelm and his supporters accused SEIU President Andrew Stern of supporting Raynor's disaffiliation move, a charge Stern vigorously denied. Wilhelm also accused Raynor of supporting the disaffiliation effort only because he faced a difficult re-election bid, and of misusing union money and staff to support the secession effort. Raynor categorically denied all charges. Delegates from the 15 affiliates (representing 100,000 members) met in Philadelphia in late March, and on March 22, 2009, they voted to disaffiliate from UNITE HERE and establish a new union, Workers United. Workers United immediately affiliated with SEIU. Former UNITE HERE elected officer Edgar Romney was elected President of Workers United. Despite winning the disaffiliation vote, Raynor announced he would finish his term as General President of UNITE HERE rather than join Workers United—a move, one newspaper said, undertaken so that Workers United could gain control of the Amalgamated Bank.

UNITE HERE and Workers United began arguing over who had jurisdiction over various kinds of workers and how to divide UNITE HERE's assets (most importantly, the bank). Wilhelm asked a federal court to give UNITE HERE control over all the union's assets, but the court declined to issue a ruling at that time. Joseph T. Hansen, president of the United Food and Commercial Workers (UFCW), attempted to mediate a solution in mid-April, proposing (among other things) that UNITE HERE take jurisdiction over workers in the gaming industry and hotels; that Workers United take jurisdiction over workers in textiles and laundries; and that the two unions split organizing in food service. Hansen also suggested that Workers United keep the Amalgamated Bank and the former New York City headquarters of UNITE, but that Workers United make a multi-million dollar payment to UNITE HERE to compensate it for the losses. Wilhelm rejected the offer. Andrew Stern then suggested that each union retain their existing casino workers, but that UNITE HERE have exclusive jurisdiction over casino workers in the future. Workers United would also pay UNITE HERE $20 million immediately and $46 million move within five years, if UNITE HERE would agree to turn the Amalgamated Bank and other of UNITE's pre-merger assets over to Workers United. United States Senate Majority Leader Harry Reid also unsuccessfully attempted to mediate the dispute. American Federation of Teachers president Randi Weingarten urged the sides to settle as well, writing a letter to both Raynor and Wilhelm cautioning that "This conflict is causing collateral damage... . The longer it continues, the less likely we are to enact a strong Employee Free Choice Act."

Raynor did not finish his term. In April 2009, Wilhelm formally charged Raynor of using union resources to support the disaffiliation movement. Later that month, the UNITE HERE executive board gave Wilhelm the power to suspended Raynor as the union's president, pending an investigation into Wilhelm's charges. Wilhelm suspended Raynor on May 15. Raynor sued Wilhelm and UNITE HERE in federal court, arguing suspension was not permitted under the union's constitution. At 4:00 AM on May 22, the UNITE HERE's executive board and John Wilhelm ordered security guards to secure Raynor's New York City office and prevent Raynor and his allies from entering. Wilhelm said he acted to prevent the destruction of documents, and that Raynor's staff had already removed hundreds of documents and scrubbed computer hard drives clean. Wilhelm told the press on May 28 that UNITE HERE staff had found documents showing that Raynor was receiving confidential updates about Workers United activities and finances even though he was still a UNITE HERE official, and that he had shifted millions of dollars of union assets to affiliates seeking disaffiliation. Juan Gonzalez, a columnist for New York Daily News, reported on June 16, 2009, that Raynor had transferred more than $12 million to affiliates which supported him as well as to groups outside the union. The transfers allegedly included:

• A January 31, 2009, transfer of $457,981 to The Organizing Group, a consulting firm founded by Steve Rosenthal (a close associate of former SEIU President Andrew Stern). The Organizing Group, the paper said, used the money to mail and call to UNITE HERE members and advocate for disaffiliation, and to set up a pro-disaffiliation Web site.
• About a dozen transfers totalling $11.2 million between January 26 and January 31, 2009, to affiliates which supported Raynor and the disaffiliation movement. The affiliates then allegedly transferred the funds to an external group called Fund for the Future, which supported the disaffiliation effort.
• Another dozen transfers totaling $500,000 on March 6, 2009, sent to supportive affiliates allegedly to reimburse them for expenditures.

According to internal union documents obtained by the newspaper, Raynor disbursed the money without the required approval from Wilhelm. Wilhelm also accused Raynor of absconding with the $23 million UNITE HERE strike fund (which was invested in the Amalgamated Bank), and investing another $333 million in long-term assets so that the union could not function. Raynor categorically denied the charges. Raynor sued Wilhelm and UNITE HERE, seeking an injunction, access to his office, and return of all property therein. The court declined the request for injunctive relief on May 26. An angry Raynor accused Wilhelm of removing his personal files from the office and resigned on May 30 mere hours before the start of the hearing on his suspension. Wilhelm was named General President of UNITE HERE after Raynor's resignation. He was elected to the position at the union's first quadrennial convention in July 2009.

Wilhelm subsequently accused SEIU of spending millions of dollars to convince more UNITE HERE members to disaffiliate and join Workers United. UNITE HERE retaliated by urging employers not to recognize or negotiate with the locals affiliated with Workers United or honor their dues checkoff agreements. Stern disputed the claim, saying SEIU was merely helping its affiliate regain textile workers still part of UNITE HERE, and that SEIU itself had a legitimate right to organize workers in food service. Stern also said on August 12, 2009, that the efforts had stopped. Nonetheless, UFCW President Joe Hansen continued to try to mediate a resolution, and expressed his hope that a settlement was possible. In July 2009, the presidents of 27 national unions signed a letter sent to Stern in which they announced their support of UNITE HERE and said they would help defend the union against any raid on its membership or incursion into its organizing jurisdiction.

The remaining 265,000 members of UNITE HERE reaffiliated with the AFL-CIO on September 17, 2009.

On July 25, 2010, SEIU and UNITE HERE announced they had resolved their 18-month-long dispute. As part of the agreement, ownership of the Amalgamated Bank will be transferred to Workers United (pending approval of federal banking regulators). UNITE HERE retained ownership of the union's headquarters in New York City and an additional $75 million in assets. The agreement also settles a jurisdictional dispute over which workers the unions will organize. UNITE HERE agreed to restrict its organizing in the food service industry to those workers at airline caterers, airports, businesses, convention centers, and athletic stadiums, while SEIU and Workers United will restrict its organizing activity in the industry to food service workers in state and local government, health care facilities, and prisons. Both unions will continue to organize food service workers in elementary, middle, and secondary schools and in higher education. The two unions had also disagreed over whether several thousand members of Workers United had been given the opportunity to choose which union they wished to belong to. In the new agreement, SEIU and UNITE HERE agreed to let an arbitrator decide to which union the workers wished to belong to. At least one analyst characterized the agreement as "SEIU surrendered most of the assets of the venerable splinter union it had tried to absorb, and gave up some jurisdiction it had sought..."