Auto Workers Claim Union Bribes Were Behind Layoffs

TOLEDO, Ohio (CN) – Former Jeep Wrangler paint shop workers sued Fiat Chrysler and United Automobile Workers, claiming they were forced out of their northwest Ohio paint shop after union officials bargained away jobs for bribes.

Fiat Chrysler Automobiles world headquarters in Auburn Hills, Mich. (AP Photo/Carlos Osorio, File)

Two class-action lawsuits were filed by the former workers in Toledo, Ohio, federal court on Thursday. In the first, lead plaintiff Robert DeShetler Jr. alleges that he and 72 other workers were induced to “retire” from Chrysler to work at the Jeep Wrangler paint shop but were later forced out when Chrysler took control of the operation.

At the time of the layoffs in 2012, their local union said Chrysler had replaced them with younger, lower-paid employees. The complaint also alleges age discrimination.

A second class action was filed by lead plaintiff Richard Sheets, one of many workers who say they were stripped of benefits and pay raises because of a November 2012 bargaining agreement.

Filed by Sandusky, Ohio, lawyer Leslie Murray, both complaints alleged that the paint shop workers lost key benefits and jobs because a corrupt union official bargained them away. Murray did not immediately respond Friday to a request for comment.

The complaints link the alleged wrongdoing to former UAW executive General Holiefield, who died in March 2015.

Last year, the Justice Department filed indictments against Holiefield’s wife and former Fiat Chrysler executive Alphons Iacobelli, alleging he had paid more than $1.2 million in illegal payments during a period that covers collective bargaining negotiations outlined in the two lawsuits.

Holiefield and other executives had “two separate unlawful motives directly adverse to plaintiffs at the time that they bargained away plaintiffs’ jobs with Iacobelli and Chrysler,” DeShetler’s complaint states.

“First, Holiefield and his team had accepted bribes, and hoped to accept additional bribes, from Chrysler to take company friendly positions at the expense of the UAW members that they represented. Second, members of the Chrysler Department of the UAW International Union had developed a lucrative side business of selling Chrysler jobs. By acting in the manner described above, these officials created over 70 open positions that could be sold,” the filing states.

In the backdrop was Chrysler’s decision to handle the paint shop in-house after several independent companies oversaw operations. Around 2006, the 73 paint shop workers named as plaintiffs in DeShetler’s lawsuit retired from their positions at Chrysler to work in the shop, painting Jeep Wranglers assembled at the Toledo South plant.

Chrysler encouraged the workers to start collecting their pensions and work at the paint shop, assuring them they would be hired indefinitely, the lawsuit says.

But in 2012,Holiefield, in violation of the union’s rules, “systematically locked” out paint shop workers and the leadership of their local union, UAW Local 12, as they entered in negotiations over their futures, the plaintiffs allege. Holiefield allegedly did not object or dispute Chrysler’s position that union workers in the Wrangler paint shop “were functionally equivalent to new hires from the street.”

Chrysler said it would “hire” paint shop workers but stripped them of their seniority based on an arbitrary new hire date of Nov. 30, 2012, according to DeShetler’s lawsuit.

Workers lost pension and other benefits and were not able to obtain raises based on the actual number of years they had worked at the plant, the filing says. Instead, they say they were treated as new hires and employees of the company that ran the shop, Gonzales Contract Services.

Prosecutors say Iacobelli’s bribes to Holiefield included designer apparel, jewelry, and furniture as well as $262,219 for the mortgage on Holiefield and his wife’s home in Harrison, Mich.

The alleged bribes were paid from 2009 until 2014, at the same time that Iacobelli and Holiefield were negotiating agreements between Fiat Chrysler and the UAW, the workers say.

According to the DeShetler lawsuit, reports suggest that authorities are also investigating the UAW International Union’s Chrysler Department for selling jobs for payments of a few thousand dollars from prospective workers.

Despite interest from Toledo residents, a “suspiciously large number” of people who took jobs at the paint shop relocated from Detroit, the lawsuit says, adding that some of those people have admitted paying for their jobs.

The former employees seek damages for lost pay and reinstatement of their positions.

The defendants are FCA USA, the UAW International, and UAW Region 2B.

Fiat Chrysler spokesman Michael Palese declined to comment.

The unions did not immediately respond to requests for comment Friday.

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