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1) Teacher Unions Meet Their Match in Trial
Lawyers. Members of the New York State United Teachers
filed a class action suit against the union's Member Benefits Trust for
its paid endorsement relationship with the ING Group investment firm. The
arrangement was the subject of a
settlement between ING, NYSUT and then-state Attorney General Eliot
Spitzer last year.
The class action suit is considered to be a big deal
primarily because it seeks to establish a union requirement to abide by the
regulations of the Employee Retirement Income Security Act (ERISA). I think
it's a big deal because it pits one huge liberal special interest group -
teachers' unions – against another huge liberal special interest group –
trial lawyers, over something they both value very highly - money.
One of the law firms involved in the NYSUT suit,
Keller Rohrback L.L.P., announced on Saturday it is also investigating
the NEA Valuebuilder program, which is the national union's 403(b)
retirement annuity plan for members.
"The plan, which is sold by an insurance company called
Security Benefit, is the only retirement program endorsed by the NEA," reads
the firm's press release. "In exchange for the endorsement, Security
Benefit provides compensation to the NEA. Keller Rohrback is evaluating
whether the NEA endorsed the program because of the payments, as opposed to
a prudent evaluation of whether the plan is in the best interests of NEA
members."
Unless the unions consider these suits to be highly
frivolous, I would expect them to settle fairly quickly. While it would be
costly, much of that money would go to the members involved, and it would
avoid laying bare financial arrangements with vendors they would just as
soon keep secret. And you can count on the trial lawyers to expose these
arrangements in the most unflattering way.
The allegations and exhibits in the NYSUT lawsuit are
blunt. The plaintiffs claim NYSUT "vigorously promoted the Plan for its own
financial gain and to the detriment of Plan participants. ING reimbursed
NYSUT for the salaries of certain employees of NYSUT Trust whose jobs were
to promote the plan to NYSUT members while appearing to be disinterested
NYSUT employees."
NYSUT's own documents are the most damning exhibits,
particularly a February 2002 letter from NYSUT's executive director of
finance and administration to ING, regarding a legal disclaimer about the
paid endorsement arrangement.
"The issue, as I am sure you can understand, is that
the Trust does not want to advertise the financial arrangement between ING
and the NYSUT Benefit Trust to our competition," the letter stated, adding
that the disclosure "could create political problems for our local
presidents," and insisted the financial arrangement be
disclosed only in the prospectus.
A January 2004 e-mail from a NYSUT Member Benefits
official suggested keeping the formula for computing the endorsement payment
out of the prospectus as well.
"I am often asked or simply bring up myself, that
neither NYSUT nor myself receive extra money from ING should a local choose
to use them as an exclusive carrier," the officer wrote. "Same goes when
were (sic) assisting with access. Should the prospectus outline a dollar
amount reimbursement based on the number of Opp+ clients, we can no longer
state that, and I feel that we lose some of our objectivity."
The last thing NEA and AFT need is high-powered legal
talent nosing around in their old memos. Let's see how fast this goes away.
2) Why Mess with 403(b) Chump Change? When it
comes to getting a hand on teacher retirement money, many unions could learn
from the California Teachers Association. While the New York State United
Teachers fooled around with a measly handful of dollars by getting in bed
with an investment firm, out here on the Left Coast they go all out.
Last week, Dana Dillon was elected chairwoman of the
California State Teachers Retirement System. Dillon is a long-time CTA
activist and retired after serving as a member of the NEA Board of
Directors. She will oversee a $163.5 billion portfolio.
3) Teacher Organizations in Utah Granted Equal
Access. A new law in Utah requires school districts and charter schools
to give equal access to all education employee organizations. No one
organization can monopolize teacher mailboxes or e-mail, employee
orientation sessions, or receive favorable treatment or endorsements from a
school system.
The bill's passage was a blow to the Utah Education
Association (UEA), the largest such organization in the state. But it was an
unusual coalition of interests that got it through the legislature.
The bill was supported by the
Utah Council of Educators (UTCE), a non-union educators group similar to
those formed in many other states as an alternative to NEA and AFT
membership. Even in Republican-dominated Utah this probably wouldn't have
been enough to ensure passage, but the bill also picked up the endorsement
of AFT Utah.
