North and South: Perspectives on Cross- Border Transportation and NAFTA by Arcie Izquierdo Jordan North American Transportation Employee Relations Association October 13, 2008

U.S. Company Operations in Mexico Direct Cross-Border Operations under NAFTA Pilot Program Logistics (Freight Management) Operations Warehouse Management Operations Vehicle Leasing Operations

Mexican Labor Law Issues Little case law Paternalistic Federal Labor Law Worker-favorable attitude at Labor Boards Union issues

Absence of Case Law Precedent Difficult to Establish: Requires 5 decisions on same issue by Mexican Supreme Court Cases rarely litigated Culture of Negotiating

Federal Labor Law Concepts No at-will employment Written employment agreement requirement Specific conditions & benefits required: Minimum daily wages Minimum vacation period & vacation premium Minimum Christmas bonus Premium for work on Holidays & Sundays Mandatory Profit Sharing

Severance & Re-Installation Termination for Cause – Very Difficult to Establish Termination without Cause Normal Severance: 3 Months’ Integrated Salary Seniority Premium (12 days per/year; Capped) Pro-rated Vacation Days, Vacation Premium, & Christmas Bonus Re-installation Bonus: 20 days per year (No maximum) Special Rules in the event of Economic Layoffs

Union Issues Workers eligible to unionize Number of workers to initiate unionization activities Types of unions Typical organization procedures Effect of having an existing CBA on file Rules during work stoppage “White” – “Pink” – “Red” Unions Advantages & disadvantages

Workers Eligible to Unionize Workers White collar (including office & sales personnel) Supervisors, but not Managers Substance of position not Title Controls Blue collar positions Confidential Employees (subset of Workers) Separate union Representatives of the Employer (Top level)

Number of workers required Bargaining unit concept has less significance than in the U.S. Not as tied to “commonality of interest” requirements as in the U.S. Can be comprised of a single individual May have different unions at different locations

Types of Unions “Craft unions” – same occupation, trade or specialty “Company unions” – same company “Industrial unions” – same industry; different companies “National industry unions” – industry unions operating in multiple jurisdictions

Typically Organization Procedures Union files petition with Labor Board with jurisdiction for work site Petition must indicate filed for proper purpose Execution of CBA Require compliance with CBA Require compliance with profit sharing requirement Require review of wages

Typically Organization Procedures Filing of petition => review to determine if CBA already on file Employer has 48 hours in which to respond Hearing will be set for 6-10 days out Labor Board will pressure parties to reach resolution No resolution => Work Stoppage Employer has 72 hours in which to raise defenses Work stoppage continues until hearing (2-6 wks out) Investigation conducted (polling of workers) Intimidation, fraud may occur Labor Board mediation & pressure; absence of authority to impose CBA

Effect of having an existing CBA on file Filing of petition => review to determine if CBA already on file If CBA on file, Labor Board will not admit petition Union may sue company for right to represent workers Employer must respond timely Labor Board will pressure parties to reach resolution No resolution, NO Work Stoppage Investigation conducted by Labor Board (polling of workers) Intimidation, fraud may occur Union may withdraw petition if contribution toward its “cultural & sports activities” made

Rules during work stoppage Workers cannot be permanently replaced in the event of a work stoppage Substitute workers are not normally used Assets of company cannot be moved during work stoppage

“White” – “Pink” – “Red” Unions White union = employer dominated (friendly) union Employer pays an annual fee to union No dues paid directly by workers Workers may not know of existence Pink union = usually affiliated with national union Generally operates like a white union (i.e., employer friendly) But, more active and visible to workers Red union = aggressive, independent union

Advantages & Disadvantages White union Easy to terminate relationship Pro-forma review of CBA & wages as required by law Generally will not turn “red” But may not be effective in defeating red union Filing CBA with White union publishes existence of company

Advantages & Disadvantages Pink union Less likely to be displaced by aggressive or “red” union May require more for workers than employer would want May turn “red”

Advantages & Disadvantages Red union Dues & Contributions required Aggressive on benefits CBA terms must be reviewed every 2 years Wages must be reviewed every year May insist on presence of union representatives on site

North and South: Perspectives on Cross-Border Transportation and NAFTA by Arcie Izquierdo Jordan 100 Congress Ave., Suite 1100 Austin, Texas North American Transportation Employee Relations Association October 13, 2008