AMC Must Pay $250,000 for Trying to Supress Dissent : Union Activism Is Winner in Suit
In a case with potentially significant ramifications for the free speech rights of employees, American Motors Corp. recently agreed to pay nearly a quarter of a million dollars to settle a National Labor Relations Board suit that accused the company of attempting to suppress dissent, “chill” collective action and “exact reprisals” against workers at a Kenosha, Wis., auto factory.
The labor board suit alleged that American Motors had secretly orchestrated, financed and controlled an “ill-founded” $4.2-million libel lawsuit filed in 1980 by five company supervisors and the son of a plant official against three United Auto Workers union activists. The three--Jon Melrod, 35; John Drew, 32, and Tod Ohnstad, 33--were the editors of Fighting Times, a militant rank-and-file newspaper highly critical of management.
According to labor board documents, the company’s actions violated federal fair labor practice laws in an effort to “exact reprisals” against the three.
Denounced Company
The labor board filed a complaint against AMC in April, 1983, soon after it learned of the company’s role in initiating the libel suit.
The complaint denounced AMC for using the supervisors as a “front” to harass and punish the UAW activists. The board’s complaint also charged that AMC’s sponsorship of the libel suit was the culmination of a 10-year campaign to suppress the free speech rights of Melrod, whom the company fired after he protested an assembly-line speed-up in 1973. The labor board ordered him reinstated.
The NLRB complaint cited six company attacks--in addition to the libel suit--on Melrod’s right to engage in informational picketing and distribution of literature, including Fighting Times. All the cases led to board actions in his favor.
Melrod, Drew, Ohnstad and other sources said that AMC will pay $238,000 to the activists and other union members to compensate them for attorneys’ fees, expenses, lost wages and other costs directly associated with the defense of the libel suit. The three men won the libel suit, which was tried before a jury in Racine, Wis., in November, 1983.
Lloyd Northard, a spokesman for AMC, said the company felt it was in its best interest to settle. The company did not acknowledge violating any laws. But in the settlement it signed, AMC agreed “not to do anything” that interferes with employees’ rights to act collectively nor to engage in several other forms of conduct that the board said are illegal. The company agreed to “cease and desist” from:
- Prosecuting, financing, sponsoring or controlling “any non-meritorious and retaliatory” lawsuit against any employee.
- Unlawfully interrogating any employee concerning the internal affairs of the United Auto Workers Kenosha local.
- Interfering with, restraining or coercing Melrod, Drew, Ohnstad or any other employee in the exercise of his protected rights, including publication of the Fighting Times.
- Discriminating in any manner against employees because of their union activities.
Warren Kaplan, a Washington attorney who represented the three auto workers in the libel trial, said he was delighted by the outcome of the case.
“I would like to believe and hope that to the extent that this order is publicized and comes to the attention of decision-making officers of major corporations around the country that they will realize filing or procuring of frivolous libel suits against employees is not to be encouraged,” Kaplan said. “And, as in this case, it can backfire against companies (that) try to use such suits to exert control over their employees.”
Kaplan said he thought AMC made “a very pragmatic decision” to settle the case because much embarrassing information would have been revealed during a trial. The NLRB had subpoenaed several leading company officials to testify, including Jose Dedeuwaerder, its president, and Alex McCluskey, its labor relations counsel.
Melrod and Drew said they were relieved that the case had come to an end. But Melrod said he thought the results of the incident were mixed.
Rights Upheld
“On the one hand, it upheld the free speech rights of employees in the sense that the employer had to acknowledge it was a violation of the act to engage in non-meritorious lawsuits,” Melrod said.
“On the other hand,” he added, suits like the one AMC fomented “act to make rank and file or even official union publications apprehensive. I’ve been in a number of conferences where people asked me, ‘What would you do to keep yourself from being sued for libel?’ I tell them some technical things, but in the end you can’t stop someone from suing for libel.”
Joseph Szabo, director of the labor board’s Milwaukee regional office, which filed the case, declined to comment on the settlement, other than to say AMC could be subject to contempt proceedings in federal court if it failed to honor the agreement.
“The company felt that nothing should detract from negotiations” with the UAW over the fate of AMC plants in Kenosha and Milwaukee, spokesman Northard said. In the recently concluded bargaining, the UAW agreed to numerous concessions to avert a shutdown of the plants.
Ironic Twist
In an ironic twist, Drew and Ohnstad almost lost their jobs at AMC as a result of those negotiations in which they, along with Melrod, played an active role as members of the union’s executive board. Under terms of the agreement, about 2,500 of the factory’s 7,000 workers--those with less than 12 years’ seniority--will lose their jobs. Drew and Ohnstad both have 11 years at the plant. Late last week, however, Rudy Kuzel, president of the Kenosha UAW local, appointed both of them to union jobs that will enable them to stay on for at least 60 days.
Melrod had 13 years’ experience and could have stayed, but with the plant’s long-term future in doubt, decided it was time to pursue another career. He will enroll at the University of California’s Hastings College of Law next month. Friday was his last day at AMC.
