North and South: Perspectives on Cross-Border Transportation and NAFTA by Arcie Izquierdo Jordan

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

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

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

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

5. 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

6. 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

7. 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

8. 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)

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. “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

16. 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

17. 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”

18. 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

19. North and South: Perspectives on Cross-Border Transportation and NAFTA by Arcie Izquierdo Jordan 100 Congress Ave., Suite 1100 Austin, Texas 78701 512-236-2209 ajordan@jw.com North American Transportation Employee Relations Association October 13, 2008