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Kellogg v BCTGM

What will this Memphis contract war come to?

By Kacey Culliney+

27-Mar-2014
Last updated on 28-Mar-2014 at 11:34 GMT2014-03-28T11:34:07Z

It's very common for larger companies to have both a master contract and local contract, a common point of confusion, says an attorney
It's very common for larger companies to have both a master contract and local contract, a common point of confusion, says an attorney

A labor attorney says there could be a number of reasons behind the Kellogg-BCTGM contract dispute and now that the National Labor Relations Board is involved, worse-case scenario it could end up in the US Supreme Court.

Shawn Lillie, managing partner of Memphis labor and employment firm Allen, Summers, Simpson, Lillie & Gresham, told BakeryandSnacks.com that it was common for larger companies to have both a master contract that covers and governs multiple site locations that are unionized, as well as a local contract.

“Their reason for doing so is there are some issues that are more corporate-wide; certain benefits like health insurance and things like that, that a company wants to negotiate for their entire workforce. Companies with a master agreement will almost always have local agreements,” Lillie explained.

It was possible the master and local contract could cover the same issue, he said, however typically the master contract, if well-written, would reserve certain topics over the local contract.

“But if the master agreement were silent on the use of casual labor, for example, it would be my opinion that Kellogg’s could still negotiate over that, unless there’s some specific foreclosing of the rights.”

Both parties standing strong

Lillie said the union's push for legal action was likely strategic – to keep out casual labor at the plant. “The Kellogg’s workers in Memphis are some of the most highly-paid, blue collar employees around. They make a lot of money – they’re not mistreated in any sense of the word,” he said.

Shawn Lillie is a managing partner for Allen, Summers, Simpson, Lillie & Gresham

He suggested many of the locked-out workers would want to return to their well-paid factory posts, and that the lack of resolve was a union matter, rather than worker-by-worker concern. “The average worker has probably lost $40-50,000 since the lockout started,” he said.

BCTGM representative Ron Baker said:  "If they [Kellogg] were successful in Memphis imposing their 'worker of the future' they will do everything possible to push current senior bargaining unit members out of the Memphis plant to bring in their lower-wage-no-benefit worker of the future. Once they replace the current workforce in Memphis and fill the plant up with their new low-wage-no-benefit workforce they will then move to eliminate regular full-time jobs at the other three cereal facilities across the country that are also under the master contract and place their work in the hands of their new Memphis low-wage no-benefit workforce."

"f they say that is not their intent, just take a look at where their current Memphis workers are today; locked out now for over 140 days. That's what they think about their current Memphis employees."

Kellogg has said that any new, casual hires at the Memphis plant would be full-time and union members and would not replace current, full-time workers. It also said the casual contracts offered above-average, competitive wages, like the full-time contracts at the plant.

The company said its full-time staff earn $28 per hour, which with overtime it said averaged $98,000 annually - a salary it claimed was between 25-79.5% higher than the market, depending on the position. New hires, it said, would earn $22 per hour, which equated to a base salary of around $45,700 before any overtime - a rate it claimed was between 17-42% higher than comparable positions in Memphis. 

What’s next?

Lillie said that if the NLRB decided Kellogg was in the wrong, there would be a complaint issued that would be then heard before the NLRB’s administrative law judge. No matter what the result, the issue could then be appealed to the NLRB in Washington DC, then further appealed to a federal court of appeal and ultimately onto the US Supreme Court.

Asked if this dispute could get that far, he said: “I don’t know that this particular case would go that far – it’s possible. The US Supreme Court has heard cases in the past arising out of the National Relations Act.”

He added that at any time the parties could settle and the matter would be over.

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