AFT Utah is led by Debbie White, who once upon a time
was the president of the NEA-affiliated Granite Education Association. Her
service with that union ended under mysterious circumstances (see
Item #4 here, and take a look at related Item #3).
The AFT Utah advocacy led directly to the help of the
state AFL-CIO, whose president, Ed Mayne, is helpfully a Democratic member
of the Utah Senate. With Mayne's support, the bill passed comfortably in the
senate.
UEA is livid about all this, venting in a newsletter
article headlined, "AFT/UTCE:
Why did they attempt to kill teacher contract bargaining rights?"
4) Hanging On Like Grim Death. Last Wednesday
on Intercepts I relayed the details of the election for president of
the Pajaro Valley Federation of Teachers in California. Challenger Francisco
Rodriguez defeated 14-year incumbent Carolyn Savino.
The day after the election, the union's executive board
hired Savino as a full-time staffer, then changed the office of the
president into a part-time position. As you might expect, this didn't sit
well with Rodriguez and his supporters. While they attempt to reverse these
decisions, Savino launched an election challenge, claiming
improper procedures and illegal campaign tactics.
This entertaining dispute received an
additional boost through the words of PVFT Vice President (and Quote of the
Year candidate) Sarah Ringler:
"It would be cruel to let our (former)
president out on the streets. Carolyn has put in a lot of years in the union
and does not deserve to lose her job just because the constitution does not
allow for a smooth transition."
Some PVFT members
might agree that it would cruel to let Savino out on the streets. But how
much crueler for all involved to send her back to the classroom after 14
years.
5) Rare Gems. Two newspaper articles deserve
highlighting this week – one for taking a unique perspective, the other for
simply providing a simple, but long neglected, public service.
The first is a report by Daniel Gross in the April 8
New York Times headlined, "Latte
Laborers Take on a Latte-Liberal Business." The story details the
National Labor Relations Board charges against Starbucks for its treatment
of workers trying to organize a union. Gross notes that, unlike Wal-Mart,
Starbucks and other corporations with a "progressive reputation" often get a
free pass when it comes to labor practices.
Gross exhibits a blind side when it comes to why this
should be so. "Many customers feel they simply can't get their day started
without a caffeine-laden beverage," is one possibility he floats. He doesn't
address the hypocritical notion that some people can buy a $4 latte without
concerning themselves with workers' rights, but other poor slobs are
supposed to feel guilty when they buy
an entire coffeemaker at Wal-Mart for $14.96.
But let's not pick at it. This story, especially
appearing in the Times, demonstrates some original thought about
labor issues, instead of running with the same old tired angles.
The second story worth printing out, keeping, or
distributing to people who need it, appeared in the April 4 Indianapolis
Star. Headlined "No
Child Left Behind primer," it lays out in 12 simple paragraphs the basic
provisions of NCLB and the dreaded sanctions if schools don't meet
benchmarks. The perfect gift for that person on your list with strong
opinions of NCLB without any idea what the law says.
6) Scheduling Note. The next EIA Communiqué
will appear on Tuesday, April 17. On Monday
I'll be in front of the TV.
7) Last Week's Intercepts.
EIA's blog,
Intercepts, covered these topics from April 2-9:
*
Hope Your Kids Enjoyed the Screed. What passes for labor history
education in California.
*
The Last Scholar? If the Dark Ages are returning, at least we have
Norman Tutorow.
*
NUT Claims. One-third of British teachers are engaged in unhealthy
practices with alcohol, medication, and "obsessive behaviours." That claim
comes from their union.
8)
Quote of the Week.
"On
the 2nd day of an indefinite teachers' strike, Hayward teachers remind us
all how scabstitutes should be treated. The scabs should consider themselves
let off easy and take it as a lesson to never cross a picket line again."
– Indybay.org contributor with the pseudonym "Big Bill Hayward" commenting
on a shoving incident between picketing teachers and a substitute. Read the
comments after the story and Hayward's reply. (April
7 Indybay.org) |